FNBB 7813 Office Park Boulevard • P. O. Drawer 80579 • Baton Rouge, LA 70898 • www.BANKERS-BANK.com First National Bankers Bank OFFICE TOLL FREE FAX (225) 924-8015 1-800-421-6182 (225) 952-0899
December 11, 2018
Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue, N.W. Washington, DC 20551
SUBJECT: OP-1625 - Potential Federal Reserve Actions to Support Interbank Settlement of Faster Payments
Dear Federal Reserve Board of Governors:
First National Bankers Bank (FNBB) is a correspondent bank that provides correspondent banking services to more than 600 community banks throughout the Southeast. We have been a trusted partner for community financial institutions since our inception in 1984. We appreciate the opportunity to provide comment on OP-1625 and the Federal Reserve’s future role with regard to Faster Payments.
FNBB is in complete support of the Federal Reserve developing a 24x7x365 RTGS settlement service along with a liquidity management tool. The Federal Reserve’s active involvement in these ways will ensure that financial institutions of all sizes have an opportunity to play a part in this new faster payments era.
A new faster payments system is inevitable as end-user expectations and needs evolve along with evolving technologies. Much like looking up an answer to a question with a web browser, watching a clip from our favorite movie, ordering goods, to communicating with others through text, voice or video, or getting directions through an app, consumers in today’s environment expect that our payments systems be right at their fingertips. Three primary elements to each of these actions that make them desirable are that they are quick, convenient and easily accessible. End-users need these same three things when it comes to payments, but our traditional payments systems have limitations and this means end-users have less flexibility and less control over their own money.
FNBB respectfully urges the Federal Reserve to develop a 24x7x365 RTGS settlement service. The Federal Reserve’s development of this service is necessary in order to create a safe, ubiquitous, faster payments system in the United States. Interoperability is key in creating a ubiquitous faster payments system. Without the Federal Reserve’s direct involvement, the private sector cannot reasonably expect to achieve this on its own. This will leave us with a fragmented payments system that will not be beneficial to all and will not achieve the desired ubiquity. Many consumers, small businesses, community banks, etc. could be left behind.
Based on the end-user’s growing needs, the industry will advance, and a faster payments system will evolve. The Federal Reserve currently sits in a unique position to have a major impact on the evolution of this faster payments system. It can either be part of the evolution or sit back and watch it evolve and be driven by others. If the latter happens, the community banking model as we know it today will be at risk as the opportunity for community banks to play a role in the new payments system will be significantly limited. However, if the Federal Reserve develops the necessary infrastructure to support a faster payments system that provides for interoperability, the community banks’ opportunity to participate and provide this service to their customers would greatly increase.
In Governor Lael Brainard’s keynote address, given to the FedPayments Community Forum in early October, she stated, “A 24/7 RTGS service provided by the Reserve Banks could significantly improve the prospect of banks of all sizes having equitable access to a real-time interbank settlement infrastructure for faster payments in the long term. This common infrastructure would support connections across banks and faster payment service providers, acting as their agents with the potential to weave together the current patchwork of systems.” We believe this statement summarizes exactly what the Federal Reserve’s position should be, and it supports the fact that the Federal Reserve’s involvement is critical in bringing the community banks into the future of faster payments. FNBB believes RTGS is the appropriate strategic foundation for interbank settlement of faster payments. Combining interbank messaging and interbank settlement offers many advantages over a DNS-based faster payment service, as pointed out in the Federal Register Notice. The RTGS settlement service clearly aligns with the Faster Payments Effectiveness Criteria, making it a preferred choice.
FNBB also believes that the Federal Reserve should develop a liquidity management tool in tandem with the development of the RTGS settlement service. This liquidity management tool should be flexible that could allow a bank to originate a transfer from one account to another, allow an automatic transfer of balances (sweep) based on pre-established thresholds and limits, and allow correspondent banks to aggregate balances on behalf of respondents as needed. The liquidity management tool should be available 24x7x365 along with the RTGS settlement service.
The Federal Reserve has always been an active provider of payment system services in its role as the Central Bank. Its continued direct involvement remains relevant as faster payments move toward future change. Pursuing the above two initiatives will address help satisfy the future needs of the payments industry as a whole and help ensure the fair inclusion of community banks in faster payments systems as they are developed.
We appreciate the opportunity to respond to the OP-1625 proposal and thank you for your consideration of our comments. We submit our comment letter on FNBB’s behalf as well as many of community banks for which FNBB provides correspondent banking services. The names and electronic signatures of those respective financial institutions adopting this position on OP-1625 are included with our letter.
Should you have any specific questions or require clarification, please contact Brandy Wheeler at 800-421-6182 or [email protected] or me at [email protected].
Sincerely,
Joseph F. Quinlan, III Senior Executive Vice President and Chief Operating Officer We hereby fully support this comment letter from First National Bankers Bank regarding OP-1625 and adopt the position provided regarding the Federal Reserve’s role in Faster Payments as our own.
Ronald J. Lashute, President/CEO Paige Hu ll, President / CEO American Bank & Trust Company Andrew Johnson Bank Opelousas, LA Greeneville, TN
Stephen E. St a ffo rd , CEO W arren Jennings J r , P r e s id e n t Anstaff Bank Arkansas County Bank Green Forest, AR DeWitt, AR
D w ig h t L . R u t la n d , P r e s id e n t Leonardo Whyte, EVP/COO Armor Bank Banco do Brasil Americas Forrest City, AR Miami, FL
Randall P Reid, Secretary Board of D irectors Andy Anderson, President & CEO Bank of Abbeville & Trust Company Bank of Anguilla Abbeville, LA Anguilla, MS
R i c k Green, Ch a i r m a n & P r e s id e n t Stephen M. Prielozny, President / C EO Bank of Bearden Bank of Belle Glade Bearden, AR Belle Glade, FL
Dwayne Cannon, Data Processing Officer J o h n Beller, President/CEO Bank of Brookhaven Bank of Cave City Brookhaven, MS Cave City, AR
Bob W edlock, EVP - COO/CTO T h o m a s T r a h a n , Pre s id e n t/CEO Bank of Central Florida Bank of Commerce and Trust Company Lakeland, FL Crowley, LA
Beth B. Melebeck, P resident T im o th y P. D a n tz , President and CEO Bank of Erath Bank of Evergreen Erath, LA Evergreen, AL
Bradley Jones, CEO Virginia Owen, Vice President Bank of Franklin Bank of Holly Springs Meadville, MS Holly Springs, MS Bertram S. M ortim er, P resident/CEO T errence J. A lp e , Pres i d e n t Bank of Kilmichael Bank of Lake Village Kilmichael, MS Lake Village, AR
Eugen e L. "Pete" M a ris, Chairm an/CEO Sheila Kessler, President/CEO Bank of Little Rock Bank of Mingo Little Rock, AR Williamson, WV
Wes Martin , EVP a n d CLO Bi l l Hoga n , Pres id e n t/CEO Bank of Oak Ridge Bank of Ruston Oak Ridge, LA Ruston, LA
James O. R a b b y , Pres id e n t R o b e r t P. Heard, President Bank of Wiggins Bank of Winnfield & Trust Co. Wiggins, MS Winnfield, LA
StephenHa r r i s , AV P -Operations Allison Derby, President-CFO Bank of Yazoo City Bank of York Yazoo City, MS York, AL
W. Paul Tweedy, Senior Vice President, COO M a rk Lip a , Sr V P / CFO & D ir e c to r BOM Bank Catahoula LaSalle Bank Natchitoches, LA Jonesville, LA
M ichael L. Baker , President / CEO William Mellown, President CBBC Bank CCB Community Bank Maryville, TN Andalusia, AL
Andrea Browning, President & CEO M itt Schroeder, CEO Centennial Bank Central State Bank Trezevant, TN Calera, AL
Jose Vivero, Cha ir m a n a n d CEO Paulette Roberts, E\/P/COO Century Bank of Florida Charter Bank Tampa, FL Biloxi, MS
Phil Baldwin, Chief Executive Officer Rita H obbs, Cashier Citizens Bank Citizens Bank Batesville, AR Byhalia, MS Laura Brandt, President/ CEO Jim m y Pritch a r d , President/C EO Citizens Bank & Trust Co. Citizens Bank & Trust Company Covington, LA Marks, MS
Gregory E Smith , Executive VP, Ch ief D. Keith Hefner, Pres id e n t & CEO Financial Officer & Chief Operating Officer Citizens Bank & Trust Company Citizens Bank of Florida Van Buren, AR Oviedo, FL
Greg Littleton , President / CEO James Massey, Chief Financi a l Officer Citizens Bank & Trust Citizens Savings Bank Lake Wales, FL Bogalusa, LA
B ra n d o n G. M cKee, SVP.CFO Jackie M iller, IT M anager City Bank & Trust Company Cleveland State Bank Natchitoches, LA Cleveland, MS
Tina C. Young, Exec Vice President and CFO Kimberly Cox Sikes, Chief Financial Officer Colfax Banking Company Columbia Bank Colfax, LA Lake City, FL
Kenneth W. Kenneth T i l l , CEO S h ann on L o c kard, Presid e n t / CEO CommerceOne Bank Commercial Capital Bank Birmingham, AL Delhi, LA
J a y ce Simpson, Senior Vice President of Risk Management Dirk Trahan, Sr Vp, CFO/COO Community Bank of Louisiana Community First Bank Mansfield, LA New Iberia, LA
Kathryn S P errm an, EVP and CFO Brad M. Bolton, President/CEO Community Neighbor Bank Community Spirit Bank Camden, AL Red Bay, AL
Jeffrey Oody, CE O /President B ill Salters, CFO Community State Bank Concordia Bank & Trust Company Starke, FL Vidalia, LA J a s o n F T ennant, President / Chief Lending Officer Chris J. Hull, President and CEO Cornerstone Bank Covington County Bank Eureka Springs, AR Collins, MS
Stephen Notarianni, Chief Financial Officer David Dowd, President/CEO Crescent Bank Cross County Bank New Orleans, LA Wynne, AR
J a m e s S . Englan d, President & CEO Darryl J Ellerbee, President and CEO Decatur County Bank Delta Bank Decaturville, TN Vidalia, LA
Cathy Owen, Chairm an M ichael S. Newton, President & CEO Eagle Bank & Trust Company Exchange Bank Little Rock, AR Natchitoches, LA
Gary Hudson, President and CEO Randy Scott, President and CEO Farmers and Merchants Bank Farmers Bank and Trust Company Stuttgart, AR Blytheville, AR
Chris Ferris, President and CEO Melissa Burns, V.P./Controller Fidelity Bank of Louisiana Fifth District Savings Bank New Orleans, LA New Orleans, LA
Kyle A. Bourgeois, Vice President Tommy Chamberlee, CEO First American Bank and Trust First American National Bank Vacherie, LA Iuka, MS
Larry T. Wilson, Chairman, Presiden t a n d CEO Carey Soud, President & CEO First Arkansas Bank & Trust First Bank Jacksonville, AR Clewiston, FL
Gary Blossm an, CEO J Chad Jones, President & CEO First Bank and Trust First Bank of Alabama New Orleans, LA Talladega, AL Ricky Ray, President W illiam W Petrey , President/CEO First Bank of Boaz First Citizens Bank Boaz, AL Luverne, AL
Greg A ldridge, Executive Vice Pres iden t & Jeff AGEE, Chairman and CEO CFO First citizens national bank First City Bank of Florida Dyersburg, TN Fort Walton Beach, FL
William B. Marsh, C h a i r m a n o f the Board Boris A. Dover, President & COO First Commerce Bank First Community Bank Lewisburg, TN Batesville, AR
Chris M . Le h m a n , President/CEO Stephen K. Eberh a rt, Presid en t & CEO First Delta Bank First Fidelity Bank Marked Tree, AR Fort Payne, AL B. K. Goodwin III, Chairman, President a n d CEO Peter Setaro, SEVP - CIO First Financial Bank First Florida Integrity Bank Bessemer, AL Naples, FL
Alton B. Lewis, President/ CEO Brandon Norris, Executive Vice President/CFO First Guaranty Bank First National Bank Hammond, LA Arcadia, LA
Carol Strickland, Cash Management AVP Gina M. Lotter, Chief Operations Officer First National Bank DeRidder DeRidder, LA First National Bank in Staunton Staunton, IL
Russell S. Bennett, P resident & CEO Brice Fletcher, Chairm an First National Bank of Clarksdale Clarksdale, MS First National Bank of Eastern Arkansas Forrest City, AR Karen Cardwell, SVP- D irector o f Bank O perations H eidi Mouret, Vice President First National Bank of Fort Smith Fort Smith, AR First National Bank of Jeanerette Jeanerette, LA Milton Smith, President J. Randall Prather, President First National bank of Lawrence County First National Bank of Louisiana Walnut Ridge, AR Crowley, LA
Scott Uselton, EVP W A Hudspeth, CEO First National Bank of Middle Tennessee First National Bank of North Arkansas McMinnville, TN Berryville, AR
Kerry Westbrook, EVP / CFO M a rk Hayes, Chairman and CEO First National Bank of Pasco First National Bank of Pulaski Dade City, FL Pulaski, TN
Brandt Dufrene, President Jeff Prat t, President & CEO First National Bank USA First Peoples Bank of Tennessee Boutte, LA Jefferson City, TN
Jack B. Lovelady, P residen t & CEO Sam McClatchy, President & CEO First Southern State Bank First State Bank Stevenson, AL Holly Springs, MS
A lle n Hodo, CFO Gary L Golden, CEO / Vice Chairman First State Bank First State Bank of De Queen Waynesboro, MS De Queen, AR
Steve Gramling, Bank President Frank Burke, Chairman , President and CEO First Western Bank Flagship Community Bank Booneville, AR Clearwater, FL
Leonard Thomas, CFO and EVP Derek Shants, Chief Financial Officer Flint Community Bank Florida Parishes Bank Albany, GA Hammond, LA
Heyward Gould, President & CEO Marty Sellars, CEO FNB Of Central Alabama FNBC BANK Tuscaloosa, AL Ash Flat, AR
Richard E Herrington, Chairman, CEO C. Peter B a r d in , Chief Financial Officer Franklin Synergy Bank Freedom Bank Franklin, TN St. Petersburg, FL Page 9 RE: OP-1625
Susan M Farrell, EVF/CFO Joseph Dunn, President/CEO Friends Bank Gateway Bank New Smyrna Beach, FL Rison, AR
Holly May, Senior Vice President Troy Q Richards, President & Chie f Operatio n s Operat ion s Officer Gibsland Bank & Trust Co. Guaranty Bank & Trust Co. of Delhi Gibsland, LA Delhi, LA
Jason N ic h o ls, VP/ Ch ief Information
Officer Patrick, Patout, C hairm an of th e Boards Guaranty Bank and Trust Company Gulf Coast Bank Belzoni, MS Abbeville, LA
Gregory J. Hollier, CFO Andrew S. Bible, Presid en t Gulf Coast Bank & Trust Company Heartland National Bank New Orleans, LA Sebring, FL
Jacob Love, CFO Lisa B Hughes, S V P / CFO Heritage Bank & Trust Heritage Bank of St Tammany Columbia, TN Covington, LA
Pau l Durff, Vice-Presiden t John W Bordelon, President and CEO Holmes County Bank & Trust Co. Home Bank Lexington, MS Lafayette, LA
Dawn Williams, Sr. Vice Presi den t Ronnie L. Darden, President and CEO Home Federal Bank Homeland Federal Savings Bank Shreveport, LA Columbia, LA
David Prince, Presid en t & CEO Gar y C h ild e rs , CEO Insouth Bank Integrity First Bank Brownsville, TN Jonesboro, AR
Boyd R. Boudreau x , Presid ent & CEO James Esry, President/CEO JD Bank Lafayette State Bank Jennings, LA Mayo, FL
Daniels G. Rees, EVP/CFO Suzette Sullivan, Chief Operations Officer Legacy State Bank Magnolia State Bank Loganville, GA Bay Springs, MS Page 10 - RE: OP-1625
Mark Rob erts , President James M. Sm ith, P residen t/CE O Malvern National Bank McGehee Bank Malvern, AR McGehee, AR
Gerald Farrar, President J. M ic h a e l Jones, President/CE O Mer Rouge State Bank Merchants & Farmers Bank Mer Rouge, LA Dumas, AR
Leslie Howell, CFO R h o n d a M.Dowden , Chief O perations Officer Merchants & Farmers Bank Merchants & Farmers Bank Holly Springs, MS Leesville, LA
Clayton Legear, Presiden t D avid H. McCain , SVP/CFO/Cash ier Merchants & Marine Bank Merchants & Planters Bank Pascagoula, MS Raymond, MS
R on E. Samford, Jr., Presiden t & CEO Rhonda Herriage, Chief Operations Officer Metairie Bank & Trust Co. National Bank of Texas at Fort Worth Metairie, LA Fort Worth, TX
Brian Thorguson, Senior VP and Chief Anthony Humphries, President & CEO Operating Officer NobleBank & Trust Patterson State Bank Anniston, AL Patterson, LA
Bruce C. Edgington, CEO Donna McKey, EVP - C hief Operating Officer PBK Bank, Inc. Pedestal Bank Stanford, KY Houma, LA
Julie Harris, Senior Vice President Stephen P. David, President & C.E.O. Peoples Bank Peoples Bank & Trust Company Mendenhall, MS New Roads, LA
Robin Green , Presiden t Jennifer S. Wallace, President Peoples State Bank Pike National Bank Lake City, FL McComb, MS
Roy Hellwege, Chairman/CEO Jimmy R. Gammill, Executive Vice President Pilot Bank Planters Bank & Trust Company Tampa, FL Indianola, MS John J. Mullins, Chairman, President John Mario Williams, Executive Vice a n d Chief Executive Officer President & Chief Operat ing Officer Premier Bank of the South PriorityOne Bank Cullman, AL Magee, MS
E. W a y n e Davis, CEO & President Claire C. Benoit, President-CEO Progressive National Bank Rayne Building & Loan Association Mansfield, LA Rayne, LA
Blak e C h a te la in , Pre s id e n t/CEO Chuck Morgan, President and CEO Red River Bank Relyance Bank N.A. Alexandria, LA Pine Bluff, AR
C lair Leger, Lead Financial Accountant Ray Bardwell, Cashier, Comptroller & T. O . Resource Bank River Hills Bank Covington, LA Vicksburg, MS
Peter M. Reynolds, Jr., EVP/CFO J. Paul Sklar, CFO Robertson Banking Company Sabine State Bank & Trust Co. Demopolis, AL Many, LA
C. Todd Thompson, President/ CEO Chase Moroni, Chief Operating Officer Security Federal Savings Bank Sicily Island State Bank Jasper, AL Sicily Island, LA
A la n H u b b a rd , P resid ent & CEO W illiam B. Hurley, Legal C o u n se l, CEO & CFO Small Town Bank Southeast First National Bank Wedowee, AL Summerville, GA
Christopher M. Wewers, Chief Financial M ichelle R. Poulet, President/CEO /Chairm an O ffice r o f the Board Southern Bancorp Bank St. Landry Bank & Trust Company Arkadelphia, AR Opelousas, LA
Anthony Kip Bertrand, President and CEO Nancy Dooley, SVP, COO St. Landry Homestead, FSB Sunrise Bank Opelousas, LA Cocoa Beach, FL Page 12 - RE: OP-1625
Brian Peters, EVP/ C hief F inancial Officer Paul Jadwin, CIO Surety Bank Tennessee Bank & Trust DeLand, FL Nashville, TN
J. Scott Gibson, Sr. EVP/CFO/COO Serena M. Doyle, Sr. Vice President Tennessee State Bank Tensas State Bank Pigeon Forge, TN Newellton, LA
Neil Lowe, President/CEO Andy Johnson, Chairman, CFO & Co-CEO The Bank of Edison The Bank of Vernon Edison, GA Vernon, AL
Greg McK ee, CEO C hristopher M. H arley, SVP / CIO The Citizens Bank Of Philadelphia The Commercial Bank Philadelphia, MS DeKalb, MS
Jo h n R Ram age, President an d CEO Robert D. White, President and CEO The First National Bank of Brundidge The First National Bank of Mount Dora Brundidge, AL Mount Dora, FL
Sean W illiams, President & CEO Greg Crihfield, President & CEO The First National Bank of Wynne The Lauderdale County Bank Wynne, AR Halls, TN
Mary Fowler, CEO Calvin P. Ducote, VP, PC Operations The Peoples Bank The Union Bank Magnolia, AR Marksville, LA
Will Walker, President/Chairman of the B o a rd Thomas W. Mitchell, P resident and CEO Traders & Farmers Bank Traditions First Bank Haleyville, AL Erin, TN
Sonny Aldridge, Senior Vice P re sid e n t/ Chief Operating Officer Gregory L. Nelson, P resid en t & CEO United Community Bank United Southern Bank Raceland, LA Umatilla, FL Blake S. Williams, President & CEO Josh Tittle, VP Operations Vermilion Bank Warren Bank and Trust Company Kaplan, LA Warren, AR
Susie Rowe, EVP/CFO Washington State Bank Washington, LA