Tennessee Bankers

This Week Newsletter

May 09, 2016 - Issue No. 1619

Call for Bankers to Support Taylor Griffin in NC U.S. House Race

Friends of Traditional Banking (FOTB) is a nonpartisan grassroots effort organized by bankers to identify and support individual candidates who are dedicated to preserving traditional banking.
Currently FOTB is focusing its support on Taylor Griffin who is running in North Carolina's 3rd Congressional district. His opponent is incumbent Walter Jones Jr., the last remaining Republican who voted for Dodd-Frank and the only Republican to vote against HR 3791, a bill that exempts banks under $5 billion in assets from onerous provisions of Dodd-Frank.
Griffin is a friend of traditional banking who recently released the following statement: "...As Congressman, I will work tirelessly for common-sense reforms to the misguided and overly burdensome regulations imposed by Dodd-Frank that are holding back our economy. But, I need your help."
To learn more about Taylor Griffin or make a contribution to his campaign, please visit www.friendsoftraditionalbanking.com.

Bill Would Remove CFPB Enforcement Authority for Abusive Acts

Rep. Blaine Luetkemeyer (R-MO) on April 28 introduced H.R. 5112, the Unfair or Deceptive Acts or Practices Uniformity Act, which would grant the same UDAP enforcement authority on the CFPB that other financial regulators have.

Under the Dodd-Frank Act, the CFPB has authority to take action against "unfair, deceptive or abusive" acts or practices, known as UDAAP. However, the "abusive" standard is not well defined and invites compliance uncertainty and litigation risk.

Luetkemeyer's bill would also require the CFPB to comply with requirements applicable to the Federal Trade Commission when it conducts rulemaking relating to UDAPs in the commercial sphere and to consult with an institution's primary federal regulator before taking UDAP related action.

YBD Elects New Leadership

During the Young Bankers Division's Leadership Convention April 24-26 in Knoxville, members of the division elected new officers and directors to lead the division during 2016-2017. Delegates elected the following bankers to serve as officers:

  • Chairman – Chris Schlueter, FirstBank, Nashville
  • Chairman-elect – Michelle Bing, Reelfoot Bank, Union City
  • Vice Chairman – Josh Lane, TNBANK, Knoxville

In addition to the executive officers, the Young Bankers Division is governed by a nine-member board composed of three directors from each of the three grand divisions of the state—East, Middle, and West. New directors elected to the board during this year's convention were:

  • East Tennessee – Mark Bryan, SouthEast Bank, Farragut
  • Middle Tennessee – Justin Nipper, The Farmers Bank, Portland
  • West Tennessee – Derrick Whitten, The Hardin County Bank, Savannah

Fulfilling one-year of the East Tennessee un-expired term vacated by Josh Lane to join an officer position is Michael J. Saporito, II, Mountain Commerce Bank, Knoxville. View the full listing of the Young Bankers Board of Directors.

CFPB Proposal Would Undermine Benefits of Arbitration

The CFPB last Wednesday, May 4,  released a proposal that would prohibit customers from waiving their ability to participate in class action suits and limit drastically the use of mandatory arbitration agreements for financial products and services. Many banks include mandatory arbitration clauses in their credit card and deposit account agreements in order to manage the unpredictable costs of class action lawsuits.

The proposal also would require institutions that continue to employ arbitration to submit certain claim records and agreements related to ongoing arbitrated disputes to the bureau. The CFPB said it would use the records to monitor arbitration and that it would publish redacted records on its website.
The proposal would apply to all extensions of credit under the Equal Credit Opportunity Act, automobile leases, depository services under the Truth in Savings Act, payments products and services subject to the Electronic Funds Transfer Act, debt settlements, credit reports and debt collection. The proposal would cover depository institutions, nonbank lenders and money transmitters.
The rule would take effect 30 days after the final version is published in the Federal Register, with the rule applying to agreements entered into starting 180 days after the effective date. Click here to read the proposed rule.

Bipartisan House Letter Cautions Treasury on Business Lending

Business lending is fundamentally different from consumer lending, and regulations should not treat them similarly, a bipartisan group of 20 House members told Treasury Secretary Jack Lew in a letter last Tuesday, May 2. Led by Reps. Randy Neugebauer (R-Texas) and Lacy Clay (D-MO), the lawmakers cautioned the Treasury Department not to make any recommendations that would stifle small business credit.

"Most notably, small business entrepreneurs frequently access credit in order to fuel growth and expansion opportunities, many of which are short-term in nature, and therefore the types of credit they require and the characteristics of that credit may differ from that traditionally used by a consumer to buy a house or car," they said.

The House members cited "recent comments by public officials that seem to indicate a preference to regulate lending to small businesses and consumers similarly" and warned that "hastily drawn conclusions in this regard would do a great disservice to American small business owners." Click here to read the letter.

Fed Moves Forward with Executive Compensation Proposal

The Federal Reserve Board last Monday, May 2, voted to re-propose the executive compensation rule mandated by the Dodd-Frank Act, prohibiting incentive-based compensation arrangements for executives that the regulators believe could encourage excessive risk-taking behavior. The NCUA, FDIC, OCC, and FHFA previously released their versions of the proposed rule, and the SEC is expected to do so in the coming weeks.

The proposed rule would apply to banks with more than $1 billion in assets, dividing banks into three "tiers" based on asset size, with the largest banks subject to the most stringent requirements. Banks classified as "Level 1" (more than $250 billion in assets) and "Level 2" ($50 billion to $250 billion) would be required to defer a percentage of qualifying incentive-based compensation for executives and significant risk takers for a specified amount of time. Regulators would have discretion over requirements for Level 3 institutions.

The proposed rule also requires institutions to keep a record of senior executives and risk takers and disclose the incentive-based compensation arrangements of those individuals. In addition the rule includes a "clawback" provision that allows a covered institution to recover vested incentive-based compensation if the executive or risk taker engaged in the behavior was found to have hurt the firm. Click here to read the proposal.

Retail Banking Officer Forum Set for June 1

The Retail Banking Officer Forum provides a platform for retail banking officers to exchange ideas freely and examine pressing issues in today's ever-evolving regulatory, cost-conscience, and productivity-driven environment. The meeting will take place June 1 at the TBA Barrett Training Center in Nashville. It begins at 9 a.m. and ends at 4 p.m. Lunch is included. Contact Debbie Brickles to register.

Associate Member Picnic Planned for May 20

Spring is a great time for a barbeque and TBA takes advantage of the season by hosting a cook-out meet and greet for TBA's Associate Member companies. This complimentary event, Friday, May 20 from 11:30 a.m. – 1:00 p.m., allows us to show our appreciation for our 200+ associate members while offering a chance for these members to get better acquainted with the TBA team. To RSVP your plans to attend, please email Stacey Langford by close of business Monday, May 16.

Trust Company Bank Closed

Tennessee state regulators closed Trust Company Bank in Memphis on Friday, April 30. The Bank of Fayette County, Piperton, assumed all of the failed bank's $20.3 million in deposits and agreed to purchase $3.9 million in assets. The FDIC will retain the remaining assets for later disposition.

Welcome New Associate Member

TBA welcomes new associate member Provident Commercial Finance, LLC in the category of Lending. 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.

TBA On the Road

  • Bankers travel to DC for the TBA Washington Conference.
  • The TBA Board of Directors and Independent Division Board meet.

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

@TNBankers or  #TBAontheroad