Community banks were not responsible for the mortgage crisis, so their portfolio loans should be exempt from pending regulations on high-cost mortgages, ICBA told the Consumer Financial Protection Bureau. In a comment letter on proposed amendments to the Home Ownership and Equity Protection Act, ICBA said that the exemptions would help ensure that community banks are not driven from the mortgage market.

Among its other recommendations, ICBA wrote that:

• the CFPB’s definition of points and fees is too broad and should be clarified for open-end and closed-end credit
• third-party and affiliate fees and employee compensation should not be included in the calculation
• the bureau should allow financial institutions to correct unintentional violations
• HOEPA regulations should allow community banks to continue to provide balloon payment mortgage loans if the loans are held in portfolio until maturity.

   

Read ICBA Comment Letter. Read ICBA Release.

The Consumer Financial Protection Bureau announced appointments to its newly formed Community Bank Advisory Council. The new council will provide the CFPB with feedback on policy development, research, rulemaking and engagement. The CBAC will convene publicly for its first meeting on Oct. 10, and members will serve single two-year terms.

ICBA-member community bankers named to the council include:

• Guillermo Diaz-Rousselot, Continental National Bank of Miami, Fla.
• Donald Giles, Armed Forces Bank, Fort Leonard Wood, Mo.
• Jack Hartings, The Peoples Bank Co., Coldwater, Ohio
• Melany Kniffen, Southern Commercial Bank, St. Louis, Mo.
• Robin Loftus, Security Bank, Springfield, Ill.
• Jo Ann Merfeld, First Citizens National Bank, Mason City, Iowa
• Kim Saunders, Mechanics and Farmers Bank, Durham, N.C.
• Glen Thurman, First National Bank of Moody, Texas
• Jesse Torres, Pan American Bank, Los Angeles, Calif.
• Huey Townsend, Guaranty Bank and Trust Company, Belzoni, Miss.
• Timothy Zimmerman, Standard Bank, Monroeville, Pa.

A coalition of banking organizations called on Congress to temporarily extend full FDIC coverage of noninterest-bearing transaction accounts. ICBA and the American Bankers Association noted in a joint letter that the TAG program has been fully funded by the banking industry at no taxpayer expense. Meanwhile, a coalition of 80 state banking associations reiterated their concern that failing to continue the FDIC coverage would create disruption and uncertainty in the banking system.

ICBA is encouraging community bankers to continue to convey to their members of Congress their support for the temporary TAG extension. Call Congress Today. Write Congress Now.

ICBA participated in a “Farm Bill Now” rally on the U.S. Capitol grounds in which members of Congress, agricultural leaders and hundreds of farmers and ranchers called on Congress to pass a five-year farm bill. The “Farm Bill Now!” rally featured remarks from Sen. Jerry Moran (R-Kan.), Rep. Kristi Noem (R-S.D.), House Agriculture Committee Ranking Member Collin Peterson (D-Minn.) and Senate Agriculture Committee Chairman Debbie Stabenow (R-Mich.).

The rally had the backing of approximately 90 farm and agribusiness groups, including ICBA.  Numerous other members of the House and Senate Agriculture committees attended the event. The lawmakers encouraged their colleagues to work together to advance a bipartisan farm bill and noted the current bill expires Sept. 30.

ICBA supports a comprehensive, five-year bill to provide for a strong farm program that supports agricultural lending and local communities. Among its recommendations to Congress, ICBA has supported reforms to USDA guaranteed loan programs to generate more guaranteed loans. The association also backs maintaining existing funding levels for crop and revenue insurance programs to provide stability to the agricultural economy. Read ICBA Farm Bill Testimony.

The number of unbanked or underbanked households has increased in the past two years, according to the FDIC’s latest survey. The 2011 survey found that 28.3 percent of U.S. households are either unbanked or underbanked, up slightly from the 2009 survey.

According to the 2011 survey, 8.2 percent of U.S. households are unbanked, which means they do not have a bank account. This is up 0.6 percentage points since 2009 and represents nearly 17 million adults. Another 20.1 percent are underbanked, which means they have a bank account but also use alternative financial services such as check-cashing services and payday lenders. Read the Survey Results.

The over-reliance on lead institutions by banks that purchase loan participations has caused significant credit losses and contributed to bank failures, the FDIC said in a financial institution letter. The agency said the losses and failures have been most prevalent for loans to out-of-territory borrowers and obligors involved in industries unfamiliar to the bank.

The FDIC advisory reminds state nonmember institutions of the importance of underwriting and administering loan participations as diligently as if they were being directly originated by the purchasing institution.

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