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CSBS Examiner

A weekly report of events affecting the state banking system from the Conference of State Bank Supervisors


 In This Issue...

 Upcoming Events...

Certified Operations Examiner School, September 19-23, New Orleans, LA:  The full program is delivered over a 7 to 9 month period utilizing all of the EFSBS delivery channels.  Over this period the examiner will receive all of the required training and experience necessary to be in charge of an operations examination. APPROVED BY NASBA FOR 40.5 CPE HOURS. 

Bank Directors Seminar, September 25-27, Coeur d’Alene, ID:  The Graduate School of Banking at Colorado and the Conference of State Bank Supervisors join forces to deliver the best and most effective bank director training. 

CSBS Banker Briefing, September 28, Coeur d’Alene, ID:  Your State Banking Commissioner and the Conference of State Bank Supervisors cordially invite you to a roundtable briefing and open discussion of financial regulatory reform and other timely issues.  Complimentary registration; lunch will be served.

Examiner-in-Charge School, October 3-7, La Quinta, CA:  Designed to train participants to evaluate management and to recognize practices that increase a bank’s exposure to risk. Participants also receive guidance and practice conducting board meetings.

Problem Bank School, October 3-7, La Quinta, CA:  This new program takes an examiner from the “routine” to the complex and challenging world of problem banks.  In this course, examiners will learn how to:  identify red flags; risk focus the exam; identify and prevent fraud; draft enforcement actions; document to prevent or prepare for litigation. APPROVED BY NASBA FOR 40.5 CPE HOURS.

“If you had to identify, in one word, the reason why the human race has not achieved, and never will achieve, its full potential, that word would be 'meetings.'"

– Humorist Dave Barry

Clearly, Dave Barry has never worked for an association, because associations are all about meetings – planning, getting everyone on the same page, reaching out to others, solving problems. In the coming week, CSBS will convene the boards of its three organizations and its Bankers Advisory Board to take the pulse of the state banking system, assess the mood of the industry and lay out plans for the future. Yes, many folks dislike the basic concept of meetings, but ours are better (we think) than those of most other outfits.

John Allison Retires After 40 Years with Department 

John Allison, Commissioner of the Mississippi Department of Banking and Consumer Finance (Department) announced this week he will retire from the department at the end of September. Allison has served as the state’s chief financial regulator since July 1, 2000 and he has almost 40 years with the department.
John Ryan, President and CEO of CSBS, lauded Allison for his years of leadership to the Conference of State Bank Supervisors (CSBS) and the industry. “John is the embodiment of the adage that leadership is not about saying, but about doing.  John has done so much for the betterment of bank supervision and the state system of financial regulation.  He brings leadership to everything he does and has left a lasting legacy at CSBS and in state regulation.  He will be deeply missed by his peers and all of us at CSBS.”

More information on the Mississippi Department of Banking and Consumer Finance is available here.

Michael L. Stevens Named Senior Executive Vice President of CSBS
CSBS announced this week the promotion of Michael L. (Mike) Stevens to Senior Executive Vice President effective Sept. 14. John Ryan, who was recently promoted to President and CEO of CSBS, made the announcement Thursday morning.

“Mike’s experience, first as a bank examiner and then as head of regulatory policy for CSBS, has provided him with an incredible understanding of financial regulation in the field, and policy development here in Washington, D.C.,” said Ryan.  “His technical expertise, his analytical skills, and his familiarity with policy development all enable Mike to clearly interpret the real-world implications policy has upon the financial examination process and the entities regulated by state officials.  He is the perfect candidate to lead our policy and supervision efforts.” 

Stevens joined CSBS in 1999 following an 11 year career as a bank examiner, and worked in all facets of the Professional Development Division. He was named Senior Vice President of Regulatory Policy in 2005. “I am honored to have the opportunity to serve in this position,” Stevens said. “It’s truly a privilege to work on behalf of state bank regulators and support the important work they do across the country. I look forward to continuing to serve our membership in this new capacity, and I thank John and the Commissioners for their confidence and support.”

The CSBS press release announcing Stevens’ promotion is available here.

CSBS & States Cite Jobs, Requests Treasury Conduct Systematic Review of SBLF Applications

CSBS sent a letter to the U.S. Treasury Department this week, on behalf of state bank supervisors, to express concern regarding the Small Business Lending Fund (SBLF) approval process.

There were 932 institutions that applied for the SBLF; yet only 382 were approved by Treasury for an amount less than 15 percent of the $30 billion fund. “By any measure these results are unimpressive and are evidence that the approval process was unnecessarily restrictive,” wrote John Ryan, CSBS President and CEO.

State bank regulators are disturbed by the lack of identifiable metrics Treasury SBLF staff used to determine the institutions that were approved and those that were not. In many cases, state regulators have not been able to associate a reason for denial cited in the Treasury White Paper with a denied application. Further, there has been little to no explanation provided for denials in cases where both the state and federal regulators gave a favorable view.

The goal of the SBLF was for “Main Street banks” and small businesses to work together to help create jobs in local communities, economic activity the American economy desperately needs. In his address before a joint session of Congress last week, President Obama underscored this need. As such, state bank regulators are calling upon Treasury to use the remainder of its time before the SBLF program ends to re-examine denied applications and make commitments to fund perfectly healthy institutions ready to stimulate small business activity past the Sept. 27 deadline.

Four states—Georgia, Idaho, Louisiana, and North Carolina – and the American Bankers Association have also submitted letters to the Treasury encouraging further stimulus through the SBLF to institutions poised to encourage small business lending.

The CSBS letter to the Treasury is available here.  

Esther George to Succeed Tom Hoenig as Kansas City FRB President

Esther George has been appointed president and chief executive officer of the Federal Reserve Bank (the Bank) of Kansas City. The announcement was made this week by Paul DeBruce, chair of the Bank’s board of directors and CEO and founder of DeBruce Grain Inc., Kansas City, Mo. ”On behalf of the board of directors, I congratulate Esther on her appointment as president of the Federal Reserve Bank of Kansas City,” DeBruce said.

George will succeed Thomas M. Hoenig, who is retiring from the Bank on Oct. 1. Hoenig has spent the last 20 years as the president and chief executive officer of the Federal Reserve Bank of Kansas City and more than 38 years with the Bank. He is the longest serving of the Federal Reserve's 12 regional bank presidents, and has become known for his outspokenness about the regulation of the financial industry and the role of monetary policy during the recent crisis.  The press release announcing George’s appointment is available here.

Around the States

NE: Jack E. Herstein, Assistant Director of the Nebraska Department of Banking and Finance and head of the Department’s Bureau of Securities, began his one-year tenure as President of the North American Securities Administrators Association (NASAA) this week. Herstein gave his inaugural address during the annual NASAA conference. Read more.

PA: The American Association of Residential Mortgage Regulators (AARMR) presented the Pennsylvania Department of Banking with a 2011 Distinguished Service Award at the association’s annual conference.
Read more.


Around the Agencies

FTC: After the Federal Trade Commission filed an action in U.S. district court, a payday lender that allegedly attempted to illegally garnish consumers’ wages has agreed to stop the challenged conduct pending trial. As part of its continuing crackdown on scams that target consumers in financial distress, the FTC complaint alleges that Payday Financial, LLC, doing business as Lakota Cash and Big Sky Cash, along with other defendants, illegally attempted to garnish consumers’ wages without obtaining a court order, to collect payments on payday loans. Read more.

FDIC: The Federal Deposit Insurance Corporation (FDIC) has announced that its Midwest Temporary Satellite Office, located in Schaumburg, IL, will close on Sept. 28, 2012. The temporary office was approved by the FDIC in January 2010 to manage receiverships and to liquidate assets from failed financial institutions located in the Midwest. Based on ongoing workload analysis, the FDIC has determined that the current and projected workload of the temporary office can be reabsorbed by staff in permanent FDIC offices. Read more.

FINCEN: The Financial Crimes Enforcement Network (FinCEN) announced a proposal that FinCEN reports required under the Bank Secrecy Act (BSA) be filed electronically starting June 30, 2012. There will be a 60-day window for comments on this proposal after it’s published in the Federal Register. “The benefits of E-Filing, both to the government and to the filer, are obvious and compelling,” noted FinCEN Director James H. Freis, Jr. “As more financial institutions migrate to E-filing, they will be impressed with the ease and convenience of using their basic Internet connections, while gaining immediate feedback to continually improve the quality and usefulness of the reported information in the effort to combat financial crimes.” Read more.

TREASURY: The U.S. Department of the Treasury announced that an additional 61 community banks across the country received a total of $608 million as part of the next wave of funding provided through the Small Business Lending Fund (SBLF). Including today’s announcement, 191 community banks have now received about $2.4 billion in SBLF funding. Additional SBLF funding announcements will be made in the weeks ahead. Read more.

FDIC: The FDIC approved an Interim Final Rule that would require an insured depository institution with $50 billion or more in total assets to submit periodic contingency plans to the FDIC for resolution in the event of the financial institution's failure. Read more.

FDIC: The Federal Deposit Insurance Corporation (FDIC) has approved a final rule to be issued jointly by the FDIC and the Federal Reserve Board to implement Section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This provision requires bank holding companies with assets of $50 billion or more and companies designated as systemic by the Financial Stability Oversight Council to report periodically to the FDIC and the Federal Reserve the company's plan for its rapid and orderly resolution in the event of material financial distress or failure. Read more.


Around D.C.

MBA: Commercial/multifamily mortgage delinquency rates among four out of five major investor groups decreased in the second quarter of 2011, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report. “Commercial/multifamily mortgage delinquency rates for four of five major investor groups – banks, life insurance companies, Fannie Mae and Freddie Mac – declined in the second quarter and remain below levels seen in the last major real estate downturn during the early 1990’s, some by large margins,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research.” Read more.

MBA: David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA), testified before the Senate Banking Subcommittee on Housing, Transportation and Community Development at a hearing Wednesday. During his testimony, Stevens called on policymakers to help the large number of borrowers unable to refinance at today’s near-record low interest rates. Read more.

FANNIEMAE: Fannie Mae announced Servicer Total Achievement and Rewards (STAR) Program results for the first half of 2011, measuring the performance of servicers in helping homeowners avoid foreclosure.
The STAR Program, announced in February 2011, provides clear expectations and specific, consistent measurements to help Fannie Mae servicers increase their focus on areas of critical importance to Fannie Mae. Read more.

Upcoming Events

Sept. 19–23:  CSBS is hosting a Certified Operations Examiner School in New Orleans, LA.  Examiners will receive all of the required training and experience necessary to be in charge of an operations examination.  Read more.

Sept. 25-27:  CSBS and the Graduate School of Banking at Colorado will host a Bank Directors Seminar in Coeur d’Alene, ID.  This will be the best and most effective bank director training.  Read more.


Closing Comment

“We do have a lot of banks, and in over 200 years of our history that has been a huge advantage of ours.”

— Thomas M Hoenig, President and CEO Federal Reserve Bank of Kansas City, during a Q&A with the American Banker.


Catherine Woody, Editor

Edward Smith, Contributing Editor

Rockhelle Johnson, Contributing Writer


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