Greetings from Guy By Guy Sims OBA Chairman It appears the Republican efforts to repeal and replace the Affordable Care Act (a.k.a. Obamacare) has failed. Senate Majority Leader Mitch McConnell said it is time to move on. How this defeat will affect future legislative efforts, specifically regulatory reform for banks, is difficult to say but my gut tells me it is not a positive development. Watching Washington for the last 30 years I have learned that politics is a lot about risk and reward. Three Republican senators did not view it as a risk to vote against a cornerstone of the president’s agenda. If the president’s approval numbers don’t improve, I suspect there will be more senators and congressmen who take the same position on future legislation. In addition, I think it’s safe to say the president has not helped himself with some of his comments and tweets. I failed to see the logic behind the president’s attack on John McCain’s “war hero” status during the campaign last summer and I suspect the president has now paid a political price for that attack. As I’ve said before, I believe there is some bipartisan support for common sense regulatory reform for traditional banks. To achieve our goal, we will need all of the Republican votes as well as eight Democratic votes in the Senate. Let’s hope the health care vote is not an indication of things to come. Back to top CFPB meeting on Sec. 1071 of Dodd-Frank Most bankers are aware the Consumer Financial Protection Bureau has put forth a Request for Information that deals with the small business lending market. In particular, the Bureau wants information about current practices as they relate to small businesses that are minority- or women-owned. This request comes about because Section 1071 of Dodd-Frank has mandated you compile, maintain and report information concerning your banks small business customers. The Bureau ostensibly wants to learn more about the small business financing market, the products that are offered to small businesses in an effort to further eradicate violations of the nation’s fair-lending laws. In the Bureau’s defense, so to speak, it says it wants to learn more about small business lending, any data that is currently used by lenders and the potential complexity and cost of small business data collection and reporting. The Bureau is also seeking comment from the public on privacy concerns related to the disclosure purposes of section 1071. A group of state bankers association executives met with representatives from the CFPB Monday afternoon to begin discussions about banker concerns in trying to implement Sec. 1071. Included in that select group was OBA President and CEO Roger Beverage. “The RFI has to do with the mandatory collection of certain data on commercial lending activities,” Beverage said. “Among other things, the Bureau wants to know what data is used now in processing small business loans in general, and particularly about minority- and women-owned business loan applications. I know they’re just trying to do their job, but I wish they wouldn’t try so hard.” Beverage has been compiling information about the specific questions outlined in the RFI. “We didn’t go over to the Bureau with guns blazing, so to speak,” Beverage said. “Rather, we described the process of commercial lending generally and how it differs from consumer or mortgage lending. We tried to explain what we believe some of these data collection requirements will mean in the life of both bankers and consumers. “Small business lending is more of an art than it is a science. It’s not something you can readily squeeze into a pre-determined questionnaire and it’s definitely not the type of loan you can commoditize.” Beverage said the group pointed out what the normal process entails for a small business loan to be finalized. “For instance,” he said, “there isn’t a ‘loan application’ per se. Many times, loan officers visit with their customer and listen to what he or she has in mind. In this role, the loan officers tend to serve more in the nature of advisors; they take notes, study business plans, check out options and present their recommendations to the board. By its very nature it’s not something that you can apply across the board, because in this area there definitely is no “one-size-fits-all” approach. “For years banks have approached the business of commercial loans with a blind eye to its minority status or whether its owned by a female. Now that seems as if it’s all going to be turned on its head.” Beverage noted the OBA will submit a written comment by the Sept. 14 deadline. Back to top Reg relief may be pushed back to 2018 In other disturbing news, the word on the street in Washington is it’s quite possible bank regulatory reform of any type will be pushed further out on the congressional calendar than had been hoped. “While I was in Washington, I stopped by Sen. Lankford’s office to visit about the prospects for regulatory reform,” Beverage said. “The news is not wildly optimistic that we’ll get to it this year. Part of the reason is that the repeal and replace effort dealing with the Affordable Care Act has really sucked all the air out of the city. “Moreover, there does not seem to be any consensus among Republicans about what is or is not doable. Our top priorities remain a 'tailored' regulatory process to get rid of the ‘one-size-fits-all’ mentality that exists today, portfolio lending (mortgage loans originated and retained by the bank automatically achieve ‘QM’ status, and exempting small banks from the BASEL III capital requirements. I was told that we may have to wait, even as I pointed out how dumb that was. “The political atmosphere in this town (Washington) is as dysfunctional as I’ve ever seen it. Our delegation is trying to bring things to a head, but they still will need 60 votes in the Senate. Right now we don’t have them, and it’s not just Democrats that are blocking the road.” Back to top Discount OU football tickets available to OBA members The OBA, through the University of Oklahoma Athletic Tickets Office, is offering our bankers an opportunity to purchase tickets to OU's football season opener against UTEP on Sept. 2 for just $45 apiece. You can purchase the tickets by going here and entering the promo code BANKERS, if prompted. Or, contact the OU Athletic Ticket Office at (405) 325-2469. Back to top OBA education corner ... According to the temperature outside and the calendar, summer is still here. And, while that means things might slow down a bit for the OBA education department, it sure doesn't mean they stop! Take a peek at the upcoming events: Home Equity Lines of Credit, Aug. 8, webinar — Get a great overview of all aspects of Home Equity Lines of Credit (HELOC). Advanced Cash Flow Analysis, Aug. 8, webinar — This webinar will explore multiple models of both business and personal (business owner) cash-flow analyses. Annual Deposit Regulation Training for the Branch, Aug. 10, webinar — This regulatory review completes your financial institution's annual training requirements. CRE Appraisals: Two Part Series, Part 1 - Aug. 14; Part 2 - Aug. 21, webinars — These give an overview of guidelines and issues critical to CRE appraisal. New Business Accounts: The Interview, CIP, New CDD, Aug. 15, webinar — This program will focus on building the process from different types of entities to different types of risk. Regulation O: Lending to Insiders, Aug. 15, webinar — This program provides the information needed by the lending, compliance and audit staff to assure ongoing compliance with the regulation. Internal Audit Seminar, Aug. 16, Oklahoma City — This seminar will emphasize the importance of a strong risk assessment in any bank and the role this risk assessment, along with a sound and effective audit plan can have in helping a bank avoid fraud. Same-Day ACH: Round Two, Aug. 16, webinar — We'll review the rule, volume and who's currently using Same-Day ACH. 2017 OBA Compliance School, Aug. 21-25, Oklahoma City — This school is designed for those directly involved in the day-to-day compliance function as well as those who are involved in specific areas. Compliance officers, auditors, bank counsel, loan officers, cashiers and bank trainers will benefit from the courses.
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