Georgia banks that are below the threshold for being considered “well capitalized” or that are currently operating under regulatory Cease and Desist Orders have yet another obstacle for attracting deposits. The FDIC May 29 adopted a final rule amending brokered-deposit and interest rate restrictions that apply to institutions that are less than well capitalized. The actual interest-rate restrictions and restriction amounts are not new. What is new is that the FDIC will now subject these institutions directly to a national average interest rate rather than relying on calculations of prevailing rates in local markets. We are already hearing from some banks that the published FDIC national average rates are significantly lower than the average in their markets. There are provisions by which institutions can seek to rebut the presumption that the national rate is the prevailing market rate for the institution, but it looks to be an administratively burdensome process. The new regulations become effective Jan. 1, 2010. However, the FDIC has stated that institutions may use these rates as a safe harbor for complying with the statutory interest rate restrictions immediately. And, if the national rate caps would permit paying higher interest rates, banks may begin paying those rates immediately, while if they require lower rates, banks can continue to rely on the existing rules until Jan. 1, 2010.

The FDIC Board has established the FDIC Advisory Committee on Community Banking. The intent is to provide the FDIC with advice and guidance on a broad range of important policy issues impacting small community banks throughout the country, as well as the local communities they serve, with a focus on rural areas. Among the issues the Advisory Committee is expected to look into are examination policies and procedures, credit and lending practices, deposit insurance assessments, insurance coverage issues, regulatory compliance matters, and any obstacles to the continued growth and ability of community banks to extend financial services in their local markets in the current environment.

The FDIC has announced that a planned pilot sale of assets by open banks under the Legacy Loans Program component of the Public Private Investment Partnership has been postponed.

Thanks to our friends at the Bryan Cave Powell Goldstein law firm for alerting us to an important change you all should be aware of. Earlier this year the FDIC published its Final Rule on Processing Deposit Accounts in the Event of an Insured Depository Institution Failure. One of the requirements of the Rule is that financial institutions are required to provide sweep account customers with information about what would happen to the customer’s funds in the event the institution failed. As a byproduct of the attention being paid to the new sweep account disclosure rules, the FDIC has also focused on the terms of the Master Repurchase Agreement used in certain sweep arrangements where the institution serves as the customer’s custodial agent for securities held at another financial intermediary.

Dan Blanton, President and CEO, Georgia Bank and Trust, Augusta, has been appointed to a new American Bankers Association task force to focus specifically on community bank issues. The ABA’s Community Bank Solutions Task Force is composed of bankers from areas the recession has hit hardest. It is focused on finding constructive solutions to problems faced by community banks as a direct result of the economic and financial crisis.

The federal banking agencies are seeking comment on a proposed rule regarding the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act). Goals of the SAFE Act include improving accountability and tracking of mortgage loan originators (MLOs), enhancing consumer protection, reducing fraud and providing consumers with easily accessible information about the professional background of MLOs. Comments are due 30 days from the date of publication in the Federal Register.

New GBA University Bank Trainer Peer Group Meeting a Success

Lending, Accounting and Principles Highlight June AIB Courses, Register Now to Secure Your Seat

• ABA Online Review Course for the CTFA Exam (open enrollment), 12 weeks, $795

• Analyzing Financial Statements*, 16 weeks, $485 (June 22)

• Banking Today, 5 weeks, $315 (June 29)

• Commercial Lending, 16 weeks, $405 (June 22)

• Financial and Business Planning for Bank Marketers, 9 weeks, $315 (June 22)

• General Accounting*. 16 weeks, $515 (June 15)

• Introduction to Agricultural Lending, 8 weeks, $375 (June 22)

• Principles of Banking, 16 weeks, $405 (June 15)

• Principles of Banking Accelerated, 10 weeks, $335 (June 22)

• Today's Teller: Developing Basic Skills* (open enrollment), 8 weeks, $315

Please see the AIB Online Course Schedule for a complete listing or call GBA’s Alison Moreau at 404.420.2034 with questions.

• Legal Liabilities When Check Fraud Occurs – June 9

• Safe Deposit Series, Part 2: Legal Documents & Issues – June 9

• Microsoft Excel 2007: Tips & Tricks – June 10

• Microsoft Word 2007: Tips & Tricks – June 10

• SAR & CTR Form Completion, Pt. 1: Suspicious Activity Reports – June 10

• Understanding Letters of Credit – June 11

• Executive Briefing Teleseminar, Pt. 2: Selling Toxic Assets & Securities to the Government: A Practical Guide – June 11

• CRA: Identifying & Documenting Community Development Activities – June 11

With questions, please call GBA’s Courtenay Pope at 404.420.2015.

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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.

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