Tennessee Bankers

This Week Newsletter

January 22, 2018 - Issue No. 1803

CFPB to Reconsider Small-Dollar Lending Rule

The CFPB last Tuesday, Jan. 16, said it would begin a rulemaking under which the CFPB “may reconsider” its rule regarding short-term, small-dollar loans. Last Tuesday was the rule’s effective date, although most provisions do not require compliance until Aug. 19, 2019.

Finalized in October 2017, the rule imposes an ability-to-pay test on a wide swath of small-dollar loans of 45 days or less, including payday loans, auto title loans, deposit advances, and longer-term loans with balloon payments. The rule also includes provisions limiting attempts to withdraw payment from borrowers’ accounts, but includes an exception for banks that hold the borrower’s account and attempt to withdraw payment without assessing an NSF or overdraft fee.
The bureau exempted small-dollar loans from lenders that made fewer than 2,500 of these loans in each of the current and previous years and for which these loans account for less than 10 percent of revenues – a provision that protects banks’ flexibility to make small-dollar “accommodation loans” for their customers. The bureau also exempted from the rule’s ability-to-repay test installment loans of more than 45 days, signaling the bureau’s interest in encouraging bank participation in this market.

State Legislative Update

To date, over 300 new bills have been filed by House and Senate members for consideration during the second regular session of the 110th General Assembly, with over 1,000 more expected prior to the Feb. 1 bill filing deadline. These are in addition to any bills introduced last year and deferred to 2018 for consideration. 
This week, the House Committee on Insurance and Banking, chaired by Rep. Ron Travis (R - Dayton), will hear a budget presentation by Commissioner Greg Gonzales of the Department of Financial Institutions. Commissioner Gonzales will also field committee member questions on a variety of other topics, including the state of the banking industry and efforts by banks to combat elder financial exploitation.
With some of the turnover that has already taken place within the House and Senate chambers due to resignations and federal appointments, the three newest House members have all been appointed to serve on the House Insurance & Banking Committee: Rep. Clark Boyd (R - Lebanon), Rep. Jerome Moon (R - Maryville), and Rep. Kevin Vaughan (R - Collierville).

TBA to Host Lunch with Congressman David Kustoff

TBA is hosting an in-district bankers roundtable with Congressman David Kustoff this Wednesday, Jan. 24, at the Dyersburg Chamber of Commerce to discuss industry priorities for 2018. The luncheon meeting will be from 11:30-1:00 p.m. If you are interested in attending, please contact Penny Powlas at ppowlas@tnbankers.org by Monday afternoon.

Senate Committee Re-Approves Powell, Quarles Nominations

The Senate Banking Committee last Wednesday voted to advance the nomination of current Federal Reserve Governor Jerome Powell as Fed chairman. The committee previously voted to approve Powell in 2017, but the nomination had to be renewed since Powell was not confirmed before the year's end. The committee also advanced the nomination of sitting Fed Vice Chairman for Supervision Randal Quarles to a full, 14-year term on the Fed Board of Governors.

TBA Hosts ABA's EVP Bob Davis on Tuesday

On Tuesday, Jan. 23,TBA is hosting a lunch at from 11:30-1:00 p.m. with ABA's EVP Bob Davis at the TBA. Davis oversees mortgage markets, financial management, and public policy. He will be discussing tax reform, changes at the CFPB, FASB's CECL standards, and other happenings in Washington. If you are interested in attending, please contact Penny Powlas at ppowlas@tnbankers.org by Monday morning.

CFPB to Seek Public Feedback on Its Activities

CFPB acting director Mick Mulvaney last week announced that over the coming weeks the bureau will seek public feedback on its activities to ensure that it is fulfilling its statutory requirement to protect consumers. Through a series of requests for information, the bureau will seek input on its enforcement, supervision, rulemaking, market monitoring, and education activities. The CFPB expects to issue its first RFI on civil investigative demands, which are issued by the bureau during enforcement investigations. Read more.

Leadership Convention Returns to The Peabody

The TBA Young Bankers Division is one of the most robust of its kind in the country, and Leadership Convention is its foremost event. Held April 15-17, the 2018 convention returns to the iconic Peabody Hotel and features a strong business agenda with speakers on industry trends and leadership development, including a keynote address by Coach Bill Courtney, the subject of the Oscar-winning documentary Undefeated. The 2018 Convention will also include expanded opportunities for networking at Memphis' downtown attractions and through peer roundtable discussions.

New for 2018, team discounts apply for two or more attendees from the same institution. Team discounts and early registration pricing ends April 1.

Click here to register.

TBA’s Endorsed Title Agencies Earn Banks Non-Interest Income—Learn More Feb. 21

Join TBA and Investors Title at the Omni Nashville on February 21 from 2:30-3:30 p.m. before you check in for Credit Conference to learn more about the benefits of ownership in one of TBA’s two endorsed title insurance agencies.

With a focus on compliance, operational efficiency, and superior customer service, Tennessee’s lender-owned title insurance agencies—Bankers Title of East Tennessee, LLC (Knoxville) and Title Center of the South, LLC (Brentwood) specialize in title insurance for residential and commercial customers; serve the banking, real estate, and legal services communities with exceptional service and an excellent suite of products; and produce a combined average annual ROI of 147 percent and have generated over $14 million in distribution income for member banks.

Please RSVP your plans to participate in this informational overview by Friday, Feb. 16 to hharen@invtitle.com

Financial PSI This Week: Flexible Spending Accounts

If your bank is not offering employees an opportunity to participate in a Flexible Spending Account, your competition probably is. Flexible Spending Accounts provide significant pre-tax savings to employees and employers alike. Employees save nearly 30 percent on eligible healthcare and/ or dependent care expenses and employers save on payroll taxes for each and every dollar of employee participation.

An FSA is designed to save the employee money and help offset rising out-of-pocket expenses. Money in an FSA is never taxed - no federal income tax and no social security tax. Every dollar employees contribute is pre-tax, reducing their taxable income and increasing their take-home pay while saving the employer on payroll taxes. Please contact Jon Goodson or Ted Frizen to learn more about setting up an FSA.

Welcome New TBA Associate Member

TBA welcomes new associate member John M. Floyd & Associates in the category of consultants. Please visit our online directory of associate members and thank these companies for their support of the Tennessee banking industry through membership.

2018 renewals for Associate Membership are currently underway and close February 1. Members can renew online here.

TBA On the Road

  • Bankers travel to Nashville for Fundamentals of Compliance training at the TBA Barrett Training Center.
  • Colin Barrett travels to Dyersburg for TBA's banker roundtable with Congressman Kustoff.

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