Week of Jan. 23

January 23, 2017

From the chairman

By Curtis Davidson
OBA Chairman

We witnessed a remarkable event noon on Friday in Washington D.C. – the peaceful transition of political power in the United States. Since George Washington handed over the presidency to John Adams some 220 years ago, 23 presidential elections resulted in power transferred to another party. This occurred again Friday, Jan. 20, when Donald J. Trump was sworn in as our 45th president.

We could have one of the most active political agendas in history this year, but let’s take a moment to reflect on how significant Friday was. Ronald Reagan, when he was sworn in as president on Jan. 20, 1981, called it “a solemn and most momentous occasion, and yet in the history of our nation it is a commonplace occurrence.” He called the ability for our country to accept this four-year ceremony as normal is “nothing less than a miracle.”

What other country can claim such an orderly transfer of power for its entire existence? The democratic process for determining our country’s leader is certainly one of the reasons the United States is the greatest country.

You might be a Democrat studying how to preserve the political successes of the last eight years or a Republican trying to determine how to change the previous eight years of legislation. You might just be a community banker who’s hoping for changes that help you better serve your community and customers.

We can all celebrate the triumph of imperfect people who devised the best political system ever created.

Have a great week!

Curtis Davidson
OBA Chairman

Florida’s Sanchez: Tax reform must tackle big credit union exemption

The credit union corporate income tax exemption must be addressed by the new president and the new Congress. At least that’s the suggestion by the president of the Florida Bankers Association.

“My colleague in Florida, Alejandro (Alex) Sanchez, has written an excellent article about the credit union tax exemption and why it should be included in any tax reform proposal,” OBA President and CEO Roger Beverage said. “Alex has been outspoken about this issue for some time and I hope this article gets plenty of attention on (Capitol) Hill.”

“The tax exemption for large, bank-like credit unions must be on the table,” Sanchez said. “Currently, even multi-billion-dollar credit unions pay zero corporate income taxes to support the needs of our nation. The tax exemption should be left for the ‘Mom and Pop’ credit unions that remain true to the original charters.”

Does that make sense? Does that seem fair? These are the questions bankers must ask of their respective congressional delegations, even the Oklahoma delegation, which has generally been VERY supportive of bank issues.

Click here to read the op-ed.

Bankers: Call lawmakers in support of Durbin repeal

This is a request from the American Bankers Association and it’s something your OBA has been arguing for some time. It has to do with getting rid of the “Durbin Amendment,” which was a part of Dodd-Frank.

As the House prepares to reconsider a financial regulatory reform bill, ABA calls on all bankers to phone their lawmakers and urge them to support a provision in the bill that would repeal the Durbin Amendment and eliminate the government-imposed price controls on debit card interchange.

To make lawmaker phone calls easy and convenient, ABA has rolled out a new online patch-through calling system that allows bankers to reach their lawmaker by entering their contact information. Bankers may also call (844) 294-7985 to be automatically connected. ABA has prepared a fact sheet on the Durbin Amendment that can be used to start a conversation, and bankers are highly encouraged to share personal anecdotes of how the amendment has harmed both their institutions and their customers.

More information on ‘FinTech’ charter issue

The comptroller’s special-purpose national bank charter for financial technology firms (FinTech) has generated a lot of chatter about what it means, how will it impact traditional banks both large and small, is there an opportunity for banks to partner with these new entities or whether it’s at all within the comptroller’s authority.

The American Bankers Association has sent a letter to the comptroller’s office to emphasize “that the implementation of the new charter will be critical to ensuring a level playing field for banks and fintech companies” the ABA said in its news release. “The OCC must ensure that the appropriate regulations apply consistently to all national bank charters and that no regulatory gaps emerge.”

“Specifically, ABA said that fintech companies applying for a limited-purpose charter must be held to the same standards as national banks in terms of governance structure, capital and liquidity requirements, compliance risk management and financial inclusion, among other things. The association urged the OCC to work with other agencies “carefully and cooperatively to assure that no current policy lines are directly or inadvertently moved as a consequence of this action.”

ABA added that in addition to granting a limited-purpose charter to fintech firms, the OCC must also remain focused on empowering traditional banks to innovate. “Banks are the original fintech companies and have a long history of bringing innovative services to customers in a responsible manner,” said ABA VP Rob Morgan. “There are a number of steps that the OCC can take to help facilitate this. These include enabling banks to undertake limited-scale tests of innovative products and making it easier for banks to partner with fintech companies.”

What’s up with CFPB?

In the wake of having a new president in place, one of the questions we’ve been asked relates to the Consumer Financial Protection Bureau and whether President Trump is going to abolish it. In a word, no; There’s too much opposition and the Republicans have a very slim majority in the Senate (52-48).

Already there is speculation that President Trump will fire the Bureau’s director, Richard Cordray, within the first 100 days of his time in office. Rumors are Rep. Randy Neugebauer (R-Texas) has been selected to replace Cordray and Neugebauer is anxious to work with the banking industry to improve Dodd-Frank.

“It’s pretty much a jump-ball at this point,” OBA President Roger Beverage said. “The earlier decision of the Court of Appeals has been stayed pending its appeal and that means that Cordray still has to be fired ‘for cause,’ however that’s defined.

“I can see a scenario where the president ‘fires’ Cordray, and Cordray refuses to vacate his office or to leave his position. Senate Democrats will be enraged, especially Sen. Elizabeth Warren (D-Mass.). The fall-out for purposes of cooperation down the road will be immense, and will further poison the political environment, possibly beyond anything we’ve seen yet.

“Do I think Cordray would challenge his termination. Yes, I do and he will have the full backing of all Democrats in both the House and Senate. The resulting political fight will be more divisive than anything we’ve seen yet.”

Meanwhile, Beverage noted an article that appeared in the National Review that raises serious concerns about how the Bureau has been managed and what’s behind the curtain that people haven’t yet seen. Here’s a link to the article – you judge for yourself whether there’s reason for concern. And before you ask, there is no article of which we’re aware that denies that the report is accurate.

OBA hiring for open position

The OBA is looking to fill an open, non-management-level support position on its staff. The position will be for individuals in marketing and customer service, and experience in either is preferred by applicants.

Job responsibilities for this position will include, but are not limited to:

developing relationships with industry vendors for purposes of recruiting members and selling marketing opportunities;
developing relationships with members for purposes of obtaining information related to product development;
coordinating small group meetings between CEO and members as well as members and regulatory entities;
being the primary contact for members ordering products;
product development;
product inventory maintenance.

Please send a resume AND salary requirements to Lea Ann Jackson (leaann@oba.com).

OBA education corner …

Live programs are back in full force in the education department as the holidays are behind us! Check out the following:

ACH Rules Update, Jan. 27, webinar — You’ll want to join us to make sure that you are not only compliant with the ACH Rules, but understand the new opportunities are available with the changes.
Flood Insurance Update, Jan. 30, webinar — Flood Insurance rules have changed continuously over the past few years.
Escrow Rules: 2017 Review and Update, Feb. 2, webinar — This webinar covers all of the escrow rules, including the long standing and the recently revised requirements of the flood regulations, Regulation X and Regulation Z.
Onboarding Your New Hire, Feb. 2, webinar — Learn how to excel at new employee onboarding.
Open-Ended Lines of Credit, Feb. 6, webinar — This webinar will focus on the personal/overdraft lines and HELOC requirements.
FFIEC Information Security, Feb. 8, webinar — The FFEIC has completely re-written and significantly changed the Information Security Handbook.
Using Personal Tax Returns for Global Cash Flow, Feb. 8, webinar — Learn what forms and schedules in personal tax returns you should pay attention to and what you should ignore.
Oklahoma Safe Deposit Legal Issues Seminar, Feb. 15, Oklahoma City — When handled correctly, safe deposit box rentals can boost customer satisfaction and provide a valuable service. If handled incorrectly, however, a bank can suffer losses and a PR nightmare.
Chief Financial Officer Conference, Feb. 16, Oklahoma City — The 2017 CFO & Financial Officers Conference is specifically designed to provide strategic insights and critical industry updates you need to lead your bank to success.

Finally, make sure to save the date for the 2017 Community Bankers Leadership & Senior Management Conference, set this year for April 2-4 in San Diego, California. If you work for a community bank or if you’re looking for ways to improve your bank’s performance, then this event is for you! Click here for more information.