2014 ABA Accomplishments - American Bankers Association

2014 ABA Accomplishments
Highlighting ABA’s most recent initiatives and successes – on Capitol Hill,
with the regulatory agencies and in our efforts to help member banks save
money and compete more effectively.
Achieving Results
ABA’s aggressive advocacy, and our alliance with 53 state bankers associations across the country, helped
produce tangible results in both Congress and the regulatory agencies:
Reg Relief. In its final days, the 113th Congress cleared for enactment an ABA-advocated relief bill (H.R.
3329) that will help hundreds of community banks and thrifts by increasing the Federal Reserve’s “small
bank holding company” threshold from $500 million to $1 billion and including S&L holding companies.
ABA spearheaded several other relief bills that made significant progress, positioning them well for action in
the next Congress. The full House, for example, approved measures that: eliminate the annual privacy
notice requirement for institutions that haven’t changed their privacy practices; clarify the CFPB’s pointsand-fees test; exempt CLOs from the Volcker Rule; provide a mechanism for individuals and businesses in
rural areas to appeal the CFPB's designation of a rural or underserved area; and clarify that community
banks and other derivatives end-users are exempt from posting margin for uncleared swaps.
An ABA/State Association Task Force also conceived and developed support for two bills that cleared a
House committee – one that designates portfolio mortgage loans as QMs and another that provides escrow
and servicing rules exemptions for small mortgage lenders and servicers. We also built support for
legislation that would establish an independent ombudsman for exam appeals.
Swaps Fix. Congress cleared a spending bill that includes an ABA-supported provision that allows banks to
conduct more swap transactions in the bank, rather than through an affiliate, enabling banks to offer family
farmers and other customers one-stop shopping and centralizing banks’ risk management. The fix also
allows more banks to continue providing customers with swaps services, which would have been too costly
to offer through an affiliate.
Farm Credit System. ABA spotlighted the FCS’s mission creep in June testimony, media interviews and a
new website – reformfarmcredit.org – unveiled in December. Members of Congress have responded to
banker concerns by requesting oversight hearings and penning a critical op-ed.
Flood Insurance Fix. ABA and its American Bankers Insurance Association affiliate were influential in
focusing Congress’ attention on the unintended consequences of the Biggert-Waters flood insurance reform
law. Bipartisan legislation to correct those problems -- including premium affordability and escrow issues -was signed into law in March.
13 Testimonies & Statements. ABA officers and bankers testified at nine congressional hearings on topics
as varied as the state of community banking, banks’ regulatory burden, patent trolls, data breaches, rural
credit issues and credit reports. We also provided detailed statements for four other hearings.
Mutual Bill Introduction. ABA-led discussions with members of Congress and mutual institutions resulted
in the introduction of a bill (H.R. 4252) that would help mutuals raise capital and better serve their
communities. Introduced by House Financial Services Committee member Keith Rothfus (R-Pa.), the bill
would provide mutuals with a capital raising tool that would be treated as Tier One common equity and
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provide a mechanism to raise targeted capital to meet regulatory requirements. The bill also would create a
new mutual national bank charter that would allow mutuals to be diversified lenders.
Volcker Rule Victories. ABA’s aggressive advocacy – which included suing the federal banking regulators
– on the Volcker Rule’s treatment of collateralized debt obligations backed by community bank trust
preferred securities helped bring about a positive change to the rule that saved banks millions in writedowns. ABA also helped secure a more reasonable schedule for banks to wind down investments in
collateralized loan obligations, and in December the Fed extended the compliance time for all legacy
investments by banks in any funds covered by the Volcker Rule – a major relief for thousands of banks of
all sizes.
Farm Bill Wins. The Farm Bill signed into law in February included one of ABA’s long-time top ag banking
priorities: the repeal of borrower term limits in the USDA Farm Service Agency Guaranteed Loan Programs.
It also included ABA-advocated measures that maintain access to federal crop insurance programs.
Shaping GSE Reform. ABA helped shape the early debate on GSE reform by offering insights on the
housing finance market in testimony and meetings with White House and congressional leaders. A
bipartisan Senate bill introduced tin March reflects ABA-advocated principles, including ensuring equitable
access to the secondary market for lenders of all sizes and a limited government role in housing finance.
QRM Rule. The federal regulators finalized their long-debated mortgage risk retention rule, aligning its
“qualified residential mortgage” standard with the CFPB’s “qualified mortgage” standard. Persistent
advocacy and alliance building helped bring about this substantial improvement over the original proposal,
which would have required QRMs to have a 20 percent down payment.
Credit Union Membership. ABA’s repeated letters to NCUA about credit union field-of-membership
abuses resulted in the agency proposing a rule that clamps down on associations formed for the primary
purpose of expanding a federal CU’s membership.
Mortgage Rule Improvements. ABA advocacy produced several regulatory amendments that ease
liability risks and regulatory burdens, including rules that ease QM test thresholds, allow lenders to cure
certain errors, create a small-servicer QM exemption and eliminate the all-in APR.
Operation Choke Point. ABA’s outspoken criticism of the Department of Justice’s “Operation Choke
Point” and related regulatory efforts – which discourage banks from providing services to disfavored yet
legal businesses – resulted in the Justice Department reconsidering its program and the FDIC withdrawing
its controversial lists of high-risk businesses. We also were instrumental in the introduction of legislation to
stop the program.
Championing Banks
Guided by hundreds of bankers who serve on ABA’s councils, committees and
working groups, ABA advocated for solutions to help bankers better serve their
customers. We also amplified the good work banks do daily in and for their
communities.
‘America’s Hometown Bankers’ Ads. ABA launched a nationwide TV ad
campaign in December that stars real bankers and showcases the ways banks help
customers achieve their dreams. The ads are airing during programs with a
policymaker audience. Image ads also ran last March in Capitol Hill publications that
tout the ways banks enhance their customers’ lives by offering convenience and
security.
Dot-Bank. ICANN – the international body that governs Internet domains –
authorized fTLD Registry Services to operate the new domain “.bank.” ABA and
others in the industry founded fTLD so that .bank would be controlled by the
industry, not outsiders. The new domain will be available mid-2015.
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Basel III Corrections. ABA and the state associations jointly proposed that the federal banking agencies
allow highly capitalized banks to bypass the cumbersome calculations required by the Basel III capital
standards, a proposal under serious consideration by the regulators at year end. ABA and member bankers
also recruited congressional support for efforts to fix the impact Basel III capital rules have on Sub S banks
and on mortgage servicing assets.
175 Letters to Policymakers. ABA filed 93 detailed regulatory comment letters – informed by hundreds of
bankers serving on ABA committees and working groups – on a wide range of regulatory proposals,
including the liquidity coverage ratio, CFPB’s consumer complaint database, impairment accounting, debt
collection practices, flood insurance and the Defense Department’s military lending proposal. We sent 82
additional letters to Congress and regulators advocating solutions to help bankers better serve their
customers. ABA also petitioned the FCC to allow banks to send fraud alerts and other emergency notices
via customers’ cell phones.
Data Breach Survey. ABA released results of a member survey on costs borne by community banks as a
result of the Target breach and other breaches. We shared the findings with Visa and MasterCard to make
the case for increased reimbursements – especially for community and midsize banks – and we promoted
the same in testimony, letters, meetings with Congress and a Wall Street Journal op-ed.
Center for Cybersecurity and Payments. ABA consolidated and expanded our extensive payments,
security, technology and card resources into a new Center for Payments and Cybersecurity. The center
leverages our expertise and positions ABA well to respond to a rapidly changing marketplace.
Credit Unions. ABA ran ads in Capitol Hill publications in September print and radio ads in Capitol Hill
publications in September spotlighting the fact that just 1 percent of CU home loans went to low-income
borrowers – the very people credit unions are meant to serve. ABA also worked with state associations to
generate 26,000 letters to lawmakers last February, and provided updated resources about credit unions in
every state on ABA’s “It’s Time to Pay” website.
Elections. The state bankers associations helped BankPac raise $3.2 billion in support of 480
candidates. In addition, ABA’s Financial Education and Advocacy Initiative, a 501(c)(4), raised more
than $1 million this election cycle and was successful in all six
states where it engaged in get-out-the-vote efforts. Read an
analysis of the 2014 elections on banking.
Twitter Map from Amplify. ABA launched an interactive Twitter
map that generates tweets for bankers to send to members of
Congress about regulatory burden, data security, the Farm Credit
System and credit unions. The map is one of dozens of new
resources posted on ABA’s Amplify website – which helps
bankers advocate on behalf of the industry and which now boasts
more than 6,500 registrants. Amplify is open to all banks,
regardless of ABA membership, at amplifybankers.com.
Developing Leaders
ABA continues to train and develop tomorrow’s banking industry leaders through an unparalleled
range of online courses, schools, conferences and briefings, which in 2014 saw several innovations
and successes.
Training Revamp. We expanded, reorganized and improved the navigation of ABA’s training
offerings. You can now search on aba.com for courses, certificates and diplomas by bank job role and
delivery method. Courses are available in either facilitated, virtual classrooms – with fellow students
and instructor guidance – or in a self-paced format. Browse our offerings at: aba.com/onlinetraining.
Stonier Graduate School. A total of 668 students – a 24-year record – participated in our executive
education program, held at the University of Pennsylvania. The student body included representatives
from 25 countries – some as far-flung as Armenia, the Republic of the Congo and Tanzania – and our
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“Year One” enrollment was up 13 percent from last year, reflecting the value banks are placing on
developing future leaders.
Emerging Leaders Forum. ABA held its first Emerging Leaders Forum in conjunction with the
Government Relations Summit in March. Nearly 200 bankers from 43 states heard from Rep. Patrick
Murphy (D-Fla.), the youngest member of Congress, and discussed how they can become leaders in
their bank and effective advocates for the industry.
Schools and Conferences. ABA reached more than 250,000 bankers in 2014 with our professional
development offerings, which include 9 schools and 16 conferences. Our 28th Regulatory Compliance
Conference set an attendance record with 1,642 registrants.
Boosting Your Bottom Line
ABA helps our members improve their bottom lines by identifying providers that have a proven ability
to effectively serve community bank needs.
ABA Endorsed Solutions. ABA Endorsed Solutions, offered through ABA’s Corporation for American
Banking subsidiary, help banks make money, save money, diversify income and improve efficiency.
They are backed by thorough due diligence and field-tested to ensure they meet strength, quality and
customer-service standards.
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Recent endorsements include solutions that help banks raise capital, manage their balance
sheet, share due diligence information on vendors as needed for bank compliance, and offer
person-to-person and mobile payments.
Discover Debit, which ABA endorsed in September, is an
alternative signature debit card solution that delivers the same
acceptance as other networks but at a lower cost for ABA
members, allowing banks to develop a more profitable debit
program. Learn more at aba.com/DiscoverDebit.
The ABA Insurance Services program, which offers D&O, bond, property & casualty and
related insurance to community banks, often pays banks more than their ABA dues. Member
banks insured through the program shared in a $1.1 million distribution in 2014, and will do so
again in 2015.
ABA’s endorsed mortgage programs saved bankers more than $32 million last year. Active
participants in these programs -- which feature advantaged pricing and other benefits with
several residential mortgage partners -- saved an average of more than $46,655.
Mortgage LLC Ownership. ABA Community Bank Mortgage LLC paid $967,362 last year to
participating bank-owners who sold loans to LLC affiliates. The average payout to active
owners was $34,592.
Free Resources
ABA leverages its staff expertise and relationships to provide quality resources at no additional cost to
members. In 2014, ABA’s free resources helped bankers, among other things, communicate more
effectively, navigate the new world of mortgage origination and benchmark their performance.
Mortgage Origination Deskbook. ABA and law firm BuckleySandler released “The CFPB Mortgage
Origination Deskbook,” a free and comprehensive reference guide to help bankers understand and
comply with the CFPB’s rules when originating loans. The ABA members-only resource has been
downloaded more than 10,000 times.
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Infographics to Share. ABA has produced infographics to help illustrate such
issues as the avalanche of regulations that is harming community banks, data
breaches and innovations in banking.
Teach Children to Save. ABA offers free lesson plans and other resources to make
it easy for bankers to give Teach Children to Save classroom presentations. In 2014,
more than 10,700 bankers taught savings lessons, and 30 co-presented with their
members of Congress.
Mutuals. ABA’s free “Corporate Governance for Mutuals” walks through sample
policies and state and federal requirements, and provides a roadmap for mutual institutions to
evaluate, revise and update their governance procedures and approaches. Another new free guide –
“Improving Relationships With Your Regulator: A Mutual Examination Guide” – helps member mutual
bankers communicate their unique business model and strategies so that regulators better understand
their institutions.
Records Management Toolbox. ABA updated its free, members-only Toolbox on Records and
Information Management, which details current trends and best practices in records management.
Free Compliance Training. We added 14 new courses on BSA/AML, the Fair Debt Collection
Practices Act, and the Homeowners Protection Act to ABA’s Frontline Compliance Training program,
which offers member bank employees free access to online compliance courses. Most active member
banks save a significant portion of their annual dues through this program for an annual savings to the
industry of approximately $5.8 million.
Benchmarking Tools. ABA’s free bank performance benchmark tool and agricultural banks
performance scorecard allow member banks to compare their performance against a custom peer
group.
CommunicationTools. The 2014 edition of ABA’s Communications Guide provides talking points and
supporting data on a dozens of topics. The guide is prepared each year by ABA PR staff, who field
more than 2,200 media calls annually for the industry. PR staff also regularly produce sample press
releases for banks to use at aba.com/PRtools.
Customizable Presentations. Customizable speeches and
presentations on topics like data breaches and careers in banking
are available at AmplifyBankers.com as well as aba.com/PRtools.
Consumer Resources. Banks can link to new free consumer
resources on ABA’s revamped consumer site:
aba.com/consumers.
Email Bulletins. ABA offers a suite of free email newsletters, including ABA Daily Newsbytes and
several weekly and monthly bulletins that cover compliance, payments, accounting, legal, mutual and
other issues. Subscriptions are available to any member bank employee who registers on aba.com.