Tennessee Bankers

This Week Newsletter

April 09, 2018 - Issue No. 1814

Senate Passes TBA Legislation

The Senate last Monday, April 2, unanimously passed 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 House passed the measure on March 22 by a vote of 93-1. It will now go to the Governor for his signature and will take effect on July 1, 2018.

Filing Deadline for 2018 Elections Passes

Last Thursday, April 5, was the filing deadline for the August 2 and November 6 state and federal primary and general elections. To view the candidates running for governor, U.S. Senate and U.S. House, click here. To view the candidates running for Tennessee Senate and House, click here. At the time of publication, information for districts in Davidson County is incomplete and we will update it once the county provides a complete list of candidates who have filed.

While several senators running for re-election will not face a challenger the primary or general elections, nearly all of the House members have opponents in at least one election. TBA’s government relations team is requesting feedback from any member who has insight into their local elections, especially the record number of open seats. Please send comments to Amy Heaslet.

Mulvaney Calls for Key Changes to CFPB

In a semiannual report to Congress released last Monday, CFPB Acting Director Mick Mulvaney called on Congress to make four changes to the Dodd-Frank Act that would “establish meaningful accountability for the bureau.” Mulvaney recommended that Congress:
subject the bureau to the congressional appropriations process
approve major rules
make the director position answerable to the president
create an independent inspector general for the bureau

Mulvaney also noted that the bureau will move forward with a proposed rulemaking revisiting its final payday lending rule as well as others related to Regulation CC, the final debt collection rule and the Home Mortgage Disclosure Act. It will also issue final rules on the annual notice requirements under the Gramm-Leach-Bliley Act, the disclosure of the bureau’s records and information and an amendment about the use of closing disclosures to determine good faith disclosure of estimated closing costs. Read more.

Treasury Issues Recommendations for CRA Modernization

As bank regulators work toward modernizing the Community Reinvestment Act—with an advance notice of proposed rulemaking expected from regulatory agencies in the days ahead—the Treasury Department last Tuesday issued a memorandum to the agencies highlighting several recommendations for updating and improving administration of the 40-year-old law.

Treasury’s recommendations focused on four key areas: Redefining geographic assessment areas, increasing transparency around the rating process, improving the examination process, and incentivizing CRA performance.

Acknowledging numerous changes in banking law and technology that have taken place since CRA’s enactment in 1977, Treasury recommended that the agencies provide greater flexibility when determining CRA assessment areas, expand the range of products that are eligible to receive CRA credit, and consider alternative delivery channels when conducting CRA evaluations, among other things. Read the Treasury report.

FinCEN Publishes Long-Awaited FAQs on Beneficial Ownership Rule

The Financial Crimes Enforcement Network last Tuesday published a long-expected set of frequently asked questions on expanded customer due diligence requirements under the Bank Secrecy Act, including a new requirement for banks to identify and verify legal entities’ “beneficial owners” when accounts are opened. The customer due diligence rule’s mandatory compliance date is May 11.

Supplementing a set of FAQs issued in 2016, the 26 new FAQs respond to many questions that have been raised by the industry since the rule was adopted. Now that the FinCEN FAQs have been issued, the federal banking agencies are expected to release their examination procedures in the coming days. Read the FAQs.

CFPB Seeks Feedback on Financial Education Programs

The CFPB last Wednesday, April 4, issued a request for information seeking feedback on its consumer financial education programs. The request is the 11th in an ongoing series of RFIs designed to provide the CFPB with input on how to improve outcomes for both consumers and covered entities.

The public is invited to submit comments on the overall effectiveness of the CFPB’s financial education programs, which are one of the six primary functions of the bureau under the Dodd-Frank Act. Read the RFI.

Elevate Your Success at TBA's 128th Annual Meeting

Registration is open for the Tennessee Bankers Association's 128th Annual Meeting at the majestic Broadmoor in Colorado Springs, Colo.

This Annual Meeting, which takes place June 17-19, looks to be the best yet with expert speakers, a variety of learning formats, scheduled networking for meaningful business connections, and activities for families and adventure-seekers alike. It’s no surprise that Tennessee bankers return to TBA’s marquee event year after year.

Click here to register.

Instructor Ken Golliher Provides BSA Insight

Changes to the Bank Secrecy Act (BSA) regulation require all banks to revise their BSA programs on or before May 11, 2018. Board involvement is necessary as compliance necessitates amendment of the mandatory board adopted BSA/AML policy. The changes focus on overall “due diligence” and, more specifically, the requirement that banks identify the “beneficial owners” of their legal entity customers when those customers are opening new accounts.

Some critical resources:

Per BSA/AML Compliance School instructor Ken Golliher: "I want to draw your attention to FIN-2018-G001 Question 3 that indicates you are required to “drill down” when a legal entity is owned 25 percent or more by another legal entity. It does not suggest it is necessary to excavate if the percentage is less than 25 per. Also, see Question 12 regarding the maturity of automatically renewable time deposits. You may want to reach out to all of these customers at once rather than doing it piecemeal as their time deposits mature."

Tennessee Small Business Lenders Conference Takes Place September 12-14 in Nashville

Network and make lasting contacts with other industry professionals at the state-wide Tennessee Small Business Lenders Conference on September 12-14 at the Sheraton Music City Hotel. The conference will bring together experts in the SBA lending industry to present relevant and timely information and educational sessions on topics impacting all areas of SBA lending. Early Bird Registration is just $299 through May 15. Sponsorships are also available. Visit the website for more details at www.TNLendersConference.com.

Welcome New Associate Member

TBA welcomes new associate member B. Riley FBR in the category of investment services. 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.

Teach Children to Save Day Takes Place April 20

Teach Children to Save Day encourages banker volunteers to visit schools and youth programs in their communities to deliver savings lessons. Registered banks receive access to lesson plans, activity sheets, media tools, promotional materials, and much more. Everything you need to make your event an educational and memorable experience is provided. Make a difference—sign up today.

TBA On the Road

  • The Past Presidents and Chairmen of the TBA convene for their annual gathering.
  • Tennessee bankers and TDFI Commissioner Greg Gonzales meet with Ag Commissioner Jai Templeton to discuss ag banking in Tennessee.

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

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