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ICBA Meets with White House Officials on Housing-Finance Priorities
ICBA staff this week met at the White House with executive department officials to discuss pending legislation to reform the housing-finance system and secondary mortgage market.

At the meeting with White House, Treasury Department, and Department of Housing and Urban Development officials, ICBA emphasized that continued community bank access to the secondary mortgage market is essential as policymakers pursue reform.

ICBA President and CEO Cam Fine, ICBA Senior Executive Vice President of Government Relations and Public Policy Karen Thomas and ICBA Senior Vice President of Mortgage Finance Policy Ron Haynie said at the meeting that policymakers must be careful not to create a new system that eradicates liquidity for all but the largest players.

Reforms to the system and government-sponsored enterprises Fannie Mae and Freddie Mac must not limit access to the market for smaller lenders or impose requirements that make participation for small lenders and servicers too costly, they said.

In meetings with policymakers and in testimony before Congress, ICBA has repeatedly worked to ensure efforts to reform the housing-finance address community bank priorities. ICBA is calling on policymakers to:
  • recognize the unique role of community banks and the need to ensure they have straightforward access to the secondary market,
  • preserve the Federal Home Loan Banks as an access point to the national secondary market for community banks,
  • ensure that only loans meeting the “qualified mortgage” definition should be eligible for securitization or sale to the secondary market and contain a government guaranty, and
  • gradually and transparently transition from the current GSEs to any new credit enhancement-guarantor structure to prevent the disruption of the flow of funds into the housing market.
ICBA will continue working with the administration and Congress as efforts to reform the housing-finance system proceed.

ICBA Opposition to Postal Service Bank Proposal Making News
ICBA’s leadership in opposing a proposal to allow the U.S. Postal Service to offer financial services is generating headlines.

USA Today and The Hill recently quoted ICBA President and CEO Cam Fine, who has called the proposal from the agency’s Office of the Inspector General the worst idea since the introduction of the Ford Edsel. The articles follow similar reports from American Banker last week.

ICBA is meeting with policymakers and reporters to oppose the inspector general’s proposal that the Postal Service partner with banks to offer financial services such as prepaid debit cards, small-dollar loans and remittance services to under-banked households. Under the proposal, consumers could load cash or their paychecks onto a Postal Service–branded reloadable prepaid card that could be covered by the FDIC deposit insurance of a partner bank.

The Office of the Inspector General said the plan may appeal to under-banked consumers and could lead to approximately $8.9 billion in annual revenues for the Postal Service. The report said the IG is not suggesting that the Postal Service become a bank or compete with banks.

ICBA strongly opposes the plan to establish the struggling government agency in the financial services sector in an attempt to raise revenue. Fine told the newspapers that involving the Postal Service in financial services is a recipe for disaster. “They can’t even deliver your mail on time,” he told The Hill. “The track record speaks for itself.”

In a joint letter to Senate Homeland Security Committee Chairman Thomas Carper (D-Del.) and Ranking Member Tom Coburn (R-Okla.), ICBA and a coalition of other financial trade groups expressed opposition to an amendment that would authorize the Postal Service to engage in non-postal activities. “Given the Postal Service’s unique governmental status, its entry into the financial services market would raise serious unfair competition concerns,” the coalition wrote.

ICBA will continue its efforts against the proposal and will keep its members informed of the issue.

In the News
ICBA Efforts on Data Breach, Lending, Farm Bill Also Make Headlines
In addition to ICBA’s public outreach on the Postal Service inspector general report, other ICBA and community bank priories have been making news in recent days.

The association’s efforts to communicate the impact of recent retailer data breaches on community banks made the rounds in an Associated Press report. “Nearly every retailer security breach in recent memory has revealed some violation of industry security agreements,” ICBA said in the report.

Additionally, ICBA Senior Executive Vice President and Chief of Staff Terry Jorde was interviewed by Black Enterprise on how small businesses can position themselves to access capital. Jorde noted that community banks are prolific lenders and offered small-business owners tips on how to apply for a loan, such as having a strategic plan in place and skin in the game.

Finally, American Banker quoted ICBA following Senate passage of the farm bill, which sent the legislation to the White House to be signed into law. “ICBA thanks the Senate for passing a five-year farm bill to provide stability to rural communities and the community banks that serve them,” ICBA Chairman Bill Loving said in the article.

ICBA, Coalition: Retailer Claims on Data Breaches Misleading
ICBA told Congress that while Target and Neiman Marcus have consented to their share of the responsibility for recent data breaches, others in the retail industry have not taken this approach.

In a joint letter to members of Congress, ICBA and a coalition of other financial trade groups wrote that retailers continue to make misleading and counterproductive statements about the breaches and the position of banks and other financial institutions.

The financial coalition wrote that the vast majority of breaches occur at healthcare facilities and businesses, compared with just 4 percent at financial institutions. Further, the coalition wrote that recent compromises have nothing to do with chip-and-PIN card technology and that financial institutions initially make consumers whole, often receiving minimal reimbursement.

The letter follows repeated ICBA communications with policymakers on the impact of recent retailer data breaches on community banks and the need for a stronger payments system. In several meetings, committee hearing statements and letters to lawmakers this week, ICBA has been advocating reforms to, among other things, ensure the costs of data breaches should ultimately be borne by the party at fault.

In addition to meeting and communicating with congressional offices on the impact of the data breaches, ICBA also continues offering data-security resources for community banks and their customers on the association’s online security breach toolkit.

Read Coalition Letter. Access ICBA Data Breach Toolkit.

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Financial Literacy
NerdWallet Seeking Entries for Community Bank Local Project Award
NerdWallet, a financial advice website, announced its first-ever Community Banking Local Project Award, which invites community banks across the country to showcase financings that help local economies. NerdWallet is seeking submissions on community bank projects that highlights how community banks work with borrowers through good times and bad.

To be considered for the award, entrants will need to prepare a short description of a local project funded in 2012 or 2013 that is $100,000 in total financing or larger. Projects that promote the physical, social or economic health of their communities or that provide lessons, strategies and techniques that can be used or adapted in other communities will have a greater chance of winning.

ICBA Senior Executive Vice President and Chief of Staff Terry Jorde will serve as the expert judge. Jorde will select one National Award winner from three finalists, with the two remaining finalists awarded honorable mentions.

The finalists and their financings will be recognized on NerdWallet’s award homepage and in a special feature on the website. The winning bank will be presented with the award by a NerdWallet representative at the winning bank’s headquarters. As a bonus, NerdWallet will donate $1,500 to a charity of the winning bank’s choosing.           

Entries, up to three per bank, must be submitted by March 21. Enter Today!

ADP: 175K Private-Sector Jobs Gains in January
Private-sector employment increased by 175,000 jobs in January, according to the latest ADP National Employment Report. The increase included 75,000 job gains for small businesses, 66,000 for medium-sized business and 34,000 for large businesses.

Take This Week’s Quick Poll
Take this week’s Quick Poll on financial literacy, and view results from the previous poll on ICBA’s mobile apps. View the Archive.

ICBA Seminar Covers Advanced Community Bank IT Issues
Expanding technology is fueling a revolution in services available to community bank customers. As a result, information technology solutions are evolving daily to better secure these opportunities, increase efficiency and improve service capabilities. Technology officers and security officers tasked with managing technology solutions at their banks are invited to attend ICBA’s comprehensive Advanced Current Community Bank IT Issues seminar scheduled for April 16-17 in Minneapolis. Register Online.

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