Tennessee Bankers

This Week Newsletter

June 20, 2016 - Issue No. 1625

CFPB Hosts Banker Roundtable in Memphis

More than 30 bankers attended a CFPB roundtable in Memphis June 10. The meeting, led by the CFPB's Acting Deputy Director, David Silberman, and Deputy Assistant Director, Office of Financial Institutions, Jennifer Stockett, was an open discussion of top issues for bankers.

Attendees focused on CFPB rules and initiatives on arbitration, small dollar loans, and overdraft programs as well the potential harm with a future rule on collecting HMDA-like data for small business lending. Bankers also encouraged the bureau on the need to avoid unintended consequences while doing thorough research and taking into consideration banker feedback prior to issuing rules.

Commissioner Gonzales of the Tennessee Department of Financial Institutions also attended and spoke briefly about the need to fill the void left if payday lenders exit that market upon the CFPB's small-dollar loan rule taking effect. TBA is collecting information from Tennessee bankers on current small-dollar lending practices that are effective and bankers concerns with entering that space in the current environment. If you would like to provide any feedback on this, please email Amy Heaslet at the TBA office.  

FASB Issues Final Loan Loss Accounting Standard

FASB last Thursday, June 16, issued its new loan loss accounting framework, also known as the current expected credit loss model. Bank regulators have described CECL as the "biggest change to bank accounting ever."

CECL effectively requires bankers to record, at the time of origination, credit losses expected throughout the life of the asset portfolio on loans and held-to-maturity securities. This is in contrast to today's "incurred loss" accounting, under which losses are recorded when it is probable that a loss event has occurred. CECL is expected to increase the allowance for loan and leases losses throughout the industry and will require significant operational changes at banks, including collecting and analyzing the type of data that supports the modeling of the life-of-loan loss expectation, as well as forecasting and quantifying losses in the future. The new proposal will take effect in 2020 for SEC registrants and 2021 for all others. Click here to read the standard.


In light of this news, TBA will host a webinar titled "Current Expected Credit Losses (CECL) Model" on July 26. Early registration deadline is July 19. Click here to sign up.

House Bill Introduced to Repeal Durbin Amendment

Rep. Randy Neugebauer (R-TX) last Tuesday, June 14, introduced H.R. 5456, a bill that would repeal Dodd-Frank's Durbin Amendment, which caps debit interchange fees charged by institutions with $10 billion or more in assets. Neugebauer noted that as a result of the Durbin Amendment, some banks reduced their free checking account offerings, increased account fees, and instituted higher minimum balance requirements. 

House Panel Passes Bill Protecting Elder Abuse Reporters

The House Financial Services Committee unanimously passed a bill last Thursday, June 16, creating a safe harbor for banks and their employees who report suspected elder financial abuse to authorities. The safe harbor would protect financial professionals who have received relevant training from civil and administrative actions so long as the reports of abuse were made in good faith and with reasonable care. The bill would provide similar protection for institutions.


Elder abuse has also become a hot topic at the state legislature.  During the 2016 legislative session, the Tennessee Commission on Aging and Disability passed a resolution to require all interested parties to study elder abuse over the summer. TBA is now asking bankers what you are currently doing to protect your customers from financial abuse, examples of how you have prevented financial abuse, and any policies or procedures your bank has in place in the area. Please send any information to Amy Heaslet.

House Speaker Introduces Reg Reform Plan

House Speaker Paul Ryan (R-WI) last Tuesday, June 14, proposed a regulatory overhaul that contains several reforms to financial services regulations. The third plank in Ryan "Better Way" agenda includes reforming the CFPB, easing mortgage rules on portfolio loans, tailoring banking regulations, and enhancing community bank and thrift access to capital. 

Speaker Ryan's plan aligns with House Financial Services Committee Chairman Jeb Hensarling's recently released Financial CHOICE Act agenda. Click here to read more about Ryan's reg reform plan.

OCC Extends Servicemember Foreclosure Protections

The OCC issued a bulletin on the temporary extension of certain protections for military personnel under the Servicemember Civil Relief Act. The Foreclosure Relief and Extension for Servicemembers Act of 2015, which passed earlier this year, restored to a full year foreclosure protections for military personnel leaving active duty.

The temporary extension of SCRA foreclosure protections expires on Dec. 31, 2017. The one year of protection reverts back to 90 days at the beginning of 2018.

CFPB Updates eRegulations Tool, Plans Webinar

The Consumer Financial Protection Bureau recently updated its eRegulations platform to include Regulations C (HMDA), X (RESPA), and DD (Truth in Savings). The CFPB also updated Regulation Z (Truth in Lending) on the eRegulations platform to include all of the amendments made to the regulation through March 2016.

The CFPB is hosting a webinar at 2 p.m. (Eastern time) Wednesday, June 22, on the eRegulations updates. Access eRegulations Tool. Register for Webinar. 

Annual Meeting in Pictures

Earlier this month, over 650 Tennessee bankers, directors, industry partners, and their families joined TBA for a successful 126th Annual Meeting in Charleston, SC. Relive the activities of the event in our online photo gallery. Save the date and make plans to join TBA Chairman Gordon Majors for the 127th Annual Meeting June 4-6 at The Ritz-Carlton, Naples, FL.

Two Webinars Covering The Military Lending Act Rule Changes

Effective October 3, 2016, the Military Lending Act (MLA) will expand its coverage. This will require substantial changes to loan operations. For example, the Military Lending Act's requirements are completely different from the requirements of the Servicemembers Civil Relief Act (SCRA). The penalties for a violation of the MLA are severe—damages of not less than $500 per violation, plus punitive damages, and attorney fees.


The two webinars below address this topic. If you can't wait for the August webinar, you can still order the one from last year. The material from last year is still accurate and will help you prepare. The upcoming August webinar will also be beneficial because there has been more time to understand and interpret the new rules.

Complying with Final Military Lending Act Rule Changes Effective October 3, 2016—Available August 25

SHCPFoundation is now CRA Partners

The Senior Housing Crime Prevention Foundation, a trusted brand for over 15 years and endorsed partner of the TBA, has provided protection and an enhanced quality of life for vulnerable senior housing residents through a turnkey CRA compliance solution for community focused banks. Now, as CRA Partners, they have a new name and a new look but the same meaningful mission. 

Funded exclusively by the banking industry, there are currently 225 bank partners who have purchased collateral on behalf of our programs that have made a cumulative positive community impact of $350 million to low- and moderate-income communities. It is hard to overstate the transformative effect a bank can have on the lives of seniors by removing the fear of theft and neglect from their lives while also earning CRA credit for your bank. For more information email Brad Barrett, or call 615-491-2428.

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TBA On the Road

  • The Financial PSI board of directors meets in Nashville for their quarterly meeting.