Category Archives:American Banking Association

April 17, 2015 American Banking Association, Community banks, Consumer Financial Protection Bureau, Financial Institutions, Mortgage Loans, Privacy Policies
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Banking Regulatory Round Up April 2015

The U.S. House of Representatives this week passed five regulatory relief bills that help community banks.

The bills are:
Helping Expand Lending Practices in Rural Communities Act (H.R. 1259)
Reps. Andy Barr (R-KY) and Ruben Hinojosa (D-TX) have reintroduced this legislation that passed the full House in the last Congress. The bill would direct the CFPB to establish an application process under which a person who lives or does business in a state may apply to have an area designated as a rural area if it has not already been designated as such by the Bureau.

Eliminate Privacy Notice Confusion Act (H.R. 601)
This bill by Rep. Blaine Luetkemeyer (R-MO) would eliminate the annual privacy notice disclosure requirement for institutions that haven’t changed their policies.

Bureau Advisory Commission Transparency Act (H.R. 1265)
This bill by Rep. Sean Duffy (R-WI), would increase transparency in CFPB advisory council meetings.

SAFE Act Confidentiality and Privilege Enhancement Act (H.R. 1480)
This bill by Rep. Robert Dold (R-IL) would protect the confidentiality of information banks share with state regulators.

Mortgage Choice Act (H.R. 685)
This bill by Rep. Bill Huizenga (R-MI) would provide needed clarifications on the Qualified Mortgage rule’s points and fees test.

All of the bills were supported by the American Bankers Association.

February 08, 2014 American Banking Association, Basel III
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ABA Urges Action on Basel III for Subchapter S Corporations

ABA urged federal regulators to remedy a provision in the Basel III capital standards that disadvantages the 2,000 community banks organized as Subchapter S corporations.

Basel III’s capital conservation buffer prevents banks from making distributions to shareholders when capital falls below a threshold, but because federal tax liability passes through a Sub S bank to individual shareholders, Sub S shareholders might face tax liability even when they had not received a distribution. C corporation banks subject to the capital buffer pay any taxes due directly out of the bank’s income. ABA said: “The rule will force identical S-Corp and C-Corp banks to accumulate capital at different rates, and likely will result in a powerful disincentive to invest in community banks that have elected Subchapter S status. This will be critically harmful to the growth and perhaps even viability of S-Corp community banks, and an invalidation of the purpose of Congress in creating the S-Corp category to stimulate investment in small businesses.”

ABA urged the regulators to allow Sub S banks to make distributions equal to the taxes due on the bank’s undistributed income, thus eliminating the disadvantage. It also posted a sample letter to help Sub S bankers write to the agencies themselves seeking action.

Read the letter.
Take action now.