April 5 – The Independent Community Bankers of America have announced the promotion of Joseph Schneider, director of state relations, to vice president of state relations. In his new role, Schneider, who has been with the association since 2009, will continue to serve as the primary liaison between ICBA and its network of 46 affiliated state and regional partner associations.
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Nov 4 – Pioneer Financial Services, a subsidiary of MidCountry Financial Corp., has announced that Joe Freeman will serve as president of the company effective Oct. 29, 2010. While he has served as president of Pioneer Financial Services’ subsidiary companies, Freeman will now add the responsibility of president of the holding company, as well as continue his role as chief operating officer. Freeman assumes the position from Thomas H. Holcom, who has been named chairman.
September 28 – The SEC’s Office of Compliance Inspections and Examinations has issued a risk alert as it ramps up its second phase of examinations designed to bolster cybersecurity in the financial industries. The first phase kicked off in In April 2014, when OCIE published their initial announcement on the program as part of their vision for improving cyber security for the securities and financial markets.
By Bill Poquette
Focusing the discussion of regulatory relief more on bank activity and less on size is the goal of proposals outlined by FDIC Vice Chairman Thomas Hoenig recently at the Kansas Bankers Association’s CEO & Senior Management Forum and Annual Meeting at the Broadmoor in Colorado Springs.
The proposals were detailed earlier by Hoenig at the outreach meeting on the Economic Growth and Regulatory Paperwork Reduction Act in Kansas City on Aug. 4, where he explained that they emphasize the core commercial banking model and the importance of strong equity capital.
Under Hoenig’s plan, a bank would be eligible for regulatory relief if:
It holds no trading assets or liabilities.
It holds no derivative positions other than interest rate and foreign exchange derivatives.
The total notional value of all of its derivatives exposures – including cleared and non-cleared derivatives – is less than $3 billion.
It maintains a ratio of Generally Accepted Accounting Principles equity-to-assets of at least 10 percent.
More than 90 percent of the approximately 6,400 U.S. commercial banks meet the first three criteria, Hoenig pointed out. Two-thirds already meet the 10 percent GAAP capital rule. Half of the other one-third are at 9 percent and the rest are at 8 percent. “We’ve looked at these banks and 10 percent is very doable,” he said.
The goal will only be achieved by statute, not by interagency rulemaking, according to Hoenig. To that end, the plan has been embedded in legislation to be introduced by Sen. James Lankford, R-Okla., possibly in September when Congress returns from the August recess.
“We need these standards for banks taking deposits and making loans with no derivatives,” Hoenig said.
These banks would be exempted from all Basel III requirements; call reports would be shortened; exam cycles would be extended to 18 months where appropriate; Volcker Rule requirements could be met by simply having clear policies and procedures in place; and stress tests would not be required.
“I’m told my plan won’t work,” Hoenig said. “If this doesn’t work, nothing will.” The only other option in his opinion would be to repeal the Gramm-Leach-Bliley Act and bring back the Glass-Steagall Act.
“The community banking model works,” he told the Kansas bankers. “It’s relationship banking. I hate to see it go away but it’s in danger.”
He also advised the group that their pleas for regulatory relief won’t be effective unless they go to Congress with legislation already drafted. “You can’t just say, ‘we need help.’ You’ve got to put legislation in their hands,” Hoenig said.
Another speaker, Joel Leftwich, staff director of the Senate Committee on Agriculture, Nutrition and Forestry, put the Department of Agriculture’s budget in perspective for the Kansas bankers. In the fiscal 2016 federal budget, totaling $48.9 trillion, agriculture programs account for 0.32 percent, plus 1.32 percent for the Supplemental Nutrition Assistance Program. Agriculture’s 10-year baseline of $1.2 trillion will consist of 81 percent nutrition, 7 percent crop insurance, 5 percent conservation, 4 percent commodities and 3 percent other.
Leftwich reported that key topics for the committee, whose chairman is Sen. Pat Roberts, R-Kan., are reauthorizations for child nutrition, including school meals and the Women, Infants and Children program, grain inspection for exports, livestock mandatory price reporting and the Commodity Futures Trading Commission, which has been operating on supplemental appropriations for the past two years.
In an analysis of the U.S. economy, Ed Seifried, co-chairman of the consulting firm Seifried & Brew, reported that the Purchasing Managers Index for July registered 52.7 percent, a decrease of 0.8 percent below the June reading of 53.5 percent, but indicating growth in manufacturing for the 31st consecutive month.
A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting, Seifried explained. A PMI in excess of 43.1 percent over a period of time generally indicates an expansion of the overall economy. Therefore the July PMI indicates growth for the 74th consecutive month in the overall economy, he added.
Commenting on the impact of the Greek crisis on the U.S. economy, Seifried noted that the dollar will rise in value, the trade deficit will grow slightly, pressure for long-term interest rates to rise is reduced and the dollar will remain the world’s reserve currency.
The KBA will meet at the Broadmoor for the 32nd year in 2016, Aug. 4-6.
Bill Poquette is editor-in-chief of BankNews magazine.
July 24 – Digital banking technology keeps making it much easier for U.S. consumers to manage their finances on the go. So easy, in fact, that a third of them bank on their phone and online more than a year ago — and many are doing it at work, at the store or even while on a date.
July 21 – Ellie Mae, a leading provider of innovative on-demand software solutions and services for the residential mortgage industry, announced today it has entered into a strategic partnership with Fannie Mae, the leading source of residential mortgage credit in the U.S. secondary market, to further integrate Fannie Mae’s suite of risk management tools into Encompass, Ellie Mae’s all-in-one mortgage management solution.
July 20 – Capital Bank has announced it has been recognized by the American Banker as one of the top 200 Best Performing Community banks in the nation ranking number 91 overall based on a three year Average Return on Equity. For all banks with less than $500 million in assets in the State of California, American Banker ranked Capital Bank the #1 Best Performing Bank in the State.
June 29 – Sixty-one percent of financial institutions are affected by Know-Your-Customer regulatory changes and have noted an impact on their compliance operations in a number of areas, according to a new market survey conducted by NICE Actimize, a provider of financial crime, risk and compliance software for the financial services industry. (more…)
June 26 – Digital banking technology keeps making it much easier for U.S. consumers to manage their finances on the go. So easy, in fact, that a third of them bank on their phone and online more than a year ago — and many are doing it at work, at the store or even while on a date.
May 11 – Ellie Mae, a leading provider of innovative on-demand software solutions and services for the residential mortgage industry, has partnered with DocuSign, Inc., to deliver advanced electronic signature capabilities to its mortgage lender clients.