Tennessee Bankers

This Week Newsletter

March 26, 2018 - Issue No. 1812

Tennessee House Passes TBA Legislation

The Tennessee House of Representatives last Thursday, March 23, passed by a vote of 93-1 TBA’s legislation that will allow banks to pledge out-of-state bonds as collateral for public deposits. 

The legislation (SB 2684 by Bailey / HB 1707 by Wirgau) will allow out-of-state bonds to be pledged as collateral if they are AA- rated, an equivalent rating, or higher rating; are “bank qualified”; and are not a structured debt instrument.

The Senate State and Local Committee voted unanimously last Wednesday to advance the legislation. SB 2684 should be heard on the Senate floor for a final vote this week.

House Committee Passes Three Regulatory Relief Bills

The House Financial Services Committee last Wednesday, March 21, approved three regulatory relief bills. H.R. 4790, which passed by a bipartisan vote of 50 to 10, would designate the Federal Reserve as the primary rulemaking agency for the Volcker Rule, which would significantly simplify the Volcker-related policymaking process. The bill would also exempt banks with $10 billion in assets or less from the Volcker Rule.

H.R. 4861, passed on a party-line 34-26 vote, would repeal FDIC guidance on deposit advance products and direct federal banking agencies to create new guidance that does not limit consumers’ access to short-term small-dollar loans.

The committee unanimously passed H.R. 5076, which would increase the asset threshold from $1 billion to $3 billion for insured depository institutions eligible for 18-month on-site examination cycles.

Fed Hikes Rates, Signals Faster Pace of Increases

The Federal Open Market Committee announced a quarter-point rate hike at its meeting that concluded last Wednesday. The Fed also signaled an increased pace of rate hikes this year and in 2019 as the economy heats up faster than previously expected and inflation nears the Fed's target.

The committee voted unanimously to raise the federal funds rate 25 basis points to a range of 1.5 to 1.75 percent. While remaining committed to a "gradual" pace of increases, the committee noted that it expects inflation to "move up in coming months and to stabilize around the committee's 2 percent objective over the medium term." The committee also expects the economy to grow at 2.7 percent in 2018 and 2.4 percent in 2019 before reverting a longer-run rate below 2 percent.

As a result, the economic projections released by the committee revealed a split among FOMC members on hiking interest rates twice more or three times more this year. They also projected three, rather than two, increases in 2019.

FDIC Board Approves Appraisal Threshold Increase for CRE Transactions

The FDIC board of directors approved a final rule to raise the appraisal thresholds for commercial real estate transactions from $250,000 to $500,0000—an increase from the original proposal, which called for the appraisal threshold to be raised to $400,000. The threshold for loans secured by one-to-four family residential properties will remain at $250,000; however, residential construction loans secured by multiple one-to-four residential properties would be considered CRE transactions. The final rule must now be approved by the Federal Reserve and the OCC. Once approved by the agencies, it will be effective 30 days after publication in the Federal Register.

Strategic Technology & Operations Conference Hotel Deadline Only a Week Away

TBA's Strategic Technology and Operations Conference, designed for community bank CEOs, CIOs, CFOs, COOs, senior department heads, and senior officers who have strategic planning responsibilities for their institutions, focuses on the community bankers’ technology planning needs. The event, April 26 & 27, features nationally-known speakers who are experts in the areas of financial institution technology as well as technology vendors available on-site to answer questions regarding the latest in financial services technology.

The Conference takes place at the Embassy Suites Hotel Conference Center in Murfreesboro, and the hotel deadline is April 3. Contact the hotel directly at 615-890-4464 and specify that you are attending TBA's Strategic Technology & Operations Conference for the special group rate of $148 single/double.

Click here for more information.

Human Resources Conference Photo Recap

TBA's annual Human Resources Conference covered compliance issues and addressed current topics and management issues. HR professionals from across the state networked with peers and discovered solutions to their common problems.

Click here to see the photos.

TBA On the Road

  • TBA participates in the Tennessee Financial Literacy Commission annual dinner Tuesday.

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