Tennessee Bankers

This Week Newsletter

January 19, 2016 - Issue No. 1603

Fast-Paced Session Underway

With the commencement of the second half of the 109th General Assembly last Tuesday, the halls of the legislature are buzzing as lobbyists and legislators ready themselves for what is expected to be an expedited session. This marks a relatively significant change from past years where the first few weeks of session got off to a relatively slow start. But with the bill filing deadline set for Thursday, January 21, and the Senate recently announcing a target adjournment date of April 11, everyone at the Capitol hit the ground running. TBA is no exception.

We will report on bills of interest throughout the session. You can also receive more detailed updates on banking-related bills by participating in TBA's bi-weekly legislative update conference calls. The next call is scheduled for Friday, January 22. Please contact Amy Heaslet if you would like to join the calls.

TBA Legislative Priority Issues

The Association expects to file only one bill on its legislative agenda, which will increase the amount of a check a bank may negotiate on a decedent's account from $2,500 to $15,000 when no estate is open or the estate has been closed. TBA's government relations team does not expect any pushback on this legislation and will spend the bulk of their time during session playing defense.
A priority bill TBA will oppose would authorize local governments to create special districts to enact property assessed clean energy (PACE) programs.  The legislation is expected to be brought by a California for-profit company that would act as a third-party administrator of PACE loans made to owners of commercial and residential real property to make energy efficient improvements. TBA's core concern with the measure is that it would put local governments in the lending business by allowing them to use their bonding authority to finance these PACE loans.
TBA also plans to remove the statutory authority for HOA super-priority liens and, instead, provide that should a lender foreclose on an HOA-property, the HOA should have a six-month payment priority of dues. This "fix" comes after recent FHFA guidance expressed strong concerns with state laws that threaten the first-lien status of loans owned or guaranteed by Fannie Mae and Freddie Mac. The Association will include a provision making this change in a broader HOA reform bill but, if necessary, will pass its own stand-alone bill.

FHFA Issues Final FHLB Membership Rule

The Federal Housing Finance Agency last Tuesday, January 12, issued its final rule changing eligibility for membership in the Federal Home Loan Bank system. In a win for the banking industry, the FHFA did not include a controversial provision requiring all FHLB members to hold at least one percent of assets in home mortgage loans and larger members to have at least 10 percent of assets in residential mortgage loans on an ongoing basis.

The final rule did include restrictions on "captive insurance" companies' membership in the FHLB system, but it does appear to allow entities that are otherwise eligible for membership to retain membership in the system. Read the final rule.

CFPB Seeks Feedback on Correcting HMDA Data Submissions

The CFPB is requesting feedback on its guidelines for when banks must resubmit erroneous Home Mortgage Disclosure Act data.

Under its final HMDA rule in October 2015 expanding the categories of data collected, the CFPB required lenders to resubmit data if errors exceeded certain percentages of the HMDA loan/application register or certain percentages of entries within an individual data field. The percentages vary based on the number of loans institutions report.

The bureau is collecting feedback on whether it should continue to use error percentage thresholds, how these thresholds should be calculated and differentiated, and whether it should require different thresholds for institutions with lower volume. It also is seeking additional comments on the bureau's HMDA review and error correction procedures. Comments will be due 60 days after the request is published in the Federal Register. Click here to read the request for information.

Fed Pays $117 Billion to Treasury

The Federal Reserve System paid $97.7 billion out of its annual net income to the U.S. Treasury in 2015, according to figures released last week. The payments remain elevated from previous years, rising from $47.4 billion in 2009 and $79.6 billion in 2013.

The Federal Reserve transferred an additional $19.3 billion to the Treasury under the highway bill provision in December that tapped the regional Fed banks' capital surplus in excess of $10 billion to pay for transportation spending.

The revenue driving Fed profits largely comes from interest income on securities purchased through the system's open market operations. The Fed banks' net income in 2015 was estimated at $100.2 billion; Treasury payments are calculated after the costs of operations, dividends, and other expenses. 

Day on the Hill Scheduled for March 8

Day on the Hill is an annual advocacy event hosted by the TBA Young Bankers Division, providing a valuable opportunity for bankers from across the state to engage in the legislative process. Participants will spend the day at the state capitol in Nashville and hear from members of the General Assembly and the TBA government relations team about current issues before the legislature, Tennessee's legislative process, and the role of TBA and bankers in producing positive legislative outcomes for the banking industry. Attendees have the opportunity to observe committee meetings and participate in group or individual visits with their legislators.

Day on the Hill can serve as an introduction to the legislative process or an opportunity for regular participants to reinforce their relationships with elected officials. Breakfast and lunch is provided, with the luncheon panel sponsored and hosted by Bone McAllester Norton PLLC. Click here to register.

Call for Young Bankers Board Member Applications

The success of the Young Bankers Division can be measured through the many leaders in the banking industry, local communities across the state, and the Association itself who are products of these efforts. The leadership of this division is critical to its strength and growth as the Young Bankers Division works to engage more banks and bankers from across the state and provide value-added programming throughout the year. 
Each year, the YB Board nominates one new director from each of the grand divisions and a vice chairman, this year from East Tennessee, who will proceed through the chairs to president. If you are interested in serving on this board, please submit the Young Bankers Board of Directors Application form to Stacey Langford by Friday, February 19. The application includes more detail as to the commitment involved with board service. Please contact Stacey Langford or a member of the current Board of Directors with any questions. 

Omni Hotel Room Block Sold Out for Credit Conference

This year's TBA Credit Conference will be held February 25-26 - just six weeks away. Thanks to the work of the Credit Committee, we are on pace for another year of record attendance. As a result, we have filled our room block of $209 per night at the Omni Nashville. We have contracted with the Hampton Inn and Suites (across the street from the Omni at 310 Fourth Avenue South) for an additional 80 rooms at a rate of $199 per night. You can book your room by clicking here. These will be available until January 25 or until the room block has sold out.

Additionally, TBA has a corporate rate of $179 available at the Hampton Inn and Suites Vanderbilt-Elliston Place (2330 Elliston Place). These rooms can be reserved by contacting 615-320-6060 and asking for the Tennessee Bankers Association corporate rate.

If you have not yet registered for the Credit Conference, you can do so by clicking here. If you have any questions, please email Susan Taylor.

Welcome New Associate Members

TBA welcomes new associate members BDO, an accounting firm, and CEIS Review, Inc, a consultanting firm. Please thank these companies for their support of the Tennessee banking industry through membership and learn more about all of TBA's associate members in our online directory.

TBA On the Road

  • Senior Lenders travel to Nashville for their first Forum session of 2016.

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

@TNBankers or  #TBAontheroad