ICBA Urges Community Bank Exemption from Basel III
ICBA called on federal financial regulators to exempt community banks from proposed Basel III regulatory capital standards. In a comment letter, ICBA wrote that it strongly believes that the Basel III standards should not apply to U.S. financial institutions with consolidated assets of $50 billion or less and that are not deemed to be systemically important financial institutions.

ICBA wrote that applying Basel III proposals to community banks would represent a very large shift in their definition of regulatory capital, minimum capital requirements and risk sensitivities of these institutions. The proposals would significantly erode community bank profitability and credit availability and drive community banks out of business, which would further industry consolidation, the association wrote. 

ICBA noted that introducing the capital conservation buffer, new definitions for common equity Tier 1 regulatory capital, new risk weightings for assets such as residential mortgages and the timeline for adopting the new minimum capital levels present many expensive and unnecessary regulatory burdens for community banks. Absent a total exemption from the proposed rules, ICBA advocated several modifications to Basel III to simplify the rule and better align the proposed capital standards to the unique strengths and activitiess of community banking.

More details on ICBA’s comments are available in the association’s comment letter to regulators and in its national news release. Read ICBA Comment Letter. Read ICBA Release.

ICBA Asks High Court To Take Up Case on SAR Immunity
ICBA and a coalition of other financial organizations asked the U.S. Supreme Court to take up a case to clarify the immunity related to claims that arise from the filing of Suspicious Activity Reports. The joint amici curiae brief asks the court to take up a case to decide whether the safe harbor established by the Annunzio-Wylie Anti-Money Laundering Act provides absolute immunity or more qualified immunity from these claims.

The act includes a safe harbor provision that provides financial institutions immunity from all civil claims based on SAR filings. The circuit courts have rendered conflicting decisions as to whether the safe harbor provision has a “good faith” requirement.

The case is George W. Cummings III, Progressive State Bank and Progressive Bancorp Inc. v. Joe Doughty.

Regulator: Enterprise Risk Management Key to Success
Community banks should integrate an enterprise-wide approach to risk management into their culture to successfully manage risk, an Office of the Comptroller of the Currency official said. Deputy Comptroller for Operational Risk Carolyn DuChene said that enterprise risk management means that individual risks aren’t considered within the lines of business. Rather, it means that how different risks are interconnected and interact with one another should be considered in total across the institution.

“A strong risk culture supports an enterprise-wide approach to risk management by rewarding risk awareness and information sharing, discouraging a ‘siloed’ approach and ensuring there is the right kind of information in the right hands at the right time to manage risks collectively and to achieve strategic objectives,” DuChene said.

CFPB Taking Credit Reporting Complaints
The Consumer Financial Protection Bureau announced that it has begun accepting consumer complaints about credit reporting. The bureau encouraged consumers who believe there is incorrect information on their credit reports or who have an issue with an investigation to first file a dispute from the consumer reporting agency itself. The CFPB said it is available to help consumers who are dissatisfied with the resolution or if the consumer reporting agency does not respond.

The announcement extends the kinds of complaints the CFPB already handles. The CFPB began taking credit card complaints when it launched on July 21, 2011. Since then, it has expanded to take complaints on mortgages, bank accounts and services, consumer loans and private student loans.

Take This Week’s Quick Poll
Take this week’s Quick Poll on compliance-audit committees, and view the results from the previous poll on Basel III comment letters. View the Archive.

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