ICBA News, sponsored by QwickRate—ICBA Backs Bills Advancing Plan for Prosperity

Advocacy
ICBA Backs Bills Advancing Plan for Prosperity
ICBA recently expressed its support for new regulatory-relief legislation that would implement provisions of the Plan for Prosperity, ICBA’s policy platform for the 113th Congress. The following legislation would advance key pieces of ICBA’s flexible set of legislative priorities to help remove excessive regulatory burdens from the nation’s community banks:

H.R. 797, sponsored by Reps. Steve Stivers (R-Ohio) and Gwen Moore (D-Wis.), would prevent community banks and their employees from having to register as municipal advisors with and be examined by the Securities and Exchange Commission.
H.R. 801, sponsored by Reps. Steve Womack (R-Ark.) and Jim Himes (D-Conn.), would allow thrift holding companies to deregister under Title VI of the JOBS Act in the same manner as banks and bank holding companies.
H.R. 749, sponsored by Rep. Blaine Luetkemeyer (R-Mo.), would eliminate a provision requiring financial institutions to provide annual privacy notices to customers even when their policies have not changed.

ICBA launched the Plan for Prosperity to support bipartisan congressional advancement and adaptability of its detailed policies to ease excessive, redundant and costly regulations on community banks. The Plan for Prosperity is not a single bill, but a flexible, living document that can be quickly adopted as legislation.

In addition to the bills already introduced, the Plan for Prosperity includes high-priority provisions to exempt community banks from mortgage-lending reforms, improve bank exam accountability, and offer relief from auditing expenses. Read ICBA Fact Sheet. Read ICBA FAQs.

Advocacy
Community Bank QM Concerns in the News
Community bank concerns with the Consumer Financial Protection Bureau’s final rule on qualified mortgages made headlines this week. American Banker reported that ICBA and community bankers are concerned that the CFPB’s accommodations on balloon-payment mortgage loans are too narrow and would force many community banks to stop offering the product. ICBA Vice President of Mortgage Finance Policy Ron Haynie told the newspaper that the CFPB should broaden the definition of “rural” and apply the safe harbor to all balloon loans held in portfolio.

In a comment letter to the bureau this week, ICBA said it is concerned that the exemptions for community bank loans do not cover nearly enough community banks, which could drive them out of the market. The association offered several recommendations to the proposed community bank portfolio loan provisions to ensure community banks can continue meeting the mortgage needs of their customers.

Among its recommendations, ICBA said the bureau should expand the definitions of “qualified mortgage” and “rural” to include more loans, increase the limit for the number of mortgage loans originated and retained in portfolio to qualify as a community bank lender, and extend the safe harbor conclusive presumption of compliance for community bank mortgage loans held in portfolio.

ICBA recently launched an educational webpage to provide details of all of the CFPB’s mortgage-lending rules. The webpage includes summaries of the final rules and links to the rules themselves. It also links to a proposal to amend the final qualified mortgage rule to add an additional special QM category for community bank portfolio loans. Read ICBA Comment Letter. Visit ICBA’s Mortgage Webpage.

Credit Unions
ICBA Reminds Congress of Study Faulting Credit Union Power Grab
As members of the Credit Union National Association continued their visit to Capitol Hill this week to press their legislative agenda, ICBA reminded lawmakers of a recently released study examining controversial legislation to increase the statutory cap on credit union business lending. In a message to lawmakers, ICBA noted that the study found that increasing the cap from 12.25 percent of total assets to 27.5 percent would reduce tax revenues and pose new risks to the health of the credit union industry and financial system as a whole.

The study from Ike Brannon of Capital Policy Analytics found that:

Additional commercial lending by tax-subsidized credit unions would decrease tax revenues because it would displace lending by tax-paying commercial banks.
Credit unions with high business loan-to-asset ratios comprise a disproportionate share of failed credit unions since 2008.
The vast majority of credit unions are nowhere near their business lending limit, and more than 70 percent of credit unions have no member business loans at all.
Existing law provides credit unions a variety of ways to make commercial loans without exceeding their statutory business lending cap.
Job growth forecasts offered by proponents of a higher business-lending cap are highly suspect and based on assumptions that make little economic sense.

ICBA continues to oppose any legislation to raise the credit union business-lending cap, which would benefit a select few credit unions while harming taxpaying community banks.

ICBA NewsWatch Today is sponsored by QwickRate:
Stop by booth #256 to enter a free iPad mini-drawing and to check out our new Bank Performance Report Card at ICBA’s convention. Also, be sure to attend our workshop, “Basel III: What Does it Really Mean to Community Banks,” at 11:15 a.m. Tuesday in room Mouton 1. Contact us for more information at www.qwickrate.com.

Housing
Bipartisan Housing Group Proposes Secondary-Market Reforms
A bipartisan commission of former policymakers this week released a blueprint to reform housing policy and the government-sponsored enterprises. The report from the Bipartisan Policy Center calls for a far greater role for the private sector, a continued but limited role for the federal government, the elimination of Fannie Mae and Freddie Mac, and reform of the Federal Housing Administration.

The proposal would replace the housing GSEs with an independent government corporation, the Public Guarantor, which would provide a limited catastrophic government guarantee for the single-family and rental markets. Unlike the GSEs, the Public Guarantor would not buy or sell mortgages or issue mortgage-backed securities. Other than the Public Guarantor, all other actors in this new system would be private-sector entities.

At a housing forum last year sponsored by the Bipartisan Policy Center and Jack Kemp Foundation, ICBA Senior Executive Vice President and Chief of Staff Terry Jorde said the housing-finance system should support a diverse range of mortgage lenders with a robust secondary market. She also warned against even greater concentration in the mortgage market and expressed support for the role of the Federal Home Loan Bank system in supporting lending.

ICBA continues to strongly believe that the housing finance system should ensure that all lenders have equitable access to the secondary market, regardless of size or volume. The association will continue to work to ensure ongoing community bank direct access to the secondary market in any changes to the housing finance system.

In the News
ICBA’s Kennedy: Too-Big-To-Fail Distorts Market
Community banks operate in a two-tiered system of justice, ICBA At-Large Director Preston L. Kennedy said on a syndicated radio program. Speaking on “Jim Brown’s Common Sense,” Kennedy said that while community banks that do not succeed get a knock on the door from regulators on Friday nights, too-big-to-fail firms are not held accountable for their businesses.

“Community banks live in the free-market system, and we understand the risks that that entails,” Kennedy said. “But there seems to be insulation from that risk at the highest levels because of the too-big-to-fail and now too-big-to-jail status that these large financial institutions enjoy.”

Kennedy also noted that the policy response to megabank risks leads to mounting regulatory burdens on community banks. Click here to listen to the interview, which starts at the 27-minute mark.

Fraud
FinCEN Issues Advisory on Tax-Refund Fraud
The Financial Crimes Enforcement Network issued an advisory to remind financial institutions of previously published information concerning tax-refund fraud and the subsequent reporting of such activity through Suspicious Activity Reports.

The advisory notes that identity theft can be a precursor to tax-refund fraud because individual income tax returns filed in the United States are tracked and processed by Taxpayer Identification Numbers and the individual taxpayer names associated with these numbers.

Criminals can obtain TINs through various methods of identity theft, including phishing schemes and establishing fraudulent tax-preparation businesses. In response to this problem, the IRS has developed a comprehensive strategy focused on preventing, detecting and resolving instances of tax-related identity theft crimes.

Treasury
Senate Confirms Lew for Treasury Secretary
The Senate voted to confirm Jacob Lew for Treasury secretary. The 71-26 vote confirms the former White House chief of staff to replace Timothy Geithner. Lew was nominated last month and has previously served as director of the Office of Management and Budget and at Citigroup.

Economy
Pending Home Sales Up in January
Pending home sales rose 4.5 percent in January and were up 9.5 percent from a year ago, the National Association of Realtors reported. The sales index is at its highest level since April 2010, just before the deadline for the homebuyer tax credit. Apart from spikes due to tax credits, the index is at its highest level since February 2007. The NAR said favorable affordability conditions and job growth have unleashed a pent-up demand.

Economy
Durable-Goods Orders Down on Transportation
New orders for manufactured durable goods decreased 5.2 percent in January, according to the Commerce Department. The decline followed four consecutive monthly increases. New orders for defense and nondefense aircraft and parts were down sharply. Excluding transportation, new orders increased 1.9 percent.

In Depth
Vigilant Advocacy the New Normal
As the nation continues to right itself from one of the worst financial crises in decades, increasingly vigilant advocacy among the nation’s community banks has become a core business practice, according to a new exclusive on the ICBA Independent Banker website. “It is incumbent on community bankers to recognize and develop ways to incorporate advocacy into their daily bank operations at all levels, and ICBA is here to assist you,” ICBA Director of Congressional Advocacy Brian Anderson writes. Read the Article.

Convention
ICBA Twitter Contest Offers Free 2014 Convention Registration
Want to go to the 2014 ICBA Convention and Techworld in Honolulu, Hawaii, for free? Follow these instructions for your chance to win:

Be a Twitter user or sign up for Twitter at www.twitter.com.
Follow us @ICBA.
Tweet during the 2013 ICBA National Convention and Techworld in Las Vegas using the hashtag #ICBALV13!

The deadline to enter is noon (Eastern time) Thursday, March 21. The winner will be announced the next day via ICBA’s Twitter handle. For contest specifics, check out the social media section of the ICBA convention website.

Important: Please make sure you are easily identifiable through your Twitter account. For example: include your bank name, title, first and last name, and/or a head shot.

Poll
This Week’s Quick Poll
Take this week’s Quick Poll on in-school branches, and view results from the previous poll on microlending programs. View the Archive.

Education
Loan Review Seminar Coming Up
ICBA is hosting an upcoming classroom seminar on structuring the loan process to ensure timely identification of problem credits, asset quality and accuracy. “Loan Review—Implementing Best Practices,” scheduled for April 17-18 in Minneapolis, also will cover well-defined classification guidelines that ensure consistent loan ratings and accounting for the allowance for loan and lease losses to comply with generally accepted accounting principles. Register Online.