Tennessee Bankers

This Week Newsletter

April 10, 2017 - Issue No. 1714

Congressman Kustoff Presses CFPB Director Cordray on Lack of Checks and Balances

In a Financial Services Committee hearing on Tuesday, Congressman David Kustoff (TN-08) questioned CFPB Director Richard Cordray on the structure of the CFPB and their lack of accountability. "Since the CFPB does not rely on any appropriations from Congress to fund its operations, it faces less Congressional oversight than almost any other agency or bureau," said Kustoff. "This inherent lack of accountability creates a cloak of secrecy that contradicts the very nature of the Bureau's commitment to transparency."


Kustoff specifically asked Director Cordray about the CFPB's authorization to prohibit unfair, deceptive, or abusive acts or practices (UDAAP) under the Dodd-Frank Act. For footage of Congressman Kustoff questioning Director Cordray, please click here.

TBA Legislation Advances to Full House; Senate

TBA's legislation cleared their final committee hurdles this week in both the House and Senate and are expected to be voted on by the full chambers in the next 10 days. TBA's elder financial exploitation protection legislation, HB1064/SB1267 by Rep. Kevin Brooks and Sen. Norris, was approved by the House Committee on Consumer and Human Resources by a voice vote of recommendation and Senate Commerce and Labor Committee by a vote of 9-0. View the House Committee discussion video here, by selecting HB1064.


HB772/SB997 by Rep. Hazlewood and Sen. Tracy, which increases the maximum permissible interest rate for banks under the credit card state bank act from 21-30 percent, was approved by the House Insurance & Banking Committee by a voice vote and by the Senate Commerce and Labor Committee 8-0. TBA General Counsel Tim Amos testified on both bills, view the committee discussion here by selecting HB772.

TBA Legislative Call Change of Date

The bi-weekly legislative call of the TBA Government Relations Committee originally scheduled for Friday, April 14, has been rescheduled to Thursday, April 13 at 2:30 CT/3:30 ET. To participate in the call, contact Penny Powlas.

Several Committees Close as General Assembly Pushes Towards Adjournment

With the exception of the relevant finance committees where the budget bills will be heard along with bills with a fiscal impact that are heard after the passage of the budget, most Senate committees have closed or will finish this week and most House Subcommittees have closed. This is an important deadline and serves to narrow the number of bills that are eligible for passage this session. Bills that aren't placed on a committee calendar to date are essentially dead for the session, including several that TBA had on our watch list for their possible negative impact to the industry. With the budget and several of the Governor's priority initiatives including the gas tax and broadband legislation still in play, an adjournment date is still a moving target with the Senate indicating they could conclude their business by May 4 and the House signaling it would be closer to May 12. The Senate has been passing bills in a more expedited fashion with 149 bills gaining approval of that chamber to date and only 60 passing through the full House.

Congressmen Introduce Bill Subjecting PACE Loans to Consumer Protections

Sens. Tom Cotton (R-Ark.), Marco Rubio (R-Fla.) and John Boozman (R-Ark.) and Reps. Brad Sherman (D-Calif.) and Ed Royce (R-Calif.) have introduced legislation subjecting PACE (Property Assessed Clean Energy) loan originators and sales personnel to Truth in Lending Act requirements, enhancing pre-origination disclosures of total loan amounts and loan terms, and bringing the loans explicitly under the oversight of the CFPB.


While TBA has been successful in preventing PACE-enacting legislation from getting any traction here the last several years, more than 30 states allow PACE loans, which may take a first-lien position over the primary mortgage on a residence. For this reason, the Federal Housing Finance Agency has blocked Fannie Mae and Freddie Mac from buying mortgages for homes with outstanding first-lien PACE loans, limiting home sale options for PACE borrowers, and potentially harming borrowers and lenders who rely on the certainty of the first-lien position on mortgages for affordable financing.

Oral Arguments Heard in Fletcher Case

The Tennessee Supreme Court held oral argument on the In Re Estate of Calvert Hugh Fletcher matter last week in Jackson, in which the Tennessee Bankers Association is an amicus. The questions before the Supreme Court was whether funds in a married couple's joint account titled "joint tenancy with rights of survivorship" were part of a tenancy by the entirety, and, if so, whether the funds ceased to be part of a tenancy by the entirety after they were withdrawn. The Court of Appeals ruled that the funds were part of a tenancy by the entirety and that they continued to be part of a tenancy by the entirety even after withdrawn from the account.  As an offshoot, the Court of Appeals included language in its opinion that implied that a bank did not have a security interest in funds held in a joint account of a married couple. At this time we do not know when the Supreme Court will issue its ruling.   

Streamlined Call Report Available for April 30 Due Date

In an April 4 Financial Institutions Letter, the FDIC released materials for the March 31 call report, due Sunday, April 30. The updated materials include the new FFIEC 051 call report, reduced from 85 to 61 pages for institutions with less than $1 billion in assets. The updated report also excludes approximately 40 percent of the nearly 2,400 data items included in the regular quarterly report.

Identifying Common Mistakes During the Appraisal Compliance Review

TBA's Identifying Common Mistakes During the Appraisal Compliance Review is a one-day, hands-on workshop focusing on the common mistakes that banks need to be aware of when reviewing appraisal reports for minimum compliance with the Interagency Appraisal and Evaluation Guidelines as well as identifying the most recent revisions to USPAP. Several case studies will be conducted in the classroom during the afternoon session. Participants will receive a reference manual with resources and sample appraisal review checklists. The seminar is April 26 at Nashville's TBA Barrett Training Center.

Real Estate Lending Compliance Seminar Set for Two Locations

Attend TBA's Real Estate Compliance Review Seminar for an overview of the real estate lending requirements from each regulation, along with 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, determining which disclosures are required, the content of the required disclosures, and prohibited acts or practices.


Every year major changes appear, and this year is no exception. The integrated disclosure rules, effective  October 3, 2015, continue to evolve with massive proposed changes published in July 2016. Final interagency flood rules were effective, in part on October 1, 2015, with the balance of the requirements effective on January 1, 2016. More recently Private Flood Insurance Rules were proposed on October 31, 2016. Massive revisions to HMDA/Regulation C were published in October 2015, and are effective January 1, 2018. The program and the manual are completely updated for these rules.


The seminar takes place May 1 and 2 at Knoxville's U.T. Conference, and May 3 and 4 at Nashville's TBA Barrett Training Center. Click here to register.

Welcome New Associate Member

TBA welcomes new associate member Porter Keadle Moore in the category of accounting. 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.

Paul Hackett, President of Citizens Bank in Carthage, Passes Away

Paul Hackett, President of Citizens Bank in Carthage, passed away on March 31. Hackett's banking career began at Citizens Bank in 1963, and he became President and CEO in 1984. Paul is survived by his wife Frances, daughter Martha Holladay (Ricky) and granddaughter Elizabeth Blackwell (Patrick) and great granddaughter Caroline Rockwell. Please keep the Hackett family in your prayers. For a full obituary, please click here.

TBA On the Road

  • Past Presidents of the TBA meet for their annual gathering and update on the Association.

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

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