Tennessee Bankers

This Week Newsletter

July 18, 2016 - Issue No. 1629

Congressman Duncan Cites TBA Letter, Questions FDIC on Capital Requirements, Reg Burden

The House Committee on Oversight and Government Reform held a hearing last Wednesday, July 13, to examine the decline of de novo banks in recent years and review the FDIC's role in issuing new bank charters and its regulation and supervision of financial institutions. With just seven de novo banks started in the past five years and 1,500 fewer community banks over that period, FDIC Chairman Martin Gruenberg faced a tough line of questioning from committee members.
Congress Jimmy Duncan (R-Knoxville), a member of the committee, cited a letter sent from TBA in preparation of the hearing to question Chairman Gruenberg. "Among the key factors that are...restricting new banks and driving consolidation are the ability to attract...high levels of capital...and...the regulatory burden imposed by the Dodd-Frank, which requires significant resources to be directed simply toward compliance issues," Duncan said. Click here to read TBA's letter. Click here to view Duncan's testimony.

Tailored Regulation Bill Introduced in the Senate

Sen. Mike Rounds (R-SD) last Monday, July 11, introduced the TAILOR Act, which would require financial regulators to consider bank risk profiles and business models before taking regulatory actions. In addition to requiring a tailored approach for future rulemakings, Tipton's bill would require a review of regulations issued in the past six years and a report on how to tailor them better. Regulators would be required to state in notices of proposed rulemaking how they applied the TAILOR Act.

The bill closely resembles the House version of the TAILOR Act by Rep. Scott Tipton (R-CO), which cleared the House Financial Services Committee earlier this year. TBA and other state and national trade associations have strongly advocated for tailored regulation. Click here to read more.

Senators to FHFA: Let Congress Lead on GSE Reform

A bipartisan group of six senators, led by Bob Corker (R-TN) and Mark Warner (D-VA), cautioned FHFA Director Mel Watt that taking steps toward moving Fannie Mae and Freddie Mac out of conservatorship without comprehensive reform would "perpetuate the pre-crisis practice of socializing losses and privatizing gains." The lawmakers added that they hope to re-engage Congress on the issue in the months ahead, and they urged FHFA to take steps in the meantime to protect taxpayers by shifting risk into the private market and winding down Fannie's and Freddie's investment portfolios. Click here to read the senators' letter.

OCC Focusing on Credit, Strategic Risk Leading Issues for Small, Midsize Banks

The OCC is focusing on credit risk and strategic risk as the top risk priorities in its supervision of community and midsize banks, according to the agency's Semiannual Risk Perspective report released last week.

Credit risk has grown throughout the upswing in the economy cycle, which has seen strong loan growth combined with eased underwriting standards as banks compete among themselves and with nonbank lenders for loans. The report noted that credit concentrations have grown at banks of all sizes, particularly in commercial real estate, financial services and energy loans. Supervisors will focus closely on concentration risk management, the OCC said.

The agency raised particular concerns about the "notable and unprecedented growth" in auto lending, with total loan volume growing by 50 percent since 2010. As delinquencies rise and collateral values decrease, the OCC said "some banks' risk management practices have not kept pace with the growth and increasing risk in these portfolios."

Strategic risk remains high as smaller and midsize banks struggle with increased nonbank competition, merger trends, the persistent low-rate environment and governance issues.
For larger banks, the OCC highlighted operational and cybersecurity risks from their large and complex operations, as well as the ongoing challenge of integrating new rules into their compliance management systems. Other top operational and compliance priorities for the next year include BSA compliance, third-party risk management and cybersecurity. Click here to read the report.

The Tennessee Banker Now Available

The July/August edition of The Tennessee Banker is now online and will hit mailboxes soon. We're excited to reveal some new changes to magazine. Along with an updated look on the inside, we've made it easier to read the magazine whether it's on your desktop, tablet, or mobile device. Some of the top stories include:

  • A full recap our 126th Annual Meeting in Charleston, SC.
  • A profile about new TBA Chairman Gordon Majors, whose passion for cars is only rivaled by his passion for banking.
  • A rundown of TBA's trip to Washington DC, where we had productive briefings with government organizations, Tennessee legislators, and more.

Click here to read the digital edition. We hope you enjoy.

Training the Credit Analyst and Basic Consumer Lending Programs

On August 23-26, David L. Kemp, president, Bankers Management, Inc, will be back in Nashville at the TBA Barrett Training Center for two separate programs on lending principles.  
Training the Credit Analyst, which takes place August 23 and 24, gives lenders and analysts the tools required to understand and use financial information provided by borrowers. It is an excellent preparation for attending The Southeastern School of Commercial Lending in May 2017. The early registration deadline for this program is August 9. Click here to register.
Basic Consumer Lending, which takes place August 25 and 26, was developed for those charged with organizing and managing consumer loans. It addresses credit decision-making as well as the human relations aspect of lending. This program is an excellent preparation for those who want to attend The Southeastern School of Consumer Credit in March 2017. The early registration deadline for this program is August 11. Click here to register.

SBS Institute: Certified Banking Security Manager

The SBS Institute: Certified Banking Security Manager seminar equips attendees with the tools and information to be successful in reporting, documenting, and creating proper assessments. Attendees will:

  • Develop an entire information security program framework to take back to their institution
  • Understand how to successfully implement and manage each component of the information security program
  • Boost their knowledge of layered security programs
  • Gain confidence in decision making with comprehensive cybersecurity knowledge
  • Dive into FFIEC cybersecurity guidelines

This seminar, which takes place July 27 and 28 in Nashville, offers an opportunity to work closely with a security expert and network with peers. The deadline to register is July 20. Click here to enroll.

TBA Membership Meetings Kick off August 15

A highlight of the year for the newly elected TBA Chairman and the TBA team is the opportunity to travel across the state to meet with the majority of our members during Membership Meetings. Held this year August 15–19; 24 and 25; we hope that you will make plans to join your chairman, Gordon Majors, for one or more of the meetings that is most convenient for you. In addition to an opportunity to gather with friends and industry partners, the TBA team will review the initiatives that are the present focus of your association. View the dates, locations, and register today.

TBA On the Road

• 92 banker students report to Belmont University for years I and II of The Southeastern School of Banking.