Tennessee Bankers

This Week Newsletter

February 22, 2016 - Issue No. 1608

House Subcommittee Advances TBA Legislation

The House Civil Justice Subcommittee last Wednesday, Feb. 17, passed by voice vote TBA's legislation (HB 1894) to increase the amount of a check from $2,500 to $15,000 that a bank may negotiate if written to a deceased person where no estate is open or one has already closed. The legislation also increases from $10,000 to $15,000 the amount that a bank may pay from a deceased depositor's account to an executor or creditor for funeral or medical expenses, a surviving spouse or next of kin. The legislation was amended at the request of the committee to allow for those funds to be paid to a creditor for a civil judgment prior to any funds going to a surviving spouse or next of kin.
HB 1894 will be heard by the full Civil Justice Committee on Tuesday.   

NCUA Finalizes Business Lending Rule

The National Credit Union Administration board last Thursday, Feb. 18, voted to finalize significantly looser limits on business lending by credit unions. Among other things, the final rule exempts participations in loans to non-members from the statutory 12.25 percent member business lending cap. It also eliminates explicit loan-to-value requirements, aggregate limits on construction and development loans, and the requirement of a personal guarantee.

"I am disappointed to see that once again the NCUA has disregarded its regulatory responsibilities in order to serve as a cheerleader for the credit union industry," TBA President Collin Barrett said. "However, actions like this do not come without consequences. The NCUA is making the banking industry's case as it shines a spotlight on the credit union industry's growth and tax exemption. As the NCUA skirts its Congressional mandate, we will continue to engage the Tennessee Congressional delegation."

FDIC Proposes Deposit Account Recordkeeping Rule

The FDIC last Wednesday, Feb. 17, issued a proposed rule that would require banks with more than 2 million deposit accounts to upgrade their deposit recordkeeping systems to facilitate the determination of FDIC insured deposits in the event of a bank failure. The FDIC would use the failing bank's systems, data and staff to calculate the insured and uninsured amounts for each depositor and place holds on portions of uninsured deposits.

The proposal, which would affect 36 of the nation's largest institutions, would require the banks to collect and maintain more depositor information, and make changes to information systems so that prompt and accurate determinations could be made regarding FDIC insurance.

The FDIC will accept comments on the proposal for 90 days after publication in the Federal Register. Read more.

CFPB Requests Comments on Rural Area Designation Application Proposal

The CFPB last Thursday, Feb. 18, invited comments on new agency procedures by which businesses can appeal the CFPB's designation of a rural or underserved area.

The Dodd-Frank Act gave the CFPB discretionary authority to exempt certain loans from the qualified mortgage rule for banks serving areas that it deems "rural" or "underserved." Given the CFPB's struggle to appropriately define what constitutes rural or underserved, and the significant impact that the designation, or lack thereof, can have on small lenders and their customers, the industry urged Congress to require a formal process by which banks can appeal for rural or underserved status.

Since Congress imposed a 90-day deadline to institute the new appeals process, the CFPB plans to issue enabling procedural rules by March 3. The CFPB will accept comments for 60 days after the notice is published in the Federal Register. Read more.

OCC Issues Revised Installment Lending, Risk Management Booklets

The OCC issued updates to the "Installment Lending" and "Country Risk Management" sections of its Comptroller's Handbook. The "Installment Lending" revisions include updated administrative and assessment guidance associated with installment lending activities and risk management and rescinds an earlier OCC bulletin on retail lending interim examination procedures.

The "Country Risk Management" portion of the Handbook was revised to provide updated guidance and examination procedures, including more in-depth discussion of the effects of country risk, cross-border risk and sovereign risk, and an expanded sample request letter. Additionally, it incorporates lessons learned from both the financial crisis and European debt crisis.

Read the updated installment guidance.
Read the updated country risk management guidance.

TDFI and TEMA Plan Emergency Exercise

The Tennessee Emergency Management Agency (TEMA) is preparing to conduct a state-wide exercise on June 23, 2016. This exercise will include several large events occurring across the state on the same day. Therefore, bankers have the opportunity to exercise their Emergency Response Plan (business disaster response plan or Continuity of Operations Plan) and communication abilities when the entire state is impacted. Bankers can determine at what level their institution would like to participate, whether that be simply exercising your phone tree to staff, a table top exercise or a full scale exercise involving off-site testing.

There will be an additional exercise on June 24 that will test ways that banks can establish a business location, obtain cash, tend to ATMs and more. If you are interested in signing up or learning more, please contact Gina Tarolli at gina.tarolli@tn.gov by Feb. 29. For additional information, please contact Tod Trulove at 615-741-5064.

Compliance Alliance Question of the Week

Q: Will the bank lose its exempt status as a small creditor under the HPML escrow rule as a result of being required to escrow for flood insurance?
A: Yes. The small creditor exemption in the HPML escrow rule requires, among other things, that the bank, together with its affiliates, does not escrow for any mortgage it or its affiliates currently services (with two unrelated exceptions). If the bank is required to escrow for flood insurance on even one of its loans, it will fail to meet this requirement.

Not a Compliance Alliance member? Learn more about membership with Compliance Alliance by attending one of our live demos Tuesday, Feb. 23, 10 a.m. CT or Thursday, Feb. 25,  1 p.m. CT.

Limited Space Available for The Southeastern School of Consumer Credit

If you have an employee who needs training in the retail function of your bank, time is running out to enroll them in The Southeastern School of Consumer Credit (TSSCC). This intermediate-level, one-week school is designed to increase knowledge of consumer lending as a retail banking function and a source of bank income. TSSCC convenes on Sunday, March 6, in Nashville, and runs through Friday morning, March 11. Because of pre-school requirements, TBA will accept applications until Friday, Feb. 26. Click here to learn more and register.

Early Registration Deadline for Human Resources Conference Approaching

The March 15 early registration deadline for the annual Human Resources Conference is quickly approaching. This Conference, designed for HR professionals and support staff, branch managers, and supervisory personnel, covers HR compliance subjects and addresses the current topics and management issues. HR professionals from across the state network with peers and find solutions to their common problems. 
This year's Conference covers multi-generational issues: a legal update; HR 101 – Back to Basics, for new HR personnel; social network issues; wage and hour issues; new protections for LGBT workers and accommodations for transgender employees; preparing for unexpected experiences, from international terrorism to domestic violence to other workplace violence challenges; and an interactive session on "The Disaster Experience," where attendees will break into groups to work through an actual disaster scenario and how to respond. The Human Resources Conference is scheduled for March 29 and 30, at the Embassy Suites and Conference Center in Murfreesboro. Click here to register.

Welcome New Associate Member

TBA welcomes new associate member Praesidio, Seattle, WA, in the category of security services.  Please thank this company for their support of the Tennessee banking industry through membership and learn more about all of TBA's associate members in our online directory.

Submit Your Bank's Community Involvement, News, and Promotions to TBA

We want to know the latest news about your bank for possible inclusion in The Tennessee Banker magazine. Please submit text and photos to Tyler Nelson about the following items: 

  • Job promotion announcements
  • Bank celebrates milestone or receives an award
  • Opening a new branch
  • Community involvement

TBA On the Road

  • The TBA Board of Directors meets in Nashville for its quarterly meeting.
  • Bankers convene for the annual Legislative Reception at War Memorial Auditorium.
  • TBA hosts a record number of attendees for Credit Conference 2016.

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

@TNBankers or  #TBAontheroad

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