Louisiana Bankers Notes Blog


Financial Literacy Update

LBA recently meet with the leadership of the Louisiana Workforce Commission suggesting that the work they do in training and placing workers could include a financial education component to help them manage their money when in the workforce.  They were very positive about implementing this component and LBA will help them get underway.  The LBA is also working with the Jump$tart coalition in working on curriculums that will assist teachers as they implement the new requirement that public schools include financial education in their curriculum.  



U.S. Sen. John Kennedy Looks to Provide Relief for Community Banks

Senator John Kennedy will soon move into his refurbished office after having more of a war room in the basement of the Senate Russell Office Building.  LBA has been in D.C. twice this year and a third visit is scheduled for early May when a group will participate in the annual ICBA Capitol Summit.  We remain hopeful that Louisiana banking will have relief from onerous regulations, and the enforcement of those regulations.  Senator Kennedy has been focused on community bank relief since the campaign.  He is now working on legislation that will give that relief and we should have a clearer idea of what that will entail soon.  The LBA has asked Senator Kennedy to look also at the examination process and consider items such as:  set a deadline for when the interview must occur, to require the exam report be provided within 60 days of the exit interview, establish an independent examination review council, give banks the right to appeal a material supervisory determination contained in the final report of the examination, among other items.  We are encouraging and are hopeful Senator Kennedy and the Senate Banking Committee are able to work in a bipartisan manner and seek to solve problems that interfere with commerce and common sense.   

The expectation continues to be the House of Representatives will pass the Financial CHOICE Act by Chairman Hensarling, which has a tremendous number of provisions that have been sought after for many years, along with others that reset the regulatory process and the how regulations are promulgated to assure a more thorough vetting of proposals.  The House will likely also have rifle shot legislation that aims at specific areas and that could individually gain broader support.  

The LBA has worked on a few proposals of our own which we accept up front is a high hill to climb.  Nonetheless, we believe fair lending has areas that should be addressed.  One area targets the circumstances of when a bank is referred to the Department of Justice due to a fair lending allegation, and another deals with fair lending and flood insurance.  There is an aversion in D.C. to talk seriously about fair lending.  I tell people there I am not talking about unfair lending in place of fair lending.  But I will say that having these conversations has found some receptivity in talking further.  LBA would like to change the automatic referral to DOJ if allegations reach a certain ‘threshold’,  as we have been told by the most senior staffer at a federal banking agency that they as staff have had allegations they do not deem serious enough to refer but must refer under current law.  Further, LBA believes that ‘pattern and practice’ needs to be defined as greater than just a few loans, or even one loan, but enough loans to be meaningful and pass the common sense understanding of a true pattern that supports an allegation.  Beyond that, we have been told that a very senior federal banking agency staffer in D.C., after hearing the ideas LBA is promoting, suggested that perhaps another way to get at this is, for banks $10 billion and below, to bar any fair lending allegation being referred to DOJ and have the banking regulator address any issues through their normal exam process.  This idea is supported  by the extremely small numbers of banks below $10 billion that are referred to DOJ and then the almost universal response by DOJ to kick the allegations back to the regulator anyway.  We will continue to press these ideas as someone needs to raise the topic for discussion.  



LBA State Legislation

The state legislature convenes April 10 with the budget and taxes as the focus.  For that reason, the LBA has a limited agenda this year.  We have seen legislation introduced that would increase taxes on banking.  Stay tuned and be ready to engage in making you banks voice heard.  The LBA Bankers Day at the Capitol is April 26 and we expect Governor Edwards to speak to our group.  Commissioner Ducrest should also be in attendance.  Please try to join us make an impact in Baton Rouge.  The focus of the LBA’s state legislative agenda for 2017 is to facilitate the execution of certain bank-related documents that have traditionally required the signature of a notary but that may not necessarily be needed.  Instead of having the notary sign the document, the document could be signed by authorized bank officers.  There are two areas where we think this makes sense.  One area is with a bank’s mortgage cancellation or partial release of mortgage documents.  Instead of having the cancellation prepared and signed by one bank representative and then signed by a notary, allow the cancellation or partial release form to be signed by two authorized bank officers.  

The second area involves secured loans for the purchase of certain used movable assets that are titled.  Currently, when a bank makes a loan to a customer to purchase a used car, ATV, trailer, small boat, or motor, the seller signs the back of the title and has it signed by a notary.  The bank takes a security interest in this titled asset by taking the old title and submitting it to the Office of Motor Vehicles through a public tag agent or directly, or to the Department of Wildlife and Fisheries if it is a boat or outboard motor, along with its financing statement so that a  new title may be issued showing the new owner and the bank’s lien.  Our proposal is to allow an authorized bank officer to witness the seller’s signature on the back of the title.  This would only be done in connection with a loan by the bank.  Both of these initiatives should help increase efficiency and allow a bank to better serve its customers.




Washington, D.C.

On February 6-7, LBA staff and three Louisiana bankers visited Louisiana congressional delegation members in Washington, D.C.  We met with Sen. John Kennedy and Congressmen Steve Scalise, Mike Johnson and Clay Higgins; and with staffers of Congressmen Garret Graves and Cedric Richmond and Sen. Bill Cassidy. Uniformly the meetings were positive and encouraging. We also met with a staffer of Congressman Blaine Luetkemeyer, now chairman of the powerful House Financial Services Committee subcommittee Financial Institutions and Consumer Credit. Items of discussion were The Financial CHOICE Act by House Financial Services Committee Chairman Thomas Hensarling, which will be the starting point for regulatory changes in the House, and Sen. Kennedy stated that this bill will influence what transpires in the Senate.  Flood insurance was a common theme in our meetings and our delegation appears to be optimistic that reauthorization of NFIP by the September 2017 that is acceptable to Louisiana. Fair lending was discussed with Sen. Kennedy and his aide, as well as a fair lending concern with flood insurance. The LBA is working on some legislative language to address some concerns in these areas to provide to our delegation. HMDA, CRA and BSA ‘modernization’ is being discussed by Congressman Luetkemeyer and his staff to be addressed in a separate bill from The Financial CHOICE Act. This was very encouraging to hear. We also spoke about our concerns with the reports of David Nason possibly being nominated for the Federal Reserve Board Vice Chairman of Supervision. And credit unions tax exemptions and push for more business lending. Optimism tempered by realism is our attitude. Help us in our work this year!