Tennessee Bankers

This Week Newsletter

July 03, 2017 - Issue No. 1726

Fed Gov. Powell Highlights Focal Points for Reg Reform

Federal Reserve Governor Jerome Powell last Monday pointed to several key areas that the Fed is currently focusing on for regulatory reform. Specifically, Powell noted that the Fed will look to simplify and recalibrate existing regulations for small and medium-sized banks, including call report and exam cycle requirements and certain capital rules. The agency is also considering changes to resolution plans, including an extension of the cycle from one year to two years; a reassessment of the Volcker rule; changes to increase the transparency of the stress testing process; and recalibrations to the supplementary leverage ratio.

TBA Legislation, Among Other Laws, Goes into Effect

Of the 524 bills and resolutions approved during the 2017 legislative session and signed by Gov. Bill Haslam, 133 of those took effect July 1. The most talked about law is the IMPROVE Act, which will increase fuel taxes by four cents per gallon and increase by $5 the annual state vehicle registration fee.

TBA's two pieces of legislation for 2017 also took effect July 1. Public Chapter 264, TBA's priority legislation of 2017, will aid banks in combating elder financial exploitation by permitting them to delay suspicious transactions, notify family members of suspected abuse, or refuse to accept a power of attorney.

TBA's other legislation, Public Chapter No. 225, will increase the interest rate under Tennessee's Credit Card State Bank Act from a maximum of 21 percent to 30 percent, effective July 1.

For a complete list of the laws that took effect July 1, click here.

CFPB Issues Guidance on Compliance Dates for Servicing Rule Amendments

The CFPB last week issued policy guidance stating that it does not intend to take supervisory or enforcement action for violations of existing Regulation X or Regulation Z resulting from a servicer's early compliance with the 2016 final servicing rule for a period of three days before the applicable effective dates.

Certain amendments to the rule will take effect on Thursday, Oct. 19, 2017, while others have a compliance date of Thursday, April 19, 2018. Servicers are prohibited from early adoption of some of the 2016 servicing amendments, which further complicates the midweek compliance deadlines. Under the new policy guidance, servicers would be permitted to implement the new rules the Monday before the Thursday effective date. This will allow servicers to update and test their systems over a weekend rather than over a weeknight. Read the guidance.

Agencies Invite Comments on Proposed Call Report Changes

The federal regulatory agencies are requesting public comments on additional revisions to the Call Report, which take effect March 31, 2018. The proposed changes will simplify the Call Report by removing or consolidating a number of existing data items, reducing the reporting frequency for other data items, and increasing certain reporting thresholds.

The agencies also proposed changes to provide greater transparency on the effect of unrealized gains and losses on certain equity investments; revisions that would align the method for determining the past-due status of certain loans and other assets with an accepted industry standard; and revisions that reflect recent changes from FASB. Read the request for comments.

TSSB Alumni Reception is July 17

Make plans to join TBA for The Southeastern School of Banking Alumni Night Reception, Monday, July 17, 6:15–7:15 p.m. at the Loews Vanderbilt Hotel on West End Avenue. The annual Alumni Night reception is held in conjunction with the TSSB Students' Reception for 2017 first- and second-year students and faculty. This event celebrates past graduates of TSSB and brings former classmates together. It is a great opportunity to meet and interact with the alumni of the future, or to use it as an opportunity to support and visit a colleague who is a student in the school. Please RSVP so we can plan for your participation—the deadline to RSVP is July 13. There is no cost to attend; Alumni Night is sponsored by HORNE LLP. RSVP today for TSSB Alumni Night.

FPSI This Week: Mitigate Your ATM Risk

Hopefully you have experienced that rewarding sensation when a casino slot machine dispenses quarters endlessly into your plastic money bucket. In some cases with larger payouts, a casino employee may come over and give you cash or a check. Now imagine sitting at a slot machine when $20,000 in bills shoots out.

Cybercriminals know ATMs are loaded with cash, and they are investing significant resources in exploiting systems to extract the money and in some cases, causing cash to shoot out from the ATM. The FFIEC has posted guidance around ATMs to bring awareness to "Unlimited Operations" fraud schemes. We have also seen ATMs infected with malware from USB devices, attacked with advanced skimmers/shimmers, and hacked via network connections.

Be sure that ATM security has moved up on your radar and properly integrated into your risk assessment program. For the latest on guidance around ATMs, ATM crime trends, new security controls to mitigate risk, and how you can integrate your ATMs into your Information Security Program, please contact Jon Goodson or Ted Frizen for loss prevention tips.

TBA On the Road

  • If you're on the road this week for the Fourth of July, we wish you safe travels!
See where TBA goes while "on the road" by following @TNBankers.