02/07/2014

ICBA’s Fine: Postal Service Plan Is a Dead Letter

ICBA NewsWatch Today 02/07/2014

AdvocacyICBA’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. The blog post follows an appearance by Fine on the Fox Business Network, in which he said more government intervention in Americans’ personal finances is dangerous. The interview follows recent coverage of ICBA’s response to the Postal Service plan in USA Today, The Hill and American Banker. Read the Blog Post. Watch the Fox Business Interview.RegulationTarullo: Regulators Reviewing Volcker Impact on CLOsRegulators plan to continue reviewing the impact of the Volcker Rule on the banking industry, Federal Reserve Governor Daniel Tarullo told Congress this week. Testifying before the House Financial Services Committee, Tarullo said provisions that could affect collateralized loan obligations are at the “top of the list” of Volcker Rule issues under consideration by regulators. CLOs are among the financial instruments defined as covered funds under the rule. Depository institutions are required to divest their holdings of such funds. Following ICBA’s frequent communications and meetings with the banking agencies and Congress, regulators recently released an interim final rule to mitigate the negative community bank impact of a provision affecting TruPS CDOs. The interim final rule permits banks to retain TruPS CDOs they owned as of Dec. 10, 2013, if the CDOs were issued before May 19, 2010, and are backed primarily by TruPS or subordinated debt of bank holding companies that had less than $15 billion in assets when the securities were issued or of mutual holding companies. Additional resources are available on ICBA’s comprehensive webpage dedicated to the Volcker Rule CDO TruPS provisions. In the NewsOp-Ed: Value of Branches Based on More than Dollars and CentsThere is perhaps no greater difference in philosophies than between community banks that exist to serve their communities and financial number crunchers who often don't understand what their metrics can't tell them, ICBA Senior Executive Vice President and Chief of Staff Terry J. Jorde wrote in a new op-ed. In an American Banker op-ed, Jorde wrote that analysts are calling for swifter community bank branch closings despite the fact that community banks did not engage in the branching boom of the 1990s and 2000s. Further, Jorde wrote, the community bank return on investment includes meeting customers’ everyday needs and enhancing their quality of life—something the folks in the green eyeshades don’t understand. The op-ed is the second this week for Jorde, who previously wrote that the common knowledge that community banks are specialists at small-business lending remains true. Jorde cited data from various sources showing that community banks continue to punch above their weight when it comes to lending and expanding on the technologies they offer their customers. Read the Branching Op-Ed. Read the Lending Op-Ed.ICBA NewsWatch Today is sponsored by QR Lending:Old methods of doing mortgages – and complying with regulations – are a thing of the past. NOW is the time to partner with an expert who can help you run a profitable, compliant and service-oriented mortgage operation. Benefit from your own Dedicated Loan Coordinator. Call 888.766.4734 or register for webinar on February 19th at 2:00pm ET. Equal Housing Lender. www.qrlending.com/webinarsSecurityICBA Details Data Breach Impact on Community Banks for CongressICBA this week communicated repeatedly with Congress on the impact of recent retailer data breaches on community banks and the need for a stronger payments system. In several meetings, committee hearing statements and letters to lawmakers this week, ICBA has advocated that:

• the costs of data breaches should ultimately be borne by the party at fault for the breach,
• all participants in the payments system—including merchants—should be subject to Gramm-Leach-Bliley Act–like standards,
• a national data-security breach and notification standard should be enacted to replace the current patchwork of state laws, and
• unnecessary barriers to effective threat-information sharing between law enforcement and the financial and retail sectors should be removed.

ICBA also has noted that retailers continue to make misleading and counterproductive statements about the breaches and that financial institutions initially make consumers whole following a breach, often receiving minimal reimbursement. In addition to meeting and communicating with congressional offices on the impact of the data breaches, ICBA also continues offering data-security resources for community banks and their customers on the association’s online security breach toolkit. AdvocacyICBA Meets with White House Officials on Housing-Finance PrioritiesICBA staff this week met at the White House with executive department officials to discuss pending legislation to reform the housing-finance system and secondary mortgage market. At the meeting with White House, Treasury Department, and Department of Housing and Urban Development officials, ICBA emphasized that continued community bank access to the secondary mortgage market is essential as policymakers pursue reform. ICBA President and CEO Cam Fine, ICBA Senior Executive Vice President of Government Relations and Public Policy Karen Thomas and ICBA Senior Vice President of Mortgage Finance Policy Ron Haynie said at the meeting that policymakers must be careful not to create a new system that eradicates liquidity for all but the largest players. In meetings with policymakers and in testimony before Congress, ICBA has repeatedly worked to ensure that reforms do not limit access to the market for smaller lenders or impose requirements that make participation for small lenders and servicers too costly. RegulationICBA Details Mortgage-Closing Challenges to CFPBICBA detailed community bank challenges with the mortgage loan closing process in a comment letter to the Consumer Financial Protection Bureau. Responding to an inquiry on consumer responses to closing, ICBA stressed that community bankers work with their customers to thoroughly explain loan terms and answer borrowers’ questions. In its comment letter, ICBA noted that often delays are due to items outside the control of community bankers, such as borrowers with invalid identification and last-minute demands from secondary market investors. The association again urged the CFPB to field test the recently finalized combined RESPA-TILA mortgage disclosures on live transactions to identify any possible problems that could cause closing delays. Additionally, ICBA recommended that the CFPB work with the banking industry and other agencies to address the fundamental causes of the numerous extraneous documents that consumers are forced to sign during the closing process before seeking to automate a broken process. Read ICBA Comment Letter. Farm BillPresident Slated to Sign ICBA-Advocated Farm Bill into Law TodayThe ICBA-advocated farm bill is scheduled to be signed into law by President Barack Obama today. The president is scheduled to sign the bill into law at Michigan State University in East Lansing alongside Senate Agriculture Committee Chairman Debbie Stabenow (D-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. ICBA has worked closely with Congress in recent years to ensure a strong farm bill safety net, a robust crop insurance program and enhanced USDA guaranteed farm loan programs. Debt CeilingICBA, Coalition Urge Congress to Raise Federal Debt CeilingICBA and a coalition of other business associations this week urged Congress to raise the federal debt limit without delay. In a joint letter to lawmakers, the coalition wrote that the administration and Congress should come together and develop long-term solutions to the nation’s fiscal challenges. The coalition wrote that if the president and Congress cannot raise the debt limit in a timely fashion, the Treasury would be unable to meet government obligations, which would lead to American taxpayers paying more to finance the debt. Read Coalition Letter.CongressSenate Finance Chairman Baucus Approved for China AmbassadorThe Senate confirmed Senate Finance Committee Chairman Max Baucus (D-Mont.) to become U.S. ambassador to China. Baucus, who has served 35 years in the Senate, passed on a 96-0 vote. Sen. Ron Wyden (D-Ore.) is expected to replace Baucus as finance committee chairman, and Montana Gov. Steve Bullock (D) will name a temporary replacement for Baucus’ Senate seat.PollTake This Week’s Quick PollTake this week’s Quick Poll on financial literacy, and view results from the previous poll on ICBA’s mobile apps. View the Archive.Products and ServicesWebinar Next Week on Benefits of Cloud ComputingICBA Strategic Technology Solutions is hosting a webinar next week on how cloud computing can be the answer to many community bank IT challenges. “Cloud Computing 101—Introduction to Cloud Computing,” scheduled for 1 p.m. (Eastern time) Thursday, Feb. 13, is the first in a three-part series on cloud computing. Learn More and Register.