Tennessee Bankers

This Week Newsletter

February 20, 2018 - Issue No. 1807

General Assembly Works Toward April Adjournment

As promised in early January by House and Senate leadership, the General Assembly is working towards its goal of an early April adjournment. Lt. Governor McNally announced recently his objective is to pass the budget and finish the legislature’s business. To do that, committees in both chambers must hear and pass departments’ budgets, which are ongoing. This week, several state departments appeared before their committees of jurisdiction to present their 2018-2019 budget and field questions from members on other issues the departments are facing. 

Another indicator of a quickly approaching adjournment date is some committees already announcing their last calendar within the next few weeks. This means all bills the committee will hear this year must be scheduled to be heard, although committees will continue to meet until the bills are passed, defeated or removed from the calendar.

TBA’s government relations team continued their work last week to support the remote notarization legislation, which will be heard in the House subcommittee next Wednesday. The team also spent their time last week expressing the industry’s concerns with bills that would create streamlined processes for contesting UCC and real estate liens. Proponents of those bills were receptive to those concerns, and TBA will continue their push to defeat those measures.

House Passes 'Madden Fix,' TRID Improvement Bills

The House last Wednesday approved two bipartisan regulatory reform bills supported by the banking industry. H.R. 3299, which passed by a 245-171 vote, would provide a much-needed fix for confusion created by the Madden v. Midland Funding decision by codifying the “valid-when-made” doctrine. This doctrine ensures that validly made loans remain valid when they are sold or assigned, thus promoting transparency and predictability in the secondary market.

The House also voted 271 to 145 to approve H.R. 3978, which would amend RESPA to require the CFPB to allow the accurate disclosure of title insurance premiums and any potential available discounts to homebuyers as part of the TILA-RESPA integrated disclosures. The CFPB does not currently permit these disclosures, which creates inconsistencies in mortgage documents and creates confusion for consumers.

FASB Issues Final Standard to Resolve Accounting Issues after Tax Reform

The Financial Accounting Standards Board last Wednesday issued its final standard outlining how banks can adjust regulatory capital balances that were affected by the new tax reform law. Companies will be able to apply the standard to their 2017 reporting results.

Under current tax accounting, the reductions of deferred tax assets and liabilities are recorded entirely within net income, including those applying to items in accumulated other comprehensive income such as unrealized gains and losses on available-for-sale securities. As a result, not only are net income and regulatory capital affected, but this treatment also creates onerous operational burdens to track the related amounts in the future.

While the new standard will not change the impact to net income, the adjustment between AOCI and retained earnings will allow ending regulatory capital to be appropriately stated and also avoid onerous operational requirements to keep track of the amounts that would have been “stranded” within AOCI. Under the standard, financial statement preparers are required to disclose a description of the accounting policy for releasing income tax effects from AOCI, whether they elect to reclassify the stranded income tax effects from the tax reform bill and information about other income tax effects that are reclassified. View the standard.

CFPB Releases 2018-22 Strategic Plan

The CFPB last week released its five-year strategic plan that establishes its mission, goals, and objectives. CFPB Director Mick Mulvaney summarized the bureau’s strategic changes as committing to fulfilling its statutory responsibilities but going no further.

The bureau identified three goals: first, to ensure that all consumers have access to markets for consumer financial products and services; second, to “implement and enforce the law consistently to ensure that markets for consumer financial products and services are fair, transparent, and competitive”; and third, to ensure “operational excellence.”

To achieve the first goal, the CFPB identified three objectives: providing information and education to consumers; “regularly identify[ing]” outdated, burdensome or unnecessary regulations; and ensuring transparent and efficient financial market operation. Toward the second goal, the bureau said it would continue protecting consumers from UDAAPs and discrimination, as well as “enforc[ing] federal consumer financial law consistently, without regard to the status of a person as a depository institution, in order to promote fair competition.” Read the plan.

CFPB Seeks Feedback on Supervision

The CFPB last Wednesday issued a request for information on its supervision processes. The bureau is seeking comments to help it assess the overall efficiency and effectiveness of its supervision program and whether any changes are needed. This is the fourth in a series of RFIs designed to ensure the CFPB is fulfilling its functions. View the CFPB request.

Ford Appointed to St. Louis Fed Advisory Council

The Federal Reserve Bank of St. Louis has appointed TBA Vice Chairman Mott Ford to its Community Depository Institutions Advisory Council (CDIAC). Ford is vice chairman and CEO of Commercial Bank and Trust Co. in Memphis and has been appointed to a three-year term ending in 2020.

Members of the 12-person advisory council, established by the St. Louis Fed in 2011, are executives of smaller financial institutions headquartered across the Federal Reserve’s Eighth District. Council members advise St. Louis Fed President James Bullard on the credit, banking, and economic conditions facing their institutions and local communities.

Tennessee Deposit Account Administration Set for Four Locations

TBA's Tennessee Deposit Account Administration program addresses issues and common questions regarding customer onboarding, account opening, and ongoing administration of deposit accounts. Tennessee law and federal regulations affecting ownership, control, and documentation are discussed in detail.

This program provides a practical, real-world understanding of the bank’s BSA/AML requirements, expectations, and goals in the area of deposit accounts.

Indicators of suspicious activity are also provided. Using “red flags” identified by the federal government, participants are given real-world examples of what to look and listen for when onboarding new customers and servicing existing relationships.

This event takes March 5 in Jackson, March 6 in Nashville, March 7 in Knoxville, and March 8 in Kingsport.

Click here to register.

Deadline Approaching to Register for The Southeastern School of Consumer Credit

Established in 1987, The Southeastern School of Consumer Credit is an intermediate-level, one-week program featuring over 30 hours of classroom instruction through 14 modules in five-course clusters that provide specialized but well-rounded training in consumer banking. Recommendations for participation include at least one year’s experience in consumer credit or five years of general banking experience, in addition to prescribed AIB or college course prerequisites. Participants are housed at the Loews Vanderbilt Hotel.

Click here to register.

Welcome New Associate Member

TBA welcomes new associate member Asset Black in the category of information technology. Please learn more about each of our associate member companies by visiting our online directory of associate members and thank them for their support of the Tennessee banking industry through membership.

Deadline for PEP Report Cards

The deadline for the 2017-2018 PEP awards is March 2, 2018, to submit all activity report cards to qualify for most of the awards presented at the Young Bankers Division's Leadership Convention. The Leadership Convention dates are April 15-17, 2018, at The Peabody Hotel, Memphis, Tenn.

TBA Hosts Emerging Leader Advisory Board Meeting

Last week, TBA hosted the ABA Emerging Leader Advisory Board strategic planning meeting. The Board’s composition reflects a diverse group of dedicated future industry leaders representing 21 states from banks of all sizes. The officers of the board include the Chair, Emily Gray, SVP/senior credit officer from The Hardin County Bank.

TBA On the Road

  • TBA’s Board of Directors holds its quarterly meeting Nashville.
  • The annual Legislative Reception takes place at War Memorial Auditorium.
  • TBA hosts over 570 bankers and associate members for Credit Conference.

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

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