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Flood Insurance
House To Take Up Modified Version of ICBA-Advocated Flood Insurance Bill
The House will consider a modified version of ICBA-advocated legislation to protect homeowners from significant increases in flood insurance premiums, House Majority Leader Eric Cantor (R-Va.) said. Lawmakers during the week of Feb. 24 will take up a version of the Homeowner Flood Insurance Affordability Act (H.R. 3370), Cantor said.

ICBA has expressed support for the legislation, which would provide a four-year delay for most rate increases. H.R. 3370 also would require the Federal Emergency Management Agency to complete an affordability study and propose an affordability framework to help homeowners cope with dramatically higher premiums.

The House debate follows a recent Senate vote approving S. 1926, similar legislation to delay steep National Flood Insurance Program rate increases that would negatively affect home values and destabilize the still-recovering housing market in affected areas.

ICBA has repeatedly called on policymakers to address significant NFIP premium increases and will continue working with lawmakers to address the issue. The association worked closely with the Senate and continues working with the House to mitigate these dramatic rate increases and implement a comprehensive fix.

Separately, the Federal Emergency Management Agency recently halted planning and development activities under one section of the Biggert-Waters Flood Insurance Modernization and Reform Act of 2012. The law prohibits FEMA from administering the premium increases that result from remapping. All other National Flood Insurance Program insurance and activities as required by Biggert-Waters Act will continue in the normal course of business, FEMA said.

ICBA Pursues Cybersecurity Dialogue with Industry, Policymakers
ICBA this week continued its efforts to advance the dialogue on cybersecurity following the massive data breaches at major retailers.

ICBA and a coalition of trade associations representing the financial services and retail industries announced a cybersecurity partnership to discuss areas of agreement and disagreement and to seek solutions. The partnership will explore how to increase information sharing, improve card security technology and maintain the trust of customers.

ICBA also welcomed the release of a cybersecurity framework by the National Institute of Standards and Technology at the direction of President Barack Obama. The NIST worked with the banking and financial sectors to establish a voluntary framework to help organizations align their cybersecurity activities with their business requirements, risk tolerances and resources.

ICBA has been communicating frequently with Congress on the impact of recent retailer data breaches on community banks and the need for a stronger payments system. In meetings, committee hearing statements and letters to lawmakers, ICBA has advocated that:
  • the costs of data breaches should ultimately be borne by the party at fault for the breach,
  • all participants in the payments system—including merchants—should be subject to Gramm-Leach-Bliley Act–like standards,
  • a national data-security breach and notification standard should be enacted to replace the current patchwork of state laws, and
  • unnecessary barriers to effective threat-information sharing between law enforcement and the financial and retail sectors should be removed.
More information on ICBA’s efforts and data-security resources for community banks and their customers are available on ICBA’s online security breach toolkit.

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ICBA Urging Community Banker Letters Against Costly Accounting Proposal
ICBA this week continued its campaign urging community bankers to send in custom comment letters opposing accounting standards proposed by the Financial Accounting Standards Board. The proposal would require all community banks to revise how they account for their loan-loss reserves (ALLL), loans and securities.

The FASB proposal would implement a single approach for recognizing credit losses on loans, securities and trade receivables. The proposal would use an “expected loss” model, which would require banks to estimate expected credit losses and recognize the net present value of those losses at origination. It would replace the “incurred loss” model.

FASB’s proposal would require complex modeling and compel banks to recognize losses much earlier than necessary in the credit-loss cycle, penalizing community banks for investing in loans and securities. The Office of the Comptroller of the Currency estimates that loan-loss reserves on average will increase by 30 percent to 50 percent with adoption of the proposal.

ICBA’s customizable letter urges FASB to re-propose a simpler and more straightforward proposal that would not harm the nation’s community banks. Send in Your Letter Today! Read More on the Issue.

Plan for Prosperity
ICBA Thanks CLEAR Relief Act Cosponsors, Continues Grassroots Call
ICBA this week thanked the cosponsors of the CLEAR Relief Act of 2013 (H.R. 1750/S. 1349) for supporting much-needed regulatory relief for community banks. In letters to House and Senate cosponsors, ICBA said the bill offers reasonable relief from onerous regulation to better allow community banks to serve the needs of their customers and communities.

The legislation, inspired by ICBA’s Plan for Prosperity regulatory relief platform, offers community bank exemptions from mortgage and auditing regulations and supports additional capital opportunities for small bank holding companies.

ICBA continues encouraging community bankers to view the list of cosponsors for the House and Senate legislation and to urge their members of Congress to cosponsor the legislation if they have not yet signed on.

Find Cosponsors for H.R. 1750 or S. 1349.

Call Your Lawmakers Today.

Send a Follow-Up Message.

ICBA, Coalition: Avoid One-Size-Fits-All Diversity Policies
Federal regulators should avoid a one-size-fits-all approach to diversity standards, ICBA and a coalition of other banking groups wrote in a joint comment letter to the agencies. ICBA, the American Bankers Association and a coalition of state banking groups maintaining flexibility is essential to allowing individual banking institutions to adapt to the unique and evolving nature of their own markets.

Specifically, the coalition called on regulators to remove a provision of the proposal that would require institutions’ standards to address procurement or supplier diversity or include performance measures and other specific assessments of work product in transparency of practices.

The coalition also wrote that it strongly agrees with the agencies’ view that financial institutions voluntary self-assess their diversity practices, which would be a more effective and appropriate methodology than traditional examination or other supervisory review. ICBA and a separate coalition of national financial trade groups reiterated these concerns in a separate joint comment letter.

The agencies in October released the proposed standards, which are designed to promote transparency and awareness of diversity policies and practices within the institutions they regulate.

Take This Week’s Quick Poll
Take this week’s Quick Poll on a proposal that the U.S. Postal Service enter the financial services industry, and view results from the previous poll on financial literacy. View the Archive.

Holiday Note
ICBA Offices Closed for Presidents Day
ICBA offices will be closed Monday for Presidents Day. ICBA NewsWatch Today will resume publication on Tuesday.

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