Skip to main content

The Examiner

“I'm so glad I live in a world where there are Octobers.”

― L. M. Montgomery, Author, Anne of Green Gables


In This Issue...


CSBS Publishes Community Bank Case Study Competition Journal

CSBS published the third volume of the Journal of Community Bank Case Studies, a publication highlighting undergraduate student research on community banks across the nation.

The winning student team members from Eastern Kentucky University are Lorelei Nguyen, Aaron Schmidgall and Dalton Stanley. Maggie Abney served as faculty advisor and Central Bank & Trust Co. as the team’s community bank partner. 

As first place winner, the Eastern Kentucky University team received a $1,000 scholarship per student, presented at the CSBS-Fed-FDIC research conference on community banking held in St. Louis, and was published in the Journal of Community Bank Case Studies. 

The team advanced through three rounds of judging by banking professionals and overcame a pool of 51 competitors in the competition, which is open to undergraduate students in all fields of study as an opportunity to gain valuable first-hand knowledge of the banking industry. This year’s case studies looked at how community banks are using technology to streamline processes and better serve their customers. 

A team from University of Missouri – Kansas City placed second, and a team from Southeastern Louisiana University placed third. Second and third place were also published in the journal.

For more information on the 2018 Community Bank Case Study Competition, visit www.csbs.org/bankcasestudy.

Back to Top


Large Majority of Community Banks Have Positive Business Sentiment

Eight-six percent of community bankers have a neutral or positive sentiment of economic and business conditions, with just 14 percent negative. That is one key finding from a research partnership between two Temple University economists and the CSBS, who are working together to develop a formal Indicator of Community Bank Sentiment.

To reach the conclusion of a net positive sentiment, Temple professors William Dunkelberg and Jonathan Scott analyzed the 2018 survey of community banks conducted by CSBS and the Federal Reserve. A white paper describing their findings was released at the sixth annual community bank research conference sponsored by CSBS, the Federal Reserve and FDIC. 

Dunkelberg and Scott found the community bankers who have positive sentiment are:

  • Looking to acquire than be acquired
  • Not changing loan terms due to competitive pressures
  • Prepared to be leaders in technology development
  • Younger CEOs (under age 45)
  • Operating in urban rather than rural markets

CSBS Senior Executive Vice President Michael Stevens summarized the importance of the collaboration between the Temple economists and CSBS: “If we get it right, the Indicator of Community Bank Sentiment will represent an important barometer of the economic health of local communities. To that end, the 2018 analysis is a great first step. Now, the work in front us of is to pursue further data, research and peer review, act on this feedback, and then present a formal indicator.”

Back to Top


Federal and State Regulators Issue Guidance on Hurricane Michael

The following press release was issued by the OCC, Federal Reserve, FDIC, NCUA and CSBS: 

 

Federal and State Financial Regulatory Agencies Issue Interagency Guidance on Supervisory Practices Regarding Financial Institutions Affected by Hurricane Michael


The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the state regulators recognize the serious impact of Hurricane Michael on the customers, members, and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision. The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities.

A complete list of the affected disaster areas can be found at www.fema.gov.

Lending: Financial institutions should work constructively with borrowers in communities affected by Hurricane Michael. Prudent efforts to adjust or alter terms on existing loans in affected areas should not be subject to examiner criticism. Modifications of existing loans should be evaluated individually to determine whether they represent troubled debt restructurings. This evaluation should be based on the facts and circumstances of each borrower and loan, which requires judgment, as not all modifications will result in a troubled debt restructuring. In supervising institutions affected by Hurricane Michael, the agencies will consider the unusual circumstances these institutions face. The agencies recognize that efforts to work with borrowers in communities under stress can be consistent with safe-and-sound practices as well as in the public interest. 

Temporary Facilities: The agencies understand that many financial institutions may face staffing, power, telecommunications, and other challenges in re-opening facilities after Hurricane Michael. In cases in which operational challenges persist, the primary federal and/or state regulator will expedite, as appropriate, any request to operate temporary facilities to provide more convenient availability of services to those affected by Hurricane Michael. In most cases, a telephone notice to the primary federal and/or state regulator will suffice initially to start the approval process, with necessary written notification being submitted shortly thereafter.

Publishing Requirements: The agencies understand that the damage caused by Hurricane Michael may affect compliance with publishing and other requirements for branch closings, relocations, and temporary facilities under various laws and regulations, as applicable. Institutions experiencing disaster-related difficulties in complying with any publishing or other requirements should contact their primary federal and/or state regulator.

Regulatory Reporting Requirements: Institutions affected by Hurricane Michael that expect to encounter difficulty meeting the agencies’ reporting requirements should contact their primary federal and/or state regulator to discuss their situation. The agencies do not expect to assess penalties or take other supervisory action against institutions that take reasonable and prudent steps to comply with the agencies’ regulatory reporting requirements if those institutions are unable to fully satisfy those requirements because of the effects of Hurricane Michael.

The agencies’ staffs stand ready to work with affected institutions that may be experiencing problems fulfilling their reporting responsibilities, taking into account each institution’s particular circumstances, including the status of its reporting and recordkeeping systems and the condition of its underlying financial records.

Community Reinvestment Act (CRA): Financial institutions, as applicable, may receive CRA consideration for community development loans, investments, or services that revitalize or stabilize federally designated disaster areas in their assessment areas or in the states or regions that include their assessment areas. For additional information, institutions should review the Interagency Questions and Answers Regarding Community Reinvestment at https://www.ffiec.gov/cra/qnadoc.htm.

Investments: The agencies realize local government projects may be negatively affected by Hurricane Michael. Institutions should monitor municipal securities and loans affected by Hurricane Michael. Appropriate monitoring and prudent efforts to stabilize such investments are encouraged.

For more information, refer to the Interagency Supervisory Examiner Guidance for Institutions Affected by a Major Disaster, which is available as follows: 

CSBS: https://www.csbs.org/interagency-supervisory-examiner-guidance-institutions-affected-major-disaster
FDIC: https://www.fdic.gov/news/news/financial/2017/fil17062.html 
FRB: https://www.federalreserve.gov/supervisionreg/srletters/sr1714a1.pdf 
OCC: https://www.occ.gov/news-issuances/bulletins/2017/bulletin-2017-61.html 
NCUA: https://www.ncua.gov/Resources/Documents/SL-17-02-examiner-guidance-institutions-affected-major-disaster-enclosure.pdf 

Back to Top


In Case You Missed It... State Regulators Release First-Ever Data Report on Money Services Businesses

State financial regulators released the inaugural Money Services Businesses (MSB) Industry Report with transaction data covering 2017 from licensed money transmission, payments, virtual currency and other businesses. The report is based on data collected from NMLS, which is operated by CSBS. 

Key facts: 

  • The money services businesses industry overall handled $1.24 trillion in 2017. 
  • The money transmission industry is highly concentrated with the 10 largest companies moving 74 percent of the almost $685 billion total.  
  • Foreign transfers, or international wires, comprised 22 percent of all money transmission in the United States. The average foreign transaction was $479.  
  • Virtual currency exchange ($110.8 billion) and virtual currency transmission ($6.2 billion) account for 9.4 percent of the industry.  

John Ducrest, commissioner of the Louisiana Office of Financial Institutions and chair of the CSBS subsidiary that operates NMLS (State Regulatory Registry): “State regulators rely on company and industry data to regulate money services businesses for the benefit of local communities and the safety of customer funds. The MSB Call Report and new Industry Report are providing essential insight for state regulators.”

Rick St. Onge, Money Transmitter Regulators Association (MTRA) president and non-depository examinations chief for the Washington State Department of Financial Institutions, announced at the MTRA Annual Conference in Jackson Wyoming, “The MSB Industry Report leverages data collected from NMLS, including state licensing and supervisory data and the MSB Call Report. The MTRA supports Vision 2020 and states’ effort to reduce licensing burdens with increased efficiency.”  

More information is available here

Back to Top


In Case You Missed It... Coverage of the Community Bank Research Conference

Last week, CSBS, the FDIC, and the Federal Reserve held the sixth annual Community Bank Research Conference. In case you missed the festivities, we've got you covered:

Back to Top

exit