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Banking News

Nichols: Durbin Amendment Costs Consumers ‘Tens of Billions’ in Losses April 26, 2017

As representatives from the retail industry hit Capitol Hill this week to lobby members of Congress, ABA President and CEO Rob Nichols called on lawmakers to repeal the Durbin Amendment, which imposed government price controls on debit card interchange. In an op-ed published in The Hill newspaper yesterday, Nichols noted that the amendment -- an eleventh-hour addition to the Dodd-Frank Act -- “represents a loss of tens of billions of dollars in consumer value.”

The controversial amendment has had negative consequences for consumers, small businesses and the banks that serve them, Nichols said. Since its passage, it has caused many banks to limit various product offerings, such as free checking accounts, and limited transaction processing choices for small businesses. At the same time, he added, retailers have reneged on their promise to pass along lower prices to their customers in exchange for lower interchange fees.

“Retail stores would howl if Congress capped the prices of the food or clothing or equipment they sell,” Nichols wrote. “It’s no different in financial services. Bankers strongly support policies that promote a vibrant retail sector, but onerous price caps and regulations hurt consumers more than they help grow the economy… Simply put, the Durbin amendment extracts a high price from many for the benefit of a few.”

ABA also sent a letter to members of Congress yesterday, echoing Nichols' comments and calling on lawmakers from both parties to work together to repeal the amendment. Read the op-ed. Read the letter.

ACH Transaction Volume, Value Grow in 2016 April 26, 2017

Electronic ACH payment transaction volume grew by 5.3 percent last year, reaching 25.6 billion transactions, according to a report from NACHA, the electronic payments association. The total transaction value was $43.7 trillion in 2016, a 5.1 percent increase over the year prior. Nearly all ACH transactions (94.3 percent) were originated by the top 50 originating depository institutions, while 58.2 percent of all transactions were received by the top 50 receiving depository institutions.

Debit transactions accounted for 58 percent of total ACH volume. Credit transactions grew by more than 5.6 percent. More than 13 million same-day ACH credit transactions were processed since the capability became available in September, totaling $17 billion. NACHA said it expects to see same-day ACH use continue to increase as same-day debit capabilities are rolled out later this year.

NACHA also reported increases in business-to-business payments, with same-day and traditional B2B transactions accounting for 15 percent of overall ACH volume. Consumer payments transactions also grew; direct deposit transactions totaled 6.1 billion — a 5.1 percent increase from 2015 — and nearly 79 million P2P payments were processed.

ABA Provides Treasury with Recommendations to Promote Economic Growth April 26, 2017

In a detailed letter on Friday to Treasury Secretary Steven Mnuchin, ABA provided a number of recommendations to improve banks’ regulation and promote economic growth. ABA’s letter follows up on an April 5 industry meeting at Treasury and President Trump’s executive order that initiated a core principles review of bank regulation and oversight.

Among other things, ABA urged that rules and regulations -- and regulatory enforcement -- recognize the unique strengths of community banks, including minority-owned institutions, and the community bank business model. ABA also called for a review of mortgage lending rules and highlighted the challenges posed by the oncoming CECL accounting standard, Basel III’s particular impact on Subchapter S banks, fair lending enforcement that relies on the disparate impact model, and the overall need to reduce regulatory overlap and duplication.

“Community banks’ competitive advantage rests on their detailed knowledge of their local markets, local market participants, the local business environment, and the ability to customize services in accordance with that knowledge,” ABA said. “The regulatory trend of recent years to impose standardization of loans and financial services products undermines community banks’ chief competitive advantage, instead rewarding firms that make their profit from the volume of loans and services provided.”

ABA also pointed out how the artificial $10 billion threshold -- whether by statute or by regulation -- acts as a ceiling on community banks, forcing them to restrict their growth or otherwise face a major change in their business model. “There should be little business difference between a bank with $9 billion in assets and one with $11 billion in assets, but there is a very significant -- and disruptive -- regulatory difference,” ABA said. Read the letter.

New Slate of ABA Officers Installed April 18, 2017

A new slate of officers was installed at the ABA Annual Convention on Tuesday, April 11, including Chairman Dave Dickson, President & CEO of Union Bank & Trust Co., Monticello; Chairman-Elect Cathy Owen, Chairman of Eagle Bank, Little Rock; Vice Chairman Rob Robinson, Market President of Simmons Bank, El Dorado; and Treasurer Judy Lawton, President & COO of Heartland Bank, Little Rock.

Also providing leadership for the coming year will be the ABA Board of Directors: Jeff Brecklein, Integrity First Bank, Jonesboro; Phil Baldwin, Citizens Bank, Batesville; Jim Cargill, Arvest Bank, Little Rock; Gene Crawford, First National Bank of Crossett; David Dowd, Cross County Bank, Wynne; Troy Duke, Gateway Bank, Rison; Don Gibson, Legacy National Bank, Springdale; Chris Gosnell, Farmers Bank & Trust Company, Magnolia; Scott Hancock, Centennial Bank, Fayetteville; Johnny Adams, First Security Bank, Conway; Darwin Hendrix, Bank of Delight, Prescott; Jason Tennant, Cornerstone Bank, Eureka Springs; Lynn Wright, Regions Bank, Little Rock; David Jessup, DeWitt Bank & Trust Company, DeWitt; Wilson Moore, Bank of America, Little Rock; Jerry Morgan, Focus Bank, Jonesboro; and Lori Ross, Citizens Bank, Arkadelphia.

Arkansas Milestone Bankers Honored April 18, 2017

Thirty longtime Arkansas bankers were honored with the BKD Milestones in Banking Awards at the 127th Annual Arkansas Bankers Association Convention on Tuesday, April 11, 2017 at the Little Rock Marriott and Statehouse Convention Center in Little Rock, Arkansas.

These bankers have a combined 1,220 years of service to their communities and the Arkansas banking industry. Honored for 40 years of service were Phyllis “Ceci” Bettell, Arkansas County Bank; Valerie Cook, Mary Cox, Carolyn Eckman, Kathy Kinion, Ernie Penn, Diana Rhoads, and Lola Roberts, all of Arvest Bank; Carolyn Boone, Alan Dunsworth, Vicky Hansen, Bob King, and Dolores Snider, all of the Bank of Fayetteville; Beth Dildine, Cross County Bank; Becky Burroughs, Cathey Cox, Gynelle Linder, and George Penick, all of Eagle Bank & Trust; Cindy Juhl and Lee Ann Krisell of Farmers & Merchants Bank; Gary Clark and Martha Hunt of Fidelity National Bank; Rhonda Boen and Janice Townsend of First Security Bank; I. Joe Miles of Integrity First Bank; Jill McClinton of Peoples Bank; John Garrison of Relyance Bank; and Sharon Wilson of River Town Bank.

Honored for 50 years of service were Gary Canada, Sr., and Hanna Canada, both of the Bank of England.

This marks the third year for the Milestones in Banking Awards, sponsored by BKD, LLP. To be eligible for the awards, bankers must have served 40+ or 50+ years in banking, and be actively employed by an Arkansas bank.

ABA Submits Bipartisan Economic Growth Ideas to Crapo, Brown April 17, 2017

ABA on Friday urged the leaders of the Senate Banking Committee to focus on expanding portfolio mortgage lending, modernizing rules on brokered deposits, enhancing bank innovation and providing relief from unnecessary stress tests -- all of which would be bipartisan, common-sense policies to promote economic growth.

The letter came in response to a request from Banking Committee Chairman Mike Crapo (R-Idaho) and Ranking Member Sherrod Brown (D-Ohio) for policy ideas that would stimulate economic growth and community development. ABA’s proposals included detailed information on the economic and consumer impacts and legislative language.

Specifically, ABA called for the committee to advance bipartisan legislation that would designate mortgage loans held in portfolio as Qualified Mortgages; update the FDIC’s treatment of brokered deposits to remove limits on the funding banks use to grow business and consumer lending; create a proactive, meaningful process of advance rulings from the Consumer Financial Protection Bureau on innovative products; require the CFPB and the Small Business Administration to study existing data sets before moving forward with a proposed data collection on small business lending; and remove stress testing requirements for midsize banks.

ABA also urged Crapo and Brown to take up priority legislation in ABA’s Blueprint for Growth, including bills that would tailor regulations and SIFI designations, provide an independent exam appeals process, end the Durbin Amendment’s price controls, provide charter flexibility for thrifts and count municipal securities as high-quality liquid assets, among others. Read the letter.

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At least seven banks across the country received demand letters that challenge their website compliance with Web Content Accessibility Guidelines. We have reason to believe the number of these lawsuits will rapidly climb. Arkansas banks need to be on alert.

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FS-ISAC Security Update

FS-ISAC Security Information Available to ABA Members

ABA members can now access FSā€ISAC security threat information via the FS-ISAC Weekly Risk Summary Report, designed for community institutions to deliver timely and actionable information on significant security threats.

Click here to access the most recent Weekly Risk Summary Report.