Community Banker NOV/DEC 2017 ISSUE Join ICBND for another round-up of exceptional educational opportunities in the year 2018! See pages 42-47 for more information. The Community Banker Nov/DecPO Box 2017 6128; Issue Bismarck, ND 58506 ~ Email: [email protected] ~ Phone: 701-258-7121 ~ icbnd.com Quick Look 3 Chairman & President Remarks 4,5 New Associate Member Profile and Logo Highlights of Associate Members Independent Community Banks of North 6 Fine Points by Camden R. Fine, President & CEO of ICBA Dakota 7 From the Chair by Scott Heitkamp, New Chairman of ICBA PO Box 6128 8 Portfolio Management, Jim Reber, President/CEO ICBA Securities Bismarck, ND 58506-6128 9 Tina’s Take on Payments, Tina Giorgio President/CEO ICBA Bancard 10-11 ICBA News: “ICBA-Advocated House Bill Would Expand 701.258.7121 Access to Capital”; “Payments NACHA Outlines Risks of Consumer-to-Consumer Debits”; “Fed Secure Payments Task [email protected] Force Launches Website”; “ CFB Offers Guide on Updated TILA -RESPA Disclosures”; “ICBA Sues Equifax Over Massive Data www.icbnd.com Breach”; ICBA Statement on House Passage fo Tax Reform Bill”. 12 ICBA News: “ICBA Statement on Confirmation of Otting as Comptroller of the Currency”; Agencies Finalize Basel III Changes”; Community Bank Earnings Ris 9.4 Percent” 13 Holiday Closed Signs Available 16-17 “Heidi Heitkamp & Bipartisan Group of Senators Announce Senator John Hoeven Regulatory Reform Plan to Help Protect Consumers & Rural 338 Russell Senate Office Building Communities in North Dakota, Support Economic Growth” Washington DC 20510 Phone: 202-224-2551 18-19 Office of Attorney General—”Cease and Desist Order”; “Out of Fax: 202-224-7999 State Moving Company Banned in ND”; Fraudulent Vehicle Warranty Company Banned in ND”; “North Dakota Lottery to Launch a New Game-Lotto America” Banking Aide: Emily Tryon [email protected] 19 Office of State Tax Commissions “Rauschenberger Attends White House Tax Reform Discussion” 21 ICBA News: “FHFA Shrinks Multifamily Lending Caps”; Fewer Institutions Report More CRA Loans in 2016”; “Existing-Home Sales Rise in October” 22 Industrial Commission of North Dakota: Bank of North Dakota’s S&P Credit Ratings Affirmed Senator Heidi Heitkamp 516 Hart Senate Office Building 23 North Dakota Trade Office: Grant Available to Expand ND’s Washington DC 20510 International Pulse Markets Phone: 202-224-2043 24 “Housing Finance Agency Awards Development Assistance” Fax: 202-224-7776 26 ICBA News: Congress Approves Short-Term Flood Insurance Extension Banking Aide: Craig Radcliffe [email protected] 27 Social Security Administration 33 Greater North Dakota Chamber 34-39 ICBND Members in the News 40 Classifieds Congressman Kevin Cramer 42-45 ICBND Educational Opportunities: 2018 Line-up of Workshops; 1717 Longworth House Office Building 2018 Emerging Leaders Development Program; 2018 Community Bankers for Compliance Program Washington DC 20515 Phone: 202-225-2611 46-47 ICBND Educational Opportunities: Webinars Fax: 202-226-0893 48 Our Advertisers Banking Aide: Ryan Nelson 48 ICBND Directory [email protected] The Community Banker Nov/Dec 2017 Issue 2 Chairman’s Remarks I want to start off and thank everyone for their support in 2017 and to wish everyone a Merry Christmas and Happy New Year. I hope 2018 tax relief which will help all of us!! Sounds like a good Christmas present to me. will be a great year for banking and that we will see some big regulatory relief! Again, have a safe holiday season and we will see you soon in 2018!!! As I write this letter, we have been promised that there will be some regulatory relief coming Tim and it will probably be voted on in early 2018. I think we will see some changes to residential real estate loans, some exam cycles reach some larger banks along with some call report changes. I would encourage everyone to contact our Representative and Senators in Washington, to thank them and encourage Tim Karsky their vote. We still have a ways to go. Choice Financial Group Bismarck We also have seen the tax bill pass in the House ICBND Chairman and Senate and it should get concurrence soon. I am optimistic that we as banks will see some President’s Remarks Happy Holidays everyone! I’m gonna cut to the chase because for a non-election year, things have proposal, other moderate Democrats (both on and been more than a little wild in Washington, DC as off the committee), including Senator Heitkamp, it relates to community banking. worked in bipartisan fashion to help craft a Let me start with the circus we call the Consumer regulatory relief bill that is meaningful for Financial Protection Bureau (CFPB). Richard community banks. Cordray finally decided to step away from his role For banks under $10 billion, QM relief for portfolio as director of the agency prior to his term being mortgages, escrow requirement exemptions, capital up apparently to run for Governor of Ohio. But, simplification and Volcker Rule exemptions reside in not before he flung one last arrow to the current the provisions. For banks at or below $5 billion, the administration. In an 11th hour move on the bill calls for short form call reports in the 1st and 3rd Friday after Thanksgiving (when generally nothing quarters. For banks $3 billion or less, the Fed’s Small happens!), Cordray left office abruptly and placed Bank Holding Company Policy Statement threshold is a staffer in charge who was seemingly unfit by any increased from $1 billion to $3 billion. For all banks, measure of experience with the agency, the law or the deal holds some TRID relief by removing the 3 financial service related issues. The move seemed day waiting period when a 2nd offer of credit is typical of the former director’s mantra that he Barry D. Haugen extended with a lower APR, certain reciprocal ICBND President answered to no one. deposits will not be considered brokered deposits, Hours later, President Trump appointed Mick and exempts banks that originate fewer than 500 Mulvaney, director of the Office of Management closed-end mortgages or open-end lines of credit and Budget, as the acting director of the CFPB. from the dreaded new HMDA data fields that are on Chaos ensued, particularly within the agency. the near horizon. Thankfully, not for very long as Federal District A mark-up of the bill is scheduled for next week in Judge Tim Kelly blocked the moves by Cordray the Senate. The House has said they will take up the affirming that Mulvaney is now legally the acting bill when it comes to them. But it’s unlikely that director. Mulvaney has long been a critic of the anything will get enacted until after the primary CFPB’s maverick independence and will be good deadline filings in spring. Politics again! for community banking. Have a wonderful and safe holiday season! At the same time, there’s hope for community Barry bank regulatory relief! Even after Senate Banking Committee Ranking Member Brown divorced himself of negotiations with Chairman Crapo on a The Community Banker Nov/Dec 2017 Issue 3 Associate Profiles Congratulations to Midwest Select Insurance Group and Chad Schuler on becoming one of our newest associate member! Midwest Select Insurance Group will work with financial institutions to provide employee benefit options and identity theft products to employees, members, and depositors. Our local representative, Chad Schuler, has a bachelor’s degree in finance and has worked in the financial services and insurance industry for over 10 years. Chad is originally from Washburn, ND and now resides in Bismarck. Welcome Midwest Select Insurance Group and Chad! Other Associate Members: The Community Banker Nov/Dec 2017 Issue 4 Associate Profiles Featuring other ICBND Associate Members: The Community Banker Nov/Dec 2017 Issue 5 The ‘overbanked’ fallacy Written by: Camden R. Fine, President and CEO of ICBA There is a conspicuous element of the Of course, regulatory burden contributes banking sector that encourages what greatly to the problem. A recent survey from FINE community bankers view as a dangerous the Federal Reserve and Conference of State trend: the consolidation of the banking Bank Supervisors found that community bank Points industry into fewer and fewer hands. compliance costs have increased by nearly $1 Representatives of the largest banking billion in the past two years to roughly $5.4 organizations, most recently BB&T billion, or 24 percent of community bank net chairman and CEO Kelly King, frequently income. Of the respondents who said they argue that there are too many banks in the considered an acquisition offer in the past United States. Despite the many risks year, virtually all (96.7 percent) said posed by rising industry concentration, we regulatory costs were a “very important,” hear again and again that the nation is “important” or “moderately important” overbanked. reason. Further, the Federal Reserve Bank of Richmond has found that regulatory costs In fact, our banking system is plagued not contribute to the dearth of de novo by oversupply but by consolidation, which applications. has shrunk the number of US banks from more than 18,000 to fewer than 5,800 in Because of the role US financial regulation just three decades. This excessive plays in industry consolidation, this is a public consolidation has led to too few policy issue that must be dealt with before it’s community banks, particularly in areas too late. ICBA has long advocated a more where scarce capital is needed the most. tailored approach to bank regulation, with rules tiered to the size and risk profile of This unfortunate trend culminated in the regulated institutions. Now is the time for 2008 Wall Street financial crisis and the policymakers to finally heed our calls.