by julie courtney, cae, cmp - ibat · november/december 2014 ★ 3 20 ibat's 2015 education...

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November/December 2014 www.ibat.org ★ 3

20 IBAT'S 2015 Education Schedule

By Julie Courtney, CAE, CMP

24 IBAT's 40th Annual Convention: A Look Back

30 2015 TILA-RESPA Integrated Mortgage Disclosures: What YOU Need to Know

By Alan W. Jackson and Steve Manente

33 Two Exceptional Bankers Help Shape American National Bank of Texas

34 7 Best BSA/AML Related Practices

By Mary White

38 Recruiting New Bank Directors: Is Your House in Order?

By Cathy Ghiglieri

INDEPENDENT BANKERVOLUME XL NO. 6

NOVEMBER/DECEMBER 2014

Quote: Douglas Adams

Departments

4 Up Front

6 Foundation Footprints

8 Services Solutions

10 Frontline Leadership

12 General Counsel’s Corner

14 Interest Rates

IBAT’s bi-monthly magazine, The Texas Independent Banker, welcomes letters from readers. The Texas Independent Banker, November/December, Volume XL, Issue 6. Published bi-monthly by the Independent Bankers Association of Texas, 1700 Rio Grande Street, Suite 100, Austin, TX 78701, 512/474-6889, FAX 512/322-9004. Inquiries should be sent to the Editor. Editorial guidelines are available upon request. Advertising rates may be obtained by contacting Advertising Sales at 800/749-4228 or 512/474-6889. Advertisements do not imply sponsorship by IBAT. ©2014 by the Independent Bankers Association of Texas. No part of this publication may be reproduced in any form without written permission of the publisher. Opinions expressed in this publication do not necessarily reflect official policy of the Independent Bankers Association of Texas.

Bonnie Kankel / Editor in Chief

Mary E. Lange / Contributing Editor

Darlene Revers / Advertising Manager

Lauren Sellers / Advertising Assistant

John Wilson / Cover Design/Illustration

Barbara Jezek / Design/Production

16 Personnel Update

18 Association News

40 IBAT Calendar

40 IBAT Around the State

45 Advertising Directory

46 Compliance Guy

THE TEXAS

4 ★ The Texas Independent Banker November/December 2014

ChRiStoPhER L.

WiLLiSton, CAE, is

President and Chief

Executive Officer of the

Independent Bankers

Association of Texas.

Up Front

By The Numbers

It doesn’t bother me that people accuse me of being too opti-mistic. It’s just my nature. It is true that I tend to view things from a “half full” rather than a “half empty” perspective.

But ask any staff member and they will tell you that my optimism sometimes gets in the way of the true facts. They

refer to it as “Williston numbers,” that is, those numbers some-what north of the true and actual number. In other words…numbers that are sometimes exaggerated to express my enthu-siasm for a particular project and its result. It never is my intent to deceive. That is not in my nature.

Forget about trying to explain that the number I recite is the number I think we will actually achieve. That one falls on deaf ears and is met with rousing laughter.

So as to not face further ridicule or be challenged, I asked IBAT’s management team and departmental managers to pro-vide me with “real” numbers relative to member participation and involvement in the many programs and services provided to the IBAT membership. I recently shared them with the del-egates at our 40th annual convention.

•IBATremainsfinanciallystrongwith$5.1mm in net assets.•79% of all eligible community banks in Texas are members.•213 companies are IBAT Associate Members.•IBAThasraised$285k for its state PAC and $91k for its

FedPACthisfiscalyear.•IBATranks69th in total expenditures to state candidates

($319k) and 25th among all state association PACs regis-tered in Texas.

•IBATFedPACdistributed$62.5k to federal candidates.•90 IBAT member banks and 6 associate members held in-

house PAC drives.•127 IBAT member banks contributed over $150k to its leg-

islative fund.•TheIBATLeadershipDivisionnowboastssome665 mem-

bers; 8% membership growth.•TheIBATLegalandComplianceTeamanswer270 member

calls and emails free of charge to IBAT member banks and associates per month.

•TheCommunicationsandPRteamproduced150 media mentionsinthefiscalyear.

•IBAT’sin-houseinsuranceagency,IBATFinancialServices,underwrites $6mm in premium to 139 IBAT member banks, a 42% increase since 2013.

•IBATServicesprovidesover$15mm in savings through its 21 endorsed services relationships annually. Member banks purchased$8.1mmfromDellaloneinthefirstyearoftherelationship and $8.8mminsalesinthefirstquarterof2014, providing IBAT members with a 31% average savings on all purchases.

•IBATEducationFoundationoffered140 Webinars, 13 Sum-mits, 2 specialty conferences (Leadership and TechMecca), 2 Schools (BOI, BLI) and 36 IBAT and Leadership Division regional meetings in 2014.

•IBATEducationFoundationhasreceivednearly$2.5 mm in contributions since its inception and conducted 12 “Teach theTeacher”programsdeliveringfinancialliteracycurricu-lum to 565 teachers impacting 83,944 high school students.

•IBATissecondtononeinstaffassociationmanagementexperience (307 years combined experience; 143 years among its management team) and boasts some 14 profes-sional accreditations.

All of these ancillary products, services and outreach endeavors provide tangible member value and the necessary rev-enue to support our primary mission of regulatory and legislative advocacy exclusively for Texas community banks.

Perhaps now you have a bet-ter perspective as to why I am so optimistic about the future of your association and proud of the level of engagement of the IBAT family.

Williston numbers or not, they are impressive any way you look at them. ★

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WiLLARD J. StiLL is

the Board Chairman

of the IBAT Education

Foundation and Vice

Chairman of American

Bank, N.A. in Waco

FoUnDatIon FootprInts

We Volunteer Because We Care About Students

this is the last column of 2014. We choose to use this space to recognize and honor our IBAT Foundation Directors. They are special people because they collec-tively believe that giving their time and experience as an investment in the lives of teachers and the students

they teach is both rewarding and worthwhile. The very successful IBAT Teach the Teacher ™ program was carefully put together by these and other directors who have served. We would like to share just a few of their many accomplishments.

The IBAT Foundation has completed 12 individual Teach the Teacher™ programs by providing instruction to 565 teach-ers who teach 83,944 Texas students.

The Foundation has raised (since inception) $2.46 Million and our Directors both past and present are responsible for much of this success.

Forty-fiveofourIBATmemberbanksandassociateshavebeen outstanding in their local support of every Teach the Teacher™ program that has been conducted.

Members of the Foundation Board have traveled at their expense to Washington and many other places to tell the Foun-dation’sstoryinpursuitofadditionalfinancialsupport.

They have invested their personal money in the Foundation because they believe that the Foundation will make it possible for thousands of students to gain knowledge that will enable themtomakegoodcommonsensefinancialdecisionsthatoverthelongtermwillcreateenormousbenefittosociety.

We are happy to share with you these Directors; we are so proud of their commitment and all they do. Our President, Mary Lange, joins with me to say thank you to a group of very special people with whom we are privileged to serve. ★

Willard J. Still, Vice Chairman, American Bank, NA, WacoSenator Kay Bailey Hutchison, Bracewell & Giuliani, DallasRobert A. Hulsey, CEO, American National Bank of Texas,

TerrellCharles T. Doyle, Chairman, Texas Independent Bancshares,

Inc., Texas CityGary D. Edmiston, Senior Business Consultant, UT Permian

Basin SBA Center, OdessaCatherine Ghiglieri, President, Ghiglieri & Company, AustinCharles “Stormy” Greef, Partner, Hunton & Williams, DallasD. Kenneth Greer, Advisory Director, First National Bank of

Mount VernonMary E. Lange, President, IBAT

Education FoundationCliff McCauley, Senior Execu-

tive Vice President, Frost, San Antonio

Bobbie McMillan, CEO, The Commercial Bank, Mason

Mary Scott Nabers, CEO, Strate-gic Partnerships, Inc., Austin

Charles “Mack” Neff, CEO, Integ-rity Bank, SSB, Houston

Steve Sievert, Executive Vice President, PULSE, Houston

Michael W. Thompson, President, Extraco Banks N.A., Temple

Stephanie [email protected]

or visit www.transfund.com

Patricia [email protected]

The payment world is evolving and EMV chip-based debit card technology is quickly emerging as the main concern for financial institutions in the United States today.

It’s the most recent effort designed to help debit card issuers reduce growing fraud losses caused by counterfeit plastics. US financial institutions will begin issuing the cards in 2015 to take advantage of the new rules for liability.

TransFund is a 40-year-old EFT processing company that has an experienced and knowledgeable team ready to consult with your financial institution and walk you through this process.

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also extends to the support of those systems. If bank managers, portfoliomanagers,auditors,orothershavequestionsorneeds,theyareimmediatelyresponsive.Ifregulatorsrequirenewstresstests or credit analysis, they are able to deliver them without delay. Most importantly, all of their brokers are experts in inter-est rate risk management as well as investment analysis. This too is part of The Baker Group’s history and heritage.

When we look at the banking landscape today, it is clear thatindependentcommunitybanksfacesignificantchallengesin terms of the market environment and regulatory compliance. But they continue to show solid performance. They are generally well-capitalized,profitableenterprises serving their localcom-munities, managing risks, and never posing a system-wide threat astheyprovideliquidityandsafetytoborrowersanddepositorsalike. We believe The Baker Group has played some part in the success of community banking, starting with the “systems approach” of asset/liability management that Dr. Baker outlined all those years ago.

Times change and technology evolves, but one thing remains constant: The Baker team shares a common vision to deliver information, services, and products of exceptional value to those with whom we share success.

Since 1979, The Baker Group has helped their clients improve decision-making, manage interest rate risk, and maximize investment portfolio perfor-mance. Their proven approach of total resource integration utilizing software and products developed by Baker’s Software Solutions* — combined with their solid investment experience and advice — makes them the investment firm of choice for many community financial institutions. For more infor-mation, contact Jeff Caughron at The Baker Group: 800-937-2257, www.GoBaker.com, or email: [email protected]. ★

*The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc.

“At various times, banks have had to cope with panics, recessions, depressions, deflation, and inflation to

survive and prosper. Many banks managed to adapt to changing conditions; however, many were engulfed by

the events. The survivors either anticipated or recognized the impact events would have on the banking business. Accordingly, they established policies and procedures

designed to deal effectively with the particular situation.” —Dr. James V. Baker, Jr.

over the years, community banks have navigated through some fascinating and challenging times. In the seven-ties, Federal Reserve Chairman Paul Volcker launched an unprecedented tight money campaign in order to fightdouble-digitinflationwhilethebankingindustry

was coping with enormous change in the form of deregulation andanexplosionofnewfinancialproductsthatforcedbankersto rethink the way they did business. In the midst of this tur-moil, The Baker Group (then called James Baker & Company) began to help community bankers adapt to the changes through the use of a new concept called “Asset/Liability Management,” which was also the title of Dr. James Baker’s best-selling book onmanaginginterestraterisk.Inshortorder,thefirmreleasedoneofthefirstasset/liabilitysoftwaremodelsdesignedforcom-munity banks. James Baker, ever the professor, was on the road nonstop educating banks about asset/liability management so they could make more appropriate investment portfolio deci-sions. That adaptive and entrepreneurial spirit remains at The Baker Group today.

Even after thirty years, The Baker Group continues to enhance, upgrade, and evolve. Their systems, expertise, and resources have expanded into new products and enhanced ser-vices — such as their expanded on-line educational programs, thecontentof theirwebsite,financial articles andnewsletter,and of course their top-shelf software programs. Recently, The Baker Group rolled out a new proprietary accounting system. As with their bond analytics program and their interest rate risk model, the accounting system was developed in-house by their programmers,financialanalysts,andaccountants.Theirsystemsare theirs alone; designed, developed, and built by The Baker Group. This gives them the flexibility to create new reports,enhance functions, and make other changes immediately. This

servIces solUtIons

DARLA RooKE is Chair

of the IBAT Services

Board and President/CEO

of Junction National Bank.

Systems for A/L ManagementEvolution and Enhancement


withaLegislativeBriefingattheCapitolandthenextmorningwe will host a breakfast for our legislators. Contact your legisla-tor today and be sure you get the date on his calendar. This is an easy way to get involved in a personal way with the legislative process. Take some time to come to Austin and meet with your state representative and senator and hear directly from state officialsaboutcurrentissuesaffectingcommunitybanking.Yourpresence does make a difference and it is a great first step inbecoming involved.

Later in the spring will be the annual IBAT Congressional Visit. This is an important opportunity to meet with our rep-resentatives in Washington and be heard on issues that affect community banking. Numbers matter and having a large num-ber of Texas community bankers in Washington gets noticed and legislators know that we are engaged and determined enough to make the trip to D.C. to tell our story and be heard. Don’t fall into the trap of thinking you can’t make a difference. Getting involved does make a difference and is well worth the time and effort!

Please check the Leadership Division calendar for numerous regional activities that are planned in the upcoming months. As with any organization, you get out of it what you put into it. Get involved in your regional meetings and activities. The friendships you build and the network of bankers and industry associates will help you in your career and give you the opportunity to be involved and make a difference close to home. ★

Even if you are on the right track, you’ll get run over

if you just sit there. —Will Rogers

MiChAEL R. MooRES

is Chairman of the

Leadership Division and

Executive Vice President

& Chief Lending Officer

at Citizens National Bank,

Henderson.

FrontlIne leaDershIp

Involvement Pays Off

I want to thank the Leadership Division members for a lot of hard work and dedication to our industry that resulted in a great PAC auction in Fort Worth. I think we would all agree that it was a very successful auction and the funds raised will be used wisely by Chris Williston and Steve Scurlock

to protect our franchise values and community banking in Aus-tin and Washington. It makes me very proud to be a part of an organization and industry where we are not afraid to work hard and stand up and take part in the political system to protect our great way of life.

It takes many people working together and the support of many bankers and industry partners to achieve the results we have this year with our PAC auction and other convention PAC activities. Marty Rivers did a great job leading our auction efforts this year. All told, the Leadership Division’s endeavors at convention brought in nearly $124,700 for the IBAT PAC.

It is time to plan now for some upcoming events that are important to the future of our industry. First is the Legislative Day call to action in Austin on April 7–8 in Austin. We’ll begin

Credit Insurance

I S I N A G R E A T S T A T E

with American National and Dial Dunkin & AssociatesSince 1992, American National Insurance Company (American National) and Dial Dunkin & Associates have provided credit insurance to more than 200 independent banks throughout the state of Texas.

You can offer credit insurance products confidently.Customers trust their independent Texas banks, and independent Texas bankers trust American National and Dial Dunkin.

We use our combined experience of more than 76 years to provide quality service to you and your customers. American National Insurance Company has been evaluated and assigned the following ratings by nationally recognized, independent rating agencies. The ratings are current as of July 31, 2013.

A.M. Best1 – A Standard & Poor’s2 – A

AMERICAN NATIONAL INSURANCE COMPANYCredit Insurance Division | P.O. Box 9007

League City, TX 77574

DIAL DUNKIN & ASSOCIATES1305 Stuart Place Road

Harlingen, TX 77580

Form

CID

-195

8-

13

Ratings reflect current independent opinions of the financial capacity of an insurance organization to meet the obligations of its insurance policies and contracts in accordance with their terms. They are based on comprehensive quantitative and qualitative evaluations of the company and its management strategy. The rating agencies do not provide ratings as a recommendation to purchase insurance or annuities. The ratings are not a warranty of an insurer’s current or future ability to meet its contractual obligations. Ratings may be changed, suspended, or withdrawn at any time. For the most current ratings view the full rating reports on American National’s Internet site at www.anico.com. 1 – A.M. Best’s active company rating scale is: A++ (Superior), A+ (Superior), A (Excellent), A- (Excellent), B++ (Good), B+ (Good), B (Fair), B- (Fair), C++ (Marginal), C+ (Marginal), C (Weak), C- (Weak) and D (Poor).2 – Ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.


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General coUnsel’s corner

KAREn nEELEy

received her BA and

JD from the University

of Texas at Austin.

She is a director for

the Texas Association

of Bank Counsel and

General Counsel for the

Independent Bankers

Association of Texas.

(Continued on page 43)

Debit Cards and Consumer LiabilityThe Compliance Saga

Editor’s Note: Looking for Karen’s year-endchecklist?Youcanfinditonour website at www.ibat.org/year-end-checklist

right before I started writing this column, I got one of those dreaded calls from a fraud service. And, yes, my debit card was compromised in the Home Depot debacle. While I was sitting at my desk, eating lunch, my erstwhile card was being used at a store that I never

frequent.Thesecondhitwascaughtbythefraudsystem,sonowI am facing the weekend with no debit card. Also, I will need tofileanunauthorized transactioncomplaintwithmy issuingbank. So, now I am wearing two hats as I write this: the unhappy consumer and the regulatory compliance counsel!

Time to brush up on Regulation E and procedures for resolv-ing errors and take another look at the network zero liability rules.

RegE requires certain timingandprocedureswith regardto unauthorized transactions. In the Home Depot case, there is no stolen card. (It is right in my wallet.) So, I don’t have to give notice within two days after learning of the loss or theft in order to limit my liability. Fortunately, the fraud service detected an anomaly and my card is terminated, so no more unauthor-ized transactions should hit it. If I didn’t already know about this transaction, I would have to report within 60 days of the bank’s transmittal of the periodic statement with the erroneous transactions in order to limit my liability. My account only gets electronic statements. However, the bank sends me an email, alerting me to the fact that I have a new statement to review. That would trigger the 60 days, whether or not I go online and open the statement.

I have a Visa branded card, so it (like a MasterCard branded one) is subject to the network zero liability rules. So, I am not worriedaboutlosingthefirst$50.Ifthiswereasmallbusinessdebit card, I would still have zero liability coverage on the card. However, the network cuts the issuer a little slack (but not much) by excluding liability for gross negligence. Here is a sample business debit card liability provision:

“In certain circumstances, business MasterCard™ debit card-holders have complete liability protection for all MasterCard™ business debit card transactions that are processed over the MasterCard™ network. Customer must promptly notify Bank within sixty (60) calendar days of the mailing date of the first statement showing any Unauthorized Transaction on Cus-tomer’s Account that was processed over the MasterCard™ network. Customer’s Account must be in good standing, Customer must have exercised reasonable care in safeguard-

ing the Cards, and Customer must not have reported two or more unauthorized events in the past 12 months. If Customer qualifies for zero liability protection and properly notifies Bank, then Customer shall have zero liability for any Unauthorized Transaction processed over the MasterCard™ network. Zero Liability does not apply to MasterCard cards: (i) issued for commercial, business or agricultural purposes, except for Mas-terCard commercial cards used for small businesses as listed on www.mastercardbusiness.com; or (ii) if a PIN for a debit transaction is used for the Unauthorized Transaction. Bank will provisionally recredit Customer’s account within five (5) business days. To the extent allowed by law, Bank may impose greater liability if Bank reasonably determines that Customer or any Cardholder were either grossly negligent or fraudulent in the handling of Customer’s Account or any Card transaction processed over the MasterCard™ network. IN NO EVENT WILL BANK BE LIABLE TO CUSTOMER FOR ANY CONSEQUENTIAL, INCIDENTAL, OR EXEMPLARY DAMAGES RESULTING FROM THE UNAUTHOR-IZED USE OF A CARD.”

Now my bank will need to process my consumer complaint in accordance with Reg E. It should take the following steps:1. Log in my complaint and start

the clock.2. Obtainwrittenconfirmation

within 10 business days of oral notice.

3. Investigate my complaint.4. Complete review in 10 busi-

ness days and notify me OR provisionally recredit my account and take up to 45 days to investigate and deter-mine whether there was an error.In my case, the review will

show that I used my debit card at

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community banks. One might wonder, then, why it is that the pricing sensitivities, or betas, of the various loan categories at most banks are still being modeled as if they were participating in a higher rate environment when, in fact, they’re not. While much discussion has centered around the possibility of higher betas for NMDs causing unexpectedly large increases in inter-est expense, little concern has been mentioned about the risk of lower betas on loans precluding interest income from rising commensurately with rates. That, however, is exactly what has happened.

Stress This!So, while regulatory hand-wringing over how to best model

NMDs has brought us the need to stress whatever assump-tions are being used on the liability side, the assumptions for asset behavior have not garnered the same level of attention. Attempts to quantify the effects of non-traditional depositorbehavior have resulted in higher betas being modeled so that management can see the potential results on earnings if banks are forced to be more market responsive. Further behavioral stress comes in the form of shorter average life assumptions and reduced time lags for the imposition of higher rates. Whether or not these behavioral changes ever manifest themselves is yet to be determined, but knowing what the potential results might be can aid management in avoiding the trap of making decisions based on best-case scenarios.

When it comes to earning assets, though, the vast majority of community banks are, in fact, mod-eling their behavior based upon assumptions that reflectabest-casescenario. Assuming higher rates can be fully passed on to borrow-ers with no delay will certainly help maximize projected interest income, but, as has been discussed, that is not what has happened. So, if the fear is that assigning altruis-tic behavior to the owners of NMDs understates projected interest

Interest rates

LEStER MURRAy

Sr. Vice President –

Financial Strategies

Group with The Baker

Group

Don’t Look at Interest Rate Risk Through Rose-Colored Assumptions

thanks to some specific and oft-repeated exhortationsfrom various supervisory authorities, community bank-ers have learned over recent years just what risks are of the greatest concern to bank examiners. Whether one goes back to 2010’s FFIEC Advisory on Interest Rate

Risk, or the more recent FDIC Financial Institutions Letter -46 from last October, this message is clear: regulators are afraid that the traditional modeling assumptions applied to the behavior of non-maturing deposits may be producing results that mask some real and significant risks to both earnings and capital.Their point is a good one. Non-maturing deposits have histori-cally been considered to be very stable as to balance, and very insensitive as to price volatility. One can readily see that, even thoughone’searningsprojectionsandeconomicvalueofequitymeasurements might look pretty rosy, a change in NMD behav-iorcouldsignificantlydarkenthatbrightoutlookinahurry.Ifastronger economy sparks the threat of disintermediation, what happens to the stability of those stable deposits? If a higher rate environment suddenly makes NMD owners much more sensitive to the rates they’re receiving for their deposits, what does that do to their price volatility and resulting interest expense? These arevalidquestions,andhavebeenthebasisfortheregulatorydisquietsurroundingtheassumptive inputsofNMDmodelingalong with the need to stress those assumptions. Who can trust the output of an exercise that uses unrealistic inputs?

Two Sides to EverythingWhile the need for accurate-as-possible modeling treatment

for liabilities is important for projecting accurate-as-possible interest expenses and accurate-as-possible fair values, there are also assumptions governing the behavior of income-producing assets. For modeling purposes it is generally considered a given that earning assets, precisely because they are earning assets, will participate fully in whatever rate increase occurs. That just makes sense. Why would a lender, living in a time of rising rates, limit his earnings potential by not charging his borrowers a rate that reflects the rising rate environment? Well, maybe it’s becausethe competition won’t let him, and therein lies the rub.

In the last seven months of 2013, the yield on the Ten Year Treasury Note rose by about 140 basis points, but, the loan rates at most community banks stayed pretty much unchanged. So, while some earning assets, like investment securities, are bring-inginsubstantiallyhigheryieldsthantheywereinthefirsthalfof 2013, the same cannot be said for the loan portfolios of most (Continued on page 43)

http://first-american.net/


niegos Day iacoponelli Waltz Lewis Lord

personnel UpDate


Amarillo

Letricia “Puff” Niegos has joined the board of directors of FirstBank Southwest. Niegos graduated with a BBA in Account-ing from SMU in 1985. After she received her CPA license, she moved back to the Texas Panhandle to work for the family busi-ness, Western Sales & Testing of Amarillo, Inc. (WST). She is currently treasurerandchieffinancialofficer forWSTand itsrelated companies that service the industrial gas industry.

Corpus Christi

Donna Day has joined American Bank as senior lending managerat thebank’sAustinRegionExecutiveOffices.With20-plus years of banking experience, Day comes to American BankfromanAustin-areawealthmanagementfirmwheresheserved as vice president and senior banker. Prior to that, she held commercial lending and business development positions with various Austin banks. Day holds a Bachelor of Business Administration in Finance degree from Texas Tech University and a Master’s of Business Administration with a concentration in Finance from Southern Methodist University.

Cuero

Shay Iacoponelli,chiefdevelopmentofficerandexecutivevice president of TrustTexas Bank, was elected to the board of directors of the bank and its parent holding company. Iacopo-nelli has served with TrustTexas Bank since 2003. She received an undergraduate degree from Texas A&M University, a master’s degree from Houston Baptist University, and is also a graduate of the Southwestern Graduate School of Banking at Southern Methodist University.

Dallas

SWACHA – The Electronic Payments Resource® has hired John Cogdill as director of member sales and services. Cogdill comes to SWACHA with more than 12 years of experience in Treasury/Cash Management, ATM network administrations, risk management and assessments, audit organization, daily opera-tions of ACH and Wires and debit card/check processing. He is

a 2002 graduate of New Mexico State University with a Bach-elor of Business Administration and Economics and received his Accredited ACH Professional (AAP) designation in 2011.

Des Moines, IA

Paul Waltz has been appointed president and chief oper-ating officer for SHAZAM. Waltz, who served as SHAZAMexecutivevicepresidentandchiefoperatingofficer,takesonthenew leadership role of president in anticipation of current CEO Michael Hollinger’s August 2015 retirement. Hollinger will retain his CEO title until his retirement. Waltz has spent more than30yearsworkingwithcommunityfinancialinstitutionsinIowa. During those years, Waltz also held a variety of positions ontheSHAZAMboardofdirectors,includingchairman.

Fort Worth

John Motley, president of Colonial Savings, has been named to the Consumer Financial Protection Bureau’s (CFPB) Community Bank Advisory Council. The council advises the CFPB and shares with the bureau the unique perspectives ofcommunity banks and the critical role they play in the health and viability of their local economies.

Happy

Happy State Bank has opened a branch in Allen and named thefollowingofficerstoserveatthatlocation.

Scott Lewis has been named president of the DFW area. HewilloverseethisnewofficeinAllenandthebranchinAddi-son. Lewis brings over 25 years’ banking experience to the bank. He is a graduate of Texas Tech University earning a Bachelor’s degree in Finance.

Hunter Lord joined the bank as senior vice president in commercial lending. He is a graduate of Texas Tech University and has nine years of banking experience.

Will Dridge will serve as a senior vice president in commer-cial lending. He earned a Bachelor’s of Business Administration degree in Finance from Stephen F. Austin State University and has 17 years of banking experience.

http://smithhamiltoninc.com/

assocIatIon news


Discover provides Grant to IBat’s teach the teachertm program

Discover Financial Services, through its Pathway to Financial Success program, will provide a $75,000 grant to the IBAT Education Foundation for its Teach the Teacher program. Pathway to Financial Success is part of Discover’s $10 million investmenttofurtherfinancialeducationin public high schools across the country.

“We firmly believe that it is impos-sibletoeliminategapsinfinancialliteracyamongyoungpeoplewithoutfirsteducat-ing teachers,” said Steve Sievert, execu-tive vice president at PULSE, a Discover company.

Discover’s grant will help fund sti-pends for hundreds of Texas teachers to participate in Teach the Teacher in 2015. Next year, the program is scheduled to be held in seven markets, impacting 350 teachers and more than 50,000 students.

★

IBat elects new officers and Directors

The Independent Bankers Associa-tion of Texas (IBAT) is proud to announce that John Jay, president of Roscoe State Bank, will serve as chairman of the IBAT Board of Directors for 2014–2015. He officially accepted this position duringthe association’s 40th annual convention held in Fort Worth in September.

Jay has been the president of Roscoe State Bank since 1990. He is the seventh person to hold the position since the bank’s opening on December 6, 1906.

He joins Chairman-Elect Rog-ers Pope, Jr. of Texas Bank and Trust in Longview and Secretary-Treasurer Darla Rooke of Junction National Bank in Junction. Rounding out the Executive Committee for IBAT are Immediate Past Chairman Jay Gober, First State Bank, Graham; Leadership Division Chairman

Michael Moores, Citizens National Bank, Henderson; Education Foundation Chair-man Willard Still, American Bank, N.A., Waco; and IBAT President and CEO Chris Williston.

New board members include Joe Kim King of Texas Country Bancshares in Brady, Sam Munafo of Inter National Bank in McAllen and Doug Streater of Extraco Banks, N.A. in Temple.

★

texas Banking commissioner receives IBat chairman’s award

Texas Banking Commissioner Charles Cooper was awarded the pres-tigious IBAT Chairman’s Award during the association’s 40th annual convention held September 28–30 in Fort Worth. This award is IBAT’s highest honor and is bestowed on an individual who has made an extraordinary contribution to the com-munity banking industry.

Outgoing IBAT Chairman Jay Gober selected Commissioner Cooper as the recipient, noting Cooper’s many contri-butions during the presentation. Cooper is only the second recipient of this award who is not a community banker. He has provided tremendous leadership to the Texas Department of Banking since 2008 and is a strong advocate for community banking at the federal and state level. He holds important relationships with regula-tors as well as lawmakers at all levels.

“Commissioner Cooper has our utmost respect and admiration, and IBAT is honored to present him with our Chair-man’s Award,” Chris Williston, IBAT presidentandchiefexecutiveofficer,said.“He is fearless in advocating for commu-nity banks and the need to reduce the onslaught of bureaucratic madness that has plagued our industry in recent years.”

Cooper has joined IBAT members several times as they walk the halls on Capitol Hill and is respected on the

national scene. He is known for having a firm but fair approach to regulation andalwaysfightsforwhathebelievesisright.Community bankers across the state are grateful to have such a committed indi-vidual as the chief bank regulator.

★IBat names new members

of associate member advisory council

Morgan Moliver, client services manager with Phase Engineering, Inc. in Houston and Cody Yanchak, direc-tor of sales with First American Payment Systems, LLC in Fort Worth have been appointed to IBAT’s Associate Member Advisory Council.

Moliver and Yanchak were appointed to three-year terms, and replace outgo-ing members Melanie Edmundson, P.G., principal with Phase Engineering, and Joanne Posen, account executive with Cornerstone Correspondent Lending in Albuquerque,NM.

The council was established in 2006 to represent IBAT associate members and to serve as a resource for bankers, associ-ate members, IBAT staff, and for emerg-ing legislative and regulatory issues.

★First national Bank mcGregor

announces two charity champions

First National Bank McGregor announced the first two Central TexasnonprofitsnamedasCharityChampionsfor fall 2014—Court Appointed Special Advocates (CASA) of McLennan and Hill Counties and AVANCE Waco.

As Charity Champions, representa-tives from both organizations will receive executivetrainingtohelpthenonprofitsreach their goals and expand their mis-sions. Additionally, each nonprofit willberecognizedonthefieldduringaBaylorhome football game.

November/December 2014 www.ibat.org ★ 19November/December 2014 www.ibat.org ★ 19

“We chose CASA as a Charity Champion because First National Bank McGregor truly feels the volunteers’ advocacy for children is invaluable,” David Littlewood, First National Bank McGregor president, said. “AVANCE Waco was selected because we understand the importance of bringing education to families and want to help raise awareness about this organization and what it does.”

★

texas community Banking Icons honored

Two new IBAT Wall of Heroes and Legends inductees were announced at

IBAT’s recent con-vention in Fort Worth.

Dr. Scott Mac-Donald, president and chief executive officer of the SWGraduate School of Banking (SWGSB) Foundation, has

been a teacher, mentor, counselor and coach to thousands of community bank-ers, bank directors, others in the commu-nity banking industry, students and faculty throughout his long-time career.

“There is no one more worthy of inclusion on the IBAT Wall of Heroes and Legends than Dr. Scott MacDonald — he truly is a Texas community banking hero,” Chris Williston, IBAT president and chief executive officer, said. “The impact thatMacDonald has left on the industry thus far — and continues to leave — is immea-surable. On behalf of every IBAT member, thank you for your tremendous contribu-tions to community banks in Texas and across the country.”

Ramona Jones also earned a spot on the Wall. Jones, former president of IBAT Services, recently retired after 35 years of service to the organization. As president

of the subsidiary, Ramona guided the direction IBAT Ser-vices has taken to make it one of the most respected for-profit organizationsin the nation.

She is credited with growing IBAT Services from about five percent ofIBAT’s revenue to almost 40 percent, providing the IBAT team the means to solidify and advance its primary mission as an uncompromising regulatory and legislative advocate for Texas community banks on the state and federal level.

★First american receives IBat

president’s award First American Payment Systems

received the Independent Bankers Asso-ciation of Texas (IBAT) President’s Award at the 40th Annual IBAT Convention. The President’s Award is given to a per-son or organization that goes above and beyond in serving the community bank-ing industry and IBAT members.

This is the first time a companyhas been honored with the prestigious award. First American was presented the award by IBAT President and CEO Chris Williston.

“Over the past two years as an IBAT Associate Member and then as an Endorsed Service Provider, First Ameri-can has substantially increased the num-ber of IBAT member banks supported by itsfirst-classmerchantservicesprogram,”said Williston. “While IBAT members havebenefittedgreatlyfromFirstAmeri-can’s service and marketing support, it has gone beyond that. This company has shown a real commitment to commu-nity banking through its involvement in IBAT events and support of IBAT regu-latory and legislative advocacy efforts.

That’s what made it a clear choice for the 2014 IBAT President’s Award.”

Accepting the award on behalf of First American, Rick Rizenbergs, EVP of Sales, said, “This is the culmination of a lot of hard work and dedication by our team in support of IBAT and community banking. We have enjoyed a true partnership with IBAT and look forward to continuing to grow it year after year.”

“This is a tremendous honor for First American and would not have been pos-sible without the commitment and team-work of our organization over the past several years in serving IBAT and its mem-bers,” said Shawn Dillon, VP of Sales, Financial Institutions. “We are extremely proud of this award and our organization’s support of IBAT.”

★

swacha celebrates national cybersecurity awareness month

SWACHA partnered with the Finan-cial Services-Information Sharing and Analysis Center (FS-ISAC) in early Octo-ber — National Cybersecurity Awareness Month — to host the Southwest Financial Crimes Forum at The University of Texas at Dallas. The forum featured experts in the fields of technology and risk who offeredfinancialinstitutionsthemostcurrentmiti-gation strategies regarding cybercrimes.

“It is important that we provide our members and other financial institutionswith the greatest opportunity for success fightingcybercrimeaswefeelthebestwayto help combat these types of crimes is through awareness and education,” Laura Steele, AAP, president and chief execu-tiveofficerofSWACHA,said

Additionally, SWACHA Services Corporation (SSC) recently announced a partnership with Argos Risk to promote online tools that assist financial institu-tions in mitigating fraud risk through use of reporting tools and risk analytics. ★


We can all look a few years ahead and imagine how the wave of retirements from baby boomers will result in a skills and knowledge gap in our institutions. In a recent survey of Texas community bankers, bank presidents and CEOs identified“attractingandretainingtalent”asoneoftheirtopconcerns.

With this in mind, we believe that banker education is more important than ever. To meet the needs of tomorrow’s industry and ensure a thriving community banking sector in the Texas economy, it’s essential to invest in your employees’ continuing education. There might simply not be enough seasoned community bankers to go around,andit’sacriticaltimetodevelopemployeestofillthecominggaps.

WebelievethattheeducationlineupcompiledbytheIBATEducationFoundationisasgoodasanyyouwillfind.TheIBATBoardof Directors, Strategic Planning Committee and staff have worked with IBAT members to identify their needs and ensure that we build aneducationcalendarthatreflectsthoseneeds.

Consider the variety of programs offered by IBAT — including TechMecca, education summits, Leadership Conference, cluster programs, webcasts and the Annual Convention — to meet your staff ’s educational needs in 2015.

you and your bank with opportunities to buy, sell or merge. Thus, we want to arm you with knowledge to make informed decisions in this financially important area. Specifically, as a bank director, CEO or senior officer, you need to be fully prepared to objectively and capably assess whether the most appropriate strategic plan for your bank involves being a buyer, merger partner, or perhaps, a seller.

Credit Analysis Summit

march 18 San Antonio

This one day program is designed to introduce critical financial and non-financial credit analysis considerations, documentation, monitoring and other

IBAT’s 2015 education ScheduleBy Julie courtney, cae, cmp

Winter Summit

February 8–10South Lake Tahoe

This summit offers plenty of networking opportuni-ties and social time with the speakers and other attendees, along with a fabulous venue, reasonably priced accommodations and lots of fun. Education sessions are designed to encourage audience ques-tions and participation. You’ll have the opportunity to candidly discuss pertinent issues with senior officials from the OCC, FDIC, Fed and Banking Department. Three of the preeminent banking lawyers in Texas will address current hot topics impacting your bank and your bottom line. And, finally, you can take part in a lively discussion on the present state of the economy, predictions for the future and appropriate strategies for investing in turbulent times.

Hold, Fold or Raise? An M&A Workshop for Community Banks

February 19–20Dallas

IBAT remains committed to a vibrant and healthy environment for independent community banks and continues to work for legislative relief to foster long-term success for the industry. Nevertheless, we understand that market forces inevitably may present

important factors central to the review of most major loan types. The program emphasizes ratio analysis, balance sheet and income statement trends, SFAS 95 cash flow analysis and non-financial considerations critical to sound underwriting principles.

Advanced Credit Analysis Summit

march 19–20 San Antonio

Intended for a more experienced audience, this pro-gram covers financial statement analysis concepts and SFAS 95 cash flow analysis in more depth, applying UCA cash flow analysis to specific types of loans. Case studies are used to cover underwriting issues, policy guidelines, working capital needs, business risks, collateral valuation, borrowing base financing, and other issues as they pertain to com-mercial credits.

How to Create and Maintain a Sales Culture in a Community Bank

march 25–26Dallas

This program explores the concepts and skills neces-sary to establish an effective sales environment in your bank. You will learn about the key components in structuring a sales environment, how to develop

e D U c a t I o n c a l e n D a r


employees’ attitudes and abilities toward selling, as well as tools and techniques to identify customer needs and successfully sell your bank’s products and services.

Lending Compliance Summit

april 16–17Dallas

This summit will provide an overview of recent regulatory changes, litigation of interest and practical recommendations for implementation at community banks, along with moderated “best practices” ses-sions. Come for the latest information and an unpar-alleled opportunity to network and share ideas with your peers!

Nuts and Bolts of Banking Summit

april 21–22San Antonio

In this program, ideal for beginning bank employees, you will learn about the complete banking process, including how banking institutions are structured and regulated along with what banks do and how they do it. This is also a perfect learning opportunity for bank suppliers who could use a primer on how a bank works.

Bank on Boot Camp

June 3–4Austin

IBAT teams up with SWACHA to bring you this two-day ACH educational event designed to help you attack the ACH rules, explore new ACH rules, chart the course of the ACH return items, navigate the maze of an ACH file, and mitigate the risk management enemy in all its forms.

30th Annual Leadership Conference

June 11–13San Antonio

This 2½ day conference is designed to inspire and involve the leaders of community banks. All Leader-ship Division members, presidents, CEOs, CFOs, executive management, branch managers as well as up and coming employees are encouraged to attend. In addition to first-class speakers and educational sessions, the conference is an excellent opportunity for networking and sharing ideas and solutions with peers. With a resort location and family-friendly agenda, attendees are encouraged to combine profes-sional development with a family vacation.

Financial Literacy Summit

July 23–24Dallas

This seminar will benefit anyone involved in their financial institution’s community outreach program: senior management, compliance officers, marketing officers and business development officers. The sum-mit spotlights successful programs that earn CRA credit where local bankers have promoted financial education initiatives, and demonstrates practical ways you can bring financial literacy information to your community.

Operations Compliance Summit

august 13–14San Antonio

The operations side of the bank continually faces challenges with increased regulations and aggressive consumer protection actions. Furthermore, litigation against banks has exposed several areas of concern. The speakers at this program will provide an overview of recent regulatory changes, litigation of interest, as well as practical recommendations for implementa-tion at community banks.

Appraisals Summit

august 27Dallas

This course provides attendees with the underly-ing knowledge and skills required in reviewing a

commercial real estate appraisal to determine com-pliance with appraisal regulations and standards as provided by the Uniform Standards of Professional Appraisal Practice (“USPAP”). Through case stud-ies and exercises, participants will evaluate the real estate appraisal as a key component in the credit risk assessment process for commercial real estate loans.

35th Annual Bank Operations Institute (BOI)

october 11–16Dallas

BOI builds its program around moving operations officers from the back room to the boardroom. Here the emphasis is on practical, real-world issues and solutions. BOI takes students through the nuts and bolts of operations to a new level of strategic think-ing and presentation. Students from a multi-state area attend BOI for one week each fall for two years. The program is taught by noted regulators, bankers, educators, and professionals with an emphasis on the practical skills needed for effective and profitable operational management.

Certified Community Bank Director Seminar

october 30–31Dallas

The Certified Community Bank Director (CCBD) designation is a collaboration of and administered by the Independent Bankers Association of Texas and the SW Graduate School of Banking Foundation. This certification covers the regulatory and fiduciary responsibilities of bank directors, board structures and processes, effective board governance and

IBAT’s 2015 education ScheduleBy Julie courtney, cae, cmp



expectations of board members by regulators, exam-iners and shareholders.

Investment & Asset/Liability Management Summit

november 5Dallas

This program will help shed light on some important changes taking place in the financial industry and their impact on community banks. With the regulatory landscape as a backdrop, the discussion will then shift to a macro-economic review and its influence of and implications for both investment portfolio strat-egy and interest rate risk management. The discus-sion will continue with specific investment product analyses and potential strategic alternatives. The pro-gram will emphasize the need for community banks to develop compatible and complementary strategies that will promote the optimal utilization of the invest-ment portfolio as a valuable management tool.

clUster proGramsIBAT’s Cluster Programs provide cost-effective training for your employees and directors. Bankers from numerous banks in a close geographic area are invited to

participate in a live two-hour evening workshop on a banking hot topic. Besides the excellent training they receive locally, the benefit for IBAT member banks isthey can send an unlimited number of employees foroneflat rate. It is trainingyou need, where you want it! Offerings include such topics as BSA/AML, culti-vating proactive customer advisors, and fair lending.

complIance semInarsIBAT cosponsors compliance programs with Professional Bank Services (PBS). PBS has conducted seminars throughout the U.S. for more than 20 years. They pro-vide educational programs to thousands of bankers through their relationship with 25 banking associations and several banking agencies. Training clients include various financialinstitutionregulatoryagencies.

Compliance Topics Covered for 2015

•Anti-MoneyLaundering&BankSecrecy Act School

•TexasDepositDocumentation

•HMDA•RESPA•Dodd–FrankUpdate–RegZ,Band

RESPA•IntroductiontoLendingCompliance•MortgageDisclosureWorkshop•IntegratedMortgageDisclosers

weBcast/telephone semInarsIn conjunction with Financial Educa-tion, Inc., telephone/webcast seminars are a very economical way to train your employees and directors. For one low price, everyone in the bank can sit in on the program with the use of a speaker-phone and a computer.

Additionally, by choosing the web-cast option, participants will also be able to view online visuals as the presentation is delivered. The sessions are one hour and fifteen minutes in length with a fifteenminutequestionandanswerperiod. ★

*Because you are a member of the Indepen-dent Bankers Association of Texas, you have access to participate in these webcasts at the Member rate.

2015 Education Schedule cont’d

http://www.gsblsu.org/


Leadership Conference is a great way to fellowship with people in the industry and make connections that will last a lifetime.

With Operation 411, compliance isn’t a 911.

In the next few years, financial institutions will face mandatory changes to the self-service channel. Diebold is responding now, with Operation 411:

4 compliance requirements, from 1 company with 1 request. With Diebold as a proactive partner, you’ll be efficiently ahead of change to meet everything from

Windows® 7 updates to PCI compliance. Operation 411. It’s another example of how Diebold never stops watching the future, as it helps you now.

For the entire story, visit www.diebold.com/411.

[email protected] www.diebold.com

9824-01 Operation 411 Ad 8.5x11_key1.indd 1 9/23/13 3:50 PM

http://www.diebold.com/Pages/default.aspx


ANNuAL CONVENTION

thank you to our speakers!We would like to thank our workshop speakers, who participate in our convention at their own expense.

Jared Bahner, CSI, Austin, TXRick Brophy, Beard Kultgen Brophy

Bostwick & Dickson, Waco, TXSandy Brown, Bracewell & Giuliani,

LLP, Dallas, TXJohn Cowan, USDA, Farm Service

Agency, College Station, TXShawn Dillon, First American Payment

Systems, LLC, Fort Worth, TXJenise Dounson, Padgett, Stratemann

& Co., L.L.P., San Antonio, TXChet Fenimore, Fenimore, Kay, Har-

rison & Ford LLP, Austin, TXDouglas Hartung, Diebold, Inc., North

Canton, OHScott Heitkamp, ValueBank Texas,

Corpus Christi, TXKeith Hughey, John M. Floyd & Asso-

ciates, Baytown, TXScott Kelley, TIB - The Independent

BankersBank, Dallas, TXPat Kennedy, Kennedy Sutherland,

L.L.P., San Antonio, TXEd Krei, The Baker Group, Oklahoma

City, OK

Kim Kreps, John M. Floyd & Associ-ates, Baytown, TX

Eric Lillard, PULSE, Houston, TXChad Montgomery, American National

Bank of Texas, Terrell, TXJeff Multz, Dell SecureWorks, Atlanta,

GAMatt Murdy, Happy State Bank, , Karen Neeley, Cox Smith, Austin, TXBarbara Rehm, Promontory Financial

Group, Washington, DCMerrill Reynolds, Reynolds Williams

Group, New Braunfels, TXMaria Robles Meyers, Advantage

Health Plans Trust, Oklahoma City, OK

Glen Sarvady, Deluxe Corp., Shor-eview, MN

Debbie Scanlon, BKD, LLP, Houston, TX

Kathy Smith, Bank Compensation Consulting, Inc., Plano, TX

Peter Weinstock, Hunton & Williams, Dallas, TX

Dory Wiley, Commerce Street Capital, LLC, Dallas, TX


IBAT honored 17 Texas community banks during the Best of Community Banking Awards luncheon at the IBAT convention. The competition celebrates the outstand-ing accomplishments of IBAT member banks and the critical role they play in com-munities across Texas.

“Communitybanksnotonlyprovideafinancialfoundationinmanytownsacrossthe state, but they also do extraordinary work serving both their customers and their communities,”ChrisWilliston,presidentandchiefexecutiveofficerofIBAT,said.“TheBest of Community Banking Awards gives us an opportunity each year to showcase our member banks’ great work.”

The annual Best of Community Banking Awards recognize IBAT member institu-tionswithagold,silverorbronzeawardinfourcategories:architecturaldesign,finan-cial literacy, community service and marketing. Additionally, a “Best in Show” award is given to the overall winner. Member banks are judged on innovation and creativity, numberofpeopleimpactedandthesuccessinfulfillingacommunityneed.

a look Back

Best of community Banking awards

Best in Show Winner

•marketing: Independent Bank, McKinney

Gold-Level Winners

•Financial literacy: Fort Hood National Bank, PlainsCapital Bank, Dallas

•community service: Woodforest National Bank, Spring

•marketing: Centennial Bank, Lubbock•architecture: Citizens Bank, Bryan and

United Bank of El Paso del Norte

CONVENTION SPONSORS

TITANIuM SPONSOR

PLATINuM SPONSOR

GOLD SPONSORS

SILVER SPONSORSBKD, LLPBracewell & Giuliani LLPDieboldHunton & Williams, LLP Padgett, Stratemann & Co., L.L.P.

BRONzE SPONSORSAccuSource SolutionsAmerican National Insurance CompanyAmerisource Funding, Inc.Continuity ControlCrowe Horwath LLPD + HDavis Kinard & Co, PCDell SecureWorksDoeren MayhewEquias Alliance

®

Silver-Level Winners

•community service: Bank of the West, Grapevine

•marketing: Jefferson Bank, San Antonio and Independent Bank, McKinney

•architecture: Grand Bank of Texas, Horseshoe Bay, Integrity Bank, Pasa-dena and Star Bank of Texas, Burleson

Bronze-Level Winners

•community service: Pinnacle Bank, Fort Worth and Texas First Bank, Texas City

•marketing: PlainsCapital Bank, Dallas and LegacyTexas Bank, Plano ★

(sponsors continued on page 26}


Federated Investors, Inc.Fenimore, Kay, Harrison & Ford LLPFirst American Payment SystemsFrost BankICBAKennedy Sutherland LLPMG ArchitectsPromontory Interfinancial Network, LLCRosenthal Pauerstein Sandoloski Agather LLPTIB-The Independent BankersBankVerafinWeaverYennik, Inc.

BLuE RIBBON SPONSORSBank Compensation Consulting, Inc.The Bankers BankBeard Kultgen Brophy Bostwick & DicksonCatalyst Financial CompanyCondley and Company, L.L.P.The Genesis Group Hovde GroupNFP Executive BenefitsSNL FinancialSubchapter S Bank AssociationSWACHA

CONVENTION SPONSORScont'd


EXHIBITORSAbound Resources, Inc.AccumatchAccuSource SolutionsAdvantage Health Plans TrustAgri-AccessAmerisource FundingThe Baker GroupBanc Professional ServicesBancVueBank Compensation Consulting, Inc.Bank Financial Services GroupBankers Healthcare Group, Inc.BankOnITBOK FinancialBriggs & Veselka, Co.Buzz Points, Inc.CalTechCardtronicsCatalyst Financial CompanyCBANC NetworkCenterState BankChandler SignsComptroller of the CurrencyCondley and Company, L.L.P.Consultants and Builders, Inc.Country Bankers Systems, LLCCSI, Computer Services, Inc.CSPICurtis 1000, Inc.Cushman and Wakefield of Texas, Inc.

D + H Davis Kinard & Co, PCDEI IncorporatedDell Inc.Dell SecureWorksDeluxe Corp.DieboldDoeren MayhewEmployer FlexibleEquias AllianceFarmer MacFederal Home Loan Bank of DallasFinancial Design & Construction,

Inc.First American Payment SystemsFirst Data Online BankingFTSIGarland Heart - Security / Compli-

ance / ConsultingThe Genesis GroupGlory Global SolutionsGraduate School of Banking at

ColoradoGulf Coast Business CreditHarper & Pearson Company, P.C.HarvestHogan Financial Systems Inc.Holman Capital CorporationIndependent Community Bankers of

AmericaInvestment Professionals, Inc., (IPI)

J. B. Lloyd & Associates, LLCJack Henry BankingJohn M. Floyd & AssociatesLEVEL5, LLCLowery Property Advisors, LLCMain Street Checks, Inc.MEA Financial Enterprises, llcMG ArchitectsModern Banking SystemsNicola Banking System, Inc.Oliver Garrison LLCOrderMatic Electronics Corp., LLCOutsource ATMPhase Engineering, Inc.PrecisionLenderPromontory Interfinancial Network,

LLCPULSEQuest AnalyticsReynolds Williams GroupSHAZAMSmith HamiltonSNL FinancialSubchapter S Bank AssociationSWACHATexas Department of BankingTransFundUnicom Technologies, Inc.VerafinWebEquity SolutionsWorks24/Bank On Hold

a look Back


With 217 members, IBAT has the largest associate member group of any banking associationin the country. It is our honor to provide IBAT banks with the latest in products, stellar service, and

unrivaled access to professionals who can help IBAT banks create success.

21st Century Financial ServicesAbound ResourcesAccumatch Property Tax IntelligenceAccuSource SolutionsACI WorldwideActuaries & AssociatesAdvanceTec Safe Deposit Services, Inc.

Advantage Health Plans TrustAlign Financial Services Consultants, Inc.

ALM First Financial Advisors, LLCAloStar Bank Of CommerceAmerican Banker

American National Insurance CompanyAmerisource Funding, Inc.

Andrews Positive Change Projects, LLCAporia SolutionsAvTek SolutionsBanc Statements, Inc.Banc-serv Partners, LLCBancVue, LTD

Bank Compensation Consulting, Inc.Bank Financial Services GroupBankers Healthcare Group, Inc.BankOnITBCL Of Texas

BKD, LLPBOK Financial

Bracewell & Giuliani, LLP

BranchServ, A Division Of Custom VaultBriggs & Veselka Co.Bush & Ramirez, P.L.L.C.Buzz Points, Inc.

CalTechCalyx SoftwareCardinal Software, Inc.CardtronicsCarr Riggs & IngramCatalyst Financial CompanyCatamount Funding, Inc.

CBANC NetworkCCG Catalyst Consulting GroupCenterState BankCentral States Health & Life Co. Of OmahaCerfis Group, Inc.Cetera Financial InstitutionsCFC Technology Corporation

Chandler SignsCHUBB InsuranceCommerce Street Capital, LLCCondley & Company, LLP

CoNetrixContineo TechnologiesContinuity Control

Cornerstone Correspondent LendingCorrigo Incorporated

Country Banker Systems, LLCCox Smith Matthews Inc.CP Security LLC

Crowe Horwath LLPCSI (Computer Services, Inc.)Curtis 1000Cushman & Wakefield Appraisal Management Group

D+HDavis Kinard & Co, PCDBSI, Inc.DEI IncorporatedDell SecureWorksDeluxe Corporation

DieboldDigital Filing SolutionsDoeren MayhewDoyen Sebesta, Ltd LLPDunkin & AssociatesEcon-O-Check CorporationElan Financial ServicesEmployer Flexible

Equias Alliance, LLCFederal Home Loan Bank of DallasFederated Investors, Inc.Fenimore, Kay, Harrison & Ford LLPFinancial Design & Construction, IncFirst American Payment Systems, LLCFirst Data Online BankingFiservFox, Byrd & Company, PCFTN FinancialFTSI, Inc.G.X. Clarke & Co.

Garland Heart Management Group

George, Morgan & Sneed, P.C.Ghiglieri & CompanyGlory Global SolutionsGranville Financial GroupGulf Coast Business CreditHaberfeld AssociatesHam, Langston & Brezina, LLP

Harper & Pearson Co., P.C.Harris Law Firm PCHenry & Peters, P.C.High CottonHolman Capital Corporation

Hunton & WilliamsI.T. Works

IBAT Financial ServicesIBAT Leadership Division

IBAT Services Inc.IBT, Inc.Investment Centers Of AmericaInvestment Professionals, Inc.J.B. Lloyd & Associates, LLCJack Henry & AssociatesJackson Walker L.L.P.

Jaynes, Reitmeier, Boyd & Therrell, P.C.JetPayJohn M. Floyd & AssociatesJonesBaggett LLPKennedy Sutherland, LLPKessler & Collins, P.C.Level 5, LLCLoan Review And TrainingLone Star Investment Advisors, LLCLowery Property AdvisorsMBM Advisors, Inc.McGladrey, LLPMEA Financial Enterprises, LLC.MG ArchitectsMid American Mortgage, Inc.Modern Banking SystemsMoneyDesktop, Inc.MPA Systems, Inc.nCinoNet Team TechnologiesNewGroundNewtek, “ The Small Business Authority”Nicola Banking System

NW Sign Industries, Inc.Oliver Garrison LLCOneLogosOutsource ATMPadgett, Stratemann & Co., L.L.P.Patriot Capital

Pattillo, Brown & Hill, L.L.P.Peirson-Patterson, L.L.P.Phase Engineering, Inc.Pinnacle Financial StrategiesPinnacle Training Group, LLCPolaris Benefits, LLCProfessional Bank Services, Inc.Profit Recovery Partners

Promontory Interfinancial Network, LLCProtective General Insurance ServicesPULSEPULSE Select / MoneyPassQ2 Software, Inc.Quest AnalyticsRandall S. James & Associates, Inc.Raymond James/Morgan KeeganReich & TangRioux CapitalRisk Management Partners, LLCRobertson Anschutz VettersRogers-Ford L.C. Architects & Interior DesignRosenthal Pauerstein Sandoloski Agather LLPRUTH RUHL, P.C.Sageworks, Inc.Sandler O’Neill & Partners, LPSchwartz & AssociatesSDBICSecurian Financial GroupSeidel, Schroeder & Company

Sharp BancSystems, Inc.Shay Financial Services, Inc.SHAZAMSLI Group, Inc.Smith HamiltonSNL FinancialSouthwestern Regional Insurance CenterSprouse Shrader Smith P.C.Sterne Agee & Leach, Inc.Steven H. Shimotsu, CPAStovall, Grandey & Allen CPAsStrategic Resource Management, Inc.Strategic Risk Associates, LLC

SWACHASWBC, Financial Services Division

Teraverde Management AdvisorsTexas & Southwestern Cattle Raisers AssociationTexas Dispute Resolution SystemTexas Press Association

The Baker Group

The Bank Advisory Group, L.L.C.The Bankers Bank

The Genesis Group LLCThe Hertz Corporation The Security Center

The Todd OrganizationThompson & Knight LLPTransFundTravelersTreasurer’s Choice ProcessingTSYSUMB BankUnicom Technologies, Inc.USDA Rural DevelopmentValesco IndustriesVantivVerafinVerde Financial Services, Inc.VSoft CorporationWalt Garner Associates, Inc.

WeaverWFG National Title Insurance Co.Whitley Penn, LLPWorks24/Bank On Hold

Yennik, Inc.

Developed byThe Genesis Group

J R B T L O G O S TA N D A R D S 12 . 1 0 . 2 0 12

Logo clear space is determined by taking 1/2 of the vertical height of the logo (the top of the “T” to the bottom of the swoosh) and using that measurment on the four sides of the logo to create a clear space around the logo. No other type or object should interfer with that clear space or be placed closer to the logo than the outer edge of that clear space.

LOGO CLEAR SPACE

LOGO CLEAR SPACE

LOG

O C

LEA

R S

PAC

E

ONE COLORONE COLOR REVERSE

THREE COLOR

PMS 2955 (Blue)PMS 194 (Red)PMS 430 (Grey)

THREE COLORREVERSE


FOUR COLORPROCESS

Blue C100 M45 Y0 K37 R0 G82 B136

Red C0 M100 Y64 K33 R171 G6 B52

Grey C5 M0 Y0 K45 R148 G156 B161

FOUR COLORPROCESS REVERSE

Blue C100 M45 Y0 K37 R0 G82 B136

Red C0 M100 Y64 K33 R171 G6 B52

Grey C5 M0 Y0 K45 R148 G156 B161

Alternate logo with 100th line

235 SLAYDEN ROAD | MOSCOW TN | 901-877-7008

CERTIFIED PUBLIC ACCOUNTANTS


Alternate logo with no descriptor


With 217 members, IBAT has the largest associate member group of any banking associationin the country. It is our honor to provide IBAT banks with the latest in products, stellar service, and

unrivaled access to professionals who can help IBAT banks create success.

21st Century Financial ServicesAbound ResourcesAccumatch Property Tax IntelligenceAccuSource SolutionsACI WorldwideActuaries & AssociatesAdvanceTec Safe Deposit Services, Inc.

Advantage Health Plans TrustAlign Financial Services Consultants, Inc.

ALM First Financial Advisors, LLCAloStar Bank Of CommerceAmerican Banker

American National Insurance CompanyAmerisource Funding, Inc.

Andrews Positive Change Projects, LLCAporia SolutionsAvTek SolutionsBanc Statements, Inc.Banc-serv Partners, LLCBancVue, LTD

Bank Compensation Consulting, Inc.Bank Financial Services GroupBankers Healthcare Group, Inc.BankOnITBCL Of Texas

BKD, LLPBOK Financial

Bracewell & Giuliani, LLP

BranchServ, A Division Of Custom VaultBriggs & Veselka Co.Bush & Ramirez, P.L.L.C.Buzz Points, Inc.

CalTechCalyx SoftwareCardinal Software, Inc.CardtronicsCarr Riggs & IngramCatalyst Financial CompanyCatamount Funding, Inc.

CBANC NetworkCCG Catalyst Consulting GroupCenterState BankCentral States Health & Life Co. Of OmahaCerfis Group, Inc.Cetera Financial InstitutionsCFC Technology Corporation

Chandler SignsCHUBB InsuranceCommerce Street Capital, LLCCondley & Company, LLP

CoNetrixContineo TechnologiesContinuity Control

Cornerstone Correspondent LendingCorrigo Incorporated

Country Banker Systems, LLCCox Smith Matthews Inc.CP Security LLC

Crowe Horwath LLPCSI (Computer Services, Inc.)Curtis 1000Cushman & Wakefield Appraisal Management Group

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Mark your calendars: mortgage disclosures are changing and the August 1, 2015 dead-line will be here before you know it. For over 30 years, TILA and

RESPA mortgage disclosures have been administered separately by two different entities — the Federal Reserve Board and the U.S. Department of Housing and Urban Development (HUD). In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) consolidated the administra-tion of the Truth-in-Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) in the Consumer Financial Protection Bureau (CFPB) and mandated that the CFPB combine the disclosures requiredunderTILAandRESPAintoasingle, integrated disclosure.

On November 20, 2013 the CFPB finalized the integrated disclosure rule.The new rule replaces the RESPA Good Faith Estimate (GFE) and early TILA dis-closure with a new “Loan Estimate” form, and replaces the Settlement Statement (HUD-1)andfinalTILAdisclosurewitha new “Closing Disclosure” form. Covered transactions include most closed-end con-sumer mortgage loans, but the rule exempts certain transactions, such as HELOCs and reverse mortgages, from the rule. Addi-tionally, it exempts creditors who make

2015 tIla-respa Integrated Mortgage Disclosures what YoU need to Know

By alan w. Jackson and steve manente

fiveorfewermortgagesayear.Transactionsexempt from the integrated disclosure rule will continue to use the existing TILA and RESPA forms and format.

The CFPB spent a great deal of time and effort engaging the public, evaluating feedback, and testing the new disclosure forms and believes they represent a vast improvement over the old forms in their readability and usability. It is important to understand that the new rule is not simply a formatting change; it totally overhauls and redesigns the existing disclosure forms and changes many of the fundamental aspects of a mortgage transaction. The newruleprovidesveryspecificinstructionsfor formatting, completing, and delivering these forms. Even with these directions, there are still many hurdles to overcome, aswellasunansweredquestionsthatwillundoubtedly present new challenges for lenders and their service providers.

The Loan Estimate Form

The Loan Estimate is a three-page form that combines the early TILA dis-closure and the GFE. The new form has a grid-like layout with distinct sections to organize the information and uses plain-language and bolded text to make infor-mation more comprehensible for con-sumers. It is designed to help consumers better understand the key features, risks, and costs associated with the loan.

The Loan Estimate must be delivered

or placed in the mail not more than three business days after receipt of an applica-tion and not less than seven business days before closing. If a revised Loan Estimate is provided due to a changed circumstance or other allowable reason, the consumer must have received the revised version not later than four business days before closing.

A revised Loan Estimate can be pro-vided if there are changed circumstances, if theconsumerrequests revisionstothetransaction that cause a charge to increase, or if the consumer does not indicate an intent to proceed with the transaction within ten business days after the Loan Estimate was provided. If the interest rate was not locked when the Loan Estimate was provided, the creditor must provide a revised Loan Estimate on the date the interest rate is locked that includes the finalized interest rate, discount points,loan originator charges and credits, and other interest rate dependent charges and terms. Once the Closing Disclosure has been provided to the consumer, the Loan Estimate cannot be revised. This rule change ends the practice of issuing the “Magic GFE” that popped up right before closing and resulted in fewer lender cures. It is more important than ever to make sure the Loan Estimate figures areprovided in good faith and completed as accurately as possible.

Unlike the current GFE, the new



Loan Estimate form requires that allindividual charges be itemized and listed alphabetically, and certain naming con-ventions must be followed. Lenders must be aware of these new details as failure to conform may mean big penalties and payouts.

The Closing Disclosure

TheClosingDisclosureisafive-pageformthatcombinesthefinalTILAstate-ment with the HUD-1 settlement state-ment. The layout of the form closely mir-rors the Loan Estimate and should make it easier for consumers to see any changes that have been made after the Loan Esti-mate was issued. The names for charges and the order the charges appear in must be the same on the Loan Estimate and Closing Disclosure, and the charges must be listed alphabetically.

Thefinalrulerequiresthatthecon-sumer receive the Closing Disclosure no later than three business days before consummation. If the Closing Disclosure is not delivered in person, it is presumed received three business days after it is placed in the mail, sent by email, or oth-erwise delivered. However, the creditor may rely on evidence that the consumer received the Closing Disclosure ear-lier (for example, the consumer’s signed receipt of delivery by overnight mail or acknowledgment of receipt via email).

2015 tIla-respa Integrated Mortgage Disclosures what YoU need to Know

By alan w. Jackson and steve manente


The Closing Disclosure must be pro-vided by either the creditor or a settlement agent. However regardless of who furnishes the form, the creditor retains ultimate respon-sibility — and liability — for ensuring that the Closing Disclosure is provided in accordance with the rule. This representsa significantshift of liability from the settlement agent to the lender. In order to avoid enforce-mentactionsandfines,lendersmustmakesure the Closing Disclosure is 100% accu-rate before it is issued.

Tolerances

As if the new disclosure forms weren’t enough to wrap your mind around, the new rule has also changed the fee toler-ance “buckets” that we have become accustomed to. Below is a summary of the newfeetoleranceclassifications:

10% aggregate increase: The actual total of the following charges cannot exceed the total disclosed on the Loan Estimate by more than 10%: (1) third-

party services for which the consumer is permitted to shop that are not paid to the creditoror their affiliate and (2) record-ing fees.

no limitations on increase: The follow-ing charges have no limit on how much they may increase if they are the best esti-mate available to the creditor at the time the Loan Estimate is provided, regardless of the amount that is actually paid:•Prepaidinterest;•Propertyinsurancepremiums;•Amountsplacedintoanescrow,

impound, reserve, or similar account;•Chargespaidtothird-partyservicepro-

viders selected by the consumer that are not on the creditor’s list of service providers; and

•Chargespaidforthird-partyservicesnotrequiredbythecreditor,evenifpaidtoanaffiliateofthecreditor.

no increase permitted: If the fees are not mentioned in either of the two cat-egories above, then no increase from the Loan Estimate is permitted. It is important

to note that this category now includes fees such as appraisal, credit report, and upfront mortgage insurance premiums.

Conclusion

The new integrated disclosure rule goes into effect in just a few short months. Because of the size and complexity of the rule, lenders and service providers should study the rule and supporting documenta-tion in detail and begin implementation well in advance of the August 1, 2015 effective date. There is no sign that the CFPB plans to grant an extension or move the deadline back. Benjamin Franklin once said, “You may delay, but time will not.” The time to act is now!

Implementing this new rule will require adapting business processes andworkflow management, as well as reas-sessing vendor relationships, updating IT systems, and revamping employee train-ing programs. Unfortunately, this process will likely be time intensive and costly. Luckily for us, the CFPB has provided extensive, detailed instructions on how to complete the new forms, as well as a Small Entity Compliance Guide with a number of implementation tips. With these chal-lenges comes change for the better, as we do believe that when the dust settles, the Loan Estimate and Closing Disclosure will lead to more informed consumers who can easily compare multiple product offerings from different lenders and better appreci-atetherisksandbenefitsassociatedwithmortgage loans.

Resources

The sample forms shown in the text of the rule provide guidance regarding the use and completion of the various sec-tions of each form. In addition, the CFPB has provided a number of references and resources for use in implementing the new rules. Those tools can be found on the CFPB website at http://www.consumer-finance.gov/regulatory-implementation/tila-respa/. ★

Alan W. Jackson is Compliance Administra-tor and Steve Manente is an Attorney with Schwartz & Associates in McKinney, Texas. They can be reached at 972.562.1966 or [email protected].

Mortgage Disclosures Cont’d

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he acknowledged all of the “good employ-ees and hard work” that helped boost ANBTX to the reputation it has today.

Guinn Godwin has worked in busi-ness development for ANBTX since 1951. He has a total of 71 years of community banking experience, and 63 of those have been spent at ANBTX. Godwin remi-nisced about his start at ANBTX.

“In 1941, I graduated from high school and started work for a bank in Dal-las. One afternoon in 1951, the bank’s president called me into his office andtold me I was ‘too country’ for Dallas. He introduced me to Ben L. Gill, Jr., and I have been at ANBTX ever since. Except for the time I spent serving our country in World War II, I’ve been in banking my whole life,” Godwin said as he looked at the picture of Gill hanging on the wall.

You can hear Godwin’s respect and admiration for the man he still refers to

as Mr. Gill. And, that same respect can be heard in the voices of bank employees as they speak to Godwin.

Amanquicktopraiseothersyetquietwhenitcomestohisowncon-tributions to the bank, Godwin has been invaluable to the growth and success of ANBTX. Not only has he broughthigh-profilebusinesstothebank, but he has also nurtured a cul-ture of respect and loyalty. ANBTX’s culture has garnered Dallas Morning News recognition as one of the top

places to work in the Dallas-Fort Worth areaforfiveconsecutiveyears.

The two friends, brought together by the bank, have always been a part of what makes the ANBTX family so endearing to its customers. Technology has changed many aspects of the banking industry throughout the years, but the personal connection between banker and customer isafixturethatHulseyandGodwinhaveworked hard to preserve.

They recall a time before computers and automation that dominate banking today.

Handwritten money ledgers were kept, and customers’ account balances were stored at the branch, not online. While ANBTX has evolved with the times and become digitally sophisticated, the bank has stayed true to its core values of commitment to integrity, respect and

Two exceptional Bankers Help Shape

American National Bank of Texas

Hearty laughter echoed off the bank walls in Terrell, Texas, the long-time home of American National Bank of Texas (ANBTX). Riter

Hulsey and Guinn Godwin, two of the bank’s leaders, shared favorite stories and nuggets of wisdom from their tenures spanning decades.

Riter Hulsey, an alumnus of the University of Texas, enrolled in Harvard Business School in 1942. Upon gradua-tion from Harvard, he returned to Texas and worked for Dow Chemical Company. At the behest of his father-in-law in 1947, Hulsey resigned his job and moved to Ter-rell, where he began his banking career as a teller at ANBTX. His father-in-law, Ben L. Gill, Jr., was president of ANBTX at the time. For the next 67 years, Hulsey has beenacentralfigureinthebank’sgrowthand success. Even as a teller, Hulsey dis-played his abilities as a natural leader. Hequicklymovedfromtellertoassistantvice president, then from vice president to executive vice president, becoming president in 1967. From 1975 to 1985, he servedas thebank’schiefexecutiveoffi-cer, and since 1985 has served as chairman of the board. Throughout his long tenure at ANBTX, Hulsey has helped shape the bank into what it is today. When asked how the bank has changed over the years, (Continued on page 36)



As IBAT’s Education Ambas-sador, with primary respon-sibility for our Cluster Training Program initiative and in particular our BSA/AML live training, I have the opportunity to inter-

act with Texas community bankers state-wide. I’ve listened and observed about how banks implement their Bank Secrecy Act/Anti-Money Laundering programs. As a result of these experiences, I’d like to share what I call “7 Best BSA/AML Related Practices.” These best practices are not about filling out the forms andspecifically following the regulations…which of course we all do.Instead,myques-tions and comments are meant to tweak your thinking about how your bank goes about the more informal aspects of your BSA/AML program.

1. A “culture of BSA/AML compliance” must be in place in your bank.

A culture of BSA/AML compli-ance means remembering you can get so caught up in complying with all the do’s and don’ts of BSA/AML compliance — as well as responding to examiners and regulators — you might forget that at the foundation of your BSA/AML program is protecting your customers from those who would prey upon them and from those who would perpetuate fraud to your bank.

A “culture of compliance” means

you’ve created the environment where your employees are thinking about how their efforts may result in helping a cus-tomer avoid falling victim to fraud. It means employees realize their actions may result inadrugtraffickerbeingthwartedin his activities. This culture means man-agement needs to stop and realize employ-ees are always paying attention to their “actions/attitudes” toward BSA/AML compliance.

2. Your bank’s BSA/AML training must equip bankers for their BSA/AML responsibilities.

Determining whether your employ-ees are truly equipped to handle BSAresponsibilities can be very difficult. It’sessential for bankers to not only know the technicalities of BSA/AML compli-ance but what to do with it in real world situations. Time and time again I hear the primary focus is on “passing the test” and being able to show the data to an exam-iner…whether or not the person-in-the-trenches actually knows what to do.

Best practices in BSA/AML training includes:a.Beingabletoaccuratelyanswerques-

tions an examiner (or customer) might ask. Role play is essential to ensure ALL bankers, in all departments, can do this succinctly.

b. The realization a banker’s role is not to determine if a crime is being committed, but only to determine if

the behavior is not “normal” for this customer.

c. Answering, with no hint of structuring, thecustomer’squestion,“SoifIdepositlessthan$10,000youwon’thavetofillout a CTR…is that right?”

d. Discussing money laundering and other BSA-related issues in every staff meeting or newsletter. To have a “best practices” BSA/AML program, the dis-cussion must happen regularly.

3. Customer service and BSA/AML compli-ance must go hand-in-hand.

What’s the number one reason cus-tomers stop doing business with a bank? Sixty-eight percent of customers surveyed say the reason they’ve left their bank is they are displeased or unhappy with service! Customers are unhappy with employees treating them like an account number rather than a person. They also dislike being told “It’s policy” with no fur-ther explanation.

So although you can’t change the fact you need to gather information to be in compliance with the Bank Secrecy Act, you can ensure that the manner in which you gather information delivers superior customer service. When com-municating in person, fifty-five percentof the message is your body language, and 38% is your voice, with only 7% being the words you speak. So in situations like

7 Best BSA/AML Related

practicesBy mary white


Hulsey and Godwin Cont’d

customer satisfaction. These are values that Hulsey and Godwin still portray.

“When I was a teller, a customer’s balance was on a card. Balances were updated by hand and each customer’s card was behind the tellers,” Hulsey said. “If you wanted to know a customer’s balance, you looked it up on the cards. Today, obvi-ously, all of that is automated.”

“What was always appealing to me about ANBTX was that, since we were small, we could develop a good relation-ship with every customer,” Hulsey con-tinued. “That’s one thing about the bank that has not changed over the years.”

Hulsey and Godwin fondly remem-ber times when being dedicated to their community meant going out of the way to solve their customers’ problems, whether it meant driving to the countryside to resolve a monetary dispute over chickens, or a face-to-face meeting with the CEO of a multimillion dollar business.

“You’ve got to be honest, and you’ve got to be compassionate about help-ing people,” Hulsey said. “I think if you

can’t do that then there’s not much use in you being around. It still makes me smile when I see somebody that we’ve helped become very successful in their business. That’s what we’re here for. We’ve got customers who have been doing business with ANBTX since before we got here. We took care of their needs and we recog-nized them. We appreciated their business and we didn’t hesitate to tell them so.”

The strong dedication to their cus-tomers and faith in their employees has transformed ANBTX from a single-community bank in Terrell in 1989 to a growing financial institution that offerspersonal and business banking, insurance, trust management and wealth manage-ment services.

For a bank that was established in 1875, waiting until 1989 to expand seems long overdue. “Because of regulations, you couldn’t have a branch bank in Texas prior to 1989,” Hulsey explained. “Once that regulation was changed, we started buying banks and setting up branches so that we could serve the surrounding communities.Thefirstbranchwesetupwas in Forney because we saw the growth potential of that area. Today, we have 30 locations.”

Godwin explained that despite being able to retire, he and Hulsey continue working at ANBTX because they love what they do. ANBTX provides the per-fect way for them to continue serving their community in the same way they have for decades.

“We like people, and we like helping them,” Godwin said. “Riter is a smart man and a good fellow, and there were always people lined up to see him.”

ANBTX will continue to grow thanks to the strong leadership built by Hulsey and Godwin. The bank is honored to have had two outstanding leaders for so long. Their dedication and loyalty is a reflectionofthequalitiesANBTXstrivesto display. ANBTX will continue to reach customers in the future the way Riter Hulsey and Guinn Godwin have done for the past 65 years. ★

Article written by Imaginuity in Dallas, with input from the staff of American National Bank of Texas, Terrell.

neeD helpwIth acomplIanceQUestIon?

zzIBATComplianceAdviser800.749.4228www.ibat.org/compliance

BSA compliance, where your customers may not fully understand what’s going on, they are paying attention not so much to your words but to your actions and the characteristics of your voice.

WhetherfillingoutaCTRorgather-ing CIP/CDD/EDD related information, you must hold employees accountable for doing this in a customer service focused manner.

As a banker south of San Antonio saidtome,“Allfinancialinstitutionsdealin the same green currency; the only dif-ference between us is the way we take care of our customers.”

4. You must have accountability, including constructive feedback and applause.

So often I’m told, “I wish my employ-ees would pay more attention and do what they need to do when it comes to follow-ing our BSA/AML policies.” When I hear this, several things come to mind: 1) What kinds of training have the employ-ees had and how recently? 2) Do they really understand their responsibilities? 3) How are you holding them account-able for the training you’ve invested in them? 4) Are you willing to coach them multiple times to improve? 5) Is compli-ance a part of their job description? 6) Do you simply correct their mistakes because it takes less time than to coach them?

For example, I called the BSA offi-cer at a bank and asked, “Are you the person responsible for BSA compliance?” His answer was memorable: “Isn’t every-one in the bank responsible for BSA compliance?”

If an examiner asked your bankers, “Who is responsible for BSA compliance within your bank?” would they include themselves in their answer?

It’s important to remember that accountability is also about applause. When your bankers do a great job with implementing your BSA/AML policies you must give them applause for doing so!

5. Educating customers is a best practice!You should be able to answer “yes” to

thefollowingquestions:1) Do employees “really” understand and can they explain

BSA/AML Practices Cont’d

http://www.ibat.org/compliance


to customers the “why” of the bank’s BSA/AML policies and procedures? 2) Do you have the “Notice to Customers: A CTR Reference Guide” readily available in English and Spanish to give customers whohavequestionsastowhatCTRsareall about? 3) Although not BSA/AML specificallyrelated,isyourbankinvolvedin financial literacy initiatives in yourcommunity which will enhance a custom-er’s trust of your bank?

6. Combating elder exploitation is a best practice.

Six hundred SARs a month were filedin2012detailingelderexploitation.We’ve all seen a new “caregiver” come in with an elderly customer and wonder who they are. Community bankers play an essential role in spotting and report-ing elder exploitation. A best practice is for ALL employees to be aware of the redflagsofelderexploitationand reportthem to the SAR officer who can thendetermine if a Suspicious Activity Report shouldbefiled.

For example, after hearing about elder exploitation SARs, a bank cashier filedoneasaresultofanelderlycustomerreceiving a counterfeit $20,000 business check. Because the cashier had a copy of thecheck,aSARwasfiledwiththeinfor-mation from the counterfeit check and listing the elderly man in the narrative of the SAR. (It is important to note that the victim is listed in the narrative, not as the subject of the SAR.)

7. Rely on “banker instinct.”“Banker instinct” is the gut feeling

that makes you question the actions ofthose you interact with through your bank. Banker instinct causes you to investigate, to think more, to not “assume.” (Read about the $54 M fraud involving the city comptroller in Dixon, Illinois; then draw your own conclusions about how banker instinct may not have been heeded.)

Every bank employee needs to have his or her opinion respected and to be engaged with your BSA/AML program. Too frequently I hear bankers say “myopinion doesn’t matter.” Every banker needs to be encouraged to rely on his or her “banker instinct” with situations

3 Mark your calendar! TechMecca February 2–3, 2015 Dallas

within your bank, and to know a trusted resource they can turn to have their voices heard.

I encourage your bank to consider these “best practices.” Ask a few of your employees to anonymously assess how they think your bank is doing with dem-onstrating them. ★

Mary White is founder of the WTC Performance Group and Education Ambassador for the IBAT Education Foundation. She can be reached at [email protected].

http://www.caltech.com/

http://www.ibat.org/techmecca


Many banks need to add new board members because of such factors as a mandatory retire-ment age or because board members who agreed to stay through

thefinancialcrisisnowwanttorotateoffthe board. Banks need to keep in mind that they will be under close scrutiny by any prospective candidate who will be conduct-ing due diligence on the bank at the same time the bank is conducting due diligence on the candidate. In order to ensure your bank can attract top candidates for board

positions, consider the following before beginning the recruiting process:

(1) needs assessment: The board of directors should conduct a needs assess-menttoidentifywhichqualitiesandskillsin new board members would augment the skill set of the current board members. Does the board need someone with steep knowledge of banking, such as a former banker or regulator, or is the board lack-ing knowledge of a particular product or service being offered by the bank, or does the board need a local community leader? Identification of the type of person theboard is looking for is a critical piece of information to ensure a satisfactory recruiting process.

(2) corporate Governance: While all potentialboardmemberswilllikelyinquire

firstabouttheamountofthebank’sDirec-tors & Officers Liability coverage, themore knowledgeable candidates regarding bankingwill inquireaboutthecorporategovernance practices, i.e. the manner in which the bank is overseen by the board of directors. The board should determine how answers to the following questionswill affect the recruiting process:•Doesthebankhaveanoutside,non-

executive, chairman of the board? •Whatisthecompositionoftheboard

by gender, skill set, and number of out-side directors?

•Howareagendaitemsgatheredforboard meetings?

•Istheredialogbetweenboardmembersat the meetings or do board meetings consist only of presentations made by management? Is there an executive

recruiting New Bank Directors Is Your house in order?

By cathy Ghiglieri


recruiting New Bank Directors Is Your house in order?

By cathy Ghiglieri

session at each board meeting?•Onwhichcommitteeswouldanew

board member sit? How are the agen-das for committee meetings set? What are the duties of each committee?

•Howandwhendoboardmembersreceive information for the board meetings? Does the bank make it easy ordifficultforboardmemberstoobtaininformation to make informed deci-sions? For example, do board members access board packages via a secure por-tal on the internet a week prior to the board meetings or is access to informa-tionmadedifficultbyrequiringboardmembers to go to the bank to read the board packages?

(3) Board training: New board mem-bers need to make informed decisions from their firstmeeting, sohowdo they

get up to speed on the issues facing the bank? Is there an orientation session, complete with an orientation manual? Is there training for new board members on the banking industry in general? What kind of ongoing training is available to board members?

(4) strategic planning: The OCC’s Semiannual Risk Perspective for Spring 2014 states that “strategic risk remains high for many banks.” What strategic planning process is in place and how involved is the board?

(5) Board assessments and peer evalu-ations: Has the board completed a board assessment, which is an evaluation of how well the board is overseeing the operations of the bank? If so, what are the areas that have been identified for improvement?

Has the board performed peer evaluations, which are evaluations of each individual director’s performance on the board? If so, what type of assistance is given to directors in need of improvement?

There is no better time than when guests are arriving to get your house in order, and likewise, reviewing these fivetopics, and perhaps making some adjust-ments ahead of the search process, will pay dividends in attracting new board members. ★

Ms. Ghiglieri is the former Texas Banking Com-missioner and is President of Ghiglieri & Com-pany, a bank consulting firm based in Austin, Texas. She is the co-author of “The Ultimate Guide for Bank Directors.” Contact her at www.ghiglieri.com.


IBAT Around

the Stateand beyond

IBat calendarJanuary 2015 26–29 Regional Meetings (tentative)

February 2015 2–3 TechMecca, Dallas

8–10 Winter Summit, Lake Tahoe

19-20 Hold, Fold or Raise?, Dallas

24–26 Regional Meetings (tentative)

March 2015 5–8 Post-ICBA Program, Bahamas

18 Credit Analysis Summit, San Antonio

19–20 Advanced Credit Analysis Summit, San Antonio

25–27 Sales Culture Summit

April 2015 7–8 IBAT Legislative Day, Austin

For information about any of these programs, contact Julie courtney at 800-749-4228 or [email protected], or visit www.ibat.org.

16–17 Lending Compliance Summit, Dallas

21–22 Nuts & Bolts of Banking, San Antonio

28–30 23rd Annual Congressional Visit

May 2015 1 23rd Annual Congressional Visit

June 2015 2–3 Bank on Boot Camp, Austin

11–13 Leadership Conference, San Antonio

July 201523–24 Financial Literacy Summit, Dallas

August 201513–14 Operations Compliance Summit, San Antonio

20 Fraud Security Summit, San Antonio 27 Appraisals Summit, Dallas

September 201519–22 IBAT Convention, Galveston

October 201511–16 Bank Operations Institute, Dallas

30–31 Certified Community Bank Director Program, Dallas

November 2015 5 A/L Management & Investment Summit, Dallas

15–20 Bank Lending Institute, Austin

august 6IBat leadership Division region 3 hosts the “IBat teach the lender program” in Graham.

august 7IBat leadership Division region 4 hosts the “IBat teach the lender program” in Irving.

august 8IBat leadership Division region 2 hosts the “IBat teach the lender program” in lubbock.

september 15IBat participates in the win-tergarden Bankers associa-tion meeting in hondo.

september 16IBat education presents the “2014 anti-money launder-ing & Bank secrecy act compliance seminar” in Beaumont.

september 16-18IBat Financial services attends a meeting of insur-ance agents in cleveland, oh.

september 18IBat attends the Financial women in texas hill country meeting in Fredericksburg.

september 23IBat education presents “Key Factors for Your 2014 Bsa/aml program” longview area cluster.

september 23-25IBat participates in Finovate in new York, nY.

september 24IBat attends the Dallas area compliance association’s annual conference.

IBat speaks at the meeting of the south plains Bankers association in lubbock.

IBat speaks to the san angelo area compliance association.

september 26-27IBat participates in Financial women in texas’ annual con-ference in league city.

september 28-30IBat celebrates its 40th annual convention in Fort worth.

august 11IBat education Foundation presents the teaching excel-lence in Financial literacy award in Beckville to teacher lisa tate, who was nominat-ed by Jim payne and Becky eubank of First state Bank and trust, carthage.

august 14-15IBat education Foundation presents the “2014 opera-tions compliance summit” in Dallas.

august 19-21IBat education Foundation presents “2014 real estate lending compliance” in tyler.

august 21IBat education Foundation presents the “2014 It security summit” in Dallas.

august 27IBat leadership Division region 10 sporting clays tour-nament in snook.

IBat speaks at padgett stratemann & co., l.l.p. annual Bank conference in san antonio.

august 28IBat leadership Division region 2 sporting clays tour-nament in san angelo.

IBat education Foundation presents the “2014 apprais-als summit” in san antonio.

september 5IBat leadership Division region 8 Golf tournament in Fredericksburg.

IBat celebrates classic Bank’s 125th anniversary in cameron.

september 8-9IBat participates in the pUlse Issuer advisory coun-cil meeting in las vegas, nv.

september 10-12IBat participates in cBao’s Board meeting in oklahoma city, oK.

september 11-12IBat services attends Dell secureworks’ midsize secu-rity roadshow in atlanta, Ga.

september 14-17IBat attends Diebold’s taG conference in san antonio.


IBat, in conjunction with Financial education, Inc., hosts close to 150 webinars a year. For more informa-tion, visit www.ibat.org/events/telephone-seminars, or contact Julie courtney, [email protected], 512-275-2227.

December 2014 2 Opening Accounts for Non-

profit Organizations

3 Traditional & Roth IRA Reporting Responsibili ties: Requirements, Issues & Answers

4 ACH Specialist Series: Handling ACH Exceptions & Returns

9 Filing UCC Financing State-ments: Getting it Right!

10 Supporting Documentation for the ALLL

16 Advertising Compliance: Website, Print, TV & Radio

17 Denied Loan Requirements: Consumer, Commercial & Residential

18 Self-Examination for Fair Lending Compliance

January 2015 6 HMDA: What to Know Now

& What’s on the Horizon?

7 Apple Pay, the Mobile Payments Game Changer: Considerations & Action Steps for Community Banks

8 Disaster Management & Continuity Planning, Includ-ing Critical Vendors

13 IRA & HSA Update 2014-2015 Tax Years

14 CFPB Rules for Mortgage Loan Officer Compensation

15 Advanced Endorsements: POAs, Businesses, Trusts & More

21 FDIC Trends & Deficiencies Cited in Matters Requiring Board Attention (MRBA)

22 Security Officer Reports to the Board: Compliance & Best Practices in Fulfilling Your Annual Requirement

27 Customer Complaint & Response Management

28 Dealing with ACH Tax Refunds: Exceptions, Post-ing & Bank Responsibilities

29 The UBPR: Understanding Peer Group Comparison to Improve Bank Performance

February 2015 3 Revisiting Your RESPA &

TILA Policies to Include the New Integrated Disclosure Requirements

4 Understanding Appraisals & Appraisal Review Concepts for Lenders

5 New BSA Officer Training

10 FASB/GAAP Update, Includ-ing Proposed Modifications to ALLL Calculations

11 Qualifying Borrowers Using Personal Tax Returns Part 1: Basics, Itemized Deduc-tions, Interest & Dividend Income, Sole Proprietor-ships & Capital Gains

12 Account Opening Due Diligence

18 FinCEN Guidance on Bank-ing Marijuana Businesses

19 Regulator Issues & Update for the Credit Analyst

24 Setting & Monitoring Effec-tive ACH Exposure Limits

25 FFIEC Guidelines & Recent Developments in Cyber Security Risk Management

26 Top 10 Compliance Mis-takes in Advertising

March 2015 3 Traditional & Roth IRA Fun-

damentals & Compliance Considerations

4 Qualifying Borrowers Using Personal Tax Returns Part 2: Income from Rentals, Royalties, Partnerships, S Corporations & Farms

5 Free Checking Trends in Today’s Market: Feasibility, Regulations & Benefits

10 Update on Capital Planning, Contingency & Basel III for the Board

12 Legally Handling ATM & Debit Card Claims Under Regulation E

17 Flood Insurance Compli-ance Review & Update

18 Call Report Revisions & Update

19 Real Estate Valuation: Beyond the Basics

24 The TILA/RESPA Integrated Disclosure Line-by-Line Part 1: Loan Estimate

26 Social Media Content Strategies for Visibility & Positioning of Your Bank Online

31 Opening Trust Accounts: Compliance, Documenta-tion, Signing Authority & Deposit Insurance Issues

April 2015 2 Branch Transformation:

Balancing the Trend Toward Virtual Banking While Enhancing Your Customer’s Experience

7 Current Issues in Physical Security Risk: Regula-tory Compliance & Best Practices

8 ACH Rules Update 2015

9 Advanced Issues in Dor-mant Accounts, Unclaimed Property & Escheatment

14 CFPB Real Estate Loan Col-lection Rules for Mortgage Servicers

16 Updating Your Bank’s BSA/AML/OFAC Risk Assessment

21 The TILA/RESPA Integrated Disclosure Line-by-Line Part 2: Closing Disclosure

22 Monitoring Employee Work-Related & Personal Social Media: Should We? How? Is it Legal?

23 Analyzing Credit Risk in Agricultural Lending

28 EMV & Debit Cards: Pre-paring for the October 1, 2015 Liability Shift

30 Current Trends in Cyber Crime & Payments Fraud

May 2015 5 Revised Escrow Rules Effec-

tive August 1, 2015

6 From Prospect to Customer: Skills & Tools for Success-ful Business Development

7 Regulator & Industry Hot Buttons for Directors

12 Duties of the Board Secre-tary: Fundamentals, Best Practices & E-Package Delivery

13 Home Equity, HELOC & Second Lien Risk Manage-ment, Including Maturing HELOC Guidance

14 IRA Death Distributions: Beneficiary Options & Tax Consequences

19 Wire Transfer Compliance: Who is Liable?

20 You’re the New HR Officer, Now What?

21 ACH Death Notification Entries (DNEs) & Reclama-tions: Your Bank’s Liability

27 The ALLL in Troubled Debt Restructuring: Identifying & Accounting for Impaired Loans

28 Handling Difficult Custom-ers: Effectively Dealing with Intimidation, Negativism & Anger

June 2015 2 Collection Call Techniques:

Compliant Telephone Scripts & Responses

3 Compliance Rules Lenders Must Know

4 Commercial Appraisal Review Part 1: Income Approach

9 Mastering the SBA 7a Loan Part 1: Eligibility & Pro-gram Requirements

10 BSA Officer Reports to the Board

11 Countdown to the Inte-grated Disclosure Deadline: August 1, 2015

16 Properly Handling Fiduciary Accounts: Authority, Own-ership, Access & Liability

18 When a Borrower Dies: Next Steps & Best Practices

23 From Frontline to Teller Supervisor: Developing Skills & Making a Smooth Transition

24 Stress Testing Your Loan Portfolio: Regulations, Risk & Impact on Value

25 Processing IRA Rollovers & Transfers

30 Top 10 Deficiencies in Audit Findings from Regulators & External Auditors

July 2015 7 Regulatory Oversight of

Third-Party Vendors: Due Diligence, Management & Contracts

8 Mandatory Compliance Regulations for the Frontline

9 Managing E-SIGN, E-State-ments & E-Disclosures

14 Understanding the Board’s Role in Cyber Security Risk

15 Mastering the SBA 7a Loan Part 2: Documentation, Closing & Funding

16 Commercial Appraisal Review Part 2: Sales Approach

21 Your Customer has Filed Bankruptcy, Now What?

23 Developing Your UDAAP Program: Policy, Proce-dures, Risk Assessment & Audit

28 Construction to Permanent Lending Compliance with CFPB Rules: Issues & Update

29 Call Reports: Understand-ing the New Regulatory Capital Requirements & the Revised Schedule RC-R

30 Does Your Originator Agree-ment Meet NACHA Rule Requirements?

August 2015 4 Fair Lending Comparative

File Review

5 Cross Selling & Referral Opportunities for the Front-line: Strategies to Enhance the Customer’s Experience & Grow the Bank

6 Business Account Signa-ture Cards & Resolutions: Entities, Authority & Documentation

11 Garnishments, Subpoenas, Summonses, Levies: Han-dling Official Demands for Customer Funds

12 Advanced Commercial Loan Documentation

13 CFPB Income Verification Rules for Self-Employed Borrowers: Tax Implications for Qualified Mortgages

18 Website & Social Media Compliance

20 How to Redesign Your BSA Program to Impact Your Bottom Line

25 Debt Service Coverage Cal-culations in Underwriting

26 Mastering the SBA 7a Loan Part 3: Servicing, Liquida-tion & Guaranty Purchase

Upcoming webinars

(continued on page 42)


27 Facebook: Update on Sys-tem, Strategies, Techniques & Tips

September 2015 2 Strategic Planning Years 1,

3 & 5: Scope, Techniques & Elements in Drafting Your Written Plan

3 Defining & Identifying Third-Party Senders: Risk, Liability & Audit Requirements

9 UDAAP for the Board & Senior Management

10 Call Reports: Lending Schedules RC-C, RC-N, & RI-B

15 Managing the 8 Categories of Risk Assessment

16 Loan Underwriting Basics: Interviewing, Credit Reports, Debt Ratios & Regulation B

17 Imaged Documents: What to Keep, What to Destroy, What Holds up in Court?

22 Auditing IRAs Step-by-Step

23 Basic Banking for New Employees Part 1: Banking

System, Deposit Operations, Lending

24 Regulator Guidance & Issues in ATM Security

29 HR Danger Zones: Regula-tions, Requirements & Best Practices to Keep You Out of Trouble

30 Mandatory Compliance Regulations for Deposit Operations

October 20156 Regulation E Requirements

for Debit Card Error Resolu-tion: Processing, Disclo-sure & Investigation

7 Mortgage Loan Origination & Servicing Issues, FAQs & Lessons Learned

8 Powers-of-Attorney & Living Trust Documents: Guide-lines for Deposit Accounts & Loans

14 Identifying, Reporting & Monitoring Suspicious Activity

15 New Security Officer Train-ing: Responsibilities, Best

Practices & Skill-Building Tools

20 Opening Accounts for Minors: Ownership, Access & Transactions

21 Accounting Developments Update: Recent Issues & What’s on the Horizon

22 Understanding & Navigating ACH Rules for ODFIs

27 Key Leadership Strategies for Growth, Profitability & Retention

28 Network Security 101: A Comprehensive Overview

29 Maintaining Compliant FDIC Records, Including Related Email & Social Media Retention Rules

November 2015 3 Interest Rate Risk Policies,

Considerations & Conse-quences: What Directors Should Know

4 Form 1099 Reporting: Third-Party Vendors, Fore-closures, Debt Forgiveness & More

5 Remote Deposit Capture Update & Issues for Com-mercial, Consumer & Mobile Banking

10 Regulatory Requirements for the Board & Senior Management

12 IRA Reporting, Common Issues & Error Resolution

17 Basic Banking for New Employees Part 2: Regula-tory Issues, Exams, Audits

18 Robbery Prevention, Appre-hension & Recovery

19 Managing Credit Risk

24 Nuts & Bolts of Effective Metro 2 Credit Reporting via

e-OSCAR

December 2015 2 Regulation E Error Resolu-

tion Rules Versus NACHA Operating Rules: Obliga-tions, Consumer Disputes & Case Studies

3 Call Reporting for New Pre-parers & Reviewers

8 BSA Special Risks: Policy,

Law Enforcement & Regula-tor Issues

9 Managing Accounts & Records for Nonresident Aliens: Opening, Identify-ing, Monitoring & Tax Reporting

10 Safe Deposit Issues: Drill-ing, Unpaid Rent, Death & Unclaimed Property

15 Opening Donation, Benevo-lent & Other Accounts for Nonprofit Organizations & Corporations

16 Exercising the Bank’s Right of Setoff on Deposit Accounts & Loans

17 Appraisals & Evaluations: Guidelines, Regulatory Con-cerns & Frequently Asked Questions

Upcoming webinars cont'd

visit www.ibat.org/ events/telephone-seminarsfor more information.

http://granvillegrp.com/


Home Depot within the time frame of the malware episode. In addition, it will also show that I have never used my card at themerchantinquestion.So,thisshouldbe fairly straightforward.

But not all complaints are easy. Sadly, manytimesthequestionedcarduseisduetoa“significantother”orcaretakerabus-ing a relationship. Where the card holder has authorized a friend or relative to use the card, the card holder is responsible for subsequentcharges(eventhoughnotactu-ally authorized) until such time as the card holder informs the issuer that the user is no longer authorized to make transactions. Thisisclearlyspelledoutinthedefinitionof “unauthorized electronic fund transfer” in section 1005.2(m) of the rule.

There are some limits, however, on the responsibility of the consumer. The official interpretations have always pro-vided that the negligence by the con-sumer cannot be used as a basis for impos-ing liability on him. Thus, writing one’s PIN on the card sleeve (which is really stupid) can’t be the reason for refusing the complaint. Also, the bank can’t limit the liability through its agreement. Only the network zero liability rules and Reg E — and the time frames in it — determine the liability of the consumer.

The bank cannot condition its han-dling of the complaint on the consumer filing a police report. Further, the bankcan’t delay starting or completing its investigation until the written, signed statement regarding the error is received.

As part of the investigation, the bank might be skeptical that there are really unauthorized transactions if the consumer alleges that the card was stolen and then picks and chooses which transactions dur-ing the loss period to dispute. But look for “card not present” transactions carefully. Some of these could be due to stolen data, but some might be preauthorized bill pay situations. Finally, the bank has no further error resolution responsibilities if the con-sumer voluntarily withdraws the notice. If it has fully complied with the error resolu-tionrequirementsonacomplaint,ithasno

GENERAL COUNSEL’S CORNER cont’d from page 12

further responsibilities should the consumer later reassert the same error. But be careful to determine whether the complaint is in fact the same or has been corrected to bet-terreflectallfraudulenttransactions.

The bank should be sure to follow up with a written decision regarding the complaint. This must include the results of the investigation, a written explana-tionoffindings,andanoteastothecon-sumer’s right to request the documentsthat the bank relied upon in making its

expense, that concern should also extend to the possibility that interest income from loans might be overstated by presuming that loan rates will move up with other market rates.

Empiricism vs. Speculation

It might make sense, then, for man-agers of interest rate risk to put a little stress on the left side of the balance sheet. Just as pricing sensitivities for deposits are increased to apply behavioral stress, one could make the case that those same sen-sitivities for loans ought to be decreased. This would not only give management a look at what might happen in the future,

INTEREST RATES cont’d from page 14

determination.Finally, in case you have been a tad

careless about your error procedures, be aware that in a recent exam, a bank was held to have violated UDAAP due to its violation of Reg E. (The bank had refused to investigate without the customer coop-erating with a criminal complaint.) Bot-tom line: review your Reg E procedures and assure that your fraud group is on top of its game! ★

itwouldalsomoreaccurately reflect thepresent. ★

Since 1979, we’ve helped our clients improve decision-making, manage interest rate risk, and maximize investment portfolio performance. Our proven approach of total resource integration utilizing software and products developed by Baker’s Software Solu-tions* — combined with our solid investment experience and advice — makes us the invest-ment firm of choice for many community financial institutions. For more information, contact Lester Murray at The Baker Group: 800-937-2257 www.GoBaker.com, or email: [email protected].*The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc.

http://www.thebankersbank.com/


WELCOME NEW MEMBERS®

PERSONNEL UPDATE cont’d from page 16

125125 yearsClassic Bank, Cameron

annIversarIes

ASSOCIATE MEMBER5th Gear consulting helena hauk, president san antonio, tX 5thgearconsulting.com

5th Gear Consulting is a full service SBA support provider including (REAL) 504 and All 7A loan pro-grams. We take a full service concierge approach with lender and broker to streamline the process for a smooth transaction.

cBanc network sara r. silva, talent coordinator austin, tX cbancnetwork.com

We are the professional network for the banking industry, powering an online community representing the largest group of financial institutions in the world. Founded by industry veterans, our platform helps community financial institutions comply with new regulations, navigate vendor selection, and ultimately serve their local customers.

craig, terrill, hale, & Grantham, llp Kent hale, partner lubbock, tX cthglawfirm.com

Law firm.

haberfeld associates Grant ossenkop, vice president lincoln, ne haberfeldresults.com

Haberfeld Associates helps community banks grow customer profitability while attracting many more retail and business customers. Haberfeld’s partners have added 7.5 million new customer relationships over the past decade using our data-driven strategy

that blends smart products, innovative debit card initiatives, effective sales execution, responsible poli-cies, and targeted, ROI-focused marketing.

mid american mortgage, Inc. Jeffrey e. Bode, president addison, tX midamericanmortgage.com

Mid American Mortgage is a multi-state mortgage lender headquartered in Addison, TX. We partner with community banks in order that the banks may be able to improve their HMDA numbers while at the same time earning mortgage revenue with no compli-ance risk as we handle all compliance needs.

primelending teri tarvin, Branch manager waco, tX primelending.com

PrimeLending is a Texas based mortgage company with nearly three decades of lending experience. We offer a wide variety of loan solutions including: FHA, VA, Conventional, TxVet, Jumbo, USDA Rural Development and Renovation loans. Our goal: match your customers’ needs with the best product fit while providing superior customer service.

strategic resource management, Inc. Ben mrva, executive vice president memphis, tn srmcorp.com

SRM is currently serving over 200 financial institu-tions to reduce expenses, enhance revenue, and maximize bottom line performance. Drawing on its extensive experience, market insight, and proprietary benchmarking database, SRM helps banks improve their bottom line without sacrificing quality or valued vendor relationships. ★

Otherofficerswhowill serveat thisnew office are Jody Hervey and Ariel Gunn.

Henderson

Todd Engemoen has joined Citi-zens National Bank as senior vice presi-dent financial and strategic planning.Engemoen has a wealth of experience working with community banks on merger and acquisition transactions, debt syndi-cations and providing valuation and con-sulting services. He received his Bachelor of Arts in Economics with Highest Hon-ors and his MBA with a concentration in Finance from the University of Texas at Austin. He holds the Chartered Financial Analyst(CFA)designation,theCertifiedValuation Analyst (CVA) designation and multiple securities licenses, with member-ships in the Chartered Financial Analyst Society of Austin and the National Asso-ciationofCertifiedValuationAnalysts.

Houston

Integrity Bank has promoted Kaley Schuette to banking officer/commerciallender. Schuette holds a BBA in Finance from Texas A&M University. In her new role, Schuette will handle a variety of both business and individual loans from the bank’s Houston/Washington Avenue location.

Chris Springer, promoted to bank-ingofficer/commerciallenderatIntegrityBank previously this year, has moved to the bank’s Southeast branch. Springer will continue to help cultivate and main-tain customer relationships.

Longview

Jon Honea has joined Texas Bank and Trust Company as vice president and branch manager at the bank’s new loca-tion in downtown Tyler, slated to open later this year. Honea was most recently employed as a vice president and business banker for another area bank, where he was involved in credit analysis, loan pro-duction, and relationship management.

Brad Johnson has joined the staff


aDvertIsInG DIrectorY

PERSONNEL UPDATE cont’d from page 16

Dridge hervey Gunn Engemoen

anIcowww.anico-cid.com pg 11

BKD, llp www.bkd.com pg 32

caltech www.caltech.com pg 37

Diebold www.diebold.com pg 23

First american payment systemswww.first-american.net pg 15

Graduate school of Bankingwww.gsblsu.org pg 22

Granville Financial Groupwww.granvillegrp.com pg 42

IBat services www.ibat.org/services pg 9

JmFa www.jmfa.com pg 5

pUlsewww.pulsenetwork.com pg 13

promontory Interfinancial network www.promnetwork.com pg 2

smith hamilton www.smithhamiltoninc.com pg 17

snl Financial www.snl.com pg 47

the Baker Group www.gobaker.com pg 48

the Bankers Bank www.thebankersbank.com pg 43

transFundwww.transfund.com pg 7

of Texas Bank and Trust as assistant vice president in its Frisco branch. Johnson has several years’ experience as a busi-ness lender, mortgage loan originator, and financialsalesrepresentative.HeholdsaBachelor of Business Administration in Management degree from Harding Uni-versity and a Bachelor of Science and Arts degree in Landscape Design from the University of Arkansas.

Lubbock

John R. Robinson has been appointed topresident,MidCityOfficeofFirstBank& Trust. A Texas Tech graduate, Robin-son has more than 25 years’ experience in the banking industry in Lubbock County.

Mesquite

Eduardo A. Lopez has been pro-motedtopresidentandchieflendingoffi-cer at First State Bank. In addition, he has been elected a director of the bank. Lopez joined the bank in 2012 as executive vice

president and senior lender. He has had extensive experience with several banks in the South Texas Region as well as work-ing for the FDIC. Lopez earned a BBA degree in Finance from Texas A&I and is a graduate of the Herbert K. Prochnow Graduate School of Banking at the Uni-versity of Wisconsin - Madison.

Sweetwater

The directors of Texas National Bank have announced the election of Chris Bibb as senior vice president in the bank’s Sweetwater location. An experienced West Texas banker, Bibb’s primary responsibilities will include ser-vicing existing customers and develop-ing new relationships in Nolan County and the surrounding communities while also assisting in the overall management of the bank’s loan and investment port-folios. Bibb received his Bachelor’s degree in Agricultural Finance from Tarleton State University. ★

Schuette Springer honea Johnson

Robinson Lopez Bibb


By Kelly Goulart, crcm, ccBco

THE COMPLIANCE GUY

Regulation B Questions...The Usual Culprits!

Not a month — or a week, it seems — goes by that we don’t get questionsabout the Equal CreditOpportunity Act. Issues persist about coverage, what constitutes an applica-

tion, and joint intent. The CFPB recently publisheditsfirstAnnualFairLendingReportthat included tables (see page 40 of the report) entitled Most Frequently Cited Regu-lation B Violations by FFIEC Agencies: 2012, followed by the same for 2013. That report is certainly required reading for complianceofficersandbringsusbacktothequestionswemostfre-quentlygetasked.

who and what is covered? Well, if you look at the definitions, specifically §1002.2(d), itappliesto“applicants.”Thedefinitionof“appli-cant” is a “person” who applies for credit. Here is where you havetofollowthetrail…thedefinitionofa“person”isanaturalperson, corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative or association (see§1002.2(x)).Additionally,underthedefinitionof“appli-cant,”theregulationstatesthatforthepurposesof§1002.2(d),the term “applicant” applies to guarantors, sureties, endorsers and similar parties. That last part is particularly important when dis-cussing joint intent below. It is also critical to note that appli-cants can be seeking either consumer or commercial credit.

when does coverage begin? Regulation B applies when an applicantinitiatesthe“application”process,sobacktothedefini-tions.An“application”isdefinedasan“...oralorwrittenrequestfor the extension of credit that is made in accordance with pro-ceduresusedbyacreditorforthetypeofcreditrequested.”Thelender isgiven someflexibilityhereonwhat isconsideredan“application,” and may establish its own application process. An inquiryorprequalificationisnotanapplication,butitbecomesan application when information received from the applicant is usedtomakeadecisiontoacceptordeclinearequestforcredit.The key here is for the lender to be consistent.

who must provide a joint intent notice? Simply put, that would be anyone

applying for joint credit. That intent should be in writing and “contemporane-

ous” with the application for credit. The fact that husband and wife came in together may not be adequate. Get it in writ-ing! But what about guarantors? That

gets more complicated because the answer is,“Itdepends.” Thisquestiontypi-

cally comes up in one of three situations: 1)theguarantorisarequirementofbankpolicy;

2)theapplicant(s)doesnotqualifyindividually;or 3) the applicant provides a willing guarantor

atapplication.Inthefirstsituation,iftheguarantor is required by bank policy (forexample each partner must guarantee a loan to the partnership), then no evidence of joint intentwouldbe requiredbecause

there was no joint intent by the applicants. In the second situa-tion,similartothefirst,therewouldbenoneedtodemonstratejointintentbecauseonceagainitisabankimposedrequirementand there was no intent by the applicants. (Remember that you can’trequiretheguarantortobethespouse.)Inthefinalsitua-tion, because there was the intent to apply jointly, and a guaran-torisconsideredan“applicant,”thefilewouldhavetoincludeevidence of the intent to apply jointly.

the final question: If we make a counter offer, do we have to

provide an adverse action notice? The safe answer is “yes.” If you make a counter offer and it is not expressly accepted within 90 days, you must provide an adverse action notice, or you provide a combination counter offer and adverse action disclosure so that you don’t have to follow-up later.

Thereyougo—ourmostoftenaskedRegBquestions,theusual culprits so to speak. And don’t forget to incorporate that CFPB Fair Lending Study into your training. ★

Kelly Goulart is IBAT’s Regulatory Compliance Manager with over 25 years’ experience as a compliance officer in Texas community banks. IBAT member banks can solicit his advice and pose regulatory compli-ance inquiries free of charge by calling him at 512-275-2231 or emailing him at [email protected].

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Member: FINRA and SIPC | www.GoBaker.comOklahoma City, OK | Austin, TX | Birmingham, AL | Indianapolis, IN | Salt Lake City, UT | Springfield, IL | 800.937.2257The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc.

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