Week of Jan. 3

From the chairman

By Curtis Davidson
OBA Chairman

The Oklahoman editorial on New Year’s Day listed its wish list for 2017. So, instead of New Year’s resolutions that are usually broken before January has passed, I have a federal legislative wish list.

I limit myself to three wishes since I’m hoping a genie will be sure to grant them. Also, it would be an unmanageable list if I listed everything I thought should change. So here goes:

Wish Number 1 — Affordable Health Care. Surprised my number one wasn’t a banking issue, since the purpose of OBA is to make bankers better? Here’s my reason: I have always argued that the future of community banking is tied directly to small businesses and they are desperate for affordable health care for their employees and themselves. ACA (Obamacare) was not the answer.

Even though the premise and rhetoric used by supporters of the ACA was promising, the results were not. Cost and inaccessibility to healthcare insurance coverage is a major deterrent to starting or expanding a business. I believe small business growth would benefit significantly if Congress can get health care right.

Wish Number 2 — Reform CFPB. First thing some of you noticed was I used the word “reform,” not “abolish.” My genie is good but not that good.

Personally, I can live with a well-defined regulatory roadmap for consumer products. My problem is with the non-accountable, overzealous regime which is currently in place at the Bureau.

Reform, with accountability, of the CFPB is an absolute must for community bankers to serve their customers. Too many rules only hurt consumers and limit their choices.

Wish Number 3 — Smart Tax Reform. About every other year during my career as a tax preparer, Congress passed tax reform. Except for the Reagan Tax Reform Act in 1981, most bills tended to just complicate things until we have the evolved to the system we have today: It’s near impossible to complete a return without professional help. I’m not sure what smart tax reform will look like, but maybe I’ll recognize it when I see it.

I do know that any tax reform effort must be simpler with incentives for businesses to grow. That is what I find troubling about the provision contained in the GOP’s Blueprint for Growth to eliminate the business interest deduction. Seems to me it’s a disincentive for business to leverage growth though borrowing. I don’t see how that encourages growth.

What are your top three wishes?

After you have picked three, now the work begins. 2017 is a year of promise for legislative reform. We have a chance to finally get some real regulatory relief for banks in general and for community banks in particular.   Let’s work together to make our wishes come true.

I hope each of you have a happy and prosperous New Year!

Curtis Davidson
OBA Chairman

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FFIEC finalizes revised Call Report for smaller institutions

The federal banking agencies have published a notice in the Federal Register that finalizes the rules for filing a new and streamlined Call Report for smaller (less than $1 billion in total assets with only domestic locations) banks and thrifts (about 90 percent of the current number of banks and thrifts). It cuts the existing Call Report from 85 to 61 pages by eliminating some 40 percent of the nearly 2,400 data items currently included in the existing Call Report.

Eligible small institutions may begin filing the streamlined Call Report as early as March 31, 2017.  Click here to read the FFIEC press release.

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Dems release Senate Banking Committee roster; Ryan reelected as speaker

Senate Democrats have released their party’s Senate Banking Committee roster for the 115th Congress:

Sherrod Brown (Ohio)          Bob Menendez (N.J.)        John Tester (Mont.)
Mark Warner (Va.)                 Elizabeth Warren (Mass.)     Heidi Heitkamp (N.D.)
Joe Donnelly (Ind.)               Brian Schatz (Hawaii)        Chris Van Hollen (Md.)
Catherine Cortez Masto (Nev.)

Senate Republicans have not yet released the names of their committee members.

Meanwhile, today is the first day of the 115th Congress and Rep. Paul Ryan (R-Wis.) was overwhelmingly re-elected as Speaker of the House.  As such, Ryan stands third in line to the presidency and sets the agenda for the House of Representatives.  

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NCUA final rule relaxes credit union acquired property requirements

(Thank you ABA for the following news item).  The National Credit Union Administration has finalized a rule easing restrictions on the ability of federal credit unions to acquire and lease commercial real estate and make speculative real estate investments. The rule eliminates a requirement for credit unions to achieve full occupancy of acquired premises.

Under the rule, credit unions will only be required to “partially occupy” acquired properties within six years of acquisition. The rule defines “partial occupancy” to mean “occupation and use, on a full-time basis, of at least 50 percent of the premises by the FCU, or by a combination of the FCU and a credit union service organization in which the FCU has a controlling interest in accordance with generally accepted accounting principles.

The NCUA seems to be on a roll in its cheerleading effort to expand the ability of credit unions to include an even broader, more general (and generous) definition (expansion) for credit union membership, as well as an expansion of a credit union’s ability to make commercial loans.

The ABA has filed suit challenging the membership expansion rule, and the ICBA has filed a separate lawsuit challenging the unauthorized commercial lending expansion rule. Both suits are in the beginning stages and are being strongly opposed by NCUA.  

This latest expansion means credit unions could also get into the real estate leasing business.  

Under this proposal, credit unions would only have to occupy the minimum amount of space required.  They can then lease out the remaining area which, as the ABA has said, is a further abuse of the credit union tax exemption.


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Community Bank Advisory Council members being sought

The director of the Consumer Financial Protection Bureau has published a notice in the Federal Register in which he invites the public to apply for membership for appointment to the Bureau’s consumer advisory board, its Community Bank Advisory Council and its Credit Union Advisory Council.

Membership of the Consumer Advisory Board and the community bank and credit union councils includes representatives of consumers, communities, the financial services industry and academics.

Appointments to the Consumer Advisory Board are typically for three years; appointments to the community bank and credit union councils are typically for two years. Both of these normal term limitations may be changed by the director at his discretion.  

Click here to read the notice and the details of how to apply for any of these positions.

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Register for OBA’s 2017 Contact Banker Program

We have set the dates for the 2017 Contact Banker Program. Many of you are seasoned veterans of the program and we look forward to seeing you again this upcoming year.

Click here to find a sign-up form that has all the dates listed for this years program. We ask that you look and see what dates work best for you and send it back to me. Once we have the groups finalized, we will send you an email confirmation of your date.

On the date you have selected, we will meet at the Capitol around 8:30 a.m., with groups usually consisting of 10-15 bankers. Once the group has arrived, we will have a short briefing about the issues we are tracking and what our plan is for the morning. Please know, we will stay together as a group the entire morning. We will go and meet with your individual senator and representative and you will have a few minutes to chat with them about anything you want. Depending on what week you select, the group will sit in on a committee meeting or we will sit in the gallery of both chambers and watch action on the floor. We try to finish our business about 11:30 a.m. – afterward, the OBA will take everyone to lunch to discuss the events of the morning. There is no charge to attend; the only cost is your time.

This is our 17th year to have this program and it gets more popular every year. All legislators know that on Tuesday’s there will be bankers at the Capitol and we always have legislators asking when their bankers are going to visit. The fact legislators know bankers are involved in the process and watching what they do is very valuable to your industry.

Many of you are probably thinking you haven’t been to the Capitol since you were in elementary school. This is the perfect opportunity to come back and see all the changes. We encourage you to sign up and bring as many employees as you would like.

Please fill out this form and send it back. Should you have any questions, please don’t hesitate to contact Adrian Beverage at the OBA.

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OBA education corner …

The holiday season is over! This means live education events from the OBA will soon emerge from hibernation! Check out the following:

  • IRA Update and Review, Jan. 10, webinar — This two-hour webinar will update you on any of the latest legislation, pending legislation and cost of living adjustments available for 2017.
  • Best-Ever Compliance Checklists for Consumer Loans, Jan. 10, webinar — For several years, Anne Lolley has shared her popular compliance checklists with bankers. In this latest webinar, Anne will again offer and explain those checklists.
  • CRA: Five Steps to Pass the Exam, Jan. 11, webinar — This webinar will focus on several simple steps to help ensure a successful CRA exam outcome.
  • Dealing with Subpoenas, Summonses, Garnishments, Jan. 12, webinar — On a daily basis, a financial institution is faced with having to comply with a multitude of legal documents that are served on it.
  • Handling Loan Applications: What Can Go Wrong?, Jan. 12, webinar — Do you know how the term “application” is defined in all the lending regulations? Do your lenders and front line staff understand the difference between an application and an inquiry?
  • New HMDA Rules: Iimplementation Challenges, Jan. 17, webinar — After a long wait, the CFPB finally issued its new HMDA rules.
  • Loan Structure, Documentation & Compliance, Jan 18, Tulsa — Attend this proactive seminar and receive a thorough overview of commercial lending requirements from a “loan” structure, documentation, and compliance perspective.
  • Online Deposit Account Opening, Jan. 18, webinar — Opening deposit accounts online is becoming a way of life instead of an exception.
  • Basic Cash Flow Analysis: Personal, Business, Real Estate, Jan. 19, Oklahoma City — This seminar will explore various cash flow techniques as they apply to a wide-range of business scenarios and address the underlying drivers of cash flow.
  • Implementing the New Beneficial Ownership Rules, Jan. 19, webinar — On May 11, 2016, the Financial Crimes Enforcement Network (FinCEN) issued its final rule to implement the long awaited beneficial ownership rules that will significantly impact customer due diligence requirements.
  • Right of Setoff, Jan. 24, webinar — Do you know when the right of setoff is allowed and when it isn’t? Do you know if your financial institution has a statutory or contractual right of setoff? Do you understand the financial risks of using your setoff rights incorrectly? If you don’t know the answers to these questions, make sure to attend this valuable webinar.
  • ERM Program for your Community Bank, Jan. 25, webinar — Are you creating the first ERM Program for your bank? Or do you want to ensure your current program is complete, yet simple?
  • Compliance Roundups 2017, Jan. 26-Oklahoma City; Jan. 31-Tulsa — The OBA’s annual compliance roundup seminars provide a comprehensive review of new bank compliance laws, amendments to existing laws and regulations, important court cases and common compliance mistakes.

Also, the Graduate School of Banking at the University of Wisconsin-Madison  has scholarships available for its popular Human Resources School. The School takes place on March 26-31, 2017. For more information on the scholarships available, click here.