ICBA News, sponsored by CNA—ICBA Washington Policy Summit Registration Underway

Advocacy
ICBA’s Fine: Regulators Should, First, Do No Harm
The stream of regulations from Washington is not only seemingly endless, it is often contradictory, ICBA President and CEO Cam Fine wrote in a message to community bankers. Community banks are under pressure to obey safety-and-soundness guidelines that restrict access to credit and, at the same time, to reach out to underserved communities, Fine wrote.

“Despite entreaties to ensure equal access to credit, the alphabet soup of regulations hampers the ability of community banks to devote their resources to making loans,” Fine wrote. “Additionally, words from Washington to reach out to underserved borrowers who pose ‘reasonable’ risks often fall on deaf ears to the examiners who come to town to open up the books. In other words, you’re damned if you do and damned if you don’t.” Read the Message from Fine.

Advocacy
Register Now for 2013 Washington Policy Summit
ICBA is encouraging community bankers to join colleagues from across the nation at the 2013 ICBA Washington Policy Summit. At the advocacy conference, scheduled for April 24-25 in Washington, D.C., community banks will engage their members of Congress on important policy issues and hear firsthand from the nation's top banking and financial leaders.

More information on the summit, including how to register and what’s on the schedule, is available on 2013 ICBA Washington Policy Summit website. Learn More and Register.

Advocacy
ICBA “Be Heard” Site Features Plan for Prosperity
Resources on ICBA’s new Plan for Prosperity regulatory-relief agenda for the 113th Congress are available on the association’s “Be Heard” advocacy website. The site offers fact sheets and frequently asked questions on the plan, which includes regulatory-relief provisions designed to ease the burden on community banks to help them serve their communities.

ICBA’s Plan for Prosperity is not a single bill, but a flexible, living document that can be quickly adopted as legislation. The plan includes high-priority provisions to exempt community banks from mortgage-lending reforms, improve bank exam accountability, and offer relief from auditing expenses.

Provisions of the plan already introduced in the 113th Congress would exempt community banks from proposed municipal advisor regulations, offer relief from redundant privacy notice requirements, reform the Consumer Financial Protection Bureau’s structure and apply new Securities and Exchange Commission deregistration thresholds to thrifts. Learn More.

ICBA NewsWatch Today is sponsored by CNA:
ICBA Member Milestones, brought to you by CNA, recognizes community bank anniversaries and milestones in the March issue of Independent Banker magazine. CNA understands it takes more than a strong balance sheet to run a successful bank. It takes commitment to the community, dedication to service and flexibility to meet the needs of clients. For more than 100 years, CNA's professionals have worked to build strong relationships and solid business insurance solutions that meet the needs of their clients. For more information on CNA’s programs, visit www.cna.com/communitybanks.

Housing
Agency Plans New Entity To Replace Fannie, Freddie
The Federal Housing Finance Agency said it will establish a new business entity between Fannie Mae and Freddie Mac to begin developing a new secondary mortgage market infrastructure. FHFA Acting Director Edward DeMarco said the agency’s objective is to develop a platform that functions like a market utility, not to rebuild the proprietary infrastructures of Fannie and Freddie.

DeMarco said he expects the new venture to be headed by a CEO and chairman of the board that are independent from Fannie and Freddie. It will also be physically located separate from the government-sponsored enterprises, he said. The agency plans on instituting a formal structure to allow for input from industry participants, DeMarco said.

“It will be initially owned and funded by Fannie Mae and Freddie Mac, and its functions are designed to operate as a replacement for some of their legacy infrastructure,” DeMarco said. “However, the overarching goal is to create something of value that could either be sold or used by policy makers as a foundational element of the mortgage market of the future.”

Congress
House Spending Bill to Increase Volume of USDA Farm Real Estate Loans
A GOP-drafted spending bill that is expected to be considered this week by the full House would raise the volume of USDA farm real estate (ownership) loans to $2 billion. The ICBA-backed measure would help deal with a backlog of approximately $250 million resulting from the current $1.5 billion cap.

The legislation, which would still need to be adopted by the Senate, would fund the government through Sept. 30 and would replace a six-month spending bill Congress adopted last September. The bill also provides the USDA flexibility to transfer funds between direct and guaranteed loan programs to use funds where they are needed most. Last year ICBA urged Congress to significantly increase the volume of loans that can be extended under the guaranteed farm ownership program because the program is now self-funding.

Regulation
FSOC Finalizing SIFI Designations for Nonbank Financial Firms
The Financial Stability Oversight Council is in the final stages of evaluating an initial set of nonbank financial companies for potential designation as systemically important financial institutions, or SIFI, Treasury Undersecretary for Domestic Finance Mary Miller said. In remarks at the Institute of International Bankers’ annual Washington conference, Miller said the council plans to vote on the designations in the next few months.

The SIFI designation would subject these institutions to enhanced prudential standards and supervision by the Federal Reserve. In separate remarks to the conference, FDIC Chairman Martin Gruenberg said U.S. regulators and their key foreign counterparts are working together to develop cross-border relationships to manage an orderly resolution of a globally active SIFI.

Regulation
Fed’s Powell: Reg Agenda Taking on Too-Big-To-Fail
Every private financial institution should be allowed to fail and be resolved under U.S. laws without imposing undue costs on society, Federal Reserve Gov. Jerome Powell said. Powell said the regulatory agenda is designed to accomplish just that by reducing the likelihood of failure and by making it possible to resolve large financial firms without taxpayer exposure.

“If these reforms achieve their purpose, in my view they would be preferable to a government-imposed break-up, which would likely involve arbitrary judgments, efficiency losses and a difficult transition,” Powell said.

Monetary Policy
Fed’s Yellen: Return to Prudent Risk-Taking a Priority
Federal Reserve Vice Chairman Janet Yellen defended the agency’s highly accommodative monetary policy, which she said has helped foster a stronger economic recovery and kept inflation close to the Fed’s longer-run target. Yellen said that while the Federal Reserve understands concerns that its asset-purchase program could promote excessive risk-taking, businesses have been extremely risk-averse in the aftermath of the financial crisis. As a result, the Fed believes its policies have helped promote a return to prudent risk-taking while the agency monitors large financial firms to ensure proper risk management.

Agriculture
USDA Interim Rule Sets Maximum Rate on Guaranteed Farm Loans
The USDA’s Farm Service Agency (FSA) issued an interim rule that sets maximum interest rates that lenders can charge borrowers on guaranteed farm operating and ownership loans. The interim rule sets the maximum allowable spread at 650 basis points above the three-month Libor index for variable rate loans and those fixed for less than five years and 550 basis points above five-year Treasury rates for loans fixed for five years or more. The spreads represent an additional 3 percentage points above limits USDA suggested in an earlier proposed rule. Comments are due by June 3.

Poll
This Week’s Quick Poll
Take this week’s Quick Poll on community bank advocacy, and view results from the previous poll on K-12 in-school bank branches. View the Archive.

Education
ICBA Audio Call on Call Report Changes Tomorrow
ICBA is hosting an audio conference tomorrow on the 2013 revisions to the call report. The audio conference, scheduled for 11 a.m. (Eastern time), will cover revisions due to accounting standards and regulatory guidance. Register Online.

Products and Services
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