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Heitkamp: Fed Needs Community Bank Presence
Community banks are relationship bankers and should have a presence on the Federal Reserve Board, Senate Banking Committee member Heidi Heitkamp (D-N.D.) told community bankers gathered for the ICBA Washington Policy Summit.

Addressing the more than 1,000 community bankers and industry advocates gathered in the nation’s capital, Heitkamp noted that she is encouraging President Barack Obama to appoint to the Fed someone with community banking experience.

Heitkamp noted that community banks had nothing to do with the 2008 financial crisis and should not bear the burden of regulations imposed in the aftermath. She encouraged community bankers to keep their seat at the negotiating table and tell their real-world stories as they advocate regulatory relief and sound housing-finance reforms.

“If you’re not at the table, you’re for lunch,” Heitkamp said.

Stay connected to live updates and photos of the Washington Policy Summit by following the #ICBAWPS14 hashtag on Twitter and ICBA’s Facebook page.

Corker: Community Bankers Have Clout in Washington
Community banks carry clout in Washington because they are located in congressional districts across the nation, Senate Banking Committee member Bob Corker (R-Tenn.) said at the ICBA Washington Policy Summit.

Speaking to an audience of ICBA community bankers gathered for meetings with their members of Congress, Corker said many lawmakers recognize that community banks are critical for civic endeavors, small-business development and employment growth.

Corker said the banking committee is committed to preserving community bank access to the secondary mortgage market as it considers legislation to reform the housing-finance system. He noted that lawmakers are working to ensure the existing cash window for community bank mortgage loans does not change in any way.

“Thank you for all that you do, and let’s put in place a system of regulation that allows institutions of all sizes to flourish,” Corker said.

The Senate Banking Committee is negotiating a version of the Housing Finance Reform and Taxpayer Protection Act of 2013 (S. 1217), which Corker helped draft, to reform the housing-finance system. The panel this week said it will convene for a vote on the measure in the coming days.

Community Bankers Swarm Capitol Hill for 300 Congressional Meetings
Community bankers from across the nation swarmed Capitol Hill for meetings with members of Congress as part of the ICBA Washington Policy Summit. More than 1,000 community bankers and industry advocates are gathered in the nation’s capital for more than 300 congressional meetings.

Community bankers are focusing the 2014 summit on pressing issues such as pending regulatory relief legislation, housing-finance reform, and the credit union and Farm Credit System tax subsidies.

The Washington Policy Summit continues today with remarks from Federal Reserve Chair Janet Yellen and continued grassroots meetings with members of Congress and federal financial regulators.

Community bankers in Washington for the summit can enter a social media contest. Community bankers who tweet ICBA a photo of themselves and a #BankLocally Metro ad will be entered for one of five $50 gift cards.

With many Washington Policy Summit attendees posting to social media, community bankers back home can stay connected via the #ICBAWPS14 hashtag on Twitter and ICBA’s Facebook page.

Lobby from Home with ICBA’s Virtual Policy Summit
Community bankers not in Washington for the ICBA policy summit can participate from home with ICBA’s Virtual Policy Summit and grassroots Twitter map.

The Virtual Policy Summit makes it easy for community bankers to contact their members of Congress on the very same issues that their fellow community bankers are lobbying while in Washington. Meanwhile, the grassroots Twitter map allows community bankers to tweet their members of Congress with customizable messages.

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NerdWallet Announces Community Bank Award Winner
NerdWallet announced its 2014 Community Banking Local Project Award winner and honorable mentions.

Terry Jorde, who judged the contest and serves as ICBA senior executive vice president and chief of staff, selected The Provident Bank of Iselin, N.J., as the national award winner. The community bank initiated a post–Hurricane Sandy loan program that provided financial relief to those affected most by the storm.

The Provident Bank will be presented with the award at its headquarters. NerdWallet also will donate $1,500 to a charity of the bank’s choosing.

Jorde also selected two finalists as honorable mentions, including:
  • Citizens Bank of Edmond, Okla., which provided nearly $700,000 to enable the construction and permanent financing of a non-profit day shelter for the homeless, and
  • Farmers & Merchants Bank of Ashland, Neb., which led the funding of the $5.2 million Ashland Community Resource Center, which will serve as a new library, senior center and community meeting area when it’s completed later this year.
NerdWallet’s Community Banking Local Project Award recognizes outstanding examples of public or private financings by community banks. Community banks from across the country submitted applications. Read More from NerdWallet.

Farm Credit
ICBA Urges Farm Credit Administration Not to Withdraw FCS Exec Compensation Advisory Votes
ICBA urged the Farm Credit Administration, regulator of the Farm Credit System, to issue a proposed regulation to retain requirements allowing FCS member-owners to petition for a non-binding advisory vote if an FCS institution’s compensation package for executives or senior officers changes by 15 percent in a given year.

The FCA recently issued an interim final rule to withdraw its final rule containing the option for FCS stockholders to conduct advisory votes due to a provision in the current appropriations act, expiring this September, that prohibits FCA from spending funds to implement the provisions. However, ICBA urged the FCA to modify the proposal and reissue the regulation as a proposed rule with a public comment period so that a new regulation could be finalized during the next fiscal year, which would provide Congress an opportunity to fully consider the regulation. 

ICBA noted in a comment letter that not allowing member-owners of the FCS a say in their cooperative’s management violates cooperative principles, the same cooperative principles that FCS uses to justify their nearly tax-exempt status to Congress. ICBA also said that the FCS is a government-sponsored enterprise that needs greater accountability and transparency.

CFPB Proposes Allowing Point and Fee Refunds for Qualified Mortgages
The Consumer Financial Protection Bureau proposed adjustments to its new mortgage rules that would under certain circumstances allow institutions to refund excess points and fees on loans that would continue to be considered qualified mortgages.

The CFPB’s ability-to-repay rule generally prohibits lenders from charging points and fees on qualified mortgages exceeding 3 percent of the loan principal.

Under the proposal released yesterday, if a lender believes it has offered a qualified mortgage but afterwards discovers that it has exceeded the 3 percent cap, it can refund the excess to have the loan meet the QM legal requirements.

The proposal requires refunds to occur within 120 days after the loan is made. Further, creditors must maintain and follow policies and procedures for reviewing the loans and providing refunds.

The CFPB also said it is seeking input on the impact of its mortgage rules, including their effect on lenders that do not meet the definition of small creditor. The bureau said it might address these issues in future rulemakings.

ICBA is reviewing the proposal and will submit comments. Read the CFPB’s Proposed Rule.

Monetary Policy
Fed Continues Drawdown of Asset Purchases
The Federal Open Market Committee announced its fourth reduction in its asset-purchase stimulus program. The panel again reduced its monthly pace of securities purchases by $10 billion, to a total of $45 billion per month.

The FOMC said growth in economic activity has picked up recently following a sharp decline in winter partly due to adverse weather conditions. The panel maintained its record-low target for the federal funds rates, which it has kept between zero and 0.25 percent since December 2008.

Regional News
FDIC Announces Relief Following Arkansas Storms
The FDIC announced steps to provide regulatory relief to financial institutions and to facilitate recovery in areas of Arkansas affected by severe storms, tornadoes and flooding. The agency is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe weather. The FDIC said that banks may receive favorable Community Reinvestment Act for supporting disaster recovery and that it will consider relief from certain filing and publishing requirements.

ADP: Private Sector Adds 220K Jobs in April
Private-sector employment increased by 220,000 jobs in April, according to the ADP National Employment Report. Small businesses added 82,000 jobs, while medium-size and large businesses added 81,000 and 57,000 jobs, respectively. ADP upwardly revised the March increase from 191,000 to 209,000.

GDP Growth Just 0.1 Percent in Q1
The U.S. gross domestic product increased by 0.1 percent in the first quarter, according to the Commerce Department’s advance estimate. In the fourth quarter, real GDP increased 2.6 percent. The second first-quarter estimate, based on more complete data, is scheduled to be released May 29.

Take This Week’s Quick Poll
Take this week’s Quick Poll on meeting with Congress, and view results from the previous poll on Community Banking Month activities.
View the Archive.

ICBA Webinar Covers Accounting for Purchased, Acquired Loans
A burdensome regulatory environment, highly competitive loan markets and the continued margin-squeezing low-interest-rate environment have led to an increase in mergers and acquisitions. For purchased loans, the accounting and regulatory requirements can be quite complex. An ICBA webinar scheduled for 11 a.m. (Eastern time) Thursday, May 8, will feature the key challenges banks face in managing acquired loans. Learn More and Register.

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