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The Examiner

When you arise in the morning, think of what a precious privilege it is to be alive - to breathe, to think, to enjoy, to love.
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CSBS Community Bank Case Study Competition Begins

Nearly 60 Student Teams Nationwide Examine Impact of Recent Reg Relief Law in CSBS Competition

This year, 255 individual student participants on 58 teams from 44 colleges and universities have made submissions for the 2019 Community Bank Case Study Competition. 

This is the fifth year of 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. Students partnered with local community banks to conduct a case study on the impact of the Economic Growth, Regulatory Relief and Consumer Protection Act of May 2018. The law contains several provisions designed to help community banks foster economic growth.

“These case studies will provide important insight on the potential economic impact of recent legislation,” said CSBS Senior Executive Vice President Michael L. Stevens. “The teams were also asked to identify other initiatives to enhance a bank’s ability to serve its community, which will help inform public policy going forward.”

The student teams undergo three rounds of judging over the next three weeks. The top three teams will be announced at the CSBS State Federal Supervisory Forum on May 23 in San Antonio via livestream. Results will also be available on our Twitter feed (@CSBSNews).

The overall winner of the competition also presents its work to federal and state regulators, academics and industry stakeholders at the Community Banking in the 21st Century Research and Policy Conference. Finalists are published in the annual Journal of Community Bank Case Studies.

Student teams participating in the 2019 Community Bank Case Study Competition attend the following colleges and universities are available here.

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CBLR Proposal Should Use Tier 1 Capital

CSBS this week further explained to the FDIC why the proposed interagency community bank leverage ratio (CBLR) framework rule needs changes to how it measures capital adequacy if it is to be effective.  

Section 201 of the Economic Growth Regulatory Relief and Consumer Protection Act directs the FDIC, OCC and Federal Reserve to develop a CBLR to provide qualifying banks with regulatory relief. The law specifically requires the federal agencies to consult with state regulators in the CBLR implementation. In the comment letter, CSBS addressed concerns about the FDIC’s recent proposal to amend the deposit insurance assessment regulations to apply the CBLR Framework to the deposit insurance assessment system. 

CSBS has been concerned that the CBLR, while intended to provide relief to community banks, could actually create more regulatory burdens. In the letter sent this week, CSBS explained that relying on the current Tier 1 capital rather than tangible equity would encourage community banks to use the CBLR and avoid the need to reform existing regulator frameworks. The Tier 1 leverage ratio would allow a community bank that falls below the CBLR to more easily begin reporting capital ratios under the current risk-based capital rules. 

The letter bolsters comments CSBS made in February that recommended eliminating the proposed new prompt corrective action framework for banks that use the new CBLR. 

This is the third letter CSBS has provided on the CBLR. Earlier this month, CSBS made additional recommendations to remove potential burdensome requirements in the CBLR.  

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In the Media

Fed Looks at Bank Control. This week, the agency issued a request for information to simplify the Fed’s rule in determining ownership control of banks. The idea, per Federal Reserve Board Chairman Jerome Powell, is to make it “easier for banks, particularly community banks, to raise capital to support lending and investment.” You can read the Fed’s statement here.  

Cain A No-Go. After floating the idea of nominating Herman Cain, a former corporate executive and Federal Reserve Bank official, the White House announced that it will not move forward with the nomination. According to Politico Pro, another candidate, Stephen Moore, “faces an uncertain future” with the Senate. 

CFPB Seeks Comment. The CFPB issued a request for information concerning international money transfers and whether and how smaller institutions might be exempt from reporting requirements. You can read the CFPB statement here.  

Brown Pushes to Fill FDIC Board. Senator Sherrod Brown (D-OH), the ranking member on the Senate Banking Committee, called on the White House to nominate individuals to fill two vacant positions on the FDIC Board. He pointed to the pending merger of BB&T and SunTrust as a significant development where a full Board is important in considering the matter. CSBS has highlighted federal law requiring that one Board member must have experience in state bank regulation. You can read Brown’s letter here.  

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ICYMI: CSBS Annual Report

Earlier this year, CSBS released its 2018 Annual Report.  

The Annual Report focuses on CSBS achievements and progress made last year. The report shows how state regulators work together to improve the efficiency of the state system, promote public policy, and enhance supervision practices.
You can read the Annual Report here.

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