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Yellen: Fed Works to Tailor Community Bank Regulation
The Federal Reserve has taken steps to avoid a one-size-fits-all approach to bank regulation and to tailor supervision to the size and complexity of the banks it supervises, Federal Reserve Chair Janet Yellen told community bankers gathered in Washington.

Speaking at the ICBA Washington Policy Summit, Yellen said the agency takes a disciplined approach to judging which supervisory policies should apply to community banks and whether it can minimize burdens and improve examination processes.

Yellen cited regulatory capital rules, which vary based on size and complexity, as an example of tailored regulation. She also noted that the Federal Reserve is working with the Financial Accounting Standards Board to ensure new accounting standards can be implemented practically and do not require community banks to utilize complex modeling processes.

The Fed chair also said the agency continues working to address the nation’s too-big-to-fail threat, including via stress testing and capital-planning requirements that do not, and should not, apply to community banks.

Yellen addressed community bankers and industry advocates gathered in Washington for the ICBA Washington Policy Summit. Community bankers can see more on the summit by following the #ICBAWPS14 hashtag on Twitter and ICBA’s Facebook page.

Yellen Remarks Generate Washington Policy Summit Buzz
Federal Reserve Chair Janet Yellen’s remarks at the ICBA Washington Policy Summit generated numerous headlines in leading national news media.

The Wall Street Journal, Associated Press, Bloomberg and American Banker emphasized Yellen’s discussion of regulation tailored to the smaller size and risk profile of community banks.

Meanwhile, Reuters focused on Yellen’s comments on renewed loan growth at community banks, and MarketWatch focused on her continued targeting of the nation’s too-big-to-fail problem.

Community Bankers Continue Meetings with Congress, Regulators
Community bankers continued meeting with policymakers Thursday to address the industry’s top policy priorities as part of the ICBA Washington Policy Summit.

More than 1,000 community bankers and industry advocates gathered in the nation’s capital for more than 300 congressional meetings. Community bankers also held meetings with representatives of federal financial agencies, including FDIC Chairman Martin Gruenberg and Consumer Financial Protection Bureau Deputy Director Steve Antonakes.

Community bankers focused their meetings on issues such as regulatory relief, housing-finance reform, and the credit union and Farm Credit System tax subsidies.

Whether in Washington or back home, community bankers can continue their grassroots outreach to their members of Congress with ICBA’s Virtual Policy Summit and grassroots Twitter map.

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ICBA, Coalition Urge Congress to Approve Patent Reform
ICBA and a coalition of more than 400 businesses and organizations called on Congress to pass comprehensive and bipartisan patent-reform legislation. The coalition noted in a letter to the Senate Judiciary Committee that Main Street businesses face a constant barrage of lawsuits and abusive demand letters from patent-assertion entities.

The coalition said bipartisan legislation that committee members are drafting should strengthen transparency by requiring entities to better identify themselves, the patent in question and the specific nature of the infringement they allege.

ICBA has repeatedly urged Congress to address patent abuse, including in a recent statement for the record for a House Energy and Commerce subcommittee hearing.

Volcker Rule
House Approves ICBA-Backed Bill Easing Volcker Rule CLO Provision
The House this week passed ICBA-advocated legislation that would allow community banks to retain debt securities of collateralized loan obligations issued before Jan. 31, 2014. The vote followed ICBA calls for lawmakers to support the legislation, which passed on a voice vote.

The Restoring Proven Financing for American Employers Act (H.R. 4167) was introduced by Rep. Andy Barr (R-Ky.).

In a letter to the House, ICBA noted the final Volcker Rule requires banks to divest their holdings of CLOs by July 2015. This could cause a significant, immediate and permanent loss of capital for community banks that hold these securities, the association wrote.

NerdWallet Announces Community Bank Award Winner
NerdWallet this week 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.

Regional News
FDIC Announces Relief Following Mississippi Storms
The FDIC announced steps to provide regulatory relief to financial institutions and to facilitate recovery in areas of Mississippi 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 credit for supporting disaster recovery and that it will consider relief from certain filing and publishing requirements.

CFPB Releases Tools for Foster Children Credit-Reporting Issues
The Consumer Financial Protection Bureau published action letters for child welfare caseworkers to send to credit bureaus if they find errors on the credit reports of the children in their care. The letters apply to situations such as credit reports for minors and credit reports with errors.

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.
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