Tennessee Bankers

This Week Newsletter

November 06, 2017 - Issue No. 1744

Trump Makes Arbitration Rule Repeal Official

Last Wednesday, President Trump signed the Congressional Review Act resolution invalidating the CFPB’s final rule that had effectively banned the use of mandatory arbitration for consumer financial products.

The signing marks a significant victory for the banking industry, which has been vocally opposed to the rule since it was proposed in 2015. The bureau’s arbitration rule would have imposed significant costs on consumers and banks of all sizes while enriching plaintiffs’ lawyers.

This action by Congress under the Congressional Review Act doesn’t just invalidate the arbitration rule, but it also means the CFPB is prohibited from writing a “substantially similar” rule in the future.

House Republicans Unveil Tax Reform Bill

House Republican leaders Thursday released their 429-page draft of sweeping tax reform legislation. The bill includes numerous provisions affecting banks, including:

  • A corporate income tax rate for C-corporations of 20 percent
  • An income tax rate of 25 percent for passive income from “pass-through” entities, including Subchapter S banks (with potential restrictions on the ability of active shareholders to claim the lower corporate rate)
  • Restrictions on net interest deductibility, with businesses whose average gross receipts exceed $25 million prohibited from deducting net interest expense exceeding 30 percent of adjusted taxable income
  • Retained homeownership provisions but subject to new caps going forward
  • Eliminating the deduction for deposit insurance premiums for banks with over $50 billion in assets and phasing in the elimination for banks with $10-50 billion in assets
  • Broadening the tax base by eliminating new markets and historic tax credits and net operating loss carrybacks

The House Ways and Means Committee is expected to take up the legislation starting Monday for at least a week, with the goal of the House and Senate passing it and the President signing it into law Christmas. Read the bill. Read the section-by-section summary.

Trump Names Jerome Powell as Fed Chairman

President Trump last Thursday said he would name Federal Reserve Governor Jerome Powell as chairman of the Fed. Powell first joined the board in 2012 and has played a major role in bank supervision and payments systems activities while on the board.

A lawyer by training, Powell’s pre-Fed experience includes work as an investment banker, as a senior Treasury official during the George H.W. Bush administration and as a private equity investor. If confirmed, he will be (with a brief exception during the Carter administration) the first non-economist to chair the Fed since 1970.

Reg Reform Negotiations between Crapo and Brown Fail

For the past several weeks, Senate Banking Committee Chairman Mike Crapo and Ranking Member Sherrod Brown have been in negotiations for a bipartisan regulatory reform package. Last week, those negotiations reached an impasse and it was announced that they will not resume.

The next step in achieving regulatory reform for the industry is for the national trade groups to continue working with moderate Senate Democrats, both on and off the committee. Doing so is essential if reform legislative is to pass, as it will require Democratic votes to reach the 60 vote threshold.

ABA, ICBA Call for National Data Breach Standard

ABA, ICBA and five other financial trade associations wrote to lawmakers last Wednesday calling for a national data security and breach notification standard. In a letter to Reps. Blaine Luetkemeyer (R-Mo.) and Lacy Clay (D-Mo.), the groups called for a standard that would require all entities handling sensitive personal and financial data to have robust protections in place and to notify consumers in a timely manner in the event of a breach. They added that such a standard would help eliminate current inconsistencies between a patchwork of state and federal laws. Read the letter.

House Financial Services Committee Chairman Not Seeking Re-election

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) announced last week that he will leave Congress at the end of his current term. Elected to represent the Dallas area in 2002, Hensarling took the gavel of the Financial Services Committee in 2013. He would not have been eligible for another term as committee chairman under current House rules.

Professional Development Directory Now Available

Each year TBA hosts 80 live training and professional development programs. TBA has announced the dates and locations for several schools and conferences through 2018, and the Professional Development Directory is now available online, along with the two-sided At-a-Glance calendar of educational programming. Click here to view the Professional Development Directory.

For more information about TBA's 2018 educational offerings please contact Debbie Brickles.

Office Depot Core Items List Updated Online

TBA partners with Office Depot to provide members significant discounts on a wide range of office and banking supplies, furniture, print and copy services, promotional products, break room provisions and more. Designed for state banking association banks and associate members across a 26-state footprint, our program includes discounts up to 80% off MSLP on a core list of 840+ frequently ordered products, along with each individual bank’s opportunity to customize a list of up to an additional 75 items using the same steeply discounted pricing matrix as the core list. Learn more about the opportunity for significant savings and operational efficiencies by contacting Kevin Delesk, or online by clicking here.

TBA On the Road

  • The Young Bankers Division regional Leadership Luncheons are held in Jackson, Memphis, Nashville and Chattanooga. To register for the luncheon in your area contact T’Lanie Luu.

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