Wednesday, November 25, 2020

Week of Oct. 29

In This Issue…

Sandy’s salutations
CRA modernization: banker comments needed!
OBA joins ABA’s letter calling for CECL quantitative impact study
Payments system issues: Fed needs to hear from community banks
Bankers invited to Mix & Mingles with OSCPA
Oklahoma Bankers Hall of Fame ceremony set for Dec. 4
OBA education corner …

Sandy’s salutations

By Sandy Werner
OBA Chairperson

Recent travels have taken me to both Washington, D.C., and the ABA convention in New York City. Attending the various sessions, I was reminded time and time again there are harsh consequences for inaction and Oklahoma bankers must remain active.

On my short list are the following:

A — Advocate for the regulation of FinTechs and taxation of credit unions.
C — CRA reform input is needed; respond to the OCC comment request.
T — Treasury is proposing limiting Section 199A provision. Encourage
legislators to join senators, including our own Sen. Inhofe, who have
already written to the Treasury Department.

Together, we are the OBA!

——— Sandy

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CRA modernization: banker comments needed!

It’s really important regulators hear from as many banks as possible, regardless of charter type, with written comments about the OCC’s Advance Notice of Proposed Rulemaking on CRA modernization.

When we were in Washington recently, all of the federal banking agencies told us they will read comment individual letters (but NOT form letters) in anticipation of working together to draft proposed updates to modernizing the Community Reinvestment Act. We’re asking bankers to pick a few of the 31 questions contained in the ANPR (downloadable here) and send them to all banking agencies.

“The bottom line is, if we don’t help bankers share their views about what specific changes will benefit both the bank and their customers, the effort to modernize the CRA regulations won’t be successful,” OBA President and CEO Roger Beverage said. “This is the time to capitalize on changes that will help banks and consumers. The regulators are bank-friendly (for the most part) and they want to hear from you.”

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OBA joins ABA’s letter calling for CECL quantitative impact study

The OBA, the American Bankers Association and all of the state bankers associations sent a letter Friday to Treasury Secretary Steven Mnuchin calling for a quantitative impact study of the FASB’s Current Expected Credit Loss standard on bank capital. The letter also urged the Financial Stability Oversight Council to delay the implementation of the CECL requirements until such a study can be carried out.

The associations noted that preliminary testing has shown that the standard will increase procyclicality, which generally causes loan loss allowances to spike during times of stress, which could have significant implications for banks with concentrations of residential mortgages, small business loans and loans to non-prime consumers.

“Said plainly, during a recession, the capital impact related to these products will dissuade most banks from lending,” they wrote. “We do not believe the banking agencies would have supported the issuance of CECL if this were foreseen.”

Accordingly, the associations called for a “transparent, two-pronged quantitative impact study” that would evaluate the standard’s effect on the overall stability and on the availability and affordability of credit throughout an economic cycle, as well as the effects of CECL on smaller institutions.

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Payments system issues: Fed needs to hear from community banks

For the past few years, the Federal Reserve has been involved in an effort to consider the Fed’s role in creating a faster payments system. A “Faster Payments Task Force” was created in 2015 to begin the modernization process, and the Fed Board has invited public comment on actions the Federal Reserve can take to enhance and support further development of a faster payments and settlement process.

The Task Force included more than 300 members from financial institutions, consumer groups, payment service providers, financial technology firms, merchants and government agencies. The goal is to develop a service for “Real-Time Gross Settlement” to be available 24/7/365. The other question is whether to create a liquidity management tool to enable transfers between Federal Reserve accounts that will support such 24/7/365 settlement of faster payments.

According to the Fed:

Faster payment services are valued for the conveniences they provide, such as the ability to pay another individual on-the-spot using a mobile phone application. They also provide consumers, households, and businesses more flexibility in managing their money because faster payments can be sent and received at any time, on any day.

Views are being sought on two potential actions that may support the further development of faster payments in the United States while increasing the resiliency and security of services offered to the public: 1) the development of a service for real-time interbank settlement of faster payments 24 hours a day, seven days a week, 365 days a year (24x7x365); and 2) the creation of a liquidity management tool that would enable transfers between Federal Reserve accounts on a 24x7x365 basis to support services for real-time interbank settlement of faster payments, regardless of whether those services are provided by the private sector or the Federal Reserve Banks. The Board is not committing to any specific action and is seeking input on which, if any, actions the Federal Reserve should take.

“Consumers and businesses increasingly expect to be able to send and immediately receive payments at any time of the day, any day of the year,” said Federal Reserve Board Governor Lael Brainard. “A 24/7 economy with 24/7 real-time payments needs 24/7 real-time settlement. That is where we believe that the Federal Reserve and the private sector together need to make investments for the future.”

Real-time settlement avoids interbank credit risk by aligning the speed of interbank settlement with the speed of underlying payments. As a result, broad use of real-time settlement for faster payments could enhance the overall safety of the faster payments market in the United States. Development of a nationwide real-time interbank settlement infrastructure by the Federal Reserve could encourage more banks to develop faster payment services, creating more choice for consumers, households, and businesses.

A liquidity management tool could improve the level of participation by banks in a real-time settlement infrastructure for faster payments, and hence public access to faster payment services, by mitigating risk that can arise for banks outside of standard business hours.

The Board’s Federal Register notice can be found at:
https://www.federalreserve.gov/newsevents/pressreleases/files/other20181003a1.pdf.

Comments are due by Dec. 14, 2018.

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Bankers invited to Nov. 1 Mix & Mingles with OSCPA

Want to get to know other young banking and finance professionals in your area?

Grab a seat with us Nov. 1 and enjoy drinks and networking hosted by the OBA Emerging Leaders in partnership with the OSCPA’s Young Accounting Professionals Committee. These Mix & Mingles are 5-7 p.m., come and go.

The November Mix & Mingle will provide a unique atmosphere to chat about career goals and also meet fellow upcoming leaders in Oklahoma City or Tulsa. Don’t miss out – RSVP today by emailing megan@oba.com!

Tulsa location:
Open Container
502 E 3rd St # 39
Tulsa, OK 74120-0001

Edmond location:
The Patriarch Craft Beer House & Lawn
9 E Edwards St
OK 73034-3704

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Oklahoma Bankers Hall of Fame ceremony set for Dec. 4

The OBA is proud to announce the inaugural group of inductees for the Oklahoma Bankers Hall of Fame, with the ceremony set for Dec. 4 in Oklahoma City.

Larry Briggs, with First National Bank of Shawnee; Ken Fergeson, with NBC Oklahoma in Altus; and Gene Rainbolt, with BancFirst in Oklahoma City, comprise the initial group to be inducted into the Hall of Fame, as voted on by a panel of their banking industry peers.

The ceremony will be held over lunch at the Oklahoma History Center in Oklahoma City. Stay tuned to the OBA website and upcoming OBA Updates for registration and ticket info for the event

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OBA education corner …

Fall is officially here and it seems even the weather has agreed to this reality! Of course, we live in Oklahoma, so the next 90-plus degree day could be just around the corner. One thing ALWAYS just around the corner are OBA educational offerings. Take note of the following:

Make note of the 2019 OBA Schools: 2019 Intermediate School, Feb. 4-8 and June 3-7; 2019 Commercial Lending School, March 3-8; 2019 Compliance School, Aug. 19-23; 2019 Consumer Lending School, Oct. 7-11; and 2019 Operations School, Nov. 18-22.

Finally, the dates are set for the 2019 OBA Senior Management Conference as well as the 2019 OBA Convention. Put these dates and locations on your calendar for early planning!

  • 2019 OBA Senior Management Conference, Sheraton Grand at Wild Horse Pass, Phoenix, Arizona, April 7-9.
  • 2019 OBA Convention, Edmond Convention Center and Hilton Garden Inn, Edmond, May 20-22.

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