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Too-Big-To-Fail
Fine: Too-Big-To-Jail Talk is Cheap

U.S. Attorney General Eric Holder’s recent declaration that there is no such thing as too-big-to-jail does not mesh with reality, ICBA President and CEO Cam Fine wrote in his latest blog post.

Fine wrote on his Finer Points blog that Holder’s statement directly contradicts congressional testimony he gave last year. Further, there are no results to back up Holder’s current claims, Fine wrote.

“If federal prosecutors want us to believe that they are not shy about taking on Wall Street for its role in the financial crisis that still haunts us to this day, then they should prove it,” Fine wrote. “Because all I’m hearing is just more talk.” Read the Blog Post.


In the News
ICBA Push for Regulatory Relief Makes Headlines
ICBA’s active push for community bank relief from excessive regulatory burdens is making headlines.

ICBA Senior Executive Vice President and Chief of Staff Terry Jorde’s recent speech at the Federal Reserve Bank of Chicago on community bank regulation received coverage from Heartland News and Medill Reports. The news outlets noted Jorde’s call for tiered regulations that are tailored to community banks’ size and risk profile.

The articles also covered a separate call for tiered regulation at the Chicago Fed conference, from Federal Reserve Governor Daniel Tarullo. In his speech, which ICBA publicly praised, Tarullo said policymakers should discuss amending statutes to exclude community banks, such as the Volcker rule and the Dodd-Frank Act’s incentive compensation requirements.

Separately, ICBA Executive Vice President of Congressional Relations and Chief Economist Paul Merski was quoted in a National Review Online article on the impact of excessive regulation on community bank consolidation. “The No. 1 complaint that we hear from community bankers is that they feel that regulators have gone one step too far and are choking off lending,” Merski told the publication.

ICBA is making progress in its campaign for community bank relief. Five ICBA-advocated bills inspired by the association’s Plan for Prosperity last week advanced in the House. The votes came a week after ICBA’s Washington Policy Summit.

Additionally, the Consumer Financial Protection Bureau last week proposed a rule that would allow community banks and other financial institutions to post annual privacy notices online rather than delivering them individually. ICBA has been the leading advocate to reform redundant privacy notice requirements, which is another element of the association’s Plan for Prosperity.

ICBA will continue its multipronged regulatory relief initiative on behalf of the nation’s community banks.


Regulation
House Members Raise S-Corp Concerns on Basel III Following ICBA Letter
Rep. Blaine Luetkemeyer (R-Mo.) and more than 40 other members of Congress raised concerns over the treatment of Subchapter S corporation banks under the Basel III capital rules.

In a
joint letter, the coalition of lawmakers called on federal banking regulators to amend the new capital conservation buffer, which is designed to curtail capital distributions and certain executive bonus payments when regulatory capital levels fall below preset thresholds.

The letter notes that the capital rules require Subchapter S banks to increase capital ratios at a significantly higher rate than other institutions, which would put the S-corps at a competitive disadvantage.

The letter follows ICBA’s February
letter to the agencies noting that the Basel III capital conservation buffer would be particularly detrimental to the approximately 2,000 community banks structured as S-corps.

ICBA wrote in its letter that the rule would hamper the ability of these institutions to raise capital and serve their customers. The association has repeatedly noted that the Basel III regulatory capital rules were intended to apply to the largest and most complex internationally active banks.

ICBA will continue working with federal banking regulators and Congress to address this issue.


Regulation
ICBA, Coalition Seeks Comment Extension on CFPB Privacy Notice Proposal
ICBA and a coalition of other financial trade groups asked the Consumer Financial Protection Bureau to extend the comment deadline of a proposed rule that would allow community banks and other financial institutions to post annual privacy notices online rather than delivering them individually.

In a joint comment letter, the coalition asked the bureau to extend the 30-day comment period to 90 days. The groups noted that financial institutions need time to evaluate the proposal, discuss the operational ramifications, develop a position and coordinate a response

ICBA last week expressed general support for the proposed rule. In a news release, ICBA noted that it has been the leading advocate to reform redundant privacy notice requirements—a key element of the association’s Plan for Prosperity regulatory relief platform.



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Security
ICBA Meets with GAO on Cybersecurity
ICBA met last week with representatives of the Government Accountability Office to discuss community bank perspectives on cybersecurity.

The meeting focused on cyber-threats to banks, the actions banks have taken to minimize their vulnerability to and harm from cyber-threats, and regulators’ actions to reduce the risk of cyber-threats.

ICBA Executive Vice President of Regulatory Policy Viveca Y. Ware attended the meeting and discussed issues surrounding community bank relationships with third-party processors.


Housing
FHFA’s Watt Lays Out New GSE Strategic Plan
The Federal Housing Finance Agency is focused on ensuring Fannie Mae and Freddie Mac are safe and sound, preserving their assets, and maintaining a liquid and efficient mortgage market, agency Director Mel Watt said.

Speaking in Washington, Watt announced the FHFA’s new Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac. He said the FHFA has three strategic goals to build upon and reformulate its approach to conservatorship:
  • maintaining in a safe and sound manner foreclosure-prevention activities and credit availability for new and refinanced mortgages,
  • reducing taxpayer risk by increasing the role of private capital in the mortgage market, and
  • building a new single-family securitization infrastructure for future use by the enterprises and possibly other participants in the secondary market.

Economy
Retail Sales Rise 0.1 Percent in April
Retail sales rose 0.1 percent in April and were up 4.0 percent from a year ago, the Commerce Department reported. Total sales from February through April were up 3.3 percent from the same period a year ago. The March increase was revised up from 1.2 percent to 1.5 percent.



Poll
Take This Week’s Quick Poll
Take this week’s Quick Poll on regulatory relief legislation, and view results from the previous poll on tiered regulation.
View the Archive.


Education
Community Bank Chairman’s Forum Slated for August
Chairmen, this is the one you have heard about! ICBA’s upcoming Community Bank Chairman’s Forum is not a lecture or seminar presentation. The forum, slated for Aug. 4-5 in Colorado Springs, Colo., is an open discussion among chairmen of the board from across the country facilitated by two of the nation’s leading community bank experts. Learn More and Register.


Products and Services
Webinar Offers Q1 Enforcement Actions Analysis
Continuity Control, ICBA’s new Preferred Service Provider, is hosting a free webinar at 2 p.m. (Eastern time) Thursday, May 22, on the shift in focus of first-quarter 2014 enforcement actions. “Q1 Enforcement Actions: What We Can Learn and How to Avoid Being the Next Victim” will provide a detailed review of recent enforcement actions and dissect key take-aways. The objective is to outline steps community banks can take to make sure they are prepared to withstand the increased regulatory scrutiny. Register Online.



Products and Services
Upcoming Webinar Features Security Benefits of the Cloud
ICBA Strategic Technology Solutions knows what keeps your community bank's IT management up at night and has solutions to banks top security challenges. Join Compushare Principal Technology Strategist Kevin Prince at 1 p.m. (Eastern time) Wednesday, May 21, for a webinar on why this cloud solution is more secure and compliant than your current IT environment in all areas, including information security, business continuity, vendor management and IT risk management. Register Today.






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