GrassrootsICBA Continues Working Against Costly Accounting ProposalICBA continues working to address a Financial Accounting Standards Board proposal that would require community banks to revise how they account for their loan-loss reserves (ALLL), loans and securities. The association is working to organize meetings between community bankers and their regulators to discuss the impact of the proposal on community banks. Meanwhile, ICBA continues calling on community bankers to send in custom comment letters opposing the proposal. The FASB proposal would implement a single approach for recognizing credit losses on loans, securities and trade receivables. The proposal would use an “expected loss” model, which would require banks to estimate expected credit losses and recognize the net present value of those losses at origination. It would replace the “incurred loss” model. FASB’s proposal would require complex modeling and compel banks to recognize losses much earlier than necessary in the credit-loss cycle, penalizing community banks for investing in loans and securities. The Office of the Comptroller of the Currency estimates that loan-loss reserves on average will increase by 30 percent to 50 percent with adoption of the proposal. ICBA’s customizable letter urges FASB to re-propose a simpler and more straightforward proposal that would not harm the nation’s community banks. Community bankers can go online to sign the petition, send in a customizable comment letter to FASB, and access a summary and frequently asked questions on the proposal. In December, ICBA delivered to FASB its petition signed by 4,650 community bankers and allies urging FASB to withdraw the plan. Send in Your Letter Today! Read More on the Issue.AdvocacyICBA, Coalition: Avoid One-Size-Fits-All Diversity PoliciesFederal regulators should avoid a one-size-fits-all approach to diversity standards, ICBA and a coalition of other banking groups wrote in a joint comment letter to the agencies. ICBA, the American Bankers Association and a coalition of state banking groups maintaining flexibility is essential to allowing individual banking institutions to adapt to the unique and evolving nature of their own markets. Specifically, the coalition called on regulators to remove a provision of the proposal that would require institutions’ standards to address procurement or supplier diversity or include performance measures and other specific assessments of work product in transparency of practices. The coalition also wrote that it strongly agrees with the agencies’ view that financial institutions voluntary self-assess their diversity practices, which would be a more effective and appropriate methodology than traditional examination or other supervisory review. ICBA and a separate coalition of national financial trade groups reiterated these concerns in a separate joint comment letter. The agencies in October released the proposed standards, which are designed to promote transparency and awareness of diversity policies and practices within the institutions they regulate. Flood InsuranceFEMA Suspends Certain Flood Insurance ReformsThe Federal Emergency Management Agency has halted planning and development activities under one section of the Biggert-Waters Flood Insurance Modernization and Reform Act of 2012, it announced in a memo. The law prohibits FEMA from administering the premium increases that result from remapping. All other National Flood Insurance Program insurance and activities as required by Biggert-Waters Act will continue in the normal course of business, FEMA said. FEMA is barred by the Consolidated Appropriations Act of 2014 from using Fiscal 2014 funds to administer one section of the Biggert-Waters Act. The agency said it expects an additional 12-18 months would be required to implement the planning and development activities once Congress has restored funding. FEMA said it will continue to map flood risks and phase out subsidies for certain other policyholders under the NFIP. More comprehensive ICBA-advocated legislation to protect homeowners from significant increases in flood insurance premiums recently passed the Senate on a 67-32 vote and is pending in the House. S. 1926, introduced by Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.), would delay steep rate increases for up to four years by giving FEMA time to develop a plan to help property owners who cannot afford dramatically higher premiums. ICBA worked closely with the Senate and continues working with the House to mitigate these dramatic rate increases and implement a wide-ranging fix.SecurityICBA: Merchants Should Help Community Banks Cover Fraud LossesWhen data breaches are caused by retailers’ lax security practices, merchants should be obligated to help banking institutions cover fraud losses and related expenses, ICBA Executive Vice President of Regulatory Policy Viveca Ware told BankInfoSecurity. In a podcast interview, Ware said that community bank expenses can be high following retailer data breaches and that retailers do not have the same level of oversight as financial institutions. “Where there is a party that has not performed as expected, we would like to see community banks compensated,” Ware said. “Retailers should be responsible for the fallout resulting from breached payment card information.” ICBA has been meeting and communicating with Congress and the national media on the impact of recent retailer data breaches on community banks and the need for a stronger payments system. ICBA also continues offering data-security resources for community banks and their customers on the association’s online security breach toolkit.RegulationCFPB Seeking Feedback on Additional Mortgage Market ReportingThe Consumer Financial Protection Bureau announced that it is convening a panel of small HMDA-reporting institutions to provide feedback on potential changes to mortgage information reported under the Home Mortgage Disclosure Act. The CFPB also unveiled a new online tool designed to help navigate publicly available HMDA data. In the Dodd-Frank Act, Congress requires lenders to collect and report specific new information as part of the HMDA process. These new data points include the total points and fees, the term of the loan, the length of any teaser interest rates, and the borrower’s age and credit score. The CFPB said additional mortgage information could help federal regulators, state regulators, lenders, consumer groups, and researchers better monitor the market. It is convening a Small Business Review Panel—as it is required to do by the Small Business Regulatory Enforcement Fairness Act whenever a rulemaking would have a significant impact on a substantial number of small entities. The panel will gather feedback on the potential changes to the rule, including how data can be updated to better reflect what is happening in the market. ICBA members who serve on the Small Business Review Panel, as well as on the CFPB’s Community Bank Advisory Council, will have ample opportunity to weigh in on changes under consideration by the bureau. Read More from the CFPB.ICBA NewsWatch Today is sponsored by QwickRate:Need to replace deposits without repricing your base? Post rates on QwickRate. Consistently. Attract a steady stream of institutional, non-brokered deposits – no transaction fees! Schedule a personalized webinar tour (introducing our beneficial new Bank Performance Report Card tool) to learn more or register for webinar on February 11, 2pm ET or February 12, 11am ET.AgricultureWhite House Announces “Made in Rural America” InitiativePresident Barack Obama directed his administration to lead a new “Made in Rural America” initiative to promote exports and investments involving rural businesses. The initiative is charged with bringing together federal resources to help rural businesses take advantage of new investment opportunities and access new international customers and markets. The plan is designed to connect rural businesses to export information and assistance through regional forums, an “Investing in Rural America” conference, training sessions for local USDA Rural Development staff and use of the BusinessUSA online platform. Obama announced the plan in connection with his signing of the farm bill in East Lansing, Mich. The Agricultural Act of 2014 (H.R. 2642) includes several provisions that advance ICBA objectives to spur rural economic growth, including provisions of the act to strengthen crop and revenue insurance programs and to remove term limits on USDA guaranteed farm operating loans.CommentaryICBA’s Fine: Postal Service Plan Is a Dead LetterA recent proposal to involve the U.S. Postal Service in the banking industry raises a pile of problems and appears to be a last-ditch effort to save the struggling government agency from bankruptcy and taxpayer-funded bailouts, ICBA President and CEO Cam Fine wrote in a new blog post. Fine wrote on his Finer Points blog that the proposal from the money-hemorrhaging agency’s Office of the Inspector General is motivated by seven consecutive years of net losses. He noted that the Postal Service is failing at the one thing it knows how to do—delivering mail—and that the idea is an attempted government intrusion into the financial services sector. Read the Blog Post. Financial LiteracyNerdWallet Seeking Entries for Community Bank Local Project AwardNerdWallet, a financial advice website, this week announced its first-ever Community Banking Local Project Award, which invites community banks across the country to showcase financings that help local economies. NerdWallet is seeking submissions on community bank projects that highlight how community banks work with borrowers through good times and bad. To be considered for the award, entrants will need to prepare a short description of a local project funded in 2012 or 2013 that is $100,000 in total financing or larger. ICBA Senior Executive Vice President and Chief of Staff Terry Jorde will serve as the expert judge. The finalists and their financings will be recognized on NerdWallet’s award homepage and in a special feature on the website. The winning bank will be presented with an award, and NerdWallet will donate $1,500 to a charity of the winning bank’s choosing. Entries, up to three per bank, must be submitted by March 21. Enter Today!RegulationFDIC Issues Alert on SEC Paying Agent AmendmentsThe FDIC released a Financial Institution Letter on recent Securities and Exchange Commission amendments requiring “paying agents” to send a one-time notification to “unresponsive payees” stating that the agent has sent a security-holder a check that has not yet been negotiated. The amendments affect banks and bank holding companies that issue debt or equity and pay dividends or interest on those securities as the paying agent. The effective date for the amendments is Jan. 23, so the first potential notice to unresponsive payees would be due no later than Aug. 23. PollTake This Week’s Quick PollTake this week’s Quick Poll on a proposal that the U.S. Postal Service enter the financial services industry, and view results from the previous poll on financial literacy. View the Archive.EducationICBA Audio Call Tomorrow Covers New Capital RulesCommunity banks are required to adhere to new Basel III capital requirements by Jan. 1, 2015. “Capital Planning 2.0,” a 60-minute audio session scheduled for 11 a.m. (Eastern time) tomorrow, will address the details and implications of the new rules for community banks. The presentation also will explain how to prepare a capital plan consistent with regulatory pronouncements and suggest some nontraditional alternatives for raising capital. Register Today.Products and ServicesFree Webinar To Introduce New PSP for Compliance ManagementContinuity Control, a new ICBA Preferred Service Provider, is hosting a free webinar to demonstrate its Compliance Management Platform. ICBA members will learn how Continuity Control provides a single solution engineered to automate the entire regulatory lifecycle, including regulatory update management, policy management, risk assessment, vendor management, custom controls, audit management and regulatory diagnostics and reporting. Register to attend Introducing NEW Compliance Management System PSP at 3 p.m. (Eastern time) Wednesday, Feb. 19, or 1 p.m. (Eastern time) Thursday, March 20.