Tennessee Bankers

This Week Newsletter

April 02, 2018 - Issue No. 1813

Senate To Vote Monday on TBA Legislation

The Tennessee Senate on Monday evening will vote on 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 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 legislation passed the House of Representatives on March 23 by a vote of 93-1.

Fannie Mae, Freddie Mac Announce 2019 Date for New Single Security

Fannie Mae and Freddie Mac last Wednesday, March 28, announced that the new common security they have been developing—the uniform mortgage-backed security (UMBS)—will be implemented on June 3, 2019. The UMBS will replace the current TBA-eligible MBS issued by the two GSEs. The UMBS will be issued by Common Securitization Solutions, Fannie and Freddie’s joint venture. With the announcement, the GSEs and CSS have hit several key development and testing milestones.

The GSEs, along with the Federal Housing Finance Agency, have for years been working on the project of issuing a common security. Freddie Mac began using CSS in 2016 for data acceptance, issuance support and bond administration on its current securities, processing about 1,000 securities each month using the Common Securitization Platform and performing bond administration functions for 260,000 single class securities backed by about 9.8 million loans.

Fed Releases Audited Financial Statements

The Federal Reserve recently released 2017 audited financial statements for the combined system, including the 12 Federal Reserve Banks and the Board of Governors. The Fed banks held a combined $4.5 trillion in assets at year-end, similar to the system’s balance at the end of 2016.

The Fed banks’ 2017 earnings were approximately $80.7 billion, with $80.6 billion remitted to the Treasury. The Fed spent $25.8 billion on interest on depository institutions’ balances at the reserve banks, a $13.8 billion increase from the year prior. The banks’ operating expenses were $6.8 billion, with an additional $2 billion assessed to cover currency costs, operations of the Board of Governors and the operations of the CFPB.

The Fed banks earned $113.6 billion in interest income from securities acquired through open market operations in 2017. Read more.

Quarles: Fed Engaged on CRA Reform; Seeking to Avoid ‘Gotcha’ Supervision

The Federal Reserve is looking to revise both Community Reinvestment Act regulations and the way the agency examines for CRA compliance, Fed Vice Chairman for Supervision Randal Quarles said last Monday, March 26. The effort comes as the OCC is taking a fresh look at modernizing and simplifying CRA regulation and supervision with a formal request for public comment expected in the weeks to come.

Speaking at a forum, Quarles connected modernizing CRA to the agency’s efforts to boost small business lending and promote financial inclusion through bank-fintech partnerships. “The arrival of new financial technologies, along with significant industry consolidation and other structural changes, has changed the way that financial services are delivered to consumers and the ways in which banks lend in communities,” he said. “We continue to study these shifts, and share the common goal of improving the current supervisory and regulatory framework for CRA to further the statute’s core objective of promoting access to credit and financial inclusion.”

Quarles also highlighted the Fed’s efforts to ensure consumer compliance “and still reduce regulatory burden through a balanced program of tailored and risk-focused supervision.” The Fed is promoting simpler, more efficient, and more transparent supervision where possible, he explained, “so that the institutions we supervise can focus on finding solutions that work for all consumers and communities. . . . Put simply, our role as supervisors should not be to play ‘gotcha’ with our banks, but to support their compliance efforts.”

Leadership Convention Early Registration Deadline Extended

The Leadership Convention, which takes place April 15-17 at The Peabody Memphis, is the premier event of the TBA Young Bankers Division. Join more than 120 future leaders of the Tennessee banking industry for professional and personal leadership development. You will also form relationships with peers from across the state that will benefit you and your institution for decades to come. Good news—the early registration deadline is extended to April 3. Sign up now and save.

Click here to register.

Welcome New Associate Member

TBA welcomes new associate member ATM USA, LLC in the category of bank equipment/supplies. 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.

TBA Attends Annual Tennessee Financial Literacy Commission Dinner

On Tuesday, March 27, leaders from across the state joined the Tennessee Financial Literacy Commission (TNFLC) at the State Capitol to celebrate the impact of financial education in Tennessee and honor the supporters who are making it possible. The evening was a celebration of the overall achievements of the Tennessee Financial Literacy Commission. The TNFLC has helped Tennessee K-8 students in 148 schools across the state complete 28,315 hours of online financial education modules. After utilizing the online learning platform, students have increased their scores by an average of 36% per child.


Pictured are T'Lanie Luu, Amy Heaslet, Lt. Governor Randy McNally, Colin Barrett, and INSBANK President/CEO Jim Rieniets.

Update Your Bank's Information in the TBA Bankers Directory

The TBA, along with M. Lee Smith Publishers, a division of BLR, has sent a form to bankers to update your bank's information. These include any changes, such as new branches, branches no longer in service, address and phone number accuracy, CEO designation, director and officer names, etc.

Return the form(s), with any revisions noted, to M. Lee Smith Publishers by May 4. If you did not receive a form for updating, contact Rhonda Rankin with M. Lee Smith Publishing at rrankin@blr.com or 1-800-274-6774 ext. 8081.

TBA On the Road

  • Retail banking officers and IT/operations officers travel to Nashville to participate in peer-to-peer forums.

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