Tennessee Bankers

This Week Newsletter

December 18, 2017 - Issue No. 1750

Conference Committee Reaches Agreement on Tax Reform

Republican lawmakers negotiating the differences between the House and Senate tax reform bills last week reached a tentative agreement that would reduce the C corporation tax rate to 21 percent, eliminate the corporate alternative minimum tax, and provide a 20 percent deduction for pass-through businesses, with the new rates effective in 2018.

The bill also would lower the top individual tax rate to 37 percent and allow individuals to deduct up to $10,000 in either property taxes or state and local income taxes, according to reports.

Lead negotiators on the committee expressed confidence that their tax reform plan would be ready for votes in both the House and Senate early this week and could head to the president’s desk before Christmas.

House Committee Advances Reg Relief Bills

The House Financial Services Committee last Wednesday approved 13 financial services bills. Of those passed, the committee unanimously approved H.R. 1457, which would authorize financial institutions—upon customer request—to retain personal information from scans or copies of driver's licenses or other personal IDs. The bill would facilitate mobile account opening and other digital account procedures.

The committee also approved by a 50-10 vote H.R. 4545, which establishes deadlines for banking agencies to issue exam reports and create an independent examination review and appeal process.

H.R. 4464, which would repeal the National Credit Union Administration's risk-based capital rule for credit unions and is opposed by the banking industry, passed narrowly out of the committee by a 33-25 vote.

Rep. David Kustoff (R-Tenn.), a member of the committee, voted in favor of all bills listed above.

House Passes Bill Providing Relief for Smaller Mortgage Lenders

The House last Tuesday passed a bipartisan bill by a 294-129 vote that would offer relief for smaller lenders with respect to escrow and servicing practices. H.R. 3971 would provide an exemption from the CFPB’s higher-priced mortgage loan escrow requirements for lenders with less than $10 billion in assets, and it would provide exemptions to servicing rules for those servicing fewer than 20,000 mortgages annually.

DOD Amends MLA Interpretive Rule

The Department of Defense released changes to its 2016 interpretive rule clarifying certain provisions of the Military Lending Act regulation. The amendments address a number of concerns ABA raised in previous comments to DOD.

Among the amendments is a clarification that the exemption for purchase money loans includes loans that are used not only to purchase the item securing the loan but also to purchase related items, such as extended warranties on a car. They also offer clarifications about loans secured by a deposit account, the use of remotely created checks to make loan payments, the ability of lenders to use the right of offset, and the timing of checking military status to qualify for the MLA safe harbor.

While the amendments addressed many of the banking industry’s concerns, they did not address all. Still at issue are provisions related to oral disclosures; calculation of the Military Annual Percentage Rate for open-end loans; coverage of lot loans; and whether securities are personal property and subject to the exemption for purchase money loans secured by personal property. View the revised interpretive rule.

TACIR Hears Testimony in Support of Boat Titling

The Tennessee Advisory Commission on Intergovernmental Relations held a hearing last week pursuant to legislation that passed during the 2017 session tasking the commission to research the potential creation of a boat titling system in Tennessee. The state is currently only one of 13 states that does not issue boat titles.

Prior to TACIR staff presenting a draft report on boat titling, commission members heard from testimony from various stakeholders in support of boat titling. TBA’s senior vice president and general counsel testified on behalf of lenders. Amy Heaslet testified to the increased protections boat titling would provide lenders because liens would be noted directly on titles. Under the current system, which only requires boats to be registered, liens can only be identified by doing a UCC filing search through the Secretary of State's office.

Other persons testifying included representatives from the County Clerks Association, who are supportive of their members issuing boat titles, and the Tennessee Wildlife and Resource Agency, which currently issues boat registrations.

TACIR staff will issue a final report and present it to commission members in January. Read TACIR's draft report.

SmartBank and Southern Community Bank Announce Merger

SmartFinancial Inc., parent company of SmartBank, Knoxville , and Tennessee Bancshares Inc., parent company of Southern Community Bank, Tullahoma, announced last week the signing of a definitive merger agreement in which SmartFinancial will acquire Tennessee Bancshares with Southern Community Bank merging into SmartBank. Upon completion of the transaction, the combined company is expected to have assets of approximately $2.0 billion.

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.

Start Year Off With Three Informative Webinars

Beneficial Ownership and Onboarding Legal Entity Customers
January 9
In addition to beneficial ownership requirements, this Tennessee-specific webinar explains what it takes to comply with CDD regulations when making a loan, opening a deposit account, or leasing a safe deposit box to a new legal entity customer in today’s AML-focused environment.

Profiting from a Rising Rate Environment While Managing Regulatory Concerns
January 11
In this webinar, learned how to be a part of a well prepared and focused Asset/Liability Management Committee. Topics include high performing ALCO key characteristics, effective liquidity measurement and management, and more.

Preparing for the Great Unknown - How the Changing Economic Landscape Affects Deposit Sensitivities and Liquidity Levels
January 11
Learn the importance of utilizing quantitative and qualitative data to support the stability of your deposits and key pricing decisions and how your depositors impact how you manage your liquidity, and vice versa.

Optimize Your Instant Issue Card Strategy

Financial institutions struggle with an “either/or” mentality when evaluating their card issuance strategy. Central issuance through a personalization bureau is still an integral part of the card production and delivery strategy. However, instant issuance is good for new account opening and for lost/stolen card replacement. The primary objectives of your financial institution should be to keep your card top of wallet and minimize any interruption in usage by the cardholder. Read the blog from Harland Clarke, TBA’s endorsed partner for instant issuance and check services, and discover how to best use instant and central issuance in your card distribution strategy. To learn more email keith.potts@harlandclarke.com or visit harlandclarke.com/MarketingServices.

Welcome New TBA Associate Member

TBA welcomes new associate member Cummins Allison Corp, in the category of bank equipment/supplies. 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's Susan Taylor Pens Farewell Column

TBA and Financial Products and Services Inc recently celebrated Susan Taylor, who will retire from the Association at the end of December after 18 years of service to Tennessee bankers. Click here to read Susan's farewell column.

2018 Is Almost Here—Get Your Bank Holiday Closing Signs Before It's Too Late

Have you ordered your TBA's 2018 Bank Holiday signs? Need additional sets? Hurry, because time is running out. These signs, posted at each entrance to your main office and branches as well as drive-through windows, will alert your customers to the bank being closed. The signs are 5" x 7" in size and adhere to any glass or wood surface without leaving residue upon removal. The cost of each 2018 Holiday Closing Sign set is $25.75 for TBA members, plus shipping and handling and sales tax. Click here to order your signs.

TBA On the Road

Have a holly jolly holiday on the road or wherever your celebrations take you. This Week will be back in your inbox January 8.

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

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