Tennessee Bankers

This Week Newsletter

June 12, 2017 - Issue No. 1723

Lee M. Moss Installed as 2017-2018 TBA Chairman

Delegates to the 127th Annual Meeting of the Tennessee Bankers Association, held last week at The Ritz-Carlton, Naples Fla., elected new officers and directors during the Tuesday evening banquet. The bankers join existing board members to guide the association in 2017-2018.

Lee M. Moss, president, Franklin Synergy Bank, Murfreesboro/Franklin, was installed as the new chairman of the TBA, accepting the gavel from 2016-2017 chairman, Gordon Majors, president and CEO, The Hardin County Bank, Savannah. Majors will continue to serve for three years in his capacity as a past chairman.
Executive officers elected for 2017-2018 are:

  • Chairman—Lee M. Moss, president, Franklin Synergy Bank, Murfreesboro/Franklin
  • Chairman-elect—John Muse, chairman, president and CEO, Farmers State Bank, Mountain City
  • Vice Chairman—R. Molitor Ford, Jr., vice chairman and CEO, Commercial Bank & Trust Co., Memphis

Delegates to the convention also elected directors from each of the three grand divisions of the state to serve three-year terms on the TBA board. New directors are:

  • East Tennessee Director—Brandon Hull, president/CEO, Greeneville Federal Bank, Greeneville
  • Middle Tennessee Director—DeVan Ard, president/CEO, Reliant Bank, Brentwood
  • West Tennessee Director—Andrea Browning, CEO, Centennial Bank, Trezevant

Congratulations to these bankers!
More than 680 members of the state's banking industry, associate members, and their guests attended the convention. Click here to see a photo recap, and mark your calendars to attend the 128th Annual Meeting June 17-19 at The Broadmoor, Colorado Springs, CO.

June 14 Early Registration Deadline for The Southeastern School of Banking

The Southeastern School of Banking (TSSB) has served bankers since its organization in 1939 with a 70-hour intermediate-level curriculum focused on critical banking functions, their interrelationships, and determinants of profitability. TSSB is an intensive general banking school, held at Belmont University, that consists of dual one-week resident sessions over two years. The early registration deadline is June 14. Click here to sign up. Invest in your bank's future by enrolling qualified candidates in this year's session.

House Passes Financial Choice Act

The House last Thursday, June 8, passed Financial Services Committee Chairman Jeb Hensarling's 600-page bill, The Financial Choice Act, aimed to bring regulatory relief to community banks. The legislation passed along a mostly party line vote of 233 to 186. All seven of Tennessee's Republican Congressmen voted for the measure, while Democrat Reps. Cohen and Cooper voted against.
The bill includes a number of regulatory relief provisions long sought by the banking industry, including a Qualified Mortgage safe harbor for mortgage loans held in portfolio, tailored supervision based on an institution's risk profile and business model, relief from various reporting requirements, and repeal of the Volcker Rule.

Included in the bill is a "regulatory off-ramp" for larger institutions subject to heightened prudential standards and Basel III's capital and liquidity standards, provided those institutions elect to maintain a 10 percent non-risk weighted leverage ratio.

The bill would also rename the CFPB as the Consumer Law Enforcement Agency and strip it of its examination powers and "UDAAP" enforcement authority. The agency would be led by a single director removable at will by the president, and subject to the congressional appropriations process.
The fight for regulatory relief now shifts to the Senate, which is developing its own version of regulatory relief legislation.

OCC Addresses Bank Collaboration, Fintech in Vendor Risk FAQs

The OCC last week issued a set of frequently asked questions to help bankers implement the agency's 2013 guidance on managing risk associated with third-party relationships. The FAQs address several topics, including collaboration with other banks and partnerships with fintech providers.

The FAQs make clear that relationships with fintech firms are covered under the 2013 guidance, although they may or may not qualify as a "critical activity" requiring "more comprehensive and rigorous management."
The FAQs also address access to technology service providers' regulatory exam reports, marketplace lending, mobile payments, partnering with fintech firms to serve the underbanked, reviews of fourth-party risk, and more. Read the FAQs.

FDIC Adopts Supervisory Guidance on Model Risk Management

The FDIC last week announced that it is adopting the supervisory guidance on managing "model risk" that was previously issued by the Federal Reserve and the OCC in 2011. The guidance addresses the potential for damage when models play a material role in bank decision-making. The FDIC said the guidance is "not expected" to apply to banks with less than $1 billion in assets unless "the institution's model use is significant, complex, or poses elevated risk to the institution."

The guidance describes risk management practices related to model use, including effectively challenging models through model validation, strong governance, internal audit coverage and clear internal policies and documentation. It also addresses how to incorporate third-party vendor models into the institution's overall risk management framework, and it advises banks to watch for whether model use can increase consumer compliance or fair lending risk. Read the FDIC statement. Read the supervisory guidance.

OCC Issues Updated Procedures for Termination of Federal Charters

The OCC last Tuesday issued a revised booklet on the termination of federal bank charters as part of its Comptroller's Handbook. The booklet provides updated termination procedures and regulatory requirements that banks must adhere to when terminating a charter either through a merger, conversion or liquidation. Download the booklet.

Trump to Nominate Former Bank CEO as Comptroller of the Currency

The White House announced last week that President Trump would nominate former bank CEO Joseph Otting to serve as comptroller of the currency. Otting is a former president and CEO of California-based OneWest Bank, where he worked closely with the current Treasury Secretary Steven Mnuchin.

Otting served as president and CEO of OneWest following the 2009 purchase of failed thrift IndyMac by the investor group led by Mnuchin. He left OneWest in 2015 following the bank's acquisition by CIT Group. Previously, Otting held senior roles at U.S. Bank, N.A., and management roles at MUFG Union Bank and Bank of America.

Upon confirmation, Otting would replace acting comptroller Keith Noreika, who took over the OCC upon the end of former Comptroller Thomas Curry's five-year term in April.

Welcome TBA Associate Member

TBA welcomes new associate member Q2 Software, Inc in the category of electronic banking services. Please thank this company for their support of the Tennessee banking industry through membership. When evaluating vendor partners review the list of all TBA associate members in our online directory.

TBA On the Road

  • TBA's Stacey Langford visits members in Middle Tennessee.
See where TBA goes while "on the road" by following @TNBankers.