Tennessee Bankers

This Week Newsletter



October 30, 2017 - Issue No. 1743


Senate Votes to Overturn CFPB Arbitration Rule

The Senate last Tuesday, Oct. 24, voted to overturn the CFPB’s final rule on arbitration by a vote of 51-50, with a tie-breaking vote cast by Vice President Mike Pence. The Senate followed action taken by the House in July to exercise their authority under the Congressional Review Act to reject the new federal regulation within 60 legislative days of its enactment. U.S. Sens. Bob Corker and Lamar Alexander voted to overturn the arbitration rule.

Once President Trump signs the resolution, as expected, the action by the Senate will stop the rule from taking effect and prevent government agencies from issuing any similar rule in the future.

The vote comes after months of advocacy by the TBA and other industry groups to overturn the rule that essentially banned use of mandatory arbitration agreements, which would have imposed significant costs on consumers and banks while providing a windfall to plaintiffs’ attorneys.

Universal Loans Applications Will Include Language Preference Question

The FHFA announced that it will include a language preference question on its updated Universal Residential Loan Application. The question will allow borrowers to specify if they wish to communicate in a language other than English and identify their preferred language.

The new URLA form, which the FHFA plans to issue later this year, will go into effect in July 2019 and will be mandatory for loans by Fannie Mae and Freddie Mac beginning in February 2020.

In response to serious concerns raised by the banking industry about legal risks that such a question could pose for lenders, FHFA included additional disclosure language intended to inform borrowers that their loan transaction is likely to be conducted in English and that communications may not be available in their language of choice. The text also states that the language designation is for information collection purposes only and is not intended to create an expectation that the lender will proceed with the transaction in the borrower’s preferred language.

Dave Ramsey Recommends Credit Unions Over Banks

In his nationally syndicated column last week Dave Ramsey argued that credit unions pay better rates than banks because they return their earnings to their customers. He went on to say that “banks…say (credit unions) have an unfair advantage because of their nonprofit status. This isn’t true. Credit unions, with whatever “profits” are made, put that money right back into cheaper checking accounts, better interest rates on loans, or higher interest rates on savings. A bank could do the same thing, if it were willing to make less profit. So there’s no disadvantage.”

Ramsey fails to acknowledge that credit unions don’t pay taxes and the advantage that provides. He also fails to acknowledge federal credit unions, the FDIC, and the Federal Reserve are the only non-profits not required to file a 990 to disclose executive compensation. With the Eastman Credit Union CEO making over $10 million per year, not everything is going back to the consumer. With many Tennessee banks working with Dave Ramsey's financial education programs, it should be noted his lack of knowledge regarding our industry.

Learn the Most Current Information Regarding Call Reports

The instructions and requirements for the Federal Call Report change frequently, with revisions occurring nearly every quarter. This seminar, produced in partnership with TBA and Crowe Horwath LLP, will familiarize participants with the details of recent changes. In addition, this seminar will serve as a refresher course for the Call Report preparation and address related accounting principles and regulatory issues that affect the preparation of the Call Report. Participants will receive a detailed review of the most commonly prepared Call Report schedules, and each participant will have an opportunity to review and revisit the entire Call Report preparation process.

Make plans to join us Nov. 28 at the TBA Barrett Training Center in Nashville.

Register now and save.

Individual Retirement Accounts: Advanced Update and Review

This advanced IRA workshop will cover changing regulations, rules, and detailed explanations of the more technical areas of IRAs. This intermediate-level seminar will explain the most up-to-date changes, including Health Savings Accounts and non-spouse beneficiary rollovers from Qualified Plans. You also will learn to include in your IRA customer files.

You will get the answers to these and many more common questions.

  • What are the legislative updates for 2017 and 2018?
  • How do you report Qualified Charitable Distributions on the 1099-R?
  • What is the three-piece puzzle to solve regarding rollovers and transfers?
  • What is a "late rollover" and when can this exception be used?
  • What are the nine–yes–nine biggest mistakes we make on beneficiary payouts?

This regional seminar takes place Nov. 28 in Knoxville, Nov. 29 in Nashville, and Nov. 30 in Jackson.

Click here to register.

Learn About Evolve Through the Recorded Webinar Demo

Last month TBA hosted an introductory webinar to our newest endorsed product, Evolve, for in-house, web-based evaluations. In addition to a demonstration of the platform, company principles Jason Bennett and Eric Collinsworth covered the minimum requirements of an evaluation, provided an in-depth overview of when use of an evaluation is allowed, and the proper qualifications of the evaluator. Click here to view the recorded webinar. For more information about implementing Evolve at your bank contact Eric Collinsworth.

Welcome New TBA Associate Member

TBA welcomes new associate member Sentry Advisors, LLC, in the category of compliance services. Please thank this company for their support of the Tennessee banking industry through membership. When evaluating vendor partners review the list of all TBA associate members in our online directory.

TBA On the Road

  • The Bank Lawyers Committee meets in Nashville to discuss and preview 2018 state legislative issues. Contact Amy Heaslet for information about joining the committee.

See where TBA goes while "on the road" by following @TNBankers.