From the chairman
By Curtis Davidson
There may be more than one way to skin the regulatory cat.
Nothing is higher on a banker’s wish list than regulatory reform. The problem is how to get from wish to reality.
Currently there are three methods being discussed. These methods are probably familiar to you but I would like to review them anyway because the last one has the potential to be a game-changer. Please don’t skip to the end but just stay with me.
First, change the law. That’s the one that has received all the press. From the outright repeal of Dodd-Frank, the abolishment of the CFPB to legislation like the TAILOR Act, major newspapers, TV talking heads and trade journals have put forth countless articles and opinions on the challenges facing any legislative law change. The outcome is presently impossible to predict but the battle between the Democrats and Republicans will be intense.
Next, change the regulatory heads. I recently had a discussion with a former head of one of our prudential regulators. He said change at the top will definitely make a difference with the tone and agenda particularly in Washington.
We all have stories of seemingly different attitudes as you move up the regulatory food chain. Often what makes practical sense with your onsite examiner gets nowhere when the subject is broached in Washington.
The good news is that ALL of the heads, including the CFPB, can be replaced within approximately 18 months. It’s not immediate but it will be significant.
Finally, use Executive Orders. I mentioned in a previous article that Trump overstates the “stroke-of-the-pen” effect. Reversing damaging regulation created without legislation may not be that easy but it may be easier than previously imagined.
Much has been written about the ability of Congress to overrule by a simple majority a new regulation finalized in the past 60 legislative days. That’s about 180 rules including the Labor Department’s overtime-pay rules.
A recent WSJ article by Kimberley Strassel reports that Congress could potentially go back as far as 2009. Let that one soak in. Without going into details, the person who has this idea was intimately involved in writing the Congressional Review Act that gives Congress this ability.
I invite you to read Ms. Strassel’s article in Friday’s WSJ to help formulate your own opinion. The title of the article is “A GOP Regulatory Game Changer”. I don’t have a clue what the outcome will be but I do know that, at last, the cards are finally starting to be stacked in our favor.
Have a great week!
A lawsuit has been filed in State District Court in Fort Worth, Texas in which both the Texas Bankers Association (TBA) and the Independent Bankers Association of Texas (IBAT) have joined forces to attack the ADA website compliance issue. The lawsuit seeks injunctive relief and attorney fees, not traditional monetary damages.
In earlier issues of the OBA Update, we’ve mentioned efforts by a Pittsburgh, Pennsylvania, law firm to extort money from small businesses, including banks, alleging various violations of the Americans with Disabilities Act (ADA) with respect to the businesses’/banks’ website. The allegations are that the specific website is not accessible by hearing or visually impaired consumers.
Here are the specific allegations of the suit:
- For the last several months, defendants have addressed form letters to TBA and IBAT members. In these form letters, defendants claim that they represent one or more individuals who resides in Texas and who accessed or attempted to access internet-based banking services on a bank’s website, apparently as a “tester,” and they assert that the bank’s website had “access barriers,” purportedly giving rise to claims for violation of the ADA …
- Enclosed with each form letter is a proposed draft Settlement Agreement setting forth the terms under which the defendants offer to settle the purported ADA claims against the Bank. By way of the proposed Settlement Agreement, Defendants offer to provide the bank with a full release of their clients’ purported ADA claims if the bank agrees to “pay certain attorneys’ fees and expenses in the amount and in accordance with the terms memorialized in a separate, confidential letter agreement” by which the bank would retain Carlson Lynch to represent the bank in defending ADA claims based on the bank’s website for a period of two years. The future professional [legal] services are to be provided to the bank as the soliciting lawyers’ clients in exchange for a to-be-negotiated legal fee. …
What’s really interesting is the TBA/IBAT petition alleges the law firm has committed a criminal offense of “Barratry and Solicitation of Professional Employment.” Under Texas law, “barratry” means an attorney offers anything of value to a prospective client to obtain employment as counsel for that prospective client.
Specifically, the petition alleges that the law firm and the individual defendants offered a thing of value (i.e., a release of purported ADA claims) to the Banks with the intent to obtain in return payment from the banks for the rendition of legal services. They were demanding employment as their attorney in exchange for the release of their claims.
A copy of the petition, form letter and draft settlement agreement can be viewed by clicking here.
There have been some Oklahoma banks that have run into this issue and have been on the receiving end of these demand letters. This one, however, seems to be a little bit different.
The following comes courtesy of the American Bankers Association.
In written responses to Senate Finance Committee members following his confirmation hearing last week, Trump Treasury secretary nominee Steven Mnuchin strongly endorsed efforts to provide regulatory relief for regional, midsize and community banks.
“[T]aking a fresh look at all aspects of the Dodd Frank legislation should be one of our highest priorities and if confirmed I look forward to working with Congress on this important priority,” he wrote. “It is important that we have a regulatory environment that supports credit flows to all aspects of our economy, particularly in rural and less populated areas, and that small- and mid-sized institutions are not suffering from an inappropriate regulatory burden.” (emphasis added)
Mnuchin emphasized — as ABA has long advocated — that regulation must be tailored based not only on asset size. “I believe in a regulatory framework that is determined by complexity and activity, not simply size,” he said. (emphasis added). “I endorse rethinking regulatory requirements facing large regional banks in order to regulate the banking sector in a more effective manner. In particular, we should examine whether it is appropriate for financial institutions that engage almost exclusively in traditional banking activities with consumers and businesses to be subject to measures intended for our largest and most complex financial institutions.”
He said his top priority in addressing financial sector regulation is to spur economic growth, adding that any efforts to revisit the Dodd-Frank Act will be to “addressing regulatory issues that limit banks’ abilities to lend to small and medium-sized business that will create economic growth and create more jobs.”
The Federal Reserve System is implementing a new program dedicated to educating bankers on emerging regulatory and high interest matters. One way the Fed is trying to do this is through the Ask the Fed webinar program.
Ask the Fed is a national webinar program that provides critical information on recent financial and regulatory developments. Expert speakers discuss topics for 30-45 minutes, followed by a “live” question and answer period. Bankers can register for a free account and can access all sessions, including archived sessions, at www.askthefed.org.
Ask the Fed was first introduced in 2008. Since then, the Fed has held sessions on a wide range of topics, including: troubled debt restructurings, commercial real estate guidance, appraisals, energy lending and the current expected credit loss model.
OBA member banks are welcome to join the Fed’s registration list for these calls. Creating an account is easy and can be done at www.askthefed.org. All registrants receive notifications when new sessions are scheduled. All webinars are archived on the Ask the Fed website.
The OBA is looking to fill an open, non-management-level support position on its staff. The position will be for individuals in marketing and customer service, and experience in either is preferred by applicants.
Job responsibilities for this position will include, but are not limited to:
- developing relationships with industry vendors for purposes of recruiting members and selling marketing opportunities;
- developing relationships with members for purposes of obtaining information related to product development;
- coordinating small group meetings between CEO and members as well as members and regulatory entities;
- being the primary contact for members ordering products;
- product development;
- product inventory maintenance.
Please send a resume AND salary requirements to Lea Ann Jackson (firstname.lastname@example.org).
Live programs are back in full force in the education department as the holidays are behind us! Check out the following:
- Open-Ended Lines of Credit, Feb. 6, webinar — This webinar will focus on the personal/overdraft lines and HELOC requirements.
- FFIEC Information Security, Feb. 8, webinar — The FFEIC has completely re-written and significantly changed the Information Security Handbook.
- Using Personal Tax Returns for Global Cash Flow, Feb. 8, webinar — Learn what forms and schedules in personal tax returns you should pay attention to and what you should ignore.
- What is Covered by D&O Insurance – What is Not?, Feb. 9, webinar — This session not only addresses the coverage provided by these unique insurance policies, but it also covers the enhancements that some insurers are willing to provide.
- Compliance Rules for Commercial Loans Secured by Real Estate, Feb. 9, webinar — Attend this webinar to understand the application process and applicable regulations.
- Fair Lending Review and Update, Feb. 10, webinar — Learn steps your institution can take to avoid Fair Lending problems.
- It’s Time for a TRID Check Up, Feb. 14, webinar — This comprehensive two-hour TRID check-up webinar will translate, in plain English, requirements, interpretations, latest guidance and best practices.
- Smart Social Media, Feb. 14, webinar — One simple post can destroy years of building trust and goodwill!
- Chief Financial Officer Conference, Feb. 16, Oklahoma City — The 2017 CFO & Financial Officers Conference is specifically designed to provide strategic insights and critical industry updates you need to lead your bank to success.
- BSA/AM Compliance Management, March 1 – Tulsa; March 2 – Oklahoma City — The program is designed for personnel who have responsibility for maintaining or auditing Bank Secrecy Act compliance efforts.
One education program, in particular, to be aware of is the OBA Intern Program. The Intern Program will again be active in 2017 and we’re looking for participating banks! For more information on this IMPORTANT program – important not only to aspiring students, but also to participating banks – click here for more information or contact the OBA education department at (405) 424-5252!