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2024 CFO Conference

May 15, 2024

Little Rock

See Agenda and Register

New polling on community bank policy priorities

ICBA kicked off the 2024 ICBA Capital Summit in Washington with the release of new polling data showing Americans support community banker views on the pressing issues attendees will be discussing with policymakers this week. ACB leadership bankers are attending the Summit and hosting a luncheon at the U.S. Capitol for the Arkansas Delegation and staff. See photos

The ICBA polling conducted by Morning Consult found:

• 70% of Americans say providing tax relief to lending institutions in rural communities — in line with the bipartisan Access to Credit for our Rural Economy (ACRE) Act — would help preserve family farms if these benefits are passed along to borrowers.
• 66% of adults say allowing big merchants to pick card transaction networks that are the least costly to them — as laid out by the Credit Card Competition Act (S. 1838/H.R. 3881) — would lead them to choose less secure networks.
• 68% of adults say credit union customers should have the same consumer protections that banks provide, such as those provided by the Community Reinvestment Act.
• 64% of Americans agree that the SAFER Banking Act’s provisions allowing cannabis-related businesses to access the banking system would help improve public safety.
• 69% of Americans support legislation to restrict credit reporting agencies from selling consumers’ contact information when they apply for a residential mortgage.
• 63% of adults say cryptocurrencies should be regulated at least as stringently as banks, while 60% say a U.S. central bank digital currency would negatively affect community banks.

Source: ICBA

Cut community bank assessments amid DIF growth

After the FDIC said the Deposit Insurance Fund reserve ratio is on track to reach the statutory minimum ahead of schedule, ICBA expressed strong support for proposals from the agency’s leaders to decrease deposit insurance assessments for community banks.

In its latest semiannual update on the DIF Restoration Plan, the FDIC projected the reserve ratio will reach the statutory minimum of 1.35% by 2026, two years ahead of schedule.

During the FDIC board meeting, Acting Comptroller of the Currency Michael Hsu and Consumer Financial Protection Bureau Director Rohit Chopra said reducing community bank assessments due to the faster-than-expected reserve ratio increase would support a more diverse banking system and recognize that community banks pose less risk to the DIF than larger institutions.

In a national news release, ICBA President and CEO Rebeca Romero Rainey encouraged the full FDIC board to support this approach and take action to ensure community banks do not bear the cost of the risk posed by too-big-to-fail institutions.

“The FDIC’s special assessment exemption for the vast majority of community banks recognizes the importance of distinguishing large banks that pose systemic risk to the financial system from the thousands of community banks dedicated to serving local communities,” Romero Rainey said. “Continuing to recognize these important differences via deposit insurance policy will help support our nation’s consumers, small businesses, and local economies.”

Source: ICBA

2024

CFO - Financial Officers Conference!

This event, scheduled for May 15th, is an invaluable opportunity for financial officers, bank executives, and those interested in gaining a better understanding of the opportunities that awaits our industry.

Our impressive lineup of speakers will cover key topics such as:



• Small Business Boost Program - FHLB
• Portfolio Management Opportunities in 2024
• Where are we as an Industry?
• Leveraging CDFI Certification and Programs
• Enhance Safety, Soundness, and Profitability Going Forward 

See Agenda - Reserve Your Seat - Register Today!

Source: ACB

Decentralized banking system

op-ed 

In a new op-ed pushing back against claims that the United States has too many banks, ICBA President and CEO Rebeca Romero Rainey touted the importance of community banks to local communities and the banking system.

In an op-ed on LinkedIn, Romero Rainey said community banks have remained a steady source of financial services in local communities despite last year’s failures of large banks.

 “Make no mistake: the challenge facing the banking industry and policymakers is not how to reduce competition with the largest institutions, but how to maintain a diverse and decentralized financial system,” she wrote.

ICBA offers a customizable op-ed that discusses the benefits of the nation’s community banking system and pushes back against claims that the U.S. financial system is overbanked. The custom op-ed is available on ICBA’s Marketing and Communications Toolkit.

Source: ICBA

Joint hearing on rewards programs

The Consumer Financial Protection Bureau and Department of Transportation scheduled a hearing on airline and credit card rewards programs.

Scheduled for 9 a.m. (Central time) Thursday, May 9, the hearing:

· Will focus on competition issues and consumer challenges related to airline and credit card rewards programs.

Will feature a panel of industry representatives, labor leaders, and consumer advocates moderated by CFPB Director Rohit Chopra and Transportation Secretary Pete Buttigieg.

Source: CFPB; U.S. Dept of Transportation

Mortgage servicer junk fees

In the latest edition of its Supervisory Highlights, the Consumer Financial Protection Bureau detailed its actions to combat junk fees charged by mortgage servicers, and other illegal practices. Since October 2023, the agency's supervision junk fee work has resulted in more than $120 million in additional junk fee refunds to consumers in the area of bank account deposits.

Source: CFPB

FTC finalizes rule barring noncompete agreements

The Federal Trade Commission issued a final rule prohibiting companies from enforcing noncompete agreements.

The rule exempts banks but applies to bank holding companies, affiliates, and subsidiaries. Further, the FDIC may choose to apply the FTC Act to banks.

ICBA and other groups expressed opposition to the rule. In a joint letter last year, the groups said:

• Noncompetes serve vital business and employee interests by encouraging investment in employees and helping to protect intellectual property.
• The FTC’s own economist said noncompetes allow firms to reduce recruitment and training costs, offer higher wages to new employees, and promote innovation.
• The FTC lacks the statutory authority to issue the rule because the FTC Act does not authorize the agency to adopt generally applicable substantive rules defining unfair methods of competition.

Source: Federal Trade Commission; ICBA

Labor Department finalizes overtime rule

The Labor Department issued a final rule to increase the number of employees who are entitled to overtime compensation.

Issued under the Fair Labor Standards Act, the final rule:

• Will raise the minimum salary threshold to $43,888 on July 1 and then to $58,656 on Jan. 1, 2025, replacing the current salary threshold of $35,568.
• Will adjust the threshold for "highly compensated employees" to $132,964 on July 1 and then to $151,164 on Jan. 1, 2025, from the current threshold of $107,432.
• Will adjust salary thresholds every three years starting July 1, 2027.

In a comment letter on the proposed rule, ICBA said the change:

• Would far outpace the rate of inflation and be unduly burdensome to small businesses.
• Could force community banks to reduce staff, shorten business hours, curtail services, close branches, and reduce employees’ hourly pay.
• Likely exceeds the department’s legal authority because it would arbitrarily require millions of employees who work in bona fide executive, administrative, or professional roles to be paid overtime.

The Labor Department in 2019 issued an overtime final rule that was based on its 2004 overtime methodology, as advocated by ICBA. That final rule—which came after a federal judge in 2017 struck down a rule issued in 2016—increased the salary level test from $23,660 to $35,568 per year and the total annual compensation level for "highly compensated employees" from $100,000 to $107,432 per year.

Source: U.S. Labor Department; ICBA

Small businesses again most satisfied with community banks

Small-business borrowers approved for at least some of the financing they sought last year were again more satisfied with their experiences at community banks than at larger and online lenders, according to the Federal Reserve.

According to the reserve banks’ latest Small Business Credit Survey:

• 79% of community bank loan applicants were satisfied with their experience, compared with 61% at large banks, 56% at finance companies, and 40% at online lenders.
• Community banks’ net satisfaction score of 74% topped large banks by 21 points, finance companies by 32 points, and online lenders by 59 points.
• Community bank applicants were the least likely to report challenges with interest rates or repayment terms and the most likely to say they experienced no challenges.

The reserve banks’ annual survey has found community banks perennially have the highest satisfaction scores among small-business borrowers.

Source: Federal Reserve