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As I write this, we’re in the midst of our first snow event of the season so I guess winter is officially upon us. While it seems like it’s been awhile since we had snow, the novelty of shoveling and plowing has already worn off.  Not a great sign.  My wife has also informed me that our older dog has again exercised her apparent right to move her bathroom indoors!  Also, not a great sign.

Speaking of seasons, how about that election season! I know we’re all glad it’s over, but it really was something to watch unfold.  At the national level, public pollsters and election models just absolutely missed it.  Republicans not only won the presidency, but also held a majority in the US Senate (which was somewhat unexpected) and lost many fewer seats in the US House than anticipated.

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As the father of three grown daughters, I understand the impact of reinforcement. As the youngest in my own family, my wife would probably say I need excessive reinforcement. I say she’s lucky! And, the latest Wells Fargo scandal has given regulators, particularly the CFPB, a boatload of reinforcement. Wells created over 2 million bogus accounts without customers’ knowledge. 5300 employees have been fired. Apparently rogue employees who conjured these schemes up themselves! Seems doubtful. The result so far - $185 million in fines and penalties, a trip to the US Senate Banking Committee woodshed, and the announcement of an investigation by the US House Financial Services Committee. I have a sense the final shoe has not dropped. I can only imagine there are a number of uncomfortable discussions being held behind closed doors at other mega-bank headquarters. My guess is the probes are just beginning. If it seems like I’m picking on Wells Fargo, I am. I don’t represent them.

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As I write this, we are in the home stretch of preparation for the 49th Annual ICBND Convention and Exhibition. It’s fun to be part of the “buzz” around the office as the staff of your association works hard to make this a premier event and a special occasion for our members. If you’ve not already registered, please do so! It promises to be fun and informative as we’ve assembled a quality lineup of educational and networking events along with our outstanding associate member exhibits.

On the regulatory front, we’re pleased to announce that a small contingent of ICBND member bankers will be meeting with Senator Heitkamp and CFPB Director Richard Cordray on August 10th in Bismarck. This is a great opportunity to share with Director Cordray the challenges of independent community banking in rural America under an increasingly burdensome regulatory regime.

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Each year as spring approaches I claim with good intention that I’m going to play more golf and even take some lessons. Well, it’s nearly June. I’ve played once. No lessons. Maybe I should take up fishing. Or, possibly just admit that I actually prefer doing yard work and playing hobby farmer. Anyway, I hope you’re doing a better job sticking to your spring resolutions!

Contrary to my golf game, activity at ICBND has been robust since our last newsletter. In late April, ICBND member bankers converged on Washington DC along with community bankers from across the nation for the 2016 ICBA Washington Policy Summit. This annual trek is to directly lobby our Congressional delegation and regulators addressing the major issues affecting community banking in our state. Our message focused on regulatory relief, system-wide data security standards, a level playing field with tax advantaged credit unions and Farm Credit, and certainty within the farm and rural safety net, particularly in this challenging ag market. Election year dynamics however, will prove challenging for any significant regulatory relief before November.

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Just in case you think your advocacy voice is never heard, I’m here to tell you it is! Bear with me and I’ll explain.

Last week, the CFPB released its interim final rule easing mortgage restrictions on many small creditors by expanding the number of community banks eligible for escrow and balloon loan exemptions. This resulted from community banking relief provisions in the recently passed Highway Bill.

So, effective March 31, 2016, any small creditor (in our case, community banks having $2 billion or less in assets who originate fewer than 2,000 loans per year including portfolio loans) that makes a SINGLE loan in a rural or underserved area in the previous year can receive; (1) the portfolio balloon loan exception (including Qualified Mortgage safe harbor status) and (2) the higher priced loan escrow exemption for rural lenders. This is a big deal for ICBND members as community banks were only eligible for these exemptions previously if they operated “PREDOMINANTLY” (meaning more than 50% of mortgage loans) in rural or underserved areas.

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