CHOICE Act introduced, to be considered Wednesday
Thursday, Rep. Jeb Hensarling (R-Texas), who chairs the House Financial Services Committee, released his latest version of the Financial Choice Act. We’ve talked about this approach before in this space and we featured it at the recent Bankers’ Night Out Programs across the state.
The intent of this 600-page bill is to “repeal and replace” Dodd-Frank. This proposal will do that and, at the same time, provide regulatory relief for banks of all sizes. The committee is scheduled to hold a hearing on the bill this Wednesday.
Here’s a summary of the Chairman’s ideas that are embodied in this bill:
- Taxpayer bailouts of financial institutions must end and no company can remain too big to fail;
- Both Wall Street and Washington must be held accountable;
- Simplicity must replace complexity, because complexity can be gamed by the well-connected and abused by the Washington powerful;
- Economic growth must be revitalized through competitive, transparent, and innovative capital markets;
- Every American, regardless of their circumstances, must have the opportunity to achieve financial independence;
- Consumers must be vigorously protected from fraud and deception as well as the loss of economic liberty; and
- Systemic risk must be managed in a market with profit and loss.
(you can read the bill’s language by clicking here.)
“Our focus is on Title V of this proposal,” OBA President Roger Beverage said. “Contained in that Title are the various provisions of regulatory relief intended for community banks. We’ve been working on all of these separate ideas over the past three years, including among other things:
- There would be a safe harbor (as currently exists for a “Qualified” Mortgage) for mortgage loans originated and retained by a bank (“portfolio” loans);
- Bank supervision would be “TAILORED” to the specific bank, based on its business operating model and risk profile;
- It would raise the small bank holding company asset threshold to $5 billion;
- An independent exam appeals process is created that allows banks to challenge the results of an examination before an independent Administrative law judge;
- The bill would halt efforts to collect more data on small business loans;
- Expand the short-form Call Report; and
- Repeal the Durbin Amendment.
“The proposal also intends to reform the (Consumer Financial Protection Bureau) by eliminating its examination powers and ‘UDAAP’ enforcement authority,” Beverage said. “Because the chairman introduced it, the bill is likely to pass the (House Financial Services) Committee on a purely partisan vote. Last time that Committee considered the chairman’s proposal, the Democrats on the Committee offered no amendments. This time I’m not sure what they will do.
“If the Democrats do try to introduce amendments and slow the process, then it’s probably late May or perhaps mid-June before the House would take it up. And then the bill will be sent to the Senate where it will die.
“I understand the explanation that’s being presented for going in this direction, but it’s nonsense in my view,” Beverage said. “I’d rather focus on a few things for which we can develop some bipartisan support, and this proposal is the last thing that will result in political cooperation between Republicans and Democrats.”
Beverage listed the TAILOR Act (S. 366, H.R. 1116), portfolio lending, exempting traditional community banks from the Basel III requirements and eliminating the CECL proposal proposed by FASB are key elements of the OBA’s priorities.
Meanwhile, on Friday, President Trump directed the Treasury Department to review the “Orderly Liquidation Authority” established by Dodd-Frank, including the process for designating nonbanks as systemically important financial institutions The question is whether this authority is consistent with the president’s idea about what the financial services business should look like and how it should be regulated.
The president has also directed Treasury to review the Financial Stability Oversight Council’s processes for designating nonbanks as SIFIs, and to pause any further designations of nonbanks pending completion of the review. Both reviews are to be completed within 180 days.
“ABA has welcomed and embraced the administration’s thorough review of financial regulations,” ABA EVP Wayne Abernathy said. “We appreciate the administration’s efforts to understand how financial regulations are working in practice and how to refine them to make them more supportive of economic growth. ABA and our member banks are actively participating in the process.”
Recently, Kansas City Federal Reserve Bank President Esther George made a presentation about the importance of traditional community banks that was an excellent presentation of the “bifurcated” regulatory system concept. She is truly a champion for traditional community banks.
More recently, Esther was interviewed by Bloomberg and once again she comes across as a stalwart supporter of Oklahoma-proud traditional banking institutions. We think you’ll find this interview both informative and interesting.
Click here to watch the Bloomberg interview.
Change is in the air at the federal bank regulatory agencies and we hope to maximize our opportunity to make needed changes to the regulatory environment. But, we need your help.
Please join bankers across America by participating in the Regulatory Feedback Initiative. Our new, streamlined “Post Exam Survey” will provide banking advocates with the data needed to identify problems and promote needed changes to the examination and regulatory environment.
We are asking every bank across the country to complete our new, streamlined survey after each Safety & Soundness Exam and Compliance Exam so we can track what bank regulators are doing.
It doesn’t matter when your last exam was, if you haven’t already filled out a Post Exam Survey from the Coalition of Bankers Associations, please take a minute right now and make a plan to do it by May 31, 2017.
The survey is 100 percent anonymous; the name of your bank is never included, so any answers you provide cannot be connected to your institution. The only way to access the survey is through the following link:
http://allbankers.org/link79204516.html. (Only forward this link to those who will be assisting you in completing the survey.)
If you are one of the 3,500-plus banks that have already taken a recent survey, thank you! (It truly is anonymous; we don’t know who you are!) If you haven’t taken a survey since your last exam – regardless of when it occurred – please take a moment today to make the assignment to get it done by May 31, 2017. You will also be receiving a similar follow-up message from me in the next few days.
We are pleased to be working with our fellow state bankers associations across America to fight to make the exam process fair and accountable! Together, we will make a difference! But – and as I’ve been saying for years – we can’t do it effectively without you!
Thank you for your support and participation.
In an effort to bring your bank more options, your OBA is in the process of finalizing an agreement with the Texas Bankers Association to transition the OBA Insurance Agency into the TBA’s insurance operation.
Judy Hanna will continue to be your agent and will work exclusively in Oklahoma and will still be located in the OBA offices.
“The idea behind this move is pretty simple,” OBA President Roger Beverage said. “We’re a very small agency with limited access to a large number of insurance markets for the benefit of our member banks. TBA’s agency, on the other hand, is of a significant size that the agency has access to a much larger array of insurance companies that we’ll be able to offer to member banks.”
Beverage said the agreement is in the final stages of being drafted, but an agreement in principle was reached and authorized several weeks ago.
If you have any questions at all about this change, don’t hesitate to contact us at the OBA.
Each year, the Oklahoma Bankers Association awards a $1,000 scholarship to an incoming freshman who has a parent, grandparent, sibling or spouse who is a Professional Member of the Association. The student must enroll in an accredited Oklahoma institution of higher education. The applicant must also be graduating from an Oklahoma high school. A panel of bankers will select the winning applicant.
Click here for the 2017 scholarship application. Applications are due May 1, 2017.
If you have questions, contact Megan McGuire at our office at (405) 424-5252 or by email at firstname.lastname@example.org.
Mark your calendars for the 2017 OBA Annual Convention & Trade Show, set for May 22-24 at the Embassy Suites in Norman. Keynote speaker Matt Lewis, CNN political commentator and author of the book Too Dumb to Fail: How the GOP Betrayed the Reagan Revolution to Win Elections (and How It Can Reclaim Its Conservative Roots) will discuss the upcoming Trump years in the White House.
Lewis is one of many high-quality speakers that will present. Another inspirational speaker will be Holly Hoffman on May 24. Registration is now open. Click here to view more information.
Convention is looming, as the above story mentions – but don’t forget about other education events! Check out the following:
- CRA Review and Update, April 26, webinar — This program contains core knowledge needed by all lenders to implement the new CRA rules.
- ACH Exception Processing, April 27, webinar — There is an exception to many rules, including ACH.
- Opening Accounts for Nonprofits & Charities, May 2, webinar — Learn how to set-up these different nonprofit organizations, associations and corporations.
- Lending 101, May 2, webinar — This is a great training tool for newer lenders and processors, and the webinar will help even experienced bankers understand the source of the various requirements.
- Understanding Commercial Loan Documents, May 3, webinar — Taught at a basic level (for bankers, not lawyers), the instructor will lead participants through all sections of the various required loan documents.
- Top 10 Missing FFIEC Cybersecurity Assessment Controls, May 4, webinar — The FFIEC Cybersecurity Assessment process is here to stay. At a minimum, most regulators are requiring financial institutions to complete an assessment on an annual basis.
- Bank Call Report Preparation for Beginners (Five-Part Series), May 5, 12, 19, 26 and June 2, webinars — Designed for bankers new to call report preparation, this series will cover basic reporting requirements, operational schedules, loan schedules, maturity and repricing, and Basel III risk-based capital, plus recent accounting changes affecting the Call Report.
- CIP and Customer Due Diligence 2017 Update, May 9, webinar — This program will look line-by-line at the regulations and point out avenues of change to explore in 2017.
- Call Reports: RC-C Loan Coding and Related RC-R Reporting, May 10, webinar — This webinar will help you learn the classification priority for reporting loan information correctly.
- Providing Accurate and Timely Adverse Action Notices, May 10, webinar — This webinar reviews the requirements and covers common violations and provides solutions.
- Controlling Risk of Power of Attorney Documents, May 11, webinar — This presentation will provide financial institution personnel with best practices to use when dealing with these complex legal documents.