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CBAI Meets with OCC’s Office of Innovation

The Community Bankers Association of Illinois' David Schroeder, Senior Vice President Federal Governmental Relations, participated in the March 21, 2018 Office of Comptroller of the Currency’s (OCC) Office of Innovation Office Hours event by meeting with senior OCC Innovation and Central District staff. The meeting was timely and very informative considering the many new developments in financial technology (fintech) which are being driven by consumer expectations. Fintech is rapidly moving into every area of financial services and it is critically important for community bankers to be aware of fintech opportunities and challenges and incorporate them into their community banks’ strategic planning.

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Topics covered during Schroeder’s meeting included the rapid rise of fintechs, how the pace of fintech development is different than prior technology developments, the different approaches taken by large versus small banks (go-it-alone or partner), opportunities for partnerships with fintechs, risk factors to consider in the development of a fintech strategy, the importance of communicating early and often with bank’s regulators, and the challenges of customer data sharing with fintechs (data ownership and rights, privacy concerns, and liability for mishandling and misuse).

Also discussed during the meeting were the recent changes in leadership in the OCC and its impact on the OCC’s fintech initiatives, the status of the lawsuit against the OCC by the Conference of State Bank Supervisors challenging the OCC’s authority to approve special purpose national bank charters for fintechs, coordination among regulators on fintech supervision and regulation, and the importance of the regulators sharing success stories or problems/issues as additional guidance for the community banks they regulate. Read OCC’s FAQs on Partnering with Fintechs.

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CBAI Action Alert: Urge Senators Durbin and Duckworth to Support Community Bank Regulatory Relief

Please Contact Senators Durbin and Duckworth Today!

The Time Is Now for Community Bank Regulatory Relief!

Only five minutes of your time is urgently needed - right now.

The United States Senate is poised to vote on significant bipartisan community bank regulatory relief - the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155). Please contact Illinois' Senator Richard Durbin and Senator Tammy Duckworth and ask them to support this critically important legislation. Take Action Now!

This bi-partisan legislation provides long-overdue, meaningful, and well-deserved community-bank regulatory relief including:

  • Granting “Qualified Mortgage” (QM) status for portfolio mortgage loans by community banks (fewer than $10 billion in assets)
  • Exempting certain community bank loans from escrow requirements (banks fewer than $10 billion in assets);
  • Increasing exemption thresholds for Home Mortgage Disclosure Act (HMDA) reporting (500 open-end and 500 closed-end loans);
  • Simplifying community-bank capital requirements (bans less than $10 billion in assets);
  • Increasing eligibility for a short-form Call Report to restore proportionality to community-bank quarterly reporting (banks fewer than $5 billion in assets);
  • Expanding eligibility for the 18-month regulatory examination cycle for community banks (banks fewer than $3 billion in assets);
  • Easing appraisal requirements to facilitate mortgage credit in local communities;
  • Exempting community banks from the Volcker Rule (banks fewer than $10 billion in assets);
  • Improving regulatory treatment of reciprocal deposits and certain municipal securities.

Please share this Action Alert with your board members and senior management.

We need a strong response from all Illinois community bankers. Take Action Now!

Thank you for responding.

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The Time is NOW for Community Bank Regulatory Relief!

This week, the United States Senate will consider a comprehensive package of community bank regulatory relief measures that has been many years in the making. The Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) is bipartisan legislation with 25 Senate cosponsors, including 12 Democrats, 12 Republicans and one Independent.

In a letter to Illinois Senators Richard Durbin and Tammy Duckworth, the Executive Committee of the Community Bankers Association of Illinois unanimously stated, “Your support for S. 2155 will strengthen Illinois community banks, promote competition in financial services, give consumers more choices, support small-business development, home and education lending, and bolster long-term financial stability and security. Community banks bear tremendous regulatory burden and cost, and the tiered regulatory relief provisions of S. 2155 are appropriately targeted to address these burdens and deliver an economic boost to small businesses and local communities.” The letter concluded by saying, “Your vote in favor of S. 2155 is a key measure of support for long-overdue, well-deserved and meaningful regulatory relief for Illinois community banks.” Read CBAI Executive Committee Letter to Senator Durbin. Read Letter to Senator Duckworth.

March 5, 2018

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State Associations Urge Passage of Regulatory Relief Legislation

CBAI joined a coalition of forty-three state banking associations to urge swift passage of the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155). This crucial legislation was introduced last November by Senate Banking Committee Chairman Mike Crapo (R-ID) and enjoys 25 bi-partisan cosponsors, including an equal number of Republicans and Democrats and the one Independent Senator. The bill passed the Senate Banking Committee on December 5th (by a vote of 16-7) and is now headed to the full Senate for consideration.

This legislation contains many provisions from the ICBA Plan for Prosperity including:

  • Granting “Qualified Mortgage” (QM) status for portfolio mortgage loans by community banks (less than $10 billion in assets);
  • Exempting certain community bank loans from escrow requirements (less than $10 billion in assets);
  • Increasing exemption thresholds for Home Mortgage Disclosure Act (HMDA) reporting (500 open-end and 500 closed-end loans);
  • Simplifying community bank capital requirements (less than $10 billion in assets);
  • Increasing eligibility for a short-form Call Report to restore proportionality to community bank quarterly reporting (less than $5 billion in assets);
  • Expanding eligibility for the 18-month regulatory examination cycle for community banks (less than $3 billion in assets);
  • Easing appraisal requirements to facilitate mortgage credit in local communities;
  • Exempting community banks from the Volcker Rule (less than $10 billion in assets);
  • Expanding community access to the Federal Reserve’s Small Bank Holding Company Policy Statement to help build capital (less than $3 billion in assets); and
  • Improving regulatory treatment of reciprocal deposits and certain municipal securities.
Recent reports have cautioned that the large banks are seeking to gain relaxed oversight once the legislation passes the Senate and moves to the House of Representatives, where they are hoping for a more sympathetic ear. Unlike the previous Senate regulatory relief bill in the 114th Congress, Senator Crapo’s bill contains no concessions to the largest banks and financial firms.

In Capital Hill meetings the week of January 15th, David Schroeder, CBAI’s Senior Vice President Federal Governmental Relations, urged every member of the Illinois Congressional Delegation to support S. 2155. The Senate’s carefully constructed bi-partisan effort has brought more and significant regulatory relief for community banks closer to realization that at any point in well over a decade. The reason this legislation has earned such strong bi-partisan support is that it is narrowly focused to provide relief to community banks. Any attempt to relax large bank supervision and regulation will jeopardize the current strong bi-partisan support and likely derail much-needed, long-overdue and well-deserved community bank regulatory relief. Read Joint State Banking Association Letter.

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Jerome Powell Takes the Helm at the Federal Reserve Board

CBAI looks forward to working with Jerome H. Powell as the new Chairman of the Federal Reserve Board. President Trump nominated Powell on November 2, 2017, and he was sworn into office by the Fed’s Vice Chairman for Supervision, Randy Quarles, on February 5, 2018.

Powell has been a member of the Federal Reserve Board since May of 2012 when he was appointed to fill an unexpired term. He was reappointed in 2014 for a term ending in January of 2028. Powell succeeded Janet Yellen who served as Fed’s chair since 2014 and previously as vice chair. Powell brings to the position a wealth of experience in banking, finance and regulation with the Bipartisan Policy Center (D.C.), The Carlyle Group, and as Assistant Secretary and Undersecretary of the Department of Treasury (under President George H.W. Bush).

Mr. Powell holds an AB in politics from Princeton University and earned a law degree from Georgetown University. Read Fed’s Press Release. Read Powell’s Biography.