Wednesday, October 20, 2021

Week of April 15

In This Issue…

Community bank leverage ratio draws concern; comment letter filed
You can help develop future leaders in banking industry (by taking this short survey)!
Warren, Gardner re-introduce marijuana relief proposal
2019 OBA Convention set for May in Edmond
OBA education corner …

Community bank leverage ratio draws concern; comment letter filed

Section 201 of S. 2155 requires Congress to establish a leverage ratio between 8 and 10 percent for qualifying traditional community bank operations below $10 billion in assets. Its purpose – and what we’ve argued for some time – is to create an exemption for these smaller banks from the dreadful Basel III rules, rules that were never intended to apply to these banks.

Long before the bill was passed last year, the OBA and its colleagues worked closely with the American Bankers Association and the ICBA to make the case that the proposed rules under Basel III were intended primarily for large, money center banks. The proposed rules are far too complex and have no connection to how this community bank model works in practice.

“Section 201 (of S. 2155) contains the language that most of us really did the trick in exempting our traditional community banks from Basel III,” OBA President and CEO Roger Beverage said. “The regulators were required to come up with something to provide material and significant regulatory relief for our state’s small banks.

“The proposal on which our comments were filed included an ‘option’ to calculate a very simple (leverage) ratio on a relatively simple calculation in order to demonstrate the bank is adequately capitalized. The whole process was intended to create simpler reporting requirements and yet still be able to demonstrate the bank has sufficient capital that’s “adequate” and, thus, meets the “well-capitalized” ratio requirements within the “prompt corrective action” framework.

“But, as I said last year when the bill passed, one of our goals was to exempt the vast majority of member banks from the onerous and unnecessarily complex regulatory scheme that is Basel III.”

The OBA’s comment letter can be viewed by clicking here.

The OBA’s letter proposes an 8 percent ratio as adequate for qualifying banks. While our members see this as a positive first step by actually creating meaningful regulatory relief, more needs to be done. There are still unanswered questions pending, like how the prompt corrective action framework is going to work for banks that fall below CBLR thresholds.

In related news, Senate Banking Committee Chairman Mike Crapo (R-Idaho) and Sen. Jerry Moran (R-Kansas) sent a letter urging the agencies to set the CBLR at 8 percent for banks with total assets under $10 billion. Crapo and Moran pointed out this is “well above the current Tier 1 leverage requirement for well-capitalized banks.” They added that setting the CBLR at 8 percent would “result in banks receiving relief while maintaining significant capital.”

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You can help develop future leaders in the banking industry (by taking this short survey)!

Developing effective managers and leaders continues to be a high priority for our members. From supervisory positions to senior management, the development of skilled professionals is critical to industry success and high performance.

We want to make sure the OBA is delivering the best professional development programs and learning opportunities to support your development activities. With the right mix of industry topics and training resources, we will be able to support your financial professionals throughout their career.

To ensure we are providing the right resources, Cross Financial is helping us survey our membership regarding educational resources for professional and leadership development.  You have been selected to participate and we ask that you please take time to complete the survey. Your feedback is extremely helpful as we plan for OBA classes, programs and conferences. The survey will take less than 10 minutes.

The link to complete the survey is:

The deadline to complete the survey: Friday, April 19

If you’d like, you can provide your email at the end of the survey and you’ll receive an executive summary of the results directly from Cross Financial as soon as they’re compiled this spring.  Thank you in advance for taking the time to complete the survey.

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Warren, Gardner re-introduce marijuana relief proposal

Sen. Elizabeth Warren (D-Mass.) and Cory Gardner (R-Colo.) have again joined forces to introduce S. 1028, Strengthening the Tenth Amendment Through Entrusting States Act or the STATES Act. What it does, according to OBA President and CEO Roger Beverage, is amend the Controlled Substances Act in a way that prevents both producers, users – everyone who is in compliance with their state’s law regarding marijuana – from being prosecuted for what is still a crime under federal law.

“I like the idea behind the bill, but I just don’t see the necessary votes right now to get the bill moving,” Beverage said. “Also, a companion bill has been introduced in the House (H.R. 2093) to do the same thing and limit the applicability of our current and existing BSA/AML rules to our member banks.

“We’re going to take a good look at this bill. But honestly, I have zero confidence that it will be enacted this year. I was just (in Washington), and the atmosphere is getting worse than I’ve ever seen during some 35 years of doing this. And that’s saying something.”

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2019 OBA Convention set for May in Edmond

The 2019 OBA Annual Convention & Trade Show is coming soon, set for May 20-22 at the Edmond Convention Center.

This year’s convention theme is “TOGETHER, we are the OBA!” It’s a familiar refrain for those who regularly read the OBA Update as it is the signature phrase current OBA Chairperson Sandy Werner signs off her articles with.

Former U.S. Special Forces member Eric Maddox, who was a key part of the capture of Iraqi dictator Saddam Hussein, will give the opening keynote speech on May 21. Maddox is just one of many speakers presenting at this year’s convention, which will include entrepreneur Clifton Taulbert as the closing keynote presenter on May 22.

You can download the OBA app, which provides location and times and other information for the event, by clicking here (for iTunes) or here (for Google Play).

For more information and to register, click here for the convention brochure, as well as the golf brochure and a link to make hotel reservations through the OBA’s room block. Questions? Contact the education department at the OBA at (405) 424-5252.

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OBA education corner …

Was this past weekend the last “cold” snap before spring (and eventually summer!) take hold? With Oklahoma weather, there’s no telling! One thing you can always count on, though, is OBA education events! Take note of the following:

  • Developing and Organizing an Effective (RDC) Program, April 24, webinar — Join us as we outline the detailed information you should consider adding to your documents and processes to support thorough due diligence, risk assessment, and annual oversight of your customers. The information includes and supports your ongoing risk management of remote deposit capture to mitigate the institution’s risk pursuant to the “FFIEC Risk Management of Remote Deposit Capture.”
  • Creating the Right ERM Program for YOUR Community Bank, April 24, webinar — Are you creating your first ERM Program for your bank? Do you want to ensure your current program is complete yet keep it simple? If yes to either question, this webinar is for you!
  • Mortgage Origination Compliance: Part 1, April 25, webinar — How can you keep all the requirements straight in your head so you can be sure to not miss anything? In Part 1 of this two-part webinar, we’ll discuss all the relevant requirements and considerations in the origination process.
  • Understanding Commercial Loan Documents, April 26, webinar — Taught at a basic level (for bankers, not lawyers), the instructor will lead participants through all sections of the various required loan documents.
  • Red Flags for Money Laundering for the Front Line, April 30, Webinar — This program will answer commonly asked frontline questions and it will go over the red flags for money laundering for deposits and loans.
  • Risks of Power of Attorney Documents, May 1, Webinar — This presentation will provide financial institution personnel with best practices to use when dealing with these complex legal documents.
  • Mortgage Origination Compliance: Part 2, May 1, Webinar —  In Part 2 of this 2-part webinar, we’ll discuss all the relevant requirements and considerations in the origination process.
  • 2019 Financial Privacy Seminar, May 2, Oklahoma City — If you groan or agonize when you receive a subpoena or other legal process seeking access to customer information or records, this program is for you!
  • A-Z on Account Ownership, May 2, Webinar — This program is an A-Z on account ownership and documentation. We will go from single-party accounts to the more complex type of business accounts
  • Loan Participations, May 3, Webinar — This presentation will help banks that buy or sell participations among affiliate banks or to unrelated institutions.
  • 2019 Advanced Commercial Lending Series, May 8-10, Oklahoma City — This three-part series (which can be registered for one, two or all three days) is a must for commercial lenders, credit analysts, relationship managers and credit administrators.

Also, NOW is the time to get involved in your Association, and one good way to accomplish this is to join one of our committees! We are now taking names for those interested in our committees for the 2019-2020 year. Click here to download an interest form!

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