Home I GBA University I Member Services I Volunteers I Government Relations I Calendar of Events I July 1 2011
The Federal Reserve Board adopted its anticipated final debit-card interchange price cap rule, setting a 21-cent cap for debit-card transactions. This is nine cents higher than the proposed rule, but still a reduction of more than half the current average interchange rate of 44 cents per transaction. The Fed issued the improved rule after considering more than 11,000 comments, many of which were from bankers, the GBA and our fellow trade groups and even consumer groups opposing the original 12-cent cap. These comments clearly made a difference in shaping the Fed's improved final rule. Here are the basics from the 378 page final rule:
The cap on debit interchange is 21 cents but there is an additional opportunity to charge an additional one cent if the bank meets certain security standards being set by the Fed.
The biggest surprise was the ability to allow an additional "ad valorem" charge of 5 basis points on the entire amount of a transaction to account for fraud losses throughout the payment system. The Fed had been telegraphing that it didn't interpret Dodd-Frank as giving the authority to consider fraud loss costs. This is one of the few "positives" for the industry in an otherwise negative rule.
Another "positive" is moving the effective date from July 21 to Oct. 1 to give the industry time to get systems in place.
The rule applies to banks with $10 billion in assets or more. With regard to the community bank exemption, the Fed will publish annual statistics about banks that are and are not exempted, and provide more transparency about debit-card pricing to help ensure the exemption is at least recognized. How the market reacts to that will depend on factors beyond what any rule can address, though.
The Fed also adopted requirements that issuers include two unaffiliated networks for routing debit transactions -- one signature-based, one PIN-based. The deadline for implementing this is April 1, 2012.
So, based on the new rule, a bank could receive 27 cents from the interchange component on a $100 purchase: the 21-cent base fee, plus five cents for fraud losses and an extra one cent for fraud-prevention measures. We still have grave concerns about how this government price fixing process will affect the free market system and the fact that the new cap still represents a reduction of almost 45 percent in debit card interchange revenue to the industry. "This is a multibillion dollar windfall for the merchants who are under no obligation to pass those savings on to consumers or use that money to hire new workers," said Joe Brannen, GBA President and CEO. “While it’s disappointing we couldn’t get the votes in Congress to defeat or study this ill-conceived measure, the Fed obviously listened to bankers, consumers and others, once again confirming the importance of all the stakeholders staying engaged in the process.” In discussion about the rule, Federal Reserve Governors expressed concern about the long-term effects of the rule on consumers and banks. As the lone vote against the measure, Fed Gov. Betsy Duke said she believes the rule will hurt consumers by eliminating free checking accounts and forcing hikes in other bank fees. She also was troubled by the Fed's lack of authority to ensure the intended exemptions for smaller institutions are met, and troubled by the lack of a requirement for payment networks to implement a two-tiered pricing system. Fed Gov. Sarah Bloom Raskin, who voted for the measure, worries that the rule could hurt smaller institutions. And Fed Chairman Ben Bernanke said the rule is "the best available solution that implements the will of Congress and also makes good economic decisions." He had testified before Congress saying he felt the loss in income could cause some small banks to fail. Here are links to the Final Rule, the Interim Rule related to fraud prevention, and the Fed's staff memo. Stay tuned for more analysis about how the rules will affect GBA members. With questions or comments, contact Joe Brannen, 404.420.2026, or Elizabeth Chandler, 404.420.2027.
As we have reported in previous E-Bulletins, the GBA has actively followed a proposal from the SEC that would require most bankers to register as a municipal advisor just for something as simple as having an account relationship with a local government entity. To further underscore our concern, we signed on to a letter this week to the SEC with other state banking groups and the ABA that any final rule should "state clearly that banks and bankers providing traditional banking products and services are not required to register as municipal advisors." With questions, please contact Elizabeth Chandler at 404.420.2027.
Preemption standards determining whether national banks have to comply with state-level laws are complex at best, but it's hugely important that these standards are written correctly. You may recall that were it not for an OCC preemption of the Georgia Fair Lending Act (GLFA) and the subsequent application of that preemption by the Georgia Attorney General to state chartered banks, all our members, regardless of charter type, could still be strangled by that misguided state law. The Dodd-Frank Act (DFA) contained language that essentially takes away the OCC's ability to issue the kind of preemption rulings like they did on GLFA, but DFA preserved some other long-standing preemption opportunities. The OCC recently put out for comment their proposed regulations adopting the new standard; and as expected, some liked the proposal while others think the OCC went too far. We worked with the American Bankers Association as they drafted their comment letter, which essentially supported the OCC's proposal. But weighing in with comment letters critical of the proposal were the National Association of Attorneys General, including Georgia AG Sam Olens as a signatory, and the Department of the Treasury. The OCC will consider the comment letters and will issue a final regulation soon. With questions, please contact GBA's Joe Brannen at 404.420.2026 or Elizabeth Chandler at 404.420.2027.
As a result of legislative changes this year, the Georgia Department of Banking and Finance (DBF) has issued a proposed rulemaking with comments due by July 28, 2011. The proposal deals primarily with non-bank entities that the DBF regulates, but there is a change in the reporting method of the Georgia Residential Mortgage Act per loan fee that requires these to be reported online going forward. Please review the proposed changes and let us know of any input you have for a possible GBA comment letter. Please contact Elizabeth Chandler with any feedback at 404.420.2027.
The Georgia Department of Revenue (DOR) published this week proposed changes to the unclaimed property rules and regulations that affect delivery of property from abandoned safe-deposit boxes. The new proposal states in part, “If any illegal substances, contraband, and/or hazardous materials are found by a lessor of an abandoned safe-deposit box, then the lessor must deliver the contents to the appropriate authorities in accordance with Georgia laws.” We’ve asked the Department for clarification, but if our initial reading is correct, the new rule would transfer this responsibility from DOR to the banking industry where there is little formal training in these matters. Other proposed changes govern the cataloging and sale of unclaimed property which seem less significant. There is an opportunity to comment on this proposal before its adoption so please let GBA’s Elizabeth Chandler, 404.420.2027, know of any concerns you or your bank have with these proposals.
As we reported last week, Sen. Johnny Isakson and other members of Congress had called on federal regulators to revise their proposed 20-percent down payment requirement for Qualified Residential Mortgages (QRMs) saying the proposed rule would shut out responsible homebuyers and further cripple the housing market. GBA commented similarly in a letter this week about the proposal, which establishes a risk retention requirement for originators of securitized residential mortgage lenders with QRMs being exempt from the requirement. GBA also added that we are concerned with the proposed debt-to-income ratios and credit standards. With questions, please contact Elizabeth Chandler at 404.420.2027.
Guidance issued Thursday by the OCC outlines broad expectations for appropriate foreclosure management standards by executives and boards of national banks. The bulletin provides clarification on expectations regarding governance of foreclosure process to include adequate staffing and training, dual-track processing, management of affidavit and notary practices, documentation, oversight of third-party service providers, and adherence to all laws and regulations related to mortgage foreclosure. All national banks are directed to conduct a self-assessment of their foreclosure management practices by Sept. 30 and to correct any weaknesses. Here's a link to the full guidance...
Georgia ranks as the fourth-best state for business in a study out this week by CNBC. The ranking is up six spots from a year ago, and it marks a return to the top five for the first time in four years. The state's infrastructure was ranked second, and quality of the state's workforce and relatively low cost of living also received top-10 rankings. Check out CNBC's study...
Homeowners did a better job keeping their mortgage payments current in the first quarter of this year. The percentage of total current and performing mortgages increased to 88.6 in the first quarter, up from 87.6 percent in the previous quarter, according to the Mortgage Metrics Report released yesterday by the OCC and OTS. Mortgages 20-59 days late reached their lowest level in three years, and mortgages 60-days or more past due hit a two-year low.
Also, check out the revised and reintroduced prototypes of a single mortgage disclosure form that would merge TILA and RESPA disclosures. The updated drafts incorporate feedback from the13,000 comments and interviews with consumers, lenders and brokers who commented in the first round. The CFBP will accept feedback on round two through Tuesday, July 5. Further evaluation and revision will continue through September, at which time a single draft disclosure form will be selected. A final version of the single form is expected by July 2012. View and vote on the forms...
How will developments on monetary policy and the Obama Administration's shift to a more centrist position affect the outlook for the economy and earnings? Is a rise in inflation ahead of us? What is the outlook for common stock prices, interest rates and bond yields for the rest of the year and into 2012? Joe Keating, Chief Investment Officer with CenterState Bank, Birmingham, AL, will help answer these questions and more at Leadership GBA's 2011 Leadership Conference. The conference is scheduled for July 24-27 at The King and Prince, St. Simons. There are still a few rooms available at the reduced rate of $209 to $229 per night. Reservations may be made by calling the hotel directly at 912.638.3631 or 877.543.6077. Be sure to say you are with the GBA to receive this special rate. Click here to register online. With questions or to register for the conference by phone, please contact GBA's Susie McGehee at 404.420.2010 or Jennifer Stevens at 404.420.2024.
At the GBA Annual Convention in Atlanta last week, participants of the Georgia Bankers Association Insurance Trust (GBAIT) re-elected two officers and installed a new member to the GBAIT board of directors to serve three-year terms. The Georgia bankers re-elected for three-year terms are Ray Chitty, President, Guardian Bank, Valdosta and Glenn Willis, President and COO, South Georgia Banking Company, Tifton. Ron Thigpen, Executive Vice President and COO, Georgia Bank and Trust, Augusta was elected for a first term.
Exam trends, fair lending rules, HMDA and the Bank Secrecy Act were topics covered at the GBA Compliance Peer Group meeting in Macon Tuesday. More than 40 Georgia compliance professionals heard updates from guest speaker David Smith with Accume Partners, Alpharetta. Of note, he outlined the 13 changes to HMDA reporting required by the Dodd-Frank Act. Roundtable discussions with peers covered exam trends, overdraft program guidance, and how banks are coping with and communicating SAFE Act provisions requiring mortgage loan officer registrations. With questions about GBA's Compliance Peer Group, including how you can be part of the next session, contact Alison Moreau at 404.420.2034. The GBA Compliance Committee also met to begin planning for the annual Compliance Conference, which will be Oct. 4-5 at Idle Hour Country Club in Macon, so mark your calendars. It's going to be good.
Coming Up This Summer...
Join us Aug. 16 at Idle Hour Country Club, Macon, for our next Senior Lending Officer Peer Group meeting. As you may have noticed from the article above, our peer groups are great sources of new, updated and shared expertise. With questions about the meeting, please contact GBA's Alison Moreau at 404.420.2034.
Make plans now to attend GBA's 2011 President/CEO Conference scheduled for October 9-11 at The Ritz-Carlton Lodge, Reynolds Plantation in Greensboro. The Community Bankers Committee is putting together a great program packed with timely information. A brochure will be mailed in the coming weeks. GBA has also reserved a block of rooms at The Lodge at a reduced rate of $159 per night for single or double occupancy. Make reservations by calling the hotel directly at 706.467.0600 or 800.241.3333. Be sure to say you are with the GBA to receive this special rate. The cut-off date for reservations is Sept. 8. With questions about the conference, please contact GBA's Susie McGehee at 404.420.2010.
Webinars: OREO, Loan Officer Clinic and Commercial Lending among Highlighted Offerings
A GBA Webinar is a great way to quickly get the training you need right from the comfort of your office. Here's a sample of upcoming offerings. Check the Calendar of Events for any webinars you're interested in at www.gabankers.com.
RESPA Review & Update- July 7
Notary Public- July 13
Loan Officer Clinic: A Focus on Key Issues that Challenge Lenders Daily - Part 2- July 13
All webinars are live and allow time for questions and answers. The $255 registration fee gives you access to one web site "seat," one telephone site license and all handout materials. If you can't attend the webinar, you may buy the audio CD, handout materials and a password to see the information online. With questions, please call GBA's at 404.420.2015.
Instructor Led AIB Classes: Upcoming Classes for July and August
Here are the instructor-led AIB online classes offered in July and August. These courses are instructor-facilitated with weekly assignments and can be taken from your home or your office. All you need is a computer, printer and Internet access. (Classes with an asterisk * require Microsoft Excel Software.) Please register two weeks in advance to secure a seat in the class. Classes are 16 weeks unless otherwise specified.
Analyzing Bank Performance, 7 weeks, $765 - July 5
Introduction to Trust Products and Services,
5 weeks, $225 - July 5
Economics for Bankers, $425 - July 11
Introduction to Mortgage Lending,
$425 - July 11
Principles of Banking, $425 - July 11
Consumer Lending, $425 - July 18
Law & Banking: Applications, $485 - July 18
Law & Banking: Principles, $485 - July 25
Marketing Financial Services, $425 - July 25
Supervisor Certificate, $695 - July 25
General Accounting*, $505 - Aug. 1
Analyzing Financial Statements*, $505 - Aug. 8
ABA Online Review Course for the CRCM Exam,
8 weeks, $695 - Aug. 15
Basic Administrative Duties of a Trustee,
5 weeks, $225 - Aug. 15
Principles of Banking, $425 - Aug. 15
Principles of Banking Accelerated, 10 weeks, $355 - Aug. 8
The GBA Pledging Pool concept is a great alternative to the dedicated pledging method to meet collateralization requirements associated with public deposits. GBA administers the program, so we do the heavy lifting to make sure everything runs smoothly and everyone stays in compliance. If you don’t participate, you’re likely collateralizing public funds by administering each fund separately and reporting on changes accordingly to comply with the 110 percent securitization requirements. Changes in the funds, rates, amounts and percentages are frequent and require tedious attention to detail. We’ve learned that prior to participating in the program, some banks were under-collateralized due to the complexity of monitoring and straining administrative burden. The GBA program helps with all that by pooling the securities, administering the record-keeping and auditing the records regularly to ensuring the bank, your public depositors and the State of Georgia are safe and in compliance. For more information on the program or to sign up today contact Kenyetta Parks at 404.420.2035.
The GBA has a Strategic Partnership with Deluxe for its check printing services because Deluxe offers high quality and a competitive price. We recommend that you take a look at what Deluxe can offer your bank before automatically extending your check-printing agreement this year. It is important to realize that your current agreement may contain a rollover clause, and if you don't notify your vendor in advance of a certain date, your agreement may automatically renew, possibly at higher prices. Don't let that happen. We are confident that Deluxe will show you the potential for savings beyond your current vendor's arrangement. Deluxe Financial Services works closely with financial institutions to develop unique experiences that attract and retain customers and grow business. Deluxe combines its history of strong brands and financial institution relationships with its insights into small business. And Deluxe is more than just a check printer. Deluxe offers programs that can add to your bank's profitability and maximize customer satisfaction. For more information, please call Deluxe's Brandt Tefft at 800.332.4234 ext. 159340.
TalentQuest can help you identify, develop, manage and retain the best team of people with their talent management programs. These time-tested talent management processes provide your organization with clear data for making important human capital decisions and ensuring you have the right people in the right places to remain highly competitive. As the most successful organizations know, having the best people isn't simply an ideal; it is a competitive necessity and one of few true differentiators. TalentQuest for Financial Services integrates standardized job descriptions, competency models and Peak Performer Profiles into a system designed to guide financial institutions through each stage of the employee lifecycle. For more information, please contact Jon Naphin at TalentQuest at 404.965.5221.
Find a Job, Post a Job with GBA Job Bank
The Georgia Bankers Association offers free job posting resources for our member banks. These listings can be viewed online or through our bi-weekly publication included in the GBA Bulletin. Resume postings are also available. For more information, please call Kenyetta Parks at 404.420.2035.
Read All About It: Send Us Your News
Please remember to include the Georgia Bankers Association on the list of recipients for announcements about promotions, new employees and special recognition your bank has received. We want to share your news with your colleagues across the state. Please forward your announcements and photos to GBA's David Oliver and Bogan Brannen.
Atlanta - Georgia Commerce Bank
Erin Darcy has been hired as Vice President and Assistant Branch Manager. Christin Nally Viola has been named as a Senior Mortgage Consultant. Alison Spurlock has been named a Relationship Account Manager and Teller.
Augusta - Georgia Bank & Trust
Malinda Howell, Rebecca Mooney and Travis Wright have been named Mortgage Loan Officers. Trey Kennedy has been named Assistant Vice President of Credit Administration.
Fitzgerald - Colony Bankcorp Inc.
Eddie Hoyle has been named Executive Vice President and West regional Banking Executive Officer.
Gainesville - Chattahoochee Bank of Georgia and HeritageBank of the South
Karen Widner, Nancy Greeson and Kerry Farmer have joined HeritageBank of the South's Mortgage Division, which now operates an office in the Chattahoochee Bank of Georgia branch on E. E. Butler Parkway.
Ringgold - Northwest Georgia Bank
Dana Williams has been named Manager of the LaFayette branch. Terrell Hood has joined the bank as Assistant Manager of the Fort Oglethorpe branch.
Washington D.C. - The Federal Reserve and Bureau of Consumer Financial Protection
Mark Bialek has been appointed inspector general of the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection, effective July 25.
Darcy Nally Viola Spurlock
Howell Mooney Wright Kennedy Williams Hood
Widner, Greeson and Farmer
50 Hurt Plaza, Suite 1050 | Atlanta, Georgia 30303 | 404.522.1501