Tennessee Bankers

This Week Newsletter



March 14, 2016 - Issue No. 1611


Eastman Credit Union's CEO 2014 Compensation Totaled $9.26 Million

Kingsport-based Eastman Credit Union paid its CEO, Olan O. Jones, Jr., more than $9.26 million in 2014, according to Keith Leggett's Credit Union Watch. His base pay was almost $7 million, while he received $262,440 in bonuses and $2 million in deferred compensation.
 
"Eastman Credit Union pays no state or federal income taxes. As a result, they are able to line the pockets of their executives. If the Tennessee credit union industry were to pay taxes like every other business, it would have resulted in $81 million in tax revenue for Tennessee over the last 12 years," said TBA President Colin Barrett.
 
Do you have a Twitter account? Click here to tweet to your Congressman that this is a perfect example why it's time to examine the affordability of the credit union tax exemption.
 
Together, let's keep bringing awareness to the fact credit unions have drifted from their original mission and have outgrown their special tax-exempt status. 

TBA-Opposed PACE Legislation Sent to Summer Study

Last Tuesday, March 8, the House Agriculture and Natural Resources Subcommittee voted to send to summer study TBA-opposed legislation that would authorize local governments to enact PACE (Property Assessed Clean Energy) loan programs. By sending it to summer study, the committee essentially sent a message to the bill sponsor that the legislation is dead and did not have enough votes in the subcommittee to advance it.
 
The legislation would allow local governments to use their bonding authority to provide financing for for-profit companies to make loans that were superior to first mortgages for energy efficient improvements to commercial and residential properties. Repayments on the loans would be collected only once-a-year by the county trustee along with an owner's property taxes. In the event of default and foreclose sale, the PACE loan would be assumed by the new owner.
 
Over 30 states have passed legislation authorizing PACE programs. Tennessee is one of a few states to defeat aggressive legislative efforts by PACE proponents.

TBA's Deceased Depositor Legislation on House Floor Monday Night

TBA's legislation to increase the amount of a check from $2,500 to $10,000 that a bank may negotiate if written to a deceased person where no estate is open or one that has already closed will be voted on by the full House Monday night. The legislation, HB 1894 by Rep. Patsy Hazlewood, originally was drafted to increase that amount to $15,000, but was later amended with a compromise between TBA and members of the House Civil Justice Committee.
 
Once the legislation passed on the House floor, the Senate, which has already passed it, must vote to conform to the House version that provides for an increase up to $10,000 rather than the original amount of $15,000.

US House Committee Passes Flood Insurance Legislation

The House Financial Services Committee on March 2 voted to advance the Flood Insurance Market Parity and Modernization Act to the full House for consideration. The legislation passed by a unanimous vote of 53-0.

The bill will provide consumers with private sector alternatives to the National Flood Insurance Program. Having such alternatives will increase competition and help drive down flood insurance costs, enhancing protection for consumers against flood damages in mortgage markets and ensuring that more borrowers can be covered by flood insurance. It also will help return the NFIP, a taxpayer funded initiative, to more robust physical health.

Agencies Issue Clarifying Guidance on Evaluations Versus Appraisals

The federal banking agencies issued clarifying guidance on when an evaluation is permitted instead of an appraisal for loans secured by real estate. Appraisals are optional, while evaluations are required, for: loan amounts of $250,000 or less; renewals, refinances and other transactions involving existing extensions of credit; and real estate-secured business loans with a value of $1 million or less when income from the real estate is not the primary source of repaying the loan.

The guidance provided information on how to prepare an evaluation, who should prepare it, and the required contents of an evaluation report. To read the guidance, click here.

OCC, Fed, and FDIC to Hold Joint CDFI Program

The OCC, FDIC of Dallas and Federal Reserve Bank of Atlanta are hosting a joint informational session on Community Development Financial Institutions (CDFIs) on April 8 at Pellissippi State Community College. The purpose of the event is for the CDFIs operating in East Tennessee/Appalachian region to share information about the work they are doing and opportunities for banks to collaborate with them. An overview of CRA will be provided and examples of successful CDFI/bank partnerships will be highlighted. For more information and to register, click here

FDIC Releases Consumer Cybersecurity Guide

The FDIC last Tuesday, March 8, released a special edition of the agency's quarterly FDIC Consumer News entitled "A Bank Customer's Guide to Cybersecurity." The publication features several articles on cyber-related topics, including safety precautions for computers, smartphones, and tablets; tips for avoiding identity theft online; the roles of banks and the government in consumer protection. It also includes a cybersecurity checklist for protecting personal data from online criminals. To read the publication, click here.

CFPB Accepting Consumer Complaints for Marketplace Lenders

The CFPB announced last week that it is accepting consumer complaints about loans from online marketplace lenders. Borrowers submitting complaints will be able to select the type of loan they took out, such as a mortgage, consumer loan, or student loan. Complaints will be forwarded to the lender, who will be expected to respond within 15 days.

The CFPB also issued a bulletin which included things consumers should consider before taking out a loan with a marketplace lender. To read more, click here.

First Session of Branch Management Series Set for March 30

The Branch Management Series is composed of four-workshop sessions that may be completed as stand-alone sessions. The benefits of this series include:
· An investment in developing best practices for your bank's branch network
· An educational resource for training and career development
· Recognition and opportunities for branch managers by completing
these sessions
· A foundation builder for banking schools
· A commitment to successful, profitable, efficient, and effective branches


The first session, which takes place March 30 at the TBA Barrett Training Center in Nashville, focuses on exploring the key components of a successful retail bank branch. Participants will leave with valuable tools and a "game plan."


Early registration deadline for the four-session bundle Is March 21. Click here to learn more and enroll. 

FDIC - Directors' College/Banker Outreach Program Takes Place April 26

The Dallas Region of the Federal Deposit Insurance Corporation and the Tennessee Bankers Association are jointly presenting the 2016 FDIC - Directors' College/Banker Outreach Program on April 26. This important program will give attendees the opportunity to network with state and federal regulators to learn about current and emerging issues and trends facing the financial services industry. Topics include what is going on within our state and what it means to our banks and the overall commerce industry. Program designers have closely tied the content to feedback received from bankers and suggestions from field supervisors within the state. Click here to learn more. 

Day on the Hill Photo Recap

The 2016 Day on the Hill, hosted by the TBA Young Bankers Division, brought 40 bankers to the State Capitol in Nashville to engage in the legislative process. Thank you to Bone McAllester Norton PLLC for hosting the day's luncheon and legislative panel. View the day in pictures.

TBA On the Road

  • Bankers and TBA staff travel to DC for the ABA GR Summit.

See where TBA goes while "on the road" by following

@TNBankers or  #TBAontheroad