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A Potpourri of Bank Regulatory News

October 16, 2017

Authors

Robert Klingler

A Potpourri of Bank Regulatory News

October 16, 2017

by: Robert Klingler

On the latest episode of The Bank Account, Jonathan and I discuss a veritable hodgepodge of new regulatory pronouncements, including the CFPB’s small dollar loan rule and the OCC’s guidance on CRA ratings.  But before we got to the bank regulatory issues, Jonathan first had to seek my opinion on the new Florida Gator jerseys (pictured).  I’m actually fairly proud in my restraint.  For the handful of listeners who enjoy this banter, I encourage you to view these rejected Florida Gator uniforms.  For those that wish we’d stick with banking, I assure you my interest in discussing college football has reached another low after this weekend.

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Regulators Propose Simplification of Capital Rules

September 28, 2017

Authors

Robert Klingler

Regulators Propose Simplification of Capital Rules

September 28, 2017

by: Robert Klingler

the-bank-accountOn the latest episode of The Bank Account, “Adding HVADC to our Banking Alphabet Soup,” Jonathan and I are joined by colleague Jerry Blanchard to discuss the new capital rules proposed by the federal banking regulators on September 27, 2017.  The newly proposed regulators propose to overhaul the HVCRE regime with a “new and improved” HVADC regime, while also increasing the amount of Mortgage Servicing Assets (MSAs) and Deferred Tax Assets (DTAs) that can be included in Tier 1 Capital.

As discussed yesterday, the new HVADC rule would likely expand the scope of loans that require elevated risk-weighting, but reduce the risk-weighting from 150% to 130%.  In addition, the new rules would eliminate the need (or risk-weighting benefit)

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Putting the Success in Succession

September 26, 2017

Authors

Robert Klingler

Putting the Success in Succession

September 26, 2017

by: Robert Klingler

the-bank-accountOn the latest episode of The Bank Account, Jonathan and I draw from personal experiences at Bryan Cave as well as the experiences of our bank clients for a discussion about succession planning.  Succession planning is rarely a top regulatory concern, but good succession planning requires time to implement.  Accordingly, boards (and managements teams) should always be looking at (and planning for) a future where one or more executives (and/or board members) decides to retire.  With the age of the CEO often being a primary contributor to the decision to sell the bank, succession planning should be a fundamental part of the strategic planning discussion.

A few alternative titles we kicked around for this episode include:

Why Your Board Should Stop Approving Individual Loans

September 12, 2017

Authors

Jim McAlpin, Ken Achenbach and Jonathan Hightower

Why Your Board Should Stop Approving Individual Loans

September 12, 2017

by: Jim McAlpin, Ken Achenbach and Jonathan Hightower

In this the new era of banking, our clients are continually looking for ways to enhance efficiency and effectiveness at all levels of their organizations. This line of thinking has led to the revolution of the bank branch and the adoption of many new technologies aimed at serving customers and automating or otherwise increasing process efficiency. Perhaps most importantly, however, banks have begun to focus on optimizing their governance structures and practices, particularly at the board level.

(A print version of this post if you’d like to print or share with others is available here.)

As we discuss this topic with our clients, the conversation quickly turns to the role and function of the bank’s director loan or credit committee, which we refer to herein as the “Loan Committee.” We continue to believe that

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Frenemies: Gaining Efficiency Through Shared Services

September 8, 2017

Authors

Robert Klingler

Frenemies: Gaining Efficiency Through Shared Services

September 8, 2017

by: Robert Klingler

the-bank-accountBryan Cave colleagues Ken Achenbach and Sean Christy join Jonathan and me on this episode of The Bank Account to examine the ability of banks to gain efficiency through shared services.  Throughout the business environment, business are looking to out source all non-core competencies.  Ken and Sean explore the opportunity for banks to similarly explore the opportunity for banks to join forces to purchase outsourced services and invest in technology platforms together. By working together, banks can leverage buying power and share the burden associated with evaluating their vendor options.

You can follow most of us on Twitter.  Jonathan is @HightowerBanks, I’m @RobertKlingler, and Sean is @SeanChristy.  Following Ken on Twitter is difficult, as he has, so far, refused

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The Sanity of Bank Directors

September 1, 2017

Authors

Robert Klingler

The Sanity of Bank Directors

September 1, 2017

by: Robert Klingler

the-bank-accountOn the latest episode of The Bank Account, Jonathan and I address two items of significant interest in our office: (a) a recent Wall Street Journal opinion piece on the sanity of bank directors, and (b) the start the of college football season (not necessarily in that order).

When starting the podcast, we expected the podcast would offer listeners an opportunity to hear the conversations we have around the office on a wide variety of topics.

Today, that includes a topic that represents a significant part of our fall conversations, college football, with a particular focus on the SEC.  As

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Counterpoint: Why Sane People Serve as Bank Directors

August 31, 2017

Authors

Jonathan Hightower

Counterpoint: Why Sane People Serve as Bank Directors

August 31, 2017

by: Jonathan Hightower

Bank directors have played a crucial role in the turnaround of the banking industry, an accomplishment that deserves recognition in light of the fact that it has been done under tremendous regulatory burden and tepid economic growth.  Given that, why do we continue to question why the country’s most respected business people would be willing to serve as bank directors?  Respected attorney and industry commentator Thomas Vartanian recently asked in an opinion piece in The Wall Street Journal, “Why would anyone sane be a bank director?”  Well, sane people are serving as bank directors every day, and in doing so they are benefiting the economy without exposing themselves to undue risk.

(A print version of this post if you’d like to print or share with others is available here.)

The

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HVCRE Lending: An Area of Regulatory Examination Focus

August 24, 2017

Authors

Bank Bryan Cave

HVCRE Lending: An Area of Regulatory Examination Focus

August 24, 2017

by: Bank Bryan Cave

the-bank-account

Jonathan and I are joined by our colleague, Jerry Blanchard, to discuss High Volatility Commercial Real Estate (HVCRE) Loans on the latest episode of The Bank Account.

HVCRE Loans are one of the areas of focus on regulatory exams, and we’re seeing increased attention to not only ensuring that a bank’s reported HVCRE loans are correct, but also that the bank has sufficient internal controls in place to monitor and track HVCRE lending.

Formal regulatory guidance on HVCRE lending is still rare, as the various regulatory agencies struggle to find consensus in an area that is fraught with technicalities and details.  Our colleague, Jerry Blanchard, has assisted numerous banks in evaluating overall HVCRE programs as well the application of the

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Regulators Tackle Board Effectiveness and Overdrafts

August 7, 2017

Authors

Robert Klingler

Regulators Tackle Board Effectiveness and Overdrafts

August 7, 2017

by: Robert Klingler

the-bank-account

On the latest episode of The Bank Account, Jonathan and Ken Achenbach discussed the Federal Reserve’s proposed supervisory expectations for boards of directors.

Before digging into the Federal Reserve’s proposed guidance, Jonathan and Ken first discussed the CFPB’s statistical analysis of frequent overdrafters.  As noted in the CFPB’s analysis, “very frequent overdrafters account for about five percent of all accounts at the study banks but paid over 63 percent of all overdraft and NSF fees.”  They also touched on the CFPB’s prototype model forms for overdrafts.   As might be expected from the CFPB, the sample forms do a good job of highlighting the economic consequences of utilizing overdrafts, but not mention the potentially significant benefits (tangible and psychological) that

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Dealing with an Unsolicited Offer

July 21, 2017

Authors

Robert Klingler

Dealing with an Unsolicited Offer

July 21, 2017

by: Robert Klingler

On the latest episode of The Bank Account, in preparation #SharkWeek, Jonathan and I discuss unsolicited offers and some of the approaches for bank boards to deal with them.  Topics covered include:

  • Senator Warren’s declaration that OCC Acting Comptroller Keith Noreika is a “swamp thing;”
  • unsolicited versus hostile approaches;
  • approaches to sell a bank, including full auctions, limited auctions, and negotiated transactions;
  • the need to have a current strategic plan and an understanding of the financial impact of such plan;
  • the-bank-accountthe value of having a Policy for Corporate Change to ensure discussions about offers to acquire
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