If you have trouble viewing this email or are using a mobile device, read the online version.
To ensure receipt of our e-mails, please add info@icba.org to your address book.

Sponsored by
Reading on a mobile device? Check out the online version.
ICBA: Capital Conservation Buffer Threatens Many Community Banks
The new capital conservation buffer under Basel III capital rules would limit the ability of many community banks to raise capital and serve their communities, ICBA wrote in a letter to regulators. The buffer is designed to curtail capital distributions and certain executive bonus payments when regulatory capital levels fall below preset thresholds.

ICBA wrote that the capital conservation buffer would be particularly detrimental to the approximately 2,000 community banks structured as Subchapter S corporations. The buffer’s limitations on paying dividends to shareholders in certain situations would hamper the ability of these institutions to raise capital.

ICBA noted that the buffer will force community banks to operate at a disadvantage compared with too-big-to-fail financial institutions and tax-exempt credit unions, which enjoy government subsidies. ICBA wrote that that the Basel III regulatory capital rules were intended to apply to the largest and most complex internationally active banks.

The association asked regulators to allow community banks to distribute at least 35 percent of their reported net income for a reporting period. Read ICBA Letter. Read ICBA Release.

ICBA Meets with White House on Patent Reforms
ICBA met with policymakers at the White House on the administration’s initiatives to rein in abusive patent litigation. At the meeting, White House officials announced a new U.S. Patent and Trademark Office online toolkit to help individuals and businesses understand their rights and available resources before entering into litigation or settlements.

The new portal offers various tools and information on patent litigation and demand letters, including answers to commonly asked questions and a catalog of third-party sites. The White House also announced executive actions to make it easier for the public to provide information about relevant prior art in patent applications, to improve patent examiner training, and to expand pro bono assistance with patent applications.

The meeting follows constant ICBA pressure on policymakers to advance measures that will protect community banks from patent-assertion entities, which assert infringement of business-method patents of dubious quality by legitimate businesses. In meetings with members of Congress, letters to lawmakers and committee hearing statements, ICBA has called for initiatives to address demand letters and indemnify end users.

ICBA is urging Congress to pursue legislation that would strengthen demand letter transparency by requiring patent-assertion entities to provide minimum disclosures to better identify themselves, the patent in question and the specific nature of the infringement they allege. The association also is urging Congress to amend current law to ensure that vendors that sell products or services to community banks provide the appropriate warranties and indemnification to protect the end users from patent-infringement claims.

These initiatives would build on the ICBA-advocated Leahy-Smith America Invents Act of 2011, which established a transitional proceeding at PTO to re-examine the validity of certain low-quality business-method patents.

ICBA will continue working with Congress and the administration on these and other initiatives to address problems with patent abuse. Read White House Fact Sheet. Access PTO Resource Center.

ICBA Survey Finds Community Banks Reissue 4M Cards Following Data Breaches
ICBA announced this week that community banks have already reissued more than 4 million credit and debit cards at a total reissuance cost of more than $40 million following recent data breaches at major retailers.

Data from a recent ICBA survey also show that community banks’ initial fraud costs were relatively low due to their quick action in reissuing affected cards. Less than 1 percent of community bank customers reporting fraud on their accounts following the breaches at Target and Neiman Marcus.

In a joint message to community bankers, ICBA Chairman Bill Loving and ICBA President and CEO Cam Fine wrote that ICBA recognizes how frustrated community bankers are by the recent retailer data breaches. Loving and Fine noted that ICBA has released various resources to help community banks respond to the breaches, has been in frequent communications with policymakers, and recently joined a partnership of financial services and retailer organizations to enhance inter-industry collaboration.

ICBA will continue to pursue more effective data-security standards and greater accountability following data breaches. Access ICBA Data Breach Resources.

ICBA Urges Fed Nominee with Community Bank Experience
In its continued fight to ensure a community bank voice in the regulatory agencies, ICBA this week urged President Barack Obama to nominate to the Federal Reserve Board someone with a background in community banking or community bank supervision. Because community banks serve a vital role in the nation’s economy, particularly with respect to small businesses and rural communities, there should be someone on the board who understands the community bank perspective, ICBA wrote.

The departure of former community banker Elizabeth Duke and former Maryland commissioner of financial regulation Sarah Bloom Raskin will leave the board without sufficient community banking experience, ICBA wrote in a letter to Obama.

Additionally, the board would gain from someone with community banking experience who could help with supervision of state member community banks and holding companies and systemically risky financial institutions, ICBA wrote. The association noted that the crushing regulatory burden on community banks makes tiered regulation imperative and that a community banking presence would have prevented recent unexpected Volcker Rule compliance problems. Read ICBA Letter.

ICBA NewsWatch Today is sponsored by QwickRate:
Need to replace deposits without repricing your base? Post rates on QwickRate. Consistently. Attract a steady stream of institutional, non-brokered deposits – no transaction fees! Schedule a personalized webinar tour (introducing our beneficial new Bank Performance Report Card tool) to learn more or register for webinar on March 11, 2pm ET or March 12, 11am ET.

Call Report
ICBA Urges Agencies to Exempt Community Banks from Call Report Additions
ICBA this week repeated its call for regulators to exempt financial institutions with total consolidated assets of $10 billion or less from expanded call report requirements. In a comment letter to the agencies, ICBA raised questions about the validity and usefulness of the information requested through the proposed call report changes.

The agencies proposed call report changes that would expand reporting of consumer deposit account balances when they are intended for individuals for personal, household or family use. Under the proposal, financial institutions with total assets of $1 billion or more would be required to begin reporting consumer deposit service charges based on overdraft fees, monthly maintenance charges and consumer ATM fees.

ICBA wrote that the proposal is the latest in a long line of new reporting burdens for community banks caused by policies directed at much larger financial institutions that offer commoditized financial products. Read ICBA Comment Letter.

ICBA Generally Supports FDIC’s Megabank Resolution Strategy
ICBA said it generally supports the FDIC’s proposed “Single Point of Entry” strategy for resolving systemically important financial institutions. In a comment letter to the agency, ICBA wrote that the strategy would help preserve financial stability and promote market discipline, but the association recommended significantly higher capital and unsecured debt requirements for SIFIs.

The strategy implements the FDIC's authority under the Dodd-Frank Act to place SIFIs into an FDIC receivership process if no viable private-sector alternative is available to prevent default. Because most SIFIs are organized under a holding company structure, the FDIC is proposing that the resolution take place at the holding company level to allow subsidiaries to remain operational during a resolution. Read ICBA Comment Letter.

Farm Credit
Farm Credit Administration Holds Another Secret ‘Public’ Meeting
The Farm Credit Administration, which regulates the Farm Credit System, held another secret public meeting this week despite ICBA’s strong opposition. This week’s meeting covered the factors influencing consolidation in the FCS and the potential impact on its mission.

In joint letters to the FCA and chairmen and ranking members of the House and Senate agriculture committees, ICBA and the American Bankers Association raised several objections. The associations objected to the lack of transparency surrounding the public meetings and FCA’s refusal to release a transcript of the proceedings. ICBA and ABA said the FCA’s secret meetings by invitation only to members of the public appear to violate the Government in Sunshine Act, by which all federal agencies must operate. 

The letter also objects to the lack of transparency and details surrounding this week’s secret public meeting. In addition to requesting a transcript of both meetings, the letter pointed out that the second secret meeting agenda lists non-FCA federal agency representatives from the Department of Agriculture on the agenda while limiting members of the public from attending who have specifically requested to attend. 

“If the FCA continues to ignore the requirements of the Government in the Sunshine Act and disregard calls for improving openness and transparency, we will consider all available options to ensure that the public has the opportunity to understand what is being discussed at these closed door meetings,” the associations wrote. Read the FCA Meeting Agenda. Read the Joint Letter.

ICBA Backs Bill Allowing Reassessment of CFPB 'Rural' Designation
ICBA expressed strong support for legislation introduced by Sens. Mitch McConnell (R-Ky.) and Rand Paul (R-Ky.) that would create a process in which individuals could petition the Consumer Financial Protection Bureau to reassess the rural status of counties.

The CFPB’s annual designation of “rural” counties is used to administer restrictions on qualified mortgage balloon loans, escrow requirements for higher-priced mortgage loans and the second appraisal requirement for certain higher-priced loans.

The petition process created by the HELP Rural Communities Act of 2014 (S. 1916) would allow for a broader range of evaluation criteria, more accurately identify rural counties, and help ensure continued access to mortgage credit in rural communities. In a letter to the senators this week, ICBA noted that S. 1916 would make the CFPB’s mortgage rules more workable for community bank customers.

ICBA also said it supports an alternative solution that would grant QM status and an exemption from escrow requirements to any community bank-originated mortgage loan held in portfolio, including balloon loans in rural and non-rural areas without regard to their pricing. Read ICBA Letter.

ICBA Continues Campaign Against Costly Accounting Proposal
ICBA continues 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 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.

Housing GSEs Required to Develop AML Plans
The Financial Crimes Enforcement Network finalized anti-money-laundering regulations that will require Fannie Mae, Freddie Mac and the Federal Home Loan Banks to develop AML programs and file suspicious activity reports with FinCEN. The final rule replaces the housing GSEs’ practice of filing less detailed reports through the Federal Housing Finance Agency. The FHFA will examine the GSEs for compliance with the regulations.

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

Use Social Media to Get Free Ticket to 2015 ICBA Convention
ICBA is giving away a free convention registration to the 2015 ICBA Community Banking Live convention in Orlando, Fla.

Follow these steps for your chance to win:
A. Be a Twitter user or sign up for Twitter at www.twitter.com. (Please make sure you are identifiable via your Twitter account.)
B. Follow us @ICBA.
C. Tweet during the 2014 ICBA Community Banking Live convention using the #ICBALive14 hashtag.

The deadline to enter is noon (Eastern time) Thursday, March 13. The winner will be announced on Friday, March 14, via ICBA’s Twitter handle. For contest specifics, check out ICBA’s convention website.

New to Twitter? Check out the “how-to’s” section of the convention website and the list of convention Twitter handles to follow. Learn More.

Stay Connected. Follow Us.

You are receiving this e-mail because you are a member of ICBA or you registered to receive it. To manage your email preferences or to unsubscribe click here.

ICBA | 1615 L Street NW, Suite 900 | Washington DC 20036 | info@icba.org | (202) 659-8111 | (800) 422-8439
All contents copyright 2012 Independent Community Bankers of America. All rights reserved. Privacy Statement