Community
bankers should contact their senators and urge them to vote
against the credit union powers expansion bill (S. 2957)
newly introduced by Sen. Joseph Lieberman (I-Conn.). ICBA
posted a draft
advocacy letter online that can be easily personalized
and e-mailed to your senators' offices. You can also find
any senator's office information
online or call the Capitol switch board at (202)
224-3121.
ICBND Board
Supports Stateside Measure No. 1
On November 4, 2008 the citizens
of North Dakota will vote on a measure to setup a permanent oil
tax trust fund. ICBND’s Board voted in favor of supporting this
measure for the future benefit of the citizens of North Dakota.
The funding mechanism for the fund only applies when tax
revenues exceed $100 million/biennium AND all earnings on the
fund will be transferred to the general fund annually. In
addition, the $100 million is adjusted annually by the consumer
price index which means the portion of the tax going to the
general fund will not be eroded by inflation. Finally, the
principal amount in the fund can be accessed (up to a 20% limit)
but only with a 75% super majority of the members of both houses
of the state legislature.
Help support the future of North
Dakota and encourage a YES vote on measure No. 1.
ICBND Board
Opposes a Proposed Measure to Limit State
or Political Subdivision Budgets
Currently there is a petition
circulating to place a measure on the November ballot to limit
the state and “any” political subdivision budget expenditure to
the amount of the preceding year plus a specified consumer price
index adjustment. According to the petition, this limit can be
exceeded only with a special vote on the question and with an
approval of not less than 60%.
The Board of ICBND has voted to
oppose this proposed measure because we believe the existing
safeguards built into the constitution and political process
does allow voters and the public to have their voice in such
matters heard. In addition, the Board of ICBND believes the
added costs of a special election (if needed) and the
requirement for a super majority of voters will potentially
impede the current majority rule in the political process and
will be a significant restriction in growth areas of the state.
FROM THE CSBS EXAMINER:
The Conference of
State Bank Supervisors will convene on May 20-22 for its 107th
Annual Meeting & Conference at the Amelia Island Plantation in
Amelia Island, Fla. This elite gathering brings together state
and federal bank regulators, policy makers, industry experts and
bankers to discuss current financial services issues and to
salute the state banking system.
North Dakota
Commissioner of Financial Institutions Timothy J. Karsky will
assume duties as CSBS chairman at the annual business meeting
Wednesday afternoon. He will succeed Wyoming State Banking
Commissioner Jeffrey C. Vogel.
Highlights of this
year's conference include:
Tuesday – For regulators, a day-long Supervisors Workshop is
planned. For bankers, an all-day Financial Services Symposium,
hosted by the CSBS Bankers Advisory Board.
Tuesday - Luncheon speaker Jennifer E. Duffy, managing editor
and a political analyst for The Cook Political Report, and a
dialogue with Cam Fine, president of the Independent Community
Bankers of America. A Welcome to Florida reception is planned for
the sundown hour.
Wednesday – Keynote address by FDIC Chairman Sheila C. Bair,
followed by year-in-review remarks from CSBS Chairman Jeffrey
C. Vogel, Wyoming Commissioner of Banking, followed by remarks
from James B. Lockhart III, director of the Office of Federal
Housing Enterprise Oversight, followed by economic outlook
presentation by Mark Zandi, chief economist and co-founder of
Moody's Economy.com, Inc.
Thursday, keynote address by Randall S. Kroszner, member,
Federal Reserve Board of Governors, followed by remarks from
Florida Attorney General Bill McCollum, former member of
Congress.
Thursday – Luncheon remarks from CSBS Incoming Chairman
Timothy J. Karsky, North Dakota Commissioner of Financial
Institutions, and CSBS President & CEO Neil Milner. Breakout
sessions are slated Thursday afternoon, and the conference
concludes that evening with the CSBS Annual Banquet with
musical comedy featuring Second City
Program information
is posted on the
CSBS Web site. On-site registration is available if you wish
to attend and have not registered in advance.
ICBND COMMENT: ICBND sent checks totaling $4,250 to support the
opening reception at the CSBS annual meeting and conference.
North Dakota’s own Commissioner Tim Karsky will become chairman
of CSBS at this event. This is an honor for Tim and we are
confident he will serve this fine organization well. Our best
wishes for a successful year are with Commissioner Karsky and
with CSBS.
Around The Agencies
FRB/FTC: The Federal
Reserve and Federal Trade Commission on Thursday announced a
proposal to require creditors to provide special disclosures
when a credit report influences the price or terms of a
product. The proposal would generally require a creditor to
provide a consumer with a risk-based pricing notice when,
based in whole or in part on the consumer's credit report,
the creditor offers or provides credit to the consumer on
terms less favorable than the terms it offers or provides to
other consumers. The agencies noted that many creditors
offer more favorable terms to consumers with better credit
histories. The proposed rules would apply, with certain
exceptions, to all creditors that engage in risk-based
pricing. Under the proposal, a risk-based pricing notice
would generally be provided to the consumer after the terms
of credit have been set, but before the consumer becomes
contractually obligated on the credit transaction. The
proposal provides a number of different approaches that
creditors might use to identify the consumers to whom they
must provide risk-based pricing notices. In addition, the
proposed rule includes certain exceptions to the notice
requirement. The most significant exception would permit
creditors, in lieu of providing a risk-based pricing notice
to those consumers who receive less favorable terms, to
provide all customers with their credit scores and
explanatory information. The proposal has a 90-day comment
period. To access more information about the proposal, go here.
HUD:
The Department of Housing and Urban Development announced on
Wednesday that it is extending the public comment period on
its proposed reforms to the real estate settlement process
for 30 days until June 12. The comment period for HUD's
proposed rule to simplify and improve the process of
obtaining mortgages and reducing settlement costs under the
Real Estate Settlement Procedures Act was originally
scheduled to end on May 13. "This critical rule will improve
the complicated home buying process and save families money
at the settlement table. In light of Congressional and
industry requests to extend the comment period for the rule,
and our desire to develop the best possible rule, we are
allowing additional time. However, we remain committed to
finalizing a rule before the end of the Administration,"
said Deputy Secretary Roy A. Bernardi. For more information,
see the
press release.
OFHEO:
The Office of Federal Housing Enterprise Oversight on Monday
updated the maximum conforming loan limits in three areas
under its temporary authority in the Economic Stimulus Act
of 2008. Under the law, maximum conforming loan limits are
determined by local median home prices. The three affected
areas are: Gunnison County, Colo.; Blaine County, Idaho; and
the San Juan-Caguas-Guaynabo, Puerto Rico Metropolitan
Statistical Area. For one-unit homes, the new maximum for
conforming loans in Gunnison County is $433,750. The new
limit in Blaine County is $729,750, and the new limit in San
Juan-Caguas-Guaynabo is $606,250. OFHEO said it made the
adjustments based on valid public appeals. For more
information, go on
OFHEO's web site.
FROM THE ICBA NEWSWATCH TODAY:
Farm Bill Proceeding in Congress, Despite a Veto Threat
The full
House and Senate are expected to vote on the farm bill
this week. Secretary of Agriculture Ed Schaefer
indicated late last week that President Bush would veto
the bill. Democratic and Republican members are seeking
enough votes to override the veto in both chambers.
Senate
Agriculture Committee Chairman Tom Harkin (R-Iowa) said
late last week in response to the veto threat, "Like any
compromise bill resulting from hard bargaining among
regional and other interests, this farm bill is far from
perfect. But no piece of legislation is. It includes
significant reforms, as well as these major advances. It
deserves the President's signature. Inexplicably, the
White House seems intent on destroying the harvest just
as the seeds are being planted."
View Farm Bill Summary.
ICBA Staff to Brief Tennessee Bankers in Washington
ICBA's
senior government relations staff will brief a
delegation of Tennessee Bankers Association members this
afternoon on current policy issues. The TBA delegation,
in Washington to visit members of their congressional
delegation, will be given updates on several legislative
and regulatory issues, such as foreclosure prevention
and housing stimulus legislation. Other issues include
the status of legislation to close the industrial
company loophole, tax and regulatory relief targeting
community banks and Main Street America, and efforts
opposing measures to expand credit union powers.
House Passes Abandoned Property Rehab Bill
The House
cleared a bill last week that would direct $15 billion
toward helping state and local housing agencies buy,
rehabilitate and reoccupy abandoned foreclosed homes.
The Neighborhood Stabilization Act of 2008
(H.R. 5818) would authorize the Department of
Housing and Urban Development to direct $7.5 billion in
zero-interest loans and $7.5 billion in grants toward
quickly re-occupying properties with new homeowners or
renters. Properties benefiting from the bill's financing
must house or be resold to low-income families. The bill
was introduced by Rep. Maxine Waters (D-Calif.), a House
Financial Services subcommittee chairman.
View Bill Summary.
Housing Package Passes with ICBA Provisions
By a
266-154 vote, the House of Representatives
passed a legislative package aimed at
stimulating the housing market and helping
homeowners avoid foreclosure. Central to the
package is $300 billion in funding to convert
homeowners adjustable-rate mortgages into
government-insured Federal Housing
Administration mortgages. The FHA measures would
aid roughly 500,000 households and cost $1.7
billion, according to the Congressional Budget
Office.
The
measure--the American Housing Rescue and
Foreclosure Prevention Act of 2008 (H.R.
3221)--contains several provisions sought by
ICBA. Those provisions include a first-time
homebuyer tax credit initially proposed as part
of ICBA's
Nine-Point Economic Stimulus Plan and
Federal Home Loan Bank community development
provisions that would increase the number of
community banks eligible to use advances to fund
small business and agricultural loans.
Read ICBA Release.
Agencies Propose Risk-Based Pricing Notices
A
new
proposal by the Federal Reserve Board and
the Federal Trade Commission would require
creditors to provide risk-based pricing notices
when a consumer's credit report negatively
impacts the terms of a credit offered. Lenders
would have the option of providing these
consumers their credit scores and explanatory
information in lieu of a risk-based pricing
notice. A 90-day public comment period will
follow publishing in the
Federal Register.
The
Farm Credit Administration board of directors
approved a proposed regulation that would, if
adopted, allow Farm Credit System institutions
to engage in a comprehensive series of
investments in communities with populations up
to 50,000 residents. The proposed regulation is
designed to formalize a series of pilot programs
that the FCA has allowed on a case-by-case basis
beginning in 2005 and which now has 37 FCS
institutions participating. An FCA
press release noted the program would allow
broad investments in community facilities,
transportation infrastructure, rural communities
that are recovering from disasters, debt
securities of federal, state and local agencies,
rural business investment companies, and venture
capital funds.
While FCA has refused to release details of its
investment programs, various FCS institutions
have begun soliciting "investments" for a
variety of lending activities conducted by
community banks. Those activities include
non-agricultural businesses, light
manufacturing, apartment complexes, hotel and
convention facilities, community buildings,
healthcare and hospital facilities, and dental
facilities. While such "investments" are outside
the parameters of the Farm Credit Act, the FCA
claims extending such credit would be allowed
because the credits would be considered
"investments." ICBA will continue to review the
wide-ranging proposal, which will have a 60-day
public comment period.
Read FCA Fact Sheet.
FDIC Boosts DIF Loss Reserves
The
FDIC increased the Deposit Insurance Fund's
liability reserves by $459 million to $583
million during the last quarter in response to
"continued deterioration in the banking
industry's financial conditions," according to a
Letter to Stakeholders. Karen Thomas, ICBA's
executive vice president of government
relations, tried to put potential bank failures
in perspective, calling the absence of bank
failures in the past two years "pretty
remarkable," and noting that "most banks on the
troubled bank list don't fail," in a U.S. Banker
article.
Reports Show Sales Up, Unemployment Down
Improved retailer sales reports and falling
unemployment application rates offered some
goods news on the state of the economy.
Retailers' improved sales figures from last
month indicate shoppers increased purchases of
basic living goods but shunned expensive
discretionary items. The Labor Department
announced that unemployment benefit applications
fell by 18,000 to 365,000 compared with the
previous week.
Fed Seeking to Pay Interest on Reserves
The Federal Reserve is preparing to ask
Congress for the authority to pay
interest on bank reserves beginning this
year, The Wall
Street Journal
reported. Congress already gave the Fed
permission to pay interest on bank
reserves starting in 2011, but Fed
Chairman Ben Bernanke is working on a
formal request to lawmakers to let the
agency act sooner, the newspaper said.
The authority would give the Fed another
lever to control interest rates and
manage liquidity within the financial
system. The Fed's governors discussed
the topic last week during a closed
meeting.
Fed Report Shows Surge in Consumer
Credit
Consumer credit increased at an annual
rate of 5.5 percent in the first quarter
of 2008, according to the Federal
Reserve consumer credit
report. Revolving credit increased
at an annual rate of 6.75 percent, and
non-revolving credit increased at an
annual rate of 4.5 percent. In March,
consumer credit increased at an annual
rate of 7.25 percent.
HUD Extends RESPA Comment Period
Conceding some ground to requests by
Congress and ICBA, the Department of
Housing and Urban Development
agreed to extend by an additional 30
days the comment period on the agency's
proposed overhaul disclosure rules under
the Real Estate Settlement Procedures
Act. The public will now have until June
12, or 90 days.
ICBA and nearly 150 members of Congress
asked the agency to set a 120-day
comment period on the nearly 300-page
proposal, which would add a host of new
RESPA disclosure requirements. The Bush
administration tabled a previous RESPA
reform proposal after lawmakers and the
public considered it too complicated and
unworkable.
Disaster Telecom Pilot Sign-Up Extended
The deadline was extended until Monday
for community banks to access a
streamlined application and approval
process to use a nationwide
telecommunications pilot program for use
during a natural disaster or other
emergency. Institutions in 10 states and
the District of Columbia are eligible to
use the
Government Emergency Telecommunications
Service. ICBA worked closely with
Treasury Department and other officials
to develop the pilot program. See
Application and
Brochure.
ICBA Opposing Foreclosure
Preemption Measure
ICBA is urging members of
Congress to oppose a planned
amendment to pending housing
legislation that would likely
prompt state-federal
jurisdictional disputes over the
disposition of foreclosed
properties. Reps. Brad Miller
(D-N.C.) and Steven LaTourette
(R-Ohio) plan to propose the
amendment this week during House
floor debate on an omnibus
housing stimulus bill.
The Miller-LaTourette amendment
seeks to protect state
foreclosure laws from the
theoretical chance of federal
preemption. But ICBA President
and CEO Cam Fine
wrote to lawmakers that
federal regulators have never
sought to regulate the
foreclosure process and the
amendment would create legal
disputes that would not
otherwise occur. "In short, the
amendment takes an overly broad
approach in attempting to solve
a problem that doesn't exist,"
he wrote.
Bank Executives in Worrisome
Mood, Survey Finds
Facing several challenges, most
bank executives expect 2008 to
be one of the most difficult
business years since at least
1993, according an annual Grant
Thornton LLP survey. The
accounting firm's annual
15th Bank Executive Survey
found bank executives worried
about increasing competition,
affordable funding, the slowing
economy and costly changes in
public policy arena. This year's
survey gauges executive views on
topics that include competition,
technology, risk management,
corporate governance and the
economic outlook.
OFHEO Lifts Fannie Mae Consent
Order
The Office of Federal Housing
Enterprise Oversight
lifted its two-year
regulatory consent order with
Fannie Mae as the
government-sponsored enterprise
announced plans to raise $6
billion in capital through a
public stock offering. OFHEO
said it would allow Fannie Mae
to lower its capital
reserves—from 20 percent to 15
percent above minimum
capital—after the company's
stock offering is completed this
fall. In March, OFHEO reported
that Fannie Mae and Freddie Mac
had submitted timely year-end
financial reports and built up
appropriate capital reserves in
keeping with separate consent
orders imposed on each company
for accounting and internal
control problems.
Atlanta Fed Creates Payments
Risk Forum
The Federal Reserve Bank of
Atlanta formed a new research
and discussion group to help
promote financial institutions
reduce their retail payments
fraud and risks. The Forum for
Retail Payments Risk Management
will monitor, conduct research
and propose solutions concerning
retail payments issues. The
group will initially focus on
check and automated
clearinghouse issues, according
to a
statement by the Atlanta
Fed. ICBA's Payments and
Technology Committee recently
identified payments risk
management as a priority issue,
so ICBA applauds the formation
of the forum and looks forward
to contribute to its work.
Bernanke Explains Patterns on
Troubled Mortgages
Federal Reserve Chairman Ben
Bernanke outlined regional
patterns of mortgage
delinquencies and nationwide
foreclosures based on geographic
housing data. Bernanke pointed
out in a
speech that rising
unemployment and falling home
prices underlie today's ailing
housing markets. The Fed is
providing community leaders with
data and analysis to help them
reduce foreclosures in high risk
areas, he said. About
one-quarter of the nation's
adjustable-rate mortgages are 90
days or more delinquent or in
foreclosure.
ICBA's Top Legislative,
Regulatory Agenda
ICBA works every day with
policymakers to ensure community
banks' interests remain front
and center during policy
deliberations. Check out the
top issues the association
is working on, which range from
passing legislation to close the
industrial loan company loophole
to enacting regulatory relief to
opposing Farm Credit System
efforts to expand its
government-subsidized financial
activities.
Fine Named a Top
Industry Advocate
ICBA President and CEO
Cam Fine was identified
by Capitol Hill staff
and lobbyists as one of
the most effective
industry advocates in
our nation's capital in
The Hill
newspaper's annual list
of top trade group
leaders. The Capitol
Hill newspaper, listed
Fine as one of the best
trade association
leaders "who are best at
keeping their groups
marching in lockstep on
Capitol Hill for the
collective good of their
members." The
publication noted that
Fine makes sure the
5,000 banks that ICBA
represents have a voice
on Capitol Hill.
Lawmakers Seek Longer
RESPA Comment Period
Nearly 150
representatives in
Congress are urging the
Department of Housing
and Urban Development to
extend a public comment
period for the proposed
extensive of disclosure
rules under the Real
Estate Settlement
Procedures Act. In a
letter, the
lawmakers asked the
agency to double the
comment period to 120
days, as ICBA urged the
agency last month. The
current comment period
on the nearly 300-page
proposal ends May 13.
Intended to help
borrowers compare
mortgage offers, the
proposed RESPA
regulation changes
would, among other
things, require
borrowers to receive a
standard four-page "good
faith estimate" of
mortgage terms and
settlement costs before
accepting a mortgage.
The rules would also
limit how much such
mortgage costs could
vary from an initial
estimate to closing;
require lender payments
to mortgage brokers to
be disclosed; and oblige
settlement agents to
read aloud a "closing
script" to borrowers at
settlement.
ICBA-Opposed CURIA
Introduced in Senate
Sen. Joseph Lieberman
(I-Conn.) introduced a
Senate version of the
Credit Union Regulatory
Improvements Act, a
virtually identical
counterpart to the CURIA
credit union powers
expansion bill that ICBA
has helped successfully
oppose in the House for
the past five years.
Like the House version,
Lieberman's bill (S.
2957) would nearly
double the cap on
tax-exempt credit union
business lending; allow
credit unions to expand
their fields of
membership; and make it
harder for credit unions
to convert to tax-paying
mutual savings
institutions.
Last week ICBA members,
including about 300
leadership bankers
visiting their
congressional
delegations during the
ICBA Washington Policy
Summit, convinced
lawmakers with a strong
lobbying blitz to
abandon a last-minute
vote in the House on a
revised version of the
legislation, dubbed
CURIA-Lite.
Read ICBA Policy
Resolution.
ICBA: Card Rules Would
Add Needless Costs
Proposed new credit card
rules federal regulators
released last week would
add unnecessary
regulatory costs to
community bank credit
card programs without
benefiting consumers,
TCM Bank President and
CEO Paul Weston was
quoted in
The New York Times
