Banking News

OCC Outlines Risk Supervision Priorities for 2015 December 18, 2014

Noting an environment of “high” strategic and operational risk, the OCC outlined nine priorities for midsize and community bank supervision in 2015 in its Semiannual Risk Perspective report released yesterday.

The OCC said its examiners will focus on strategic planning, corporate governance, stress testing for banks with more than $10 billion in assets, operational risk management, cybersecurity, underwriting practices in certain portfolios where the agency has observed slippage, interest rate risk, compliance and “fair access.”

These priorities respond to increasing credit risk as competition for loans picks up, evolving cyber threats, more frequent data breaches and sluggish earnings. The OCC noted that overall return on equity for federally chartered banks is down year over year, although smaller banks’ ROE has improved and now almost matches that of larger banks. Read the report.

Congress Creates ‘ABLE’ Accounts to Help Disabled Save December 18, 2014

The Senate on Tuesday passed an ABA-supported bipartisan bill creating tax-preferred savings accounts -- similar to a health savings account or a Roth IRA -- that will allow disabled people and their families to save for their care without sacrificing eligibility for disability benefits.

The Achieving a Better Life Experience, or ABLE, Act creates a special-purpose account that allows contributions of up to $14,000 per year with a maximum balance of $100,000. The account, which grows tax-free, may be used for disability-related expenses not covered by public benefits, including housing, transportation, higher education, job training and health. Prior to the passage of the ABLE Act, the disabled risked losing benefits if they saved more than a small amount for their own needs.

ABA’s Health Savings Account Council applauded the passage. “Members of the ABA HSA Council are pleased to be able to assist families and people with disabilities by helping them establish an ABLE account to pay for qualified disability expenses,” said ABA SVP Kevin McKechnie. “We look forward to working with state and federal regulators next year as they implement the tax changes associated with ABLE accounts.” For more information, contact ABA’s Renee Galbraith.

New Members Named to Senate Banking Panel December 16, 2014

Four Republicans will newly join the Senate Banking Committee in the 114th Congress. Sitting Sen. Tim Scott of Alabama, as well as the newly elected Tom Cotton of Arkansas, Mike Rounds of South Dakota and Ben Sasse of Nebraska will serve on the panel. Current Republican committee members Mike Johanns of Nebraska and Tom Coburn of Oklahoma are retiring.

ABA Wins Expansion of Small Bank Reg Relief December 12, 2014

The House and Senate yesterday passed a bill raising the threshold for small bank holding company regulatory relief from $500 million to $1 billion, sending the bipartisan bill to President Obama for his signature. The measure is a long-standing policy priority for ABA and the state bankers associations. The bill would provide relief for approximately 88 percent of bank holding companies and 75 percent of savings and loan holding companies.

“This legislation accomplishes a major goal,” remarked ABA EVP James Ballentine. “It makes it easier for community banks and thrifts to issue debt and raise capital -- and thus increase the lending that is so critical to growing their local economies.”

The bill requires the Federal Reserve to revise its policy statement providing relief for small BHCs. The Fed has welcomed the legislation, with Fed Governor Daniel Tarullo recently calling on Congress to raise the threshold.

House Passes Cybersecurity Bills December 12, 2014

The House this week passed three ABA-supported cybersecurity bills. Already passed by the Senate, the bills are headed to the White House for the president’s signature.

The bills give the Department of Homeland Security’s National Cybersecurity and Communications Integration Center to expand its role in facilitating information-sharing, clarify the responsibility of DHS and the Office of Management and Budget in safeguarding government systems from cyber attacks and require DHS to assess the readiness of its cybersecurity workforce.

When the next Congress convenes in January, ABA will continue to seek broader legislation that would clarify the legal authority for information-sharing and provide legal protections for institutions that share critical cyber threat information.

House Passes ABA-Backed TRIA Renewal, NARAB Bill December 11, 2014

The House yesterday voted 417-7 to reauthorize the Terrorism Risk Insurance Act. The compromise legislation would extend TRIA for six years while increasing the amount the private sector would be required to cover after a terrorist attack. TRIA renewal has been a longstanding priority for ABA and its American Bankers Insurance Association and ABA Securities Association subsidiaries.

The bill would incrementally reduce the federal share of losses under the program to 80 percent. It would also raise the amount that triggers federal payouts and the amount of federal assistance that must be recovered from the insurance industry after an act of terrorism.

The bill includes an ABIA-backed provision establishing an independent National Association of Registered Agents and Brokers, known as NARAB II. As NARAB members in good standing, agents and brokers could sell or broker insurance in any state based on a home-state license.

The TRIA bill also includes two ABA-supported but not insurance-related provisions, one requiring at least one Federal Reserve Board member have experience with community banking and another clarifying that end users of derivatives are exempt from posting margin for uncleared swaps. The measure now moves to the Senate, where some have expressed opposition to the end user exemption. Read more.

Bankers Urged to Submit Post-Exam Surveys December 11, 2014

One of the top concerns among bank CEOs is inconsistent supervisory expectations and treatment related to examination experience, regulatory interpretation and enforcement, or supervisory guidance. To help address these concerns, ABA and the state bankers associations developed the Regulatory Feedback Initiative.

Since 2011, bankers have submitted nearly 2,500 post-exam surveys covering safety and soundness and compliance exams. The surveys provide an opportunity to submit anonymous feedback; the results are aggregated and shared with the regulatory agencies and with CEOs of participating banks on request.

ABA encourages bank and thrift CEOs or their designees to submit a survey for any exams completed this year, provided they have not already submitted surveys. Request a survey link.

Sen. Coburn Calls for End to Credit Union Tax Subsidy December 10, 2014

Sen. Tom Coburn (R-Okla.) yesterday said that Congress should end several special interest tax breaks -- including the one enjoyed by credit unions, which he noted will cost taxpayers $2.1 billion in fiscal year 2014 and $11.9 billion through FY 2018.

Credit unions’ tax exempt status is “a skewed policy that benefits a select few at the expense of the many,” Coburn said in the 300-plus page report that illuminates more than $900 billion in annual tax expenditures for businesses and individuals.

“Congress has diluted the original statutory intent and it is clear credit unions no longer have to subscribe to a common bond [and] no long longer have the unique purpose of serving the needs of those with modest income,” the report found, adding that the credit union tax exemption “distorts competition within similar institutions and has no economic justification to exist.” Read the report.

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Graduate School of Banking Scholarships

To promote and encourage excellence in the fields of banking and finance, the Arkansas Bankers Association, along with some of the top graduate banking schools in the United States, provides an array of scholarships annually to deserving bankers in our state.

Employees of ABA-member banking institutions who meet the admissions requirements of the graduate banking schools are eligible. These scholarships are specifically for first-year students of the programs.

View the available scholarships!

With consumer sentiment the highest it’s been since the recession, shoppers are expected to open their wallets a bit wider this year. Will holiday spending leave shoppers in the red? Not if they plan wisely and some common sense tips from the ABA.

 Click here to download our 7 Helpful Holiday Spending Tips.

2015 NCCB Conference

The 2015 National Conference for Community Bankers will be held February 8-11, 2015, in Boca Raton, FL.

 This event will include sessions and speakers on topics such as interest rate risk, cybersecurity, non-interest income, industry issues and trends, legislative and regulatory updates, management strategies, the economy and more.

Click here for details.

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