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IBA E-News 6-7-19



IBA Regional Meeting Dates

It’s not too late to register for this summer’s IBA regional meetings! Make plans to join your banking peers and local lawmakers for lunch and conversation at one of seven remaining regional meetings. The IBA is delighted to host this important grassroots advocacy series once again in the cities of Bloomington (July 31), Fort Wayne (July 9), Indianapolis (July 10), West Lafayette (June 11), Merrillville (July 18), New Albany (July 29) and Richmond (June 19). For more information click here or contact Michelle Long at 317-333-7148.

New State Representative Selected by GOP Caucus

The Republican precinct committee has chosen Dollyne Sherman to replace Rep. David Frizzell (R-Indianapolis), who stepped down at the end of the 2019 legislative session. Sherman will serve out the remainder of Frizzell’s term, which runs until November 2020.

Sherman has spent much of her career in government. She served on the staffs of Gov. Robert D. Orr and Gov. Mitch Daniels, and she also worked for Rep. Susan Brooks (R-Carmel). Sherman indicated that her experience will give her a boost as she steps into elected office.

“I know who to go to when I need something done,” Sherman said. “So I can hit the ground running, and there won’t be a learning curve in that area.”




Flood Insurance Extension Heads to President

The House passed a $19.1 billion disaster aid bill that would extend the National Flood Insurance Program through Sept. 30, sending it to President Donald Trump to be signed into law. The legislation, which passed on a 354-58 vote, would avert a lapse on June 14 following a two-week extension that was approved last week.

The House Financial Services Committee could begin marking up legislation as soon as next week to enact a longer-term reauthorization of the program, which has been operating on a series of short-term renewals since 2017.

Quarles: Fed Expects Prep for LIBOR Transition

The Federal Reserve will expect to see an appropriate level of preparedness for the transition away from the London Interbank Offered Rate (LIBOR), according to Fed Vice Chairman for Supervision Randal Quarles. Quarles said the Fed’s supervisory approach will be tailored to institution size and the complexity of LIBOR exposure.

U.K. authorities have said that LIBOR – upon which some $200 trillion in U.S. dollar-based derivatives and loans are based – could be discontinued in 2021.

The Fed’s Alternative Reference Rates Committee recently issued a user guide to the Secured Overnight Financing Rate, the instrument recommended by the committee as a LIBOR alternative. The ARRC has also recommended that lenders have strong “fallback” language on what should happen to a LIBOR-referencing contract if the benchmark rate goes away.

Read remarks from Quarles.

FDIC Votes to Approve Joint Agency Capital Simplification Proposal

The Federal Deposit Insurance Corp. voted last week to approve a final interagency rule that would simplify the complex Basel III regulatory capital calculations for all but the very largest banks. The final rule would simplify the treatment of assets subject to common equity tier 1 capital threshold deductions and limitations on minority interest with a more straightforward measure.

The final rule would simplify regulatory capital requirements for mortgage servicing assets, certain deferred tax assets arising from temporary differences, and investments in the capital of unconsolidated financial institutions (such as investments in trust preferred securities) by effectively raising the deduction threshold for each of these to 25%. The final rule also simplifies the calculation for capital issued by a consolidated subsidiary of a banking organization and held by third parties (sometimes referred to a minority interest) that is includable in regulatory capital.

Read the final rule.

Trade Groups Urge FCC to Protect Lawful Bank Calls

Multiple trade groups last week urged the Federal Communications Commission to seek feedback before moving forward on its proposal to allow telephone companies to block unwanted calls. The FCC’s draft declaratory ruling – which is expected to be voted on during the agency’s June 6 meeting – would permit voice service providers to enroll customers automatically in a call-blocking program that is “based on any reasonable analytics designed to identify unwanted calls.” The ability for customers to opt out of the program would be required. If adopted, the ruling would be effective immediately.

The trade associations expressed concern that legitimate bank calls are currently being incorrectly labeled as spam or nuisance and may be blocked under the declaratory ruling. “Public safety alerts, fraud alerts, data security breach notifications, product recall notices, healthcare and prescription reminders, and power outage updates all could be inadvertently blocked under the draft declaratory order, among other time-sensitive calls,” the groups indicated.

In earlier meetings with FCC Commissioner Michael O’Rielly and key FCC staff, the groups urged the FCC to permit voice service providers to block only illegal calls – not “unwanted” calls – and to require providers to offer a robust challenge mechanism for legitimate calls that are inadvertently blocked.