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IBA E-News 3-15-19


Emerging Leaders Converge on the Indiana Statehouse

This week nearly 70 bankers from 30 member banks joined together for the 2019 IBA Future Leadership Division Day at the Statehouse. The day focused on grassroots advocacy and networking. Attendees enjoyed the opportunity to visit the House and Senate chambers for group meetings with state lawmakers and hear from Indiana banking leaders on the importance of grassroots advocacy and its benefits. Thanks to the all who participated! Find out more about IBA’s Future Leadership Division and consider becoming a member. For more information, contact Josh Myers.

Statehouse Update

This week marked the second week of the second half of the 2019 legislative session. Action at the Statehouse is slowly starting to pick up and should continue to do so throughout the remainder of session. The biggest issues of 2019 likely won’t be heard for another week or two. The legislature usually leaves the most contentious issues to be dealt with last, which makes for a great deal of excitement toward the final weeks of committee hearings. The first banking industry-specific bill will be heard next week when the Senate Insurance and Financial Institutions Committee hears House Bill 1136 – Uniform Consumer Credit Code – kickstarting the second half of session for our industry.

Below are a few bills being monitored by the IBA GR Team.

Senate Bill 265 – Various Trust Matters

Author: Sen. Randy Head, R-Logansport
House sponsor: Rep. Gregory Steuerwald, R-Danville

Summary: Defines "designated representative", "judicial proceeding", and "nonjudicial matter" for purposes of the trust code. Authorizes the establishment of legacy trusts. Prescribes the procedures for establishing a legacy trust and requirements for claims under a legacy trust. Provides that a court shall exercise jurisdiction over a legacy trust or a qualified disposition and adjudicate a case or controversy regarding the legacy trust, if the case or controversy is within the subject matter of the court. Adopts the uniform directed trust act, which allows for the terms of a trust to grant a person other than a trustee power over some aspect of the trust's administration. Provides that current law regarding the duties and liabilities of a trustee of a trust under the control of a third person applies to directions given to a trustee before July 1, 2019, by a person who has power under the terms of the trust to direct the trustee. Allows for the use of quiet trusts. Provides that an interested person may enter into a binding nonjudicial settlement agreement with respect to trust matters. Provides for nonjudicial account settlements.

Latest action: The bill was heard Monday in the House Judiciary Committee, but was held for a vote for a future meeting while further amendments to the bill are constructed.

House Bill 1330 – Disposal of Abandoned or Derelict Aircraft

Author: Rep. Mike Speedy, R-Indianapolis
Senate sponsors: Sen. Blake Doriot, R-Syracuse; Sen. Mike Bohacek, R-Michigan City

Summary: Disposal of abandoned or derelict aircraft. Specifies that a "person" includes a political subdivision for purposes of the statute concerning liens for the repair, storage, servicing, or furnishing of supplies for certain motor vehicles, airplanes, machinery, and equipment. Establishes a procedure for the disposal and removal of an abandoned aircraft or a derelict aircraft from the premises of: (1) a public-use airport; or (2) a fixed-base operator at a public-use airport.

Latest action: The bill was heard Tuesday in the Senate Homeland Security and Transportation Committee, but was held for a vote for a future meeting.

House Bill 1473 – Indiana Bond Bank

Author: Rep. Gregory Steuerwald, R-Avon
Senate sponsors: Sen. Randy Head, R-Logansport; Sen. Travis Holdman, R-Markle; Sen. Greg Taylor, R-Indianapolis

Summary: Allows the Indiana bond bank to require certain entities to establish separate reserve accounts as additional security in connection with the issuance of bonds or notes. Allows and establishes terms and procedures for certain entities to assign or otherwise transfer a future stream of revenue to the Indiana bond bank or certain other entities to obtain funding. Establishes conditions under which the state board of finance may sell, transfer, or liquidate agreements that evidence the state's right to make deductions from state tuition support to pay advances from the common school fund under the school corporation and charter school safety advance program. Provides that the state board of education must report to the budget committee each year on any defaults on the repayment of advances from the common school fund by charter schools that have closed or otherwise ceased operations.

Latest action: The bill was heard Tuesday in the Senate Tax and Fiscal Policy Committee, but was held for a vote for a future meeting.


Cannabis-Banking Safe Harbor Bill Introduced

Lawmakers formally introduced legislation that would establish a safe harbor from federal sanctions for financial institutions and ancillary companies that serve cannabis-related businesses in states where cannabis is legal.

The bipartisan Secure and Fair Enforcement Banking Act would apply solely to states that have legalized cannabis for medical or recreational use. Introduced by Reps. Ed Perlmutter (D-Colo.), Denny Heck (D-Wash.), Warren Davidson (R-Ohio), and Steve Stivers (R-Ohio), the legislation provides that federal banking regulators may not take any prejudicial action in these states against a bank solely because it serves a cannabis-related business.

Cannabis remains illegal at the federal level.

OCC Notifies Banks of Key HMDA Data Fields

The OCC on Wednesday issued a bulletin informing banks about the key data fields that examiners will typically use to test and validate the accuracy and reliability of home mortgage loan data collected in 2018. The OCC provided the 37 key data fields that will apply to full HMDA reporters, as well as the 21 data fields that will apply to banks that qualify for the partial exemption from HMDA data collection.

The bulletin also reminded banks that the OCC does not intend to require data resubmission for HMDA data collected in 2018 and reported in 2019, unless data errors are material. Read the bulletin.


McWilliams: Volcker Reform Should Address Treatment of Foreign Funds

Noting that “the agencies still have work to do” to reform the Volcker Rule, FDIC Chairman Jelena McWilliams this week emphasized that greater clarity is needed about which activities are covered by the rule.

In remarks at an international banking conference in Washington, D.C., McWilliams noted that in particular, “we need to right-size the rule’s extraterritorial scope while also minimizing competitive inequities between the U.S. banking entities and their foreign counterparts.” She added that the Volcker Rule should not prohibit activities that are not governed by U.S. rules, and that the FDIC will consider ways to simplify the current rule’s requirements for foreign funds.

“We have to provide more certainty to regulated entities and improve how we define what types of trading are prohibited and what types of funds are within the scope of the rule so that both bankers and supervisors have clear rules of the road,” she said. Read McWilliams’ speech.

Fed’s Brainard Discusses Potential Changes to CRA Assessment Area Definition

As financial regulators continue their review of the Community Reinvestment Act regulations, Federal Reserve Governor Lael Brainard on Tuesday said that they are considering making adjustments to the assessment area definition that would allow banks to receive CRA consideration for community development activities in a more expansive area.

“We have been considering a possible approach that might rework the assessment area definition so that banks of a certain scale would have separate assessment areas for their retail activities and their community development activities,” Brainard said. “This would retain the law’s focus on the credit needs of a bank’s local community by evaluating the retail lending and services it offers in the county or other geographic area surrounding its branches, deposit-taking ATMs and other concentrations of lending and deposit-taking.”

Brainard added that this approach “would help eliminate uncertainty and could encourage more capital for affordable housing, community facilities, and economic development activities in underserved areas.” Read Brainard’s remarks.