Week of April 10

April 10, 2017

From the chairman

By Curtis Davidson
OBA Chairman

Here’s the real story about my favorite community banker.

P.D. moved to Ardmore a year after he married his childhood sweetheart, Raymonde, who was known simply as Ray. He found a cashier job with Ardmore National Bank. He soon worked directly under Lee Cruce, who would become Oklahoma’s second governor.

P.D. and Ray enjoyed life in the sleepy cotton town raising four children and, just like bankers today, took a leadership role in their community. In 1913, oil was discovered in nearby Healdton and Ardmore became a booming community.

That was until Sept. 27, 1915, when railroad cars full of natural gasoline exploded and, in an instant, destroyed downtown Ardmore, killing 42 people. That was when P.D. and his bank led the effort to rebuild Ardmore.

In a span of just over two years, P.D. spearheaded a fundraiser to build the hospital by bringing in $30,000. He served on his church’s building committee and raised funds to build the Presbyterian church building still in use today. He also was a vice president at First National Bank, which had acquired Ardmore National Bank, when they built a new building in downtown Ardmore.

P.D. and Ray were pillars of their community; they even turned part of their farm into a recreation area enjoyed by Ardmore citizens. Tragedy stuck in 1919 when Ray died suddenly. P.D. was devastated and lost until he decided to follow the career Ray had encouraged for years.

On that family farm, P.D. had designed a four-hole golf course. I guess Ray thought P.D. was pretty good at this sort of thing, and she was right. This community banker turned into a golf architect and became one of our country’s greatest golf course designers.

You see, P.D. – or Perry Duke Maxwell – just wanted a better community. He did that and much more. Golf courses such as Southern Hills, Colonial and Prairie Dunes along with countless others, including his first, Dornick Hills, were all designed by Perry. They have been enjoyed by millions of golfers for over a century.

And now you know the rest of the story.

Have a great week!

Curtis Davidson
OBA Chairman

Fed President Esther George is a champion for traditional community banks

In a speech last week to the Federal Reserve Bank of New York Community Banking Conference, Esther George, president of the Federal Reserve Bank for the 10th District, hit a number of highlights about exactly how and why traditional community banks are so important to the overall success of the nation’s economy.

First, she pointed out that the federal bank regulatory system must deal with the reality that there are essentially two different systems:

There are banks that do more than traditional banking, operate in a global market and are so large and so intertwined that their failure would have a significantly negative impact on the U.S. economy;
At the same time, there are the smaller, traditional banks that take in local deposits and lend them out in the local communities in which those deposits originated. These kinds of banks have a huge impact on small businesses and small communities that has significant and real economic outcomes.

She pointed out these larger banks have “stretched” the federal safety net that supports both large and smaller traditional banks.

“(Esther) carefully pointed out there is a real need for a more ‘bifurcated’ federal regulatory system,” OBA President Roger Beverage said. “This is one of the things we talked about in Kansas City a few days ago, when I was in Kansas City. There is a real need for different rules and regulation that are able to address risks presented by both kinds of banks. That’s what’s represented by the TAILOR Act (H.R. 1116 and S. 366).”

… the differences between the largest banks and community banks are significant and those differences pose important challenges for setting effective regulatory policy. This leads me to ask a slightly different question … : Are traditional banks, or community banks, still important to the U.S. economy in 2017? (emphasis added) …

Market forces of technology and innovation … not the forces that particularly concern me. The risk I see stems from a misaligned regulatory environment that poses a threat in my view to the diversity of the U.S. banking system and healthy competition that has long served the country well. (emphasis added)

Esther also pointed out the absurdity of applying the Basel III international capital standards to traditional banks. Those rules are intended to reduce leverage for the nation’s largest banks, not “layer on additional and unnecessary reporting requirements and complexity” for traditional community banks.

George also hammered appraisal standards for smaller banks that are “ … often located in more rural markets … (and) struggle to find knowledgeable appraisers with sufficient comparable property sales … ”

It’s a real issue and it’s one that the rule makers have ignored long enough.

“It’s refreshing to have someone of Esther’s status recognize the reality to which Congress seems oblivious,” Beverage said. “One size does NOT fit every bank business operating model, just as no two customers, no two banks and no two communities are alike.”

Click here to read the full speech.

ICBA will not appeal NCUA ruling

Independent Community Bankers of America President and CEO Camden R. Fine recently released this statement on ICBA’s lawsuit against the National Credit Union Administration.

“ICBA has decided not to file an appeal in its lawsuit challenging the National Credit Union Administration’s commercial lending rule. Instead, ICBA will explore all avenues for redress of NCUA’s unjustified and outrageous expansion of limitations on credit union commercial lending activities under current congressional statutes. We remain deeply concerned with the tangible threat this poses to community banks, consumers and the financial system at large.

“The case illustrates the difficulty in challenging agency rules in light of the Chevron doctrine, which gives deference to agency rulemaking and determinations. ICBA will continue to call on Congress to prevent credit unions and their captive regulator from continuing to unreasonably expand their activities beyond any limits justified by their tax exemption, especially at the expense of taxpaying community banks.”

“I understand why this decision was made,” OBA President Roger Beverage said. “And I salute the ICBA for having the courage to challenge the unlawful rules this joke of a regulator issued for wannabe banks they call credit unions. What they are doing, what they are getting away with because of the lack of political courage in Washington is nothing short of astonishing.”

Patent troll letter circulating about USAA claims

One of our member banks has shared with us the following letter the bank received regarding a patent license involving a remote deposit capture offering. If your bank has received such a letter as the one that follows, please email it to Roger Beverage – roger@oba.com – at your early convenience.

Click here to read the letter.

OBA education corner …

Live programs and webinars are going full speed ahead in the education department! Check out the following:

Essential Teller Issues Seminar, April 17 – Oklahoma City; April 18 – Woodward; April 19 – Tulsa; April 20 – Krebs — The program zeroes in on six modules that remind your tellers of the importance of what they do, how they do it, what they say, and how they deliver customer service.
Dealing with Appraisals: Regulations and Requirements, April 18, webinar — Learn in-depth details of the appraisal and valuation process, from both the lender and appraiser side of the game.
Analyzing Tax Returns for Mortgage Decisions, April 19, webinar — This webinar is designed to give mortgage lenders a better grasp of tax returns and their importance in making quality loan decisions.
FFIEC Mobile Services Guidance Review, April 20, webinar — We will discuss the expectations within the FFIEC Retail Payments Booklet.
Commercial & Business Lending Basics for Support Personnel, April 24, webinar — This webinar is designed to take the “mystery” out of the commercial lending process and the confusing terminology often used by lenders.
CDD and the 5th Pillar, April 25, webinar — Learn about regulatory expectations for overdraft protection programs.
Investment & Interest Rate Risk Management, April 26, Oklahoma City — This seminar is developed specifically for managers of financial institutions. Designed to meet the challenges of 2017, it is an in-depth examination of current topics.
HR Seminar, April 27, Oklahoma City — Attending this seminar will provide information to allow HR managers and staff to comply with changes and support the overall compliance function.
CECL Update, May 3, Oklahoma City — This workshop will provide a brief background on FASB’s new credit impairment standard, which represents a significant change from the existing probable incurred losses model.

In additional news, now is the time to GET INVOLVED with your industry and your Association! The easiest and best way to do this is to join an OBA committee. There are several to choose from, ranging from school boards to agriculture and bank fraud. Click here to learn more about OBA committees and to download a Committee Interest Form!

Finally, each year, the Oklahoma Bankers Association awards a $1,000 scholarship to an incoming freshman who has a parent, grandparent, sibling or spouse who is a Professional Member of the Association. The student must enroll in an accredited Oklahoma institution of higher education. The applicant must also be graduating from an Oklahoma high school. A panel of bankers will select the winning applicant.

Click here for the 2017 scholarship application. Applications are due May 1, 2017.

If you have questions, contact Megan McGuire at our office at (405) 424-5252 or by email at megan@oba.com.