Tennessee Bankers

This Week Newsletter

October 03, 2016 - Issue No. 1640

Bipartisan Liquidity Definition Bill Introduced in Senate

Sens. Mike Rounds (R-SD), Mark Warner (D-VA) and Chuck Schumer (D-NY) last Tuesday, Sept. 27, introduced a bill that would expand the ability of banks to count municipal securities as high-quality liquid assets under the Liquidity Coverage Ratio. The bipartisan bill is similar to a measure that sailed through the House earlier this year.

While the Federal Reserve this spring issued a rule counting certain municipal securities as HQLA the Senate measure would apply to all banking agencies. Due to the role banks play as investors in municipal markets, expansion of the HQLA definition is expected to be beneficial for all banks—not just those covered by the LCR. Read more.

CFPB Issues Notice on New URLA Compliance with Reg B

The CFPB last Wednesday, Sept. 28, issued a notice to creditors that the recently redesigned Uniform Residential Loan Application form—while not required under the Equal Credit Opportunity Act and Regulation B—is compliant with Reg B.

The new URLA may be used starting Jan. 1, 2018. While its use is not required, it was redesigned in part to reflect expanded Home Mortgage Disclosure Act data collections that take effect at the same time. Creditors who use the previous URLA are required to use a supplemental form to comply with Regulation C.

The bureau said that lenders may, at their option, permit borrowers or applicants to self-identify with disaggregated ethnic and racial categories starting in 2017, but noted that this collection is not mandatory until 2018. Read more.

Fed to Ease Capital Planning Requirements for Banks Under $250B

The Federal Reserve last Monday, Sept. 26, released a proposed rule that would exempt many regional banks from the complex qualitative requirements of its annual Comprehensive Capital Analysis and Review (CCAR) process. The rule would apply starting in 2017 to banks with assets between $50 billion and $250 billion without significant international or nonbank activity.

The Fed is considering a future proposal to replace the existing 2.5 percent countercyclical capital buffer with a "stress capital buffer" as part of the CCAR process. The SCB would be at least 2.5 percent but would vary to match the maximum decline in a firm's common equity tier 1 capital ratio under the stress test's "severely adverse" scenario, with significant increases in capital anticipated for the eight U.S. institutions designated as global systemically important banks. Read the proposed rule.

TN Supreme Court Grants Review of Tenancy by the Entireties Case

On Sept. 23, the Tennessee Supreme Court granted review of the case In re Estate of Calvert Hugh Fletcher, which raises the issue: Do funds invested from marital property by one spouse remain marital property? 
The case arose after decedent owned a certificate of deposit before dying and his wife alleged that the funds were derived from a joint marital account and should have been "impressed" as entireties property. The trial court disagreed and held that the CD was property of the estate.
The appellate court, however, reversed and held that the funds in the CD passed to the wife upon the decedent's death. At its most basic, this implies that funds in a marital account cannot be disbursed without the consent or approval of both spouses. 
The decedent's children filed an application to appeal with the Supreme Court, and TBA filed a motion to file an amicus answer in support of their application. TBA will continue to keep members informed of the progress of this case.

NACHA Launches Same-Day ACH

NACHA on Sept. 23 launched Phase 1 of its same-day ACH initiative, which allows for the sending and receiving of ACH credit transactions. All banks are now required to accept same-day ACH transactions and will receive a per-transaction fee for doing so. While originating same-day ACH payments is optional, NACHA said it expects that many banks will opt to begin sending same-day transactions as well.

The next phase of same-day ACH will launch in September 2017 and will introduce faster processing and settling of debit transactions in addition to credit transactions. Read more.

Bank Directors Retreat Scheduled for Oct. 25 and 26

The TBA Bank Directors Retreat, scheduled for October 25 and 26 at the Franklin Marriott Cool Springs, is the ideal way to gather your inside and outside directors and ensure they are current on the many important issues in running a bank in the present-day economic and regulatory environment.

Partnering again with the Tennessee Department of Financial Institutions, this annual program is designed specifically for both inside and outside board members, CEOs, presidents of community banks, and internal auditors. The program addresses the most up-to-date information on directors' responsibilities and the risk involved in serving and continuing to grow your bank.

Register here for the Bank Directors Retreat. The Franklin Marriott  Cool Springs has extended the cutoff date for hotel reservations to October 10. Make your hotel reservation here.

Register for the Independent Bankers Division Convention

Each year, approximately 150 bankers across the state come together for the Independent Bankers Division Convention. This year's convention is scheduled for October 26 and 27 at the Franklin Marriott Cool Springs.

The agenda features an afternoon business session on the first day, featuring Philip K. Smith on "How NOT to Sell Your Bank", followed by a reception for convention participants, as well as a half-day business session on the next day. The second day features Craig Raughton, with Kasasa, on "Online Account Opening", B. Scott Daugherty, with Compliance Alliance, on "Compliance Issues Bank Executives Should Be Aware Of", and Gene Marks, with The Marks Group, on "Clinton vs. Trump: How Each Candidate Would Affect Your Business in the Next Two Years", which should be quite interesting, with the elections only a few weeks away. The agenda also includes the election of new officers.

Register here for the Independent Bankers Division Convention. The Franklin Marriott Cool Springs has extended the cutoff date for hotel reservation to October 10. Make your hotel reservation here.

Compliance Alliance Question of the Week

Q: If the bank sends the 45-day, force-placement notice prior to expiration of the flood insurance policy, does it meet the statutory notice requirements?

A: No—the bank is required to send notice upon determining that the flood insurance policy actually has lapsed in order to meet the statutory requirement. Any notice sent prior to lapse may be sent as a courtesy, but would not satisfy the statutory notice requirement.

Owned by 27 State Bankers Associations, Compliance Alliance provides an all-inclusive compliance solution for banks of all sizes. Membership offers three main areas of support including downloadable documents, a compliance hotline, and review services. Learn more on a free membership demo webinar this Tuesday or Thursday.

Get Certified as a Banking Security Executive, Course Begins October 24

Do you understand management requirements for information security? The CBSE™ course, offered through TBA partner SBS Institute, provides a clear understanding of management requirements for information security and a strategic technology background for future planning. The 10-week, online, self-paced course is instructed by Dr. Kevin Streff, founder of Secure Banking Solutions and Director of the Center for Information Assurance at Dakota State University. The course will cover hot topics in technology, security, and fraud; risk management; policy and procedures; audit programs and governance. Register or learn more here.

TBA On the Road

  • Tennessee Young Bankers gather in Chattanooga, Jackson, and Memphis for Leadership Luncheons.
  • TBA Compliance Conference draws over 150 compliance professionals to Music City.
  • CRA Partners hosts their "Doing Well By Doing Good CRA Bankers Conference" in Nashville at the Gaylord Opryland Hotel and Resort. 

See where TBA goes while "on the road" by following  @TNBankers.

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