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Eight-six percent of community bankers have a neutral or positive sentiment of  economic and business conditions, with just 14 percent negative. That is one key finding from a research partnership between two Temple University economists and the CSBS, who are working together to
develop
a formal Indicator of Community Bank Sentiment.
To reach the conclusion of a net positive sentiment, Temple professors William Dunkelberg and Jonathan Scott analyzed the 2018
survey
of community banks conducted by CSBS and the Federal Reserve. A
white paper
describing their findings was released at the sixth annual community bank research
conference
sponsored by CSBS, the Federal Reserve and FDIC.
Dunkelberg and Scott found the community bankers who have positive sentiment are:
- Looking to acquire than be acquired
- Not changing loan terms due to competitive pressures
- Prepared to be leaders in technology development
- Younger CEOs (under age 45)
- Operating in urban rather than rural markets
The Survey >>
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As Congress continues to consider ways to modernize and strengthen the IRS'  taxpayer authentication procedures, nine financial and housing groups jointly called for a modern, secure and fully integrated business to government solution for taxpayer authentication. Such a system "would be more beneficial for data security than a piecemeal approach," they noted. The groups have been engaged with the IRS throughout the modernization of its systems, including the Income Verification Express Services which plays a critical role in the mortgage lending process. The IRS last year also introduced a new Secure Access security protocol to help ensure the security of sensitive consumer data.
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The Treasury Department, Department of Homeland Security and FBI alerted  U.S. financial institutions of an ATM cash-out scheme known as "FASTCash." The agencies said the campaign, in which hackers have stolen tens of millions of dollars in cash, is linked to North Korea and has been active since late 2016. No incidents have yet been reported in the United States.
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The FDIC issued a Financial Institution Letter outlining the Bureau of Consumer  Financial Protection's previously released interpretive and procedural rule to implement and clarify the partial exemption from the Home Mortgage Disclosure Act adopted in the Economic Growth, Regulatory Relief, and Consumer Protection Act.
The Bureau's rule clarifies which data points are covered, which loans and lines of credit count towards origination thresholds, and provides guidance on determining which CRA performance evaluations to consider when determining eligibility for partial exemptions.
Community banks may use a non-universal loan identifier for partially exempt transactions and may choose to report exempt data points as long as they report all data fields included in that data point, according to the Bureau. This Financial Institution Letter applies to all FDIC-supervised institutions subject to HMDA and Regulation C.
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The Consumer Financial Protection Bureau will likely issue a rule to define what  kinds of practices it considers "abusive" under the Dodd-Frank Act, providing greater clarity to the controversial UDAAP standard created by the statute, according to Acting Director Mick Mulvaney.
"I think we're going to announce some rulemaking on what that term means," he said at an industry event in Washington. "I think 'unfair' is fairly well-established in the law, 'deceptive' is very well-established in the law and to my knowledge, I don't think 'abusive' is nearly as established in the law."
The Dodd-Frank expanded the long-established UDAAP standard to include "abusive" acts and practices, but UDAAP enforcement actions pursued by the bureau prior to Mulvaney's arrival without a clear understanding of what constituted an abusive practice created regulatory uncertainty and litigation risk.
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Recent tax reform is expected to provide upside opportunities for both personal  consumption and business investment, supporting a continuation of higher GDP growth. The FOMC is poised to tighten further, while the bond market has responded to higher projected growth and rising inflation expectations, with a fairly substantial sell-off. The environment has created robust loan demand that, in many cases, has outstripped deposit growth. Higher rates and competition will likely create increasing pressure on raising deposit rates.
At ACB's 2018 Management & Directors Conference on November 8, Michael Erhardt from Vining Sparks will discuss strategies that can create improved results from both income and risk management standpoints, while allowing institutions to be well-positioned for the near future.
There is no registration fee for ACB bank members. Plus, earn 6 CPE credits.
Be there and be informed!
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October 29, 2018
November 1, 2018
November 7, 2018
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