All Categories

    Your Weekend Briefing: Hurricane Harvey Forces Texas Banks & CUs to Close Friday & Saturday

    Hurricane Harvey Forces Texas Banks & Credit Unions to Close Friday & Saturday

    Hurricane Harvey, a Category 1 hurricane, with sustained winds of 80 mph, hit Texas on late Friday. Harvey is the fiercest hurricane to hit the United States more than a decade. Southeast Texas banks and credit unions began shuttering operations and ramping up emergency plans on Thursday in preparation for catastrophic flooding.

    The Office of the Comptroller of the Currency authorized national banks impacted by severe weather to close brick-and-mortar locations along the Gulf Coast this week. Texas Bankers Association posted information about precautionary measures and safety resources for Gulf Coast institutions on its website. 

    Likewise, the National Credit Union Administration advised federally chartered credit unions along the Gulf Coast to be prepared. The federal organization has set aside grants up to $7,500 for eligible low-income credit unions that need to rebuild after any storm. For more on that program, click here

    On Thursday, Security Service Federal Credit Union published this tweet: URGENT: Due to severe weather... #SSFCU branches will be closing today at 2 p.m. CT. and will remain closed Fri and Sat.

    Also on Thursday, Frost Bank activated its centralized emergency operations center. Frost spokesman Bill Day said, “We got a forecast this morning that the storm was strengthening. That’s why we made the decision to stand up the (emergency operations center).”

    Business continuity, security, HR and IT personnel have gathered at the center and by phone to discuss what they anticipate with the storm and how the bank will respond, he said. The center has conference call lines and televisions so staff can monitor the storm.

    “We can tap into the cameras in our locations so we can see what’s going on,” he said. “It’s a nerve center for us so we can find out what’s going on and communicate more rapidly, rather than having everybody scattered around.”

    The bank, the largest regional financial institution based in San Antonio, has also begun replenishing cash at its ATMs in coastal regions to meet customer demand, Day said.

    Frost Bank posted this tweet on Saturday:

    Likewise, PlainsCapital Bank is closing its branches in Corpus Christi, Alice and Victoria until further notice. An announcement from the bank said ATMs will remain operational unless power goes out. 

    First Community Bank is closing all locations Friday and Saturday. It's currently planning to resume normal business hours Monday. 

    First National Bank of Texas posted a notice on its website with a list of 38 branches that “closed due to inclement weather”.

    Other financial institutions  that posted online announcements about weather-related closures include Bank of the Ozarks (5 branches “will be closed temporarily”), Texas Regional Bank, Spirit of Texas Bank 

    Banks under the purview of the OCC should refer to guidance about natural disasters for further information.

    When natural or cyber or any kind of external disaster strikes, you simultaneously face an internal business crisis. 

    Is your Institution’s business continuity plan in place? Have you tested it to ensure there are not gaps in coverage that would leave you unable to serve your clients? Have you considered how your communications team will operate to prompmtly inform your customers that their accounts are safe (and to likewise safeguard your reputation)?

    Attend our webinar to ensure you're prepared to act in times of crisis. 

    GET REAL: Managing Communication in a Crisis & Protecting Your Brand 

    November 9 at 2PM ET

    The following sources enabled us to provide this Hurricane Harvey update:


    Southern Missouri Bancorp and Southern Missouri Bancshares Announce Agreement to MergeUnique Financial

    Southern Missouri Bancorp, Inc., the parent corporation of Southern Bank, and Southern Missouri Bancshares, Inc., the parent corporation of Southern Missouri Bank of Marshfield, today announced the signing of a definitive merger agreement whereby SMBC will acquire Bancshares in a stock and cash transaction.

    Bancshares operates two locations in Marshfield, Missouri. At June 30, 2017, Bancshares’ consolidated assets were $91.6 million, including loans, net, of $69.1 million, while deposits totaled $73.6 million.

    SMBC reported consolidated assets at June 30, 2017, of approximately $1.7 billion, including loans, net, of $1.4 billion, and total deposits of $1.5 billion. On a pro forma basis, following the acquisition, the combined company’s total assets will be approximately $1.8 billion, with total loans, net, of $1.5 billion, and total deposits of $1.5 billion. The combined company will operate 43 locations in Missouri, Arkansas, and Illinois.

    Subject to adjustment for Bancshares capital at closing, Bancshares shareholders will receive 9.0393 shares of SMBC common stock and $95.82 in cash for each share of Bancshares common stock. Based on the average closing price of $31.80 per share for SMBC stock over the most recent 20 trading days ending on and including the fifth trading day prior to execution of the definitive merger agreement, the deal is valued at approximately $15.1 million.

    “We are excited to add Marshfield to the communities we serve in southwest Missouri,” stated Greg Steffens, President and CEO of SMBC. “Southern Missouri Bank of Marshfield is an organization we’ve been familiar with for some time, and we have a great deal of respect for the way they go about their core business and their dedication to their community. We’ve also been familiar with the Marshfield market for some time. We are currently already serving some significant relationships in the community, we have key personnel who are intimately familiar with this part of the Springfield, Missouri, Metropolitan Statistical Area (MSA), which has been a key to our company’s growth over recent years, and we believe this acquisition will be very helpful to our continued solid growth in that market.”

    “Our core group of shareholders organized and started the bank in 1997,” noted Kent Hyde, Chairman of Bancshares. “Marshfield and the surrounding communities have been very good to us. We have had numerous opportunities in the past few years where other banks were interested in partnering with our organization. We believe Southern Bank is the best fit for our community, employees, and shareholders. They started as a local bank in a small community and have not forgotten this special way of doing business.” Read More

    Is your Financial Institution considering a merger or acquisition? Learn everything you need to know about Bank M&As in our 1-Year OnDemand Webinar for only $219.

    Community Financial Institution Mergers & Acquisitions


    Another MLA FAQ: Is the Credit Card Rule Retroactive?, NAFCU Compliance Blog

    Over the past several months, the NAFCU Compliance Team has written a few blogs on various aspects of the MLA credit card rules: Bona Fide Fee ExemptionLate Fees, Returned Payment Fees and More and Researching Call Reports and Card Agreements. With the credit card compliance deadline fast approaching, we continue to receive a number of questions on the MLA and its various credit card rules. Today's blog will focus on one particular issue that has come up for various credit unions lately: whether the rules apply retroactively.

    The scenario goes somewhat like this: Jane Member opens a credit card before the compliance deadline. Jane is a covered borrower at the time she opens the credit card and remains a covered borrower throughout the life of the credit card. Does the MLA apply to transactions Jane makes on her credit card after October 3? What if Jane requests an increase in her credit limit after October 3, is the credit card now covered by the MLA?

    Section 232.2 explains that the MLA applies to "consumer credit" extended to a "covered borrower," as determined at the time the member "becomes obligated on a credit transaction or establishes an account for credit." This suggests that whether a particular transaction is covered by the MLA is determined at consummation. This is supported by the fact that sections 232.12 and 232.13state the rules do not "apply to [a credit card account] that is extended and consummated before October 3, [2017]." This is further supported by a couple different discussions in the preamble to the final rule:

    "The Department proposed to add new subsection (a), stating: “Nothing in this part applies to a credit transaction or account relating to a consumer who is not a covered borrower at the time he or she becomes obligated on a credit transaction or establishes an account for credit.” The Department continues to believe that defining the scope of the regulation to apply only to a covered borrower when he or she enters into a transaction or establishes an account for consumer credit is consistent with the language and structure of 10 U.S.C. 987.[167] Interpreting 10 U.S.C. 987 as applying only to a covered borrower who holds that status when he or she agrees to obtain the consumer credit is fair to the creditor who, at the outset of the transaction, should be in a position to know the status of its counterparty to the agreement." (Emphasis added.) See, 80 Fed. Reg. 43579.

    Section 232.12(b) provides a general rule that the definitions, conditions, and requirements of the existing rule apply to transactions involving consumer credit that are consummated or established prior to the compliance date. Relative to the Proposed Rule, the language in § 232.12(b) has been revised to clarify that the “definitions, conditions, and requirements” of the existing rule apply. The Department believes that this provision is equitable, particularly to avoid the potential injustice and operational difficulties that could arise if new requirements under the final rule were to apply to pre-existing transactions or accounts involving consumer credit to covered borrowers. (Emphasis added.) See, 80 Fed. Reg. 43591.

    All this together seems to indicate that by “establishing” an account or “extending” credit the DOD was referring to consummation. The preamble discussion indicates that the DOD believes that credit unions are in the best position to determine whether a transaction is covered at the outset and there is no ongoing requirement to ensure the transaction is still not covered. The preamble also explains that the DOD does not expect credit unions to apply the rules retroactively to existing accounts as this may cause unnecessary operational problems. If an account was not covered at consummation, it will not become covered later on.

    Are you ready to implement the new MLA credit card rules, which go into effect on October 3d? Sign up for our upcoming MLA webinar to prepare.

    New Military Lending Act Compliance: Potential Pitfalls, Mandatory Disclosures, & MAPR Calculation

    September 20 at 2PM ET


    After 7 Months in Office, How's Trump Doing on Cybersecurity? Bank Info Security

    Donald Trump's cybersecurity policy seven months into his administration is analyzed is analyzed in a 10-minute video. The ISMG Security Report features commentary from White House Cybersecurity Coordinator Rob Joyce, who recently warned the public about using computer security software from Kaspersky Lab (a Russian-based company).

    Link to Video 


    CFPB Issues Final HMDA Rule, CFPB

    On August 24, the Consumer Financial Protection Bureau  issued a final rule (2017 HMDA Final Rule) amending Regulation C. To support implementation of the rule, the Bureau has updated the Executive Summary, the Filing Instructions Guide for data collected in or after 2018, and the HMDA Loan Scenarios document.

    The Bureau has also made minor updates (unrelated to the 2017 HMDA Final Rule) to the Filing Instructions Guide for data collected in 2017.

    You can access the 2017 HMDA Final Rule on the Bureau’s website.

    You can access the updated Executive Summary on the HMDA implementation webpage.

    You can access the Filing Instructions Guides and the HMDA Loan Scenarios document on the Resources for HMDA filers webpage.

    You can learn all about the 2017 HMDA Final Rule at our Webinar next month.

    New HMDA Data Collection Rules: Preparing for Extensive January 1, 2018 Changes

    September 26 at 2PM ET


    American Express to pay $96 million over discriminatory card terms, Reuters

    American Express (AXP.N) will end up paying $96 million to credit card customers in Puerto Rico and other U.S. territories for charging higher interest rates and engaging in other discriminatory practices, federal regulators said on Wednesday.

    The U.S. Consumer Financial Protection Bureau announced that more than 200,000 consumers at two of the company’s banking subsidiaries had been harmed by the practices, which also included stricter credit cutoffs and less debt forgiveness than offered to customers in U.S. states. 

    American Express said in a statement the discrepancy was discovered in an internal review and reported to the CFPB in 2013. The company voluntarily agreed to provide $95 million in compensation to affected customers, but said it “absolutely does not” agree with the CFPB’s contention that it had discriminated against clients. Read More.