As a continuation of work on legislative and regulatory priorities we outlined for the year, discussion centered on a number of key issues:

• Real-estate: Regulatory interpretations of accounting guidelines, failed-bank asset disposition and the difficulty of obtaining reasonable and consistent property appraisals

• The proposed FDIC special assessment that could cost Georgia banks almost $405 million

• Artificial disallowance of almost $1 billion of capital in Georgia banks

• Access to capital and sources of liquidity continue to be limited.

• Limited investment in Georgia banks from the TARP/Capital Purchase Program

“If there’s one thing we learned, it is that the regulatory environment will remain difficult for our banks for the foreseeable future,” said Steve Jordan, GBA Chairman and CEO, Bank of Monticello. “The agencies were appreciative of our concerns and feedback, but were also quick to defend their philosophy and position on issues such as disposition of closed bank assets and loan participation resolutions. We’ll continue our efforts to educate them about why flexibility on those issues, in particular, is necessary to avoid making the market environment any more difficult.” If you have any questions about our visit, please contact Joe Brannen, 404.420.2026 or Elizabeth Chandler, 404.420.2027.

• Maintain the current $250,000 FDIC deposit insurance coverage for four years through 2013.

• Allow the FDIC to take up to eight years, from the current five years, to recapitalize the Deposit Insurance Fund.

• Grant the FDIC temporary additional borrowing authority of $500 billion for systemic reasons -- subject to a two-thirds vote of the agency’s board, a two-thirds vote of the Federal Reserve, and the agreement of the Treasury secretary in consultation with the president. 

• Allow the FDIC to levy bank holding companies for any systemic special assessment if they stand to benefit from government actions, such as the debt guarantee program.

• Give more power to the Federal Housing Administration and the Rural Housing Authority to modify loans.

According to statement from Treasury Secretary Tim Geithner, these institutions have a range of options to raise capital in the private markets, including common equity offerings, asset sales and the conversion of other forms of capital into common equity.  If these options are not sufficient, they can request additional capital from the government through Treasury’s Capital Assistance Program.  Banks must submit a detailed capital plan to supervisors, who will consult with Treasury on the development and evaluation of the plan. "The stress tests have created tremendous uncertainty and unnecessarily harmful speculation in the marketplace. Regardless of your views on either the tests themselves or the results, it is good to get this announcement behind us," said GBA President Joe Brannen. "What many commentators have missed is that banks, both large and small, conduct stress tests all the time to prudently prepare for the future. These new tests had extremely adverse economic projections that few believe are even plausible. That, coupled with extremely conservative revenues generated from ongoing operations, created a very difficult test. We have been extremely concerned about what precedent this process sets for other institutions with the public release of what has traditionally been considered confidential information."

Act Now: Annual Convention Room Reservation Deadline Nears

Be sure to let them know you are with the Georgia Bankers Association Annual Convention group to get the discounted room rate of $159 per night. The convention will be June 15-16 in Atlanta. With questions, please call GBA’s Susie McGehee at 404.420.2010.

GBA will host its Internal Audit seminar on Wednesday, May 13, at Idle Hour Country Club in Macon. Designed for internal auditors, audit committee members, operations officers, compliance officers and internal control personnel, this one-day seminar will cover the basic concepts related to community bank internal controls and internal audit techniques. Registration is $225 for members and Mike Thomas with Crowe Chizek and Company, LLC is the instructor.

Topics to be discussed include:

• Essentials of Risk-Based Auditing

• Effectively Managing the Internal Audit Plan

• Primary Internal Controls/Audit Techniques

• Building an Anti-Fraud Framework.

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

• Bank Directors Workshop, Part 2: Asset Quality & the Director – May 11

• Safe Deposit Compliance & Legal - 2009 Update – May 12

• Are You Accepting Proper Appraisals? New Regulator Attention to the Requirements – May 12

• Alternative Payments 101 – May 12

• Understanding Consumer Credit Reports & Scores: Incorporating FACT Act Compliance – May 13

• 2009 IT Examination Hotspots, Pt. 2: Vendor Management Program - An Enterprise-wide Focus – May 13

• SAR Decision Making & Documentation – May 14

All webinars are live and allow time for questions and answers. The $250 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 Courtenay Pope at 404.420.2015.

• 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 Accounting*, 16 weeks, $485 (June 15)

• 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

It’s not too late; there is still availability in the following AIB Online classes beginning May 18. Please register as soon as possible.

• Commercial Lending, 16 weeks, $405

• Consumer Lending, 16 weeks, $405

• Economics for Bankers, 16 weeks, $405

• Introduction to Mortgage Lending, 16 weeks, $405

• Law & Banking:  Principles, 16 weeks, $455

• Principles of Banking, 16 weeks, $405

• Understanding Your Construction Borrower, 10 weeks, $405

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

Panelists include: 

• Rob Braswell, Commissioner, Georgia Department of Banking and Finance;

• Steve King, President, Greater Atlanta Home Builders Association and Director, Embassy National Bank, Lawrenceville;

• Michael Knowles, President and Chief Executive Officer, Northwest Bank, Acworth

• Michael Scott, Realtor and Associate Broker, Metro Brokers.

RSVP by May 7 to 770.423.6450 or ljones@kennesaw.edu. Refreshments will be served.

Our thanks to the Office of the General Counsel of the American Bankers Association for making available the newest edition of the Status of Important Banking Cases to the members of our Bank Counsel Section. This monthly report provides up-to-date information about litigation involving banks across the country and is another member benefit for the attorneys in GBA's Bank  

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