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NCBA Members, 
Recent events with the bank failures in California and New York have created uncertainty about the strength of the banking system in the media and among customers. The NCBA spent the past weekend on the phone with bankers and members of the NC congressional delegation, and we've continued to monitor developments closely. 
Earlier this week we distributed a statewide media release to communicate the strength of North Carolina's banks, and I have been interviewed by business journals and news stations across the state to reassure the public and counteract the confusion and misinformation in the news and social media. 
I want to thank our members for the outstanding work you're doing to tell your story to your customers and the public in your local press. In the coming days we will continue monitoring and communicating the situation, and I invite your observations and questions.  
Thank you for the important work you do to support your customers and communities. All of us at the NCBA are proud and honored to serve you.  
This NCBankers Bulletin is sponsored by:

Federal Legislative & Regulatory Updates

FDIC Operating Bridge Banks
Following the failures of Silicon Valley Bank and Signature Bank, the FDIC has confirmed that it is operating two bridge banks. All contracts entered into with SVB and Signature Bank and their counterparties prior to the banks’ failures have been transferred to the bridge institutions, which are backed by the FDIC and the full faith and credit of the U.S. government. FDIC staff continue to work toward transitioning the bridge institutions over to a private sector buyer.
The FDIC has also noted that it’s “too soon to speculate” about how a special assessment on the banking industry will be structured to replenish the Deposit Insurance Fund after the bank failures, but that “we all want that assessment to be as small as possible.” 
Lenders Can Be Held Liable for Discriminatory Third-Party Appraisals
Mortgage lenders can be held liable under federal law for relying on discriminatory appraisals from third-party appraisers, the CFPB and U.S. Department of Justice have said. In a statement of interest filed in U.S. District Court, the agencies weighed in on a lawsuit in which a Black couple said their Baltimore home was appraised at a considerably higher value after they replaced photographs of their family at the residence with photos of white people. The couple sued the appraiser who provided a lower appraisal for the home when the family's photographs were used, and the nonbank lender that denied a loan based on that appraisal.
Fed Provides FAQs and Presentation on Bank Term Funding Program
The Federal Reserve has released a set of FAQs providing details on its newly announced Bank Term Funding Program to provide a liquidity backstop to eligible depository institutions. The backstop is designed to prevent banks from having to sell Treasurys, agency mortgage-backed securities and other qualifying assets during times of stress by lending for up to one year at par with the securities as collateral. 
The program launched on Sunday, March 12. The 26 FAQs cover the design of the program, including how it differs from the discount window; program eligibility and documentation; what collateral is eligible; and rates, fees, maturities and other mechanics of the program, among other details. 
In addition to the FAQs, the Federal Reserve held a presentation on May 15 covering further details on the program and answering common questions. Click here to watch a recording of the presentation.
Libor Transition Communications Solution Launched
The Depository Trust and Clearing Corporation has announced the launch of the Libor Benchmark Replacement Index solution to support the industry’s transition from Libor benchmark rates to Secured Overnight Financing Rate Data and other new fallback rate indices by June 30. Market participants will be able to access the solution through DTCC’s Legal Notice System, or LENS—a repository of notices designed to report organizational actions that affect securities issues from issuers, agents and trustees—as well as through an automated data feed that will support machine-to-machine capture of standardized reference data.
CFPB Seeks Comment on Mortgage Loan Originator Rule
The CFPB has begun a mandated review of mortgage loan originator rules and will take public comment as part of that process. The rules implement Regulation Z of the Truth in Lending Act, which sets requirements and restrictions on loan originator compensation; qualifications, registration and licensing of loan originators; compliance procedures for depository institutions; mandatory arbitration; and the financing of single-premium credit insurance. 
White House Outlines Proposed Tax Changes
Accompanying President Biden’s fiscal year 2024 budget, the administration has released its “Green Book,” which includes proposed tax changes likely to be pursued in the coming year along with supplements to the announced budget. Among other things, the administration wants to quadruple of the corporate stock buyback excise tax to 4%, bump up the corporate income tax to 28% from 21%, and increase the Global Intangible Low Tax Income effective rate for multinational company foreign earnings as part of implementing the U.S. portion of the global agreement to set a minimum corporate tax rate. 
Omitted was a proposal requiring financial institutions to report information about customer accounts. Instead, expanded reporting of some foreign accounts, taxation of certain digital asset transactions, and the requirement for electronic returns by some taxpayers are intended to increase taxpayer compliance. 
Lawmakers Raise Concerns about Balance Sheet Treatment of Crypto Custody Assets
Rep. Patrick McHenry is among the members of Congress asking the banking agencies for clarification regarding an April 2022 staff accounting bulletin issued by the SEC. The bulletin, SAB 121, made changes to the way publicly traded entities, including banks, are expected to account for the safeguarding of digital assets held in custody. 
The bulletin directs companies to recognize a liability and a corresponding asset on their balance sheets, measured at the fair value of the custodied digital assets—a departure from previous long-standing practice regarding custodial assets for banks and other financial institutions. 
“Since SAB 121 purports to require banks, credit unions and other financial institutions to effectively place digital assets on their balance sheets, it would trigger a massive capital charge,” the lawmakers pointed out.
White House Pushes State Policymakers to Restrict ‘Junk Fees’
The Biden administration has released a guide for state legislatures and attorneys general on how they can take action against what it has labeled “junk fees”—a broad category of business fees that includes fees banks charge for services such as overdraft protection.

The CFPB also released a new Supervisory Highlights report alleging to have uncovered a range of “unlawful junk fees,” including “surprise” overdraft fees charged by banks. Meanwhile, the CFPB has stated that its examiners have cited banks for UDAAP findings for overdraft fees resulting from “authorize positive, settle negative” transactions. 
Postal Service Extends Implementation Date for Cash Deposits Rule
The U.S. Postal Service will extend the effective starting date for a rule requiring commercial cash deposits over $500 to be sent using registered mail, its most secure mail service. The now updated implementation date is April 30. 
House Republicans Seek Answers on CFPB’s Credit Card Fee Rule
A proposal by the CFPB to limit credit card late fees would have negative economic consequences for consumers and the agency needs to explain the process it used to draft the rule, said Rep. Andy Barr (R-Ky.), House Financial Services Committee Chairman Patrick McHenry and 16 House Republicans in a letter to the agency
The CFPB has proposed a new rulemaking to end the practice of annually adjusting the late fee safe harbor for inflation, lower the safe-harbor amount to $8 and cap permissible late fee amounts at 25% of the required minimum payment. The lawmakers posed several questions to Director Rohit Chopra about that decision, including why the agency failed to convene a small business review panel to advise on the rulemaking, as required by law; what data it used determined the dollar limits; and what communications it has had with the Biden administration, which has labeled late fees “junk fees.”
FHA Issues Final Rule for Transitioning ARMs Off Libor
The FHA has published a final rule removing Libor as an approved index for adjustable-rate mortgages and replacing it with the Secured Overnight Financing Rate as the approved index for newly originated forward ARMs, effective March 31. The rule also codifies the same changes made for newly originated reverse home equity conversion mortgage ARMs, makes clarifying regulatory changes to the requirements for monthly adjustable HECM ARMs, and establishes a 10 percentage points maximum lifetime adjustment cap for monthly adjustable HECM ARMs. 
FHA Issues Final Rule for Transitioning ARMs Off Libor
The FHA has published a final rule removing Libor as an approved index for adjustable-rate mortgages and replacing it with the Secured Overnight Financing Rate as the approved index for newly originated forward ARMs, effective March 31. The rule also codifies the same changes made for newly originated reverse home equity conversion mortgage ARMs, makes clarifying regulatory changes to the requirements for monthly adjustable HECM ARMs, and establishes a 10 percentage points maximum lifetime adjustment cap for monthly adjustable HECM ARMs. 

State Legislative & Regulatory Updates

General Assembly Holds Vote to Confirm NC Commissioner of Banks Katherine Bosken to Four Year Term
The General Assembly has held committee meetings this week on a bill to confirm Commissioner of Banks Katherine Bosken to a new, four-year term. The bill cleared the Senate Commerce and Insurance Committee on a unanimous vote on Tuesday and was set for a vote in the Senate Select Committee on Nominations on Wednesday.

NCBankers Announcements

New Capital Opportunities Website is Now Live!
In partnership with the NC Chamber, the NC Small Business and Technology Development Center (SBTDC) and the NC Rural Center, we are excited to announce the successful launch of the new Capital Opportunities website. This resource is designed to help North Carolina small businesses identify sources of capital and gain access to helpful information and technical resources. In addition to the website’s launch, we’ve taken part in a statewide media announcement in order to raise awareness for this initiative.
Click here to visit the website.  A major feature of the website is a search tool that makes it easy for small business owners to identify lenders in their area, types of loans available, and contact information for each lender.  The only lenders featured on website will be NCBA member banks and CDFIs and CDCs that are funded by NCBA members.
NCBA Nominating Committee Report
A special thanks to the NCBA’s Nominating Committee for the diligent effort applied to this important annual task.  Below are the nominees presented by the Committee for positions to become effective following our Annual Meeting in June:
Pursuant to the North Carolina Bankers Association Bylaws, 21 days from the date of distribution of this Bulletin are allowed for nominations by petition.  Any petitions must be received at the offices of the NCBA by April 6.  If no such nominations are received, the Bylaws provide that no ballot need be prepared. In that event, the slate recommended by the Nominating Committee shall be declared by the Board of Directors or the Executive Committee to have been elected by acclamation.
American Mortgage Conference - Early Bird Deadline: April 3, 2023
Each year, the American Mortgage Conference brings together policymakers, investors, leading experts in the financial services industry, and mortgage practitioners of every kind. This premier event provides a prime opportunity to discuss important industry issues and analyze the progress being made in Washington. Join us at the Wild Dunes Resort, an award-winning oceanfront paradise located just outside of Charleston, S.C.!
The early bird discount is still in effect, but act quickly - this reduced rate will only be available through April 3. Sign up for the American Mortgage Conference today and save on registration!
Bank Directors Assembly - Early Bird Deadline: March 20, 2023
Bank Directors must be well-informed and up-to-date with industry trends in order to adequately perform their jobs and contribute to the success of their bank. In order to become and remain an expert in the financial industry, bank directors should regularly participate in comprehensive training. Join us for the 2023 Bank Directors Assembly on March 20, 2023, at the Raleigh Marriott Crabtree Valley.
The early bird discount is currently in effect, but don't wait to sign up - this reduced rate will only be available through March 20. Register for this year's Bank Directors Assembly today to catch the early bird saving!
NCBA Foundation Scholarship is Accepting Applicants!
The 2023 NCBA Foundation Scholarship application is now live on our website. The application is an electronic form that must be completed in full, in addition to mailing in any supporting documents that are highlighted in the application. High school seniors who have a parent employed by an eligible North Carolina bank are encouraged to apply.
During the 2023 application cycle, two $16,000 scholarships will be awarded. Please read the full scholarship guidelines before submitting your application.
The deadline for receipt of applications is Thursday, March 23. All applications and supporting documentation must be received at the NCBA’s office (not postmarked) by 5:00 pm on Thursday, March 23.  The scholarship selection committee will schedule interviews for the finalists on Thursday, April 27.  If you have any questions or need additional information, please contact Blair Kennedy (984-344-9990 or   

Professional Development

Recent Bank Failures: What Does It Mean to Your Institution?
In this one-hour webinar, we’ll address the problems faced by Silicon Valley Bank and other recently failed banks, and anticipate questions your customers may be asking you. We’ll sort our way through what has happened and ensure you’re prepared with the right information to understand the present situation, as well as address concerns throughout the industry.
Who should attend: Anyone in the financial institution that would like an update on current events. Especially front-line personnel who may need to respond to questions from the public.
  • Get answers to questions like:
  • What has happened so far?
  • Will it happen to other financial institutions?
  • Is the industry in trouble?
  • What should I tell to concerned customers?
  • How have regulators and the government responded?
  • What is the impact on FDIC deposit insurance?

CBS Spotlight

80 Years of Retirement Planning Has Earned Pentegra their Reputation
At Pentegra, they’ve built their reputation on delivering and supporting banks with successful retirement plans for eight decades.
Pentegra is a leading provider of retirement plan and fiduciary outsourcing solutions to banks nationwide. As one of America’s oldest independent fiduciaries, banks enjoy the confidence that comes from uncompromised and objective oversight. 
Pentegra makes offering a retirement plan easier for banks, with retirement plan solutions that save time, eliminate work, and minimize risk and burdens by outsourcing key retirement plan responsibilities.
Have you wondered how your bank’s retirement plan stacks up against others?
Pentegra’s Benchmarking for 401(k) Plans provides a single resource to use in reviewing where your plan stands in relation to others along a spectrum of major benchmarks. 
Attend Pentegra’s next benchmarking report webinar to determine how best to strengthen your bank’s retirement plan in 2023. Details to come. 
Discover how their fiduciary capabilities go above and beyond. Please contact Wade Connor today (, 704-608-4563)

Industry Update

Pinnacle Financial Partners Releases 2022 Annual Report
Pinnacle Financial Partners has released its 2022 Annual Report, which details its performance and catalogs how the firm is designed from its very foundations to weather tough economic environments.

To read the report, click here.

On the Lighter Side

Clothes make the man.
Naked people have little or no influence in society.
- Mark Twain