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Senate Panel Approves Johnson-Crapo Housing Bill
The Senate Banking Committee voted 13-9 to advance legislation to reform the housing-finance system. The panel approved the Housing Finance Reform and Taxpayer Protection Act of 2013 (S. 1217), a bill introduced last year that was amended with text written by committee Chairman Tim Johnson (D-S.D.) and Ranking Member Mike Crapo (R-Idaho).

The legislation would establish a new Federal Mortgage Insurance Corp. regulator modeled on the FDIC, form a mutual cooperative jointly owned by small lenders, and gradually wind down Fannie Mae and Freddie Mac, among other provisions.

The vote completes the Senate committee’s action on the bill. Although committee members expressed interest in continuing to work on the bill, it is unclear if it will be taken up by the full Senate this year. Housing-finance negotiations are expected to continue into the next Congress.

In a statement, ICBA said it recognizes the need for housing-finance reform and appreciates the efforts of Senate Banking Committee members. It said the community banking industry remains concerned with how the legislation would work in the real-world marketplace and whether it would cause further market concentration.

ICBA said it looks forward to continuing to work with Congress to pursue housing-finance reform that meets the needs of community banks and the customers and communities they serve.

ICBA Urges Senate Passage of Tax-Extender Bill
ICBA urged the Senate to approve legislation that would extend dozens of tax provisions that have expired or will expire this year.

In a letter to senators, ICBA wrote that the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act would provide much-needed tax code clarity and certainty for millions of families and businesses served by community bankers.

ICBA wrote that failing to extend the measures included in the EXPIRE Act would prolong harmful tax code uncertainty, dramatically increase tax burdens and needlessly disrupt the economic recovery and job creation.

The ICBA-backed legislation, introduced by Sens. Ron Wyden (D-Ore.) and Orrin Hatch (R-Utah), was approved last month by the Senate Finance Committee.

ICBA Releases Tips for Responding to Public Requests for HMDA Data
ICBA is offering community bankers information and tips for responding to public requests for HMDA data. Under HMDA and Regulation C, financial institutions must provide to the public their modified LAR upon request. The document outlines Regulation C requirements and offers tips for community banks that receive requests for modified LARs. Access the Tips.

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House Members Echo ICBA Basel III S-Corp Concerns
Rep. Blaine Luetkemeyer (R-Mo.) and more than 40 other members of Congress this week raised concerns over the treatment of Subchapter S corporation banks under the Basel III capital rules—echoing concerns ICBA raised in a recent letter.

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.

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

Fannie Announces ICBA-Advocated Enhancements
Fannie Mae this week announced several ICBA-advocated enhancements on mortgage loans acquired on and after July 1, 2014.

According to Selling Guide Announcement SEL-2014-05, rep and warrant relief will be granted based on relaxed payment history criteria or new criteria based on a successful quality control review. There is also a new option for lenders in dealing with mortgage insurance rescission.

Additionally, for loans acquired on or after January 2013, Fannie Mae will send lenders loan-level reports identifying loans that are eligible for relief.

Through the ICBA Housing Policy Task Force, ICBA has advocated improved clarity around relief of selling reps and warrant issues on loans sold to the government-sponsored enterprises. Fannie Mae’s announcement is a big step in the right direction toward getting that clarity, which in turn will improve access to credit.

Fed Seeking Feedback on Payments Fraud
The Federal Reserve Banks are seeking feedback on a payments fraud survey of financial institutions and businesses.

The online survey is designed to help the reserve banks better understand new or continuing challenges with payments fraud and methods financial institutions use to reduce fraud risk.

Feedback will be publicly shared as aggregate, summary-level data. The survey is scheduled to close on May 23. Take the Survey.

Economic Indicator Roundup
Housing Starts and Building Permits: Housing starts rose 13.2 percent in April and were up 26.4 percent from the previous year, while building permits advanced 8 percent and 3.8 percent, respectively, according to the Commerce Department.

Homebuilder Confidence:
Builder confidence in the market for new single-family homes declined in May as builders wait for consumers to feel more secure about their financial situation, the National Association of Home Builders said.

Industrial Production: Industrial production decreased 0.6 percent and the capacity-utilization rate for total industry decreased 0.7 percentage point in April, according to the Federal Reserve.

Consumer Prices: The Consumer Price Index increased a seasonally adjusted 0.3 percent in April and was up 2.0 percent over the past year, the Labor Department said.

Products and Services
ICBA Selects Insperity as Preferred Service Provider for Human Resources Management
ICBA selected Insperity Inc. as a Preferred Service Provider for human resources management and payroll services. Insperity provides an array of HR and business-performance solutions designed to help improve business efficiency, including payroll services, time and attendance, performance management, organizational planning and more. Read ICBA Release.

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.
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