Tennessee Bankers

This Week Newsletter

October 31, 2016 - Issue No. 1644

Bankers' Support Setting New BankPac Record

With the election less than 10 days away, TBA's government relations team, with the help of bankers across the state, has concluded another successful election cycle of contributing at the state level to pro-banking candidates. During the 2015-2016 election cycle, TBA State BankPac will have given $340,000 to state parties, candidates, and caucuses. This breaks previous BankPac records and ensures our industry continues to have one of the top contributing business PACs in the state.
Our success at the state level is owed directly to the support of bankers and associate members of TBA. Thank you to everyone who has already contributed to TBA BankPac in 2016. If you have not yet contributed, but would like to make a contribution to TBA State BankPac, please contact Amy Heaslet. For a list of 2016 contributors, click here.

NCUA Finalizes FOM Rule, Proposes Additional Expansions

The National Credit Union Administration board voted Thursday, Oct. 27, to finalize a controversial rule further expanding the already loose fields of membership from which federal credit unions can draw their customers, and proposed a new rule that would remove some of the few remaining FOM restraints.

Under the final rule, FCUs can apply to serve entire geographic regions, so-called "rural districts" up to 1 million people (which include the entirety of Alaska, North Dakota, South Dakota, Vermont and Wyoming), and areas contiguous to their existing service areas. NCUA is also facilitating easier conversions to community charters.

After much vocal opposition from bankers across the industry, NCUA struck from the final rule a provision to allow FCUs to apply to serve entire congressional districts, including at-large districts encompassing entire states, as well as others that would leverage online and mobile banking platforms to allow FCUs to expand their field of membership even without physical proximity.

In the separate proposed rule, NCUA moved to increase the population limits on areas served by FCUs with community charters from 2.5 million to 10 million. In addition, FCUs applying for a community charter would be able to submit a narrative and supporting documentation to demonstrate that a community it proposes to serve qualifies as a "well-defined local community" based on a wide range of criteria. In cases where a statistical area is subdivided into metropolitan divisions, FCUs would be permitted under the rule to designate a portion of the area as its community without regard to division boundaries. Read the final rule.

DOL Publishes Fiduciary Rule FAQs

The Labor Department on Thursday, Oct. 27, issued a series of frequently asked questions on its final rule redefining who counts as a fiduciary under the Employee Retirement Income Security Act and Internal Revenue Code. The FAQs address questions received by DOL from the industry since the rule was issued, and are intended to offer additional clarity about the rule and what institutions must do to comply.

The DOL in question 20 addressed bank networking arrangements with bank-affiliated broker-dealers, stating that they are exempt from coverage under the fiduciary rule and that such arrangements fall within the "hire me" exclusion. Banks have until April 2017 to comply with the Best Interest Contract exemption of the rule and until Jan 1, 2018, to comply with the entire rule. Read the FAQs.

Fed Proposes FINRA as Collector of Treasury Transaction Data

The Federal Reserve said on Oct. 21 that it plans to collect data from banks on secondary market transactions in U.S. Treasury securities and that it is considering the Financial Industry Regulatory Authority as the Fed's collection agent. It said it would seek public comment on the plan.

The proposal is intended to complement FINRA's collection of these transactions by its broker-dealer members, a rule change recently approved by the SEC. Read more.

FHFA Outlines Focus Areas for GSEs in 2017

Providing greater access to credit and affordable housing, supporting underserved markets and addressing language access issues will be key focus areas for Fannie Mae and Freddie Mac in 2017, Federal Housing Finance Agency Director Mel Watt said last Monday, Oct. 24.

In developing its 2017 scorecard for Fannie and Freddie, Watt said that the FHFA will ask the GSEs to intensify their efforts to help "move the access needle safely and soundly" with respect to credit access and homeownership. Watt added that the enterprises would also look for ways to expand access to rental housing, and "to more fully support liquidity in the affordable segment of the multifamily market."

FHFA is also expected to complete by early 2017 its "duty-to-serve" rulemaking, which will require Fannie and Freddie to support manufactured housing, affordable housing preservation, and rural housing markets, Watt said. In addition, the agency plans to continue seeking input from across the industry on how to better serve non-English speaking borrowers. 

Metro Council Amends Ordinance, Removes Hours Restriction on Banks

The Nashville Metro Council passed on Oct. 18 a TBA-advocated amendment to remove restrictions placed on bank hours contained in an ordinance passed in March. That ordinance was designed to include flex lenders—a new category of alternative financial service providers—in zoning restrictions that already included check cashing and title loan stores. The ordinance, however, used hours of operation to differentiate what constitutes an alternative financial service provider and a financial institution, noting that banks are open between 8 a.m. and 6 p.m. weekdays and sometimes 8 a.m. and 1 p.m. Saturdays.
TBA was concerned with this limitation because a bank operating outside of those hours would then be subject to the same zoning restrictions as alternative financial service providers.
After the industry advocated for a change in the ordinance, the Metro Council passed an amendment to remove the hours of operation language and instead replaced it by defining financial institutions as one that is state or federally chartered and whose services are insured by an agency of the United State government.
The new ordinance took effect Oct. 21. Read the amended ordinance.

TBA Independent Division Elects Bill Yoder as Chairman

During the Independent Bankers Division Convention, held in Franklin on Oct. 26-27, new leadership was elected to the Independent Division board of directors. The Convention marked the end of Phillip Renfroe's term as Chairman of the division. Renfroe, Community Bank, Lexington, turned the gavel over to Bill Yoder, Southern Community Bank, Tullahoma
Elected to new officer positions were:

  • Chairman-elect: Ken Jones, Citizens Bank, New Tazewell
  • First Vice Chairman: Philip Calahan, Peoples Bank & Trust Company, Manchester
  • Secretary/Treasurer: Jim Robinson, Heritage Bank and Trust, Columbia

In addition to executive officers, each year convention delegates elect one director from each of the three Grand Divisions of Tennessee to replace three directors who rotate off the board.
New directors elected to the board during this convention were:

  • East Tennessee Director: Adam Robertson, Commercial Bank, Harrogate
  • East Tennessee Director (filling a one year term): Terry Eastwood, First Bank of Tennessee, Spring City
  • Middle Tennessee Director: Keith Hatley, Sumner Bank & Trust, Gallatin
  • West Tennessee Director: John Liddy, Farmers and Merchants Bank, Adamsville

Photo Recap of Bank Directors Retreat; Independent Convention

Last week the Independent Bankers Divison hosted their annual convention and the TDFI/TBA Bank Directors Retreat. Click here to view the photo recap of the Bank Directors Retreat and the Independent Bankers Division Convention. Mark your calendar for these events October 18-20, 2017, hosted at the brand new downtown Westin Nashville.

Early Registration for Consumer and RE Lending Compliance Seminar Extended

The Consumer and Real Estate Lending Compliance Seminar takes place Nov. 14-15 in Knoxville and Nov. 17-18 in Nashville. In this seminar, an overview of the consumer and real estate lending requirements from each regulation is given with a comprehensive coverage of selected topics, policy suggestions, employee training tips, audit techniques, and steps to eliminate past problems. Emphasis is placed on coverage and exemption rules, how to determine the disclosures that are required, their content, and prohibited acts or practices.

Topics include:

  • Truth in Lending Act (Regulation Z)
  • Real Estate Settlement Procedures Act (Regulation X)
  • Equal Credit Opportunity Act (Regulation B)
  • Fair Housing Act
  • Home Mortgage Disclosure Act (Regulation C)

The early registration deadline is Nov. 3. Click here to sign up.

Security Bank and Trust Co. and Reelfoot Bank to Merge

Union City-based Reelfoot Bank, a Reelfoot Bancshares Inc. subsidiary, is merging with Paris-based Security Bank and Trust Company. The merger is expected to close before the end of the first quarter of 2017, following the receipt of regulatory and shareholder approvals, according to the report. As of June 30, Security Bank had $202.4 million in assets and Reelfoot Bank had $153.4 million in assets. The combined entity will be headquartered in Paris.

TBA On the Road

  • Bankers gather in Nashville for the Trust & Wealth Management Conference.
  • Stacey Langford is visiting Middle Tennessee bankers.

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

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