Tennessee Bankers

This Week Newsletter

May 29, 2018 - Issue No. 1821

President Trump Signs Reg Reform Bill into Law

President Trump, last Thursday, May 24, signed s. 2155, into law, after it cleared the House floor on Tuesday by a bipartisan vote of 258 to 159. The bill’s passage marks an important step toward bringing much-needed regulatory relief to help banks better serve their customers and communities. It is the first significant piece of regulatory reform legislation passed by both chambers since enactment of the Dodd-Frank Act in 2010.

Some of the bill’s key provisions include:
Provide Qualified Mortgage designation for mortgages held in portfolio by banks with less than $10 billion in assets
Remove reciprocal deposits from the definition of brokered deposit
Raise the threshold for designation as a systemically important financial institution from $50 billion in assets
Simplify capital calculations for community banks
Provide relief from appraisal requirements for smaller mortgages
Institute longer exam cycles for community banks

Tennessee House members voting for the bill were Republicans Marsha Blackburn, Scott DesJarlais, Jimmy Duncan, Chuck Fleischmann, David Kustoff, and Phil Roe. Voting against the bill were Democrats Steve Cohen and Jim Cooper. Republican Diane Black did not vote on the bill. Senators Alexander and Corker both voted in favor of the bill in the Senate. 

Regarding S. 2155, Rep. Kustoff praised the legislation on the House floor before the vote: "This pro-growth package provides the desperately needed regulatory relief to our community financial institutions while providing consumers with greater options for accessing credit."

Click here to watch a video of Kustoff.

Upon House passage of S. 2155, TBA’s president and CEO Colin Barrett announced to Tennessee bankers that “while the legislation is far from perfect, it is certainly a step in the right direction. This bipartisan legislation, coupled with a renewed commitment to regulatory relief from the new heads of the federal agencies, provides optimism in the days ahead for our industry and country.”

OCC Announces Policy Shift on Small-Dollar Lending

Last Wednesday the OCC issued a bulletin encouraging banks to make “responsible short-term, small-dollar installment loans, typically two to 12 months in duration with equal amortizing payments” to help meet the credit needs of their customers.

The bulletin does not define how banks should underwrite small-dollar loans, but notes that small-dollar lending programs should be consistent with safe and sound banking practices, include an effective risk management framework, and be underwritten based on reasonable policies and practices, which may include analysis of internal and external data sources such as the borrower’s deposit activity with the bank. It also calls for banks to report repayment activity of small-dollar loan customers to the credit bureaus to help borrowers improve their credit scores. Read the bulletin.

President Signs Resolution Repealing Indirect Auto Guidance

Last Monday President Donald Trump signed into law a Congressional Review Act resolution overturning the CFPB’s guidance on indirect auto lending. The CFPB’s 2013 indirect auto lending guidance sought to impose limits on how and what indirect lenders pay car dealers who provide financing and how much discretion dealers have to set loan terms and rates.

Normally the CRA can only be used to invalidate regulatory actions issued within the previous 60 legislative days, but late last year, the Government Accountability Office formally ruled that the guidance constituted a rule, which restarted the CRA clock.

Mulvaney said the bureau would work with Congress and other agencies to identify additional guidance that might qualify for repeal under the CRA.

Mulvaney: CFPB to Revisit ECOA Regulations

As President Trump on Monday signed the resolution invalidating the CFPB’s 2013 guidance on indirect auto lending, the bureau’s Acting Director Mick Mulvaney said they will revisit the Equal Credit Opportunity Act regulations. “Given a recent Supreme Court decision distinguishing between antidiscrimination statutes that refer to the consequences of actions and those that refer only to the intent of the actor, and in light of the fact that the bureau is required by statute to enforce federal consumer financial laws consistently, the bureau will be reexamining the requirements of the ECOA,” Mulvaney said.

Take the Next Step in Your Career—Enroll in The Southeastern School of Banking

The Southeastern School of Banking offers a 70-hour general banking curriculum. Serving Tennessee financial institutions since 1939, the two-year school incorporates lectures and home study assignments. Students from both years attend classes during the same week. Some of the topics covered in the first year are bank financial analysis, macroeconomics, asset/liability management, investments, lending, business planning, managing liquidity/capital planning, sales management, and HR management.

Students will also use the nationally recognized Stanford Bank Simulation Game to learn about financial institution management. The second-year general banking classes include managing up skills, a fraud overview, ethics in banking, trust services, credit and credit scoring, technology in banking, the changing bank environment, bank security, management, and completion of the Stanford Bank Simulation Game. This school is a must for career bankers.

TSSB takes place July 15-20 at Belmont University in Nashville.

Click here to enroll.

Bankers Complete The Southeastern School of Commercial Lending

Congrats to the 39 students for completing The Southeastern School of Commercial Lending. TSSCL is an intensive, one-week school concentrates on all aspects of commercial lending.

Welcome New Associate Member

TBA welcomes new associate member Piper Jaffray in the category of Consultants. 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 On the Road

  • Tennessee bank CEOs meet in Nashville for latest CEO Forum.

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