Visit us online: Website | NCBA LinkedIn | NCEL LinkedIn | Instagram Concerns about Debit Interchange Fee Proposal Federal Reserve Governor Michelle Bowman said in a speech this week that she remains concerned about the data underpinning the Federal Reserve’s proposal to revise Regulation II and further lower the debit card interchange fee cap. Bowman said that while the proposal was based on a survey conducted by the Fed, the resulting analysis overlooks gaps in the data and ignores the broader context, such as the potential effect of the rule on bank capital and earnings. The analysis also does not take into account recent revisions to Reg II, which may have the unintended consequence of increasing the incidence of fraud in bank debit card programs, she added.  Branch Manager Bootcamp Next Session: February 29, 2024 | Online CBS Benefits Day & HR Workshop March 26-27, 2024 | Sheraton Imperial RTP “The pain here will likely be felt broadly by banks and their customers, and will continue to trickle down to smaller institutions, including community banks, even if those banks are not directly subject to the interchange fee cap,” Bowman said. “The consequences for bank debit card programs, and the customers who rely on those programs, may be significant.” The comment deadline on the Fed’s debit interchange fee proposal is May 12. Federal Legislative & Regulatory Update Bill to Prohibit Central Bank Digital Currency On Monday, Senator Ted Budd helped introduce the CBDC Anti-Surveillance State Act. The bill would stop federal efforts to issue a central bank digital currency (CBDC). Budd said, “A CBDC would open the door for the federal government to surveil and control the spending habits of all Americans. Any push to establish a CBDC must be confronted and stopped, and that’s why I’m proud to join Senator [Ted] Cruz’s effort to do just that.” A bill number has not yet been assigned. 1071 Compliance Costs A new survey has been released on the anticipated costs of implementing section 1071 of the Dodd-Frank Act, expanding the amount of data banks are required to report from 13 to 81 data fields. The survey produced by ABA noted that the CFPB estimated the cost at between $44,800 to $77,800 to build the systems and implement processes necessary for compliance with the rule. However, banks said one-time costs would range between $112,685 and $7,474,186. The ongoing compliance costs would range between $71,944 and $2,010,125, vastly exceeding the $8,349 to $278,618 estimated by the CFPB. Costs were proportionately higher for smaller banks.  Compliance with 1071 will significantly increase the cost of small-business lending. Part of the reason for the massive difference in cost estimates is that the CFPB conducted a survey of the one-time costs of reporting only the 13 data points Congress mandated. Implementation of the 1071 rulemaking remains temporarily stayed by a nationwide injunction, pending the outcome of the U.S. Supreme Court’s decision in a case examining whether the CFPB’s funding structure is constitutional.  FHA Home Retention Option  The FHA has published the final mortgagee letter for its new loss mitigation home retention option for borrowers with FHA-insured single-family forward mortgages who are behind on their mortgage payments. The offering, called the Payment Supplement, will allow mortgage servicers to temporarily reduce a borrower’s mortgage payment by using funds from a partial claim which enables the borrower to access up to 30% of the outstanding balance of their FHA-insured mortgage.  The partial claim amount is placed in a junior lien and paid back when the homeowner sells or refinances the home or the mortgage otherwise terminates. Funds from the partial claim will be used to pay any arrearages and bring the borrower’s mortgage payment current. Any remaining funds are deposited in an FHA custodial account managed by the mortgage servicer and used to temporarily supplement the principal and interest portion of a borrower’s mortgage payment each month, with a target of up to a 25% reduction in monthly principal and interest payments.  Mortgage servicers may begin implementing Payment Supplement on May 1, but must implement the solution for all eligible borrowers by Jan. 1, 2025. FHA also is extending its full suite of temporary loss mitigation options through April 30, 2025. Revised CFPB Supervisory Appeals Process  The CFPB has updated its supervisory appeals process for institutions that seek to challenge a compliance rating or an adverse material finding made by the bureau. The CPFB will expand the appeals committee’s eligibility to include any bureau manager who did not participate in the matter being appealed and who has relevant expertise on the issues raised, not just managers from supervision, as was previously the case. The rule also includes a new option for resolving the appeal, which is remanding the matter to supervision staff for consideration of a modified finding. In addition, the CFPB now will allow institutions to appeal any compliance rating issued for them, not just adverse ratings. NCBA Announcements NCBA Foundation Scholarship Application Deadline: March 8, 2024 Earlier this month, the North Carolina Bankers Association Foundation began accepting scholarship applications from high school seniors who are children of North Carolina bank employees. During the 2024 application cycle, two $16,000 scholarships will be awarded. Each applicant must be a current high school senior and will receive their diploma during the 2023-2024 school year.  The application and guidelines are available on the NCBankers website. The deadline for uploading applications and supporting documentation is Friday, March 8. If you have any questions or need additional information, please contact John Sullivan at johns@ncbankers.org. 2024 Washington Summit | March 18-20, 2024 RSVP for NCBA-Hosted Events   Register for ABA-Hosted Events   Please note: All attendees must register with the NCBA in addition to the ABA in order to attend NCBA-hosted portions of this event. Upgrade Your Cash Advance Terminals Before You’re Left in a Bind!   The Vx520s have reached their end-of-life and can no longer be serviced.  That means once you start having an issue with yours, you won’t be able to receive any new file builds, downloads, or updates to them.  They will simply have to be disposed of. Evolv successfully completed a pilot program for WorldPay last year on Verifone’s newest “smart” terminal, the T650.  This terminal is the latest in technology.   Evolv pays their bank partners $1.00 for every cash advance transaction that is processed and offers exemplary customer service and tech support.  Through a partnership with CBS, Evolv is offering NCBA members special savings of $100 off the cost of a new T650 (unlimited quantities) through April 30th!  Call Nellie Schlachter today at 888-311-7248, ext 3009, to get more information. CBS Benefits Day & HR Workshop | March 26-27, 2024 Learn More & Sign Up   NCBA President & CEO Peter Gwaltney Visits Bank Members NCBA President & CEO Peter Gwaltney spent some time with our membership this past week in a series of bank visits. Gwaltney visited with Vivian Sutton, Brandy Christian and the team at Hertford Savings Bank. Hertford Savings is a $17 million mutual savings bank chartered in 1923 and is the smallest member of the North Carolina Bankers Association with just four employees.  Gwaltney also visited with Drew Covert, Taylor Harrel, and the Southern Bank and Trust team in Raleigh. The group Southern Bank, headquartered in Mount Olive, NC, was established in 1901. Today, the bank has more than $4 billion in assets and 60 locations in North Carolina and Virginia. Southern Bank team members are actively involved in the communities they serve, are highly engaged in banking industry issues that ultimately impact their customers and communities, and are strong supporters of the North Carolina Bankers Association. Thank you to Hertford Savings Bank and Southern Bank and Trust for hosting us! American Mortgage Conference | April 15-17, 2024 Learn More & Sign Up   Thank You to Our Annual Sponsors Events from the NCBA are made possible thanks to the support of our annual sponsors: Interested in supporting the NCBA with an annual sponsorship? Click here to learn more. Professional Development Online Training from our Partnered Providers Finding the time for crucial professional development can be a challenge. Luckily, NCBA members have access to online training material through our partnered training providers. Find your perfect webinar from ABA Training or OnCourse Learning today! Upcoming OnCourse Webinars Mortgage Origination Compliance - 2 Part Series | March 1  Branch Manager & Head Teller Training - 2 Part Series | March 4   10 Common Errors on Nonresident Alien Accounts (NRA) | March 5   Bank Accounting: Beyond the Basics - 5 Part Series | March 5   Basics of ChatGPT | March 7 Lessons Learned in Recent Lending Compliance Enforcement Actions | March 7 Managing a Successful Call Center  | March 7 Commercial Construction Lending  | March 11 Opening Business Accounts - Beneficial Ownership Update | March 12 ECOA Small Business Lending Data Collection | March 12 Avoiding Check Fraud Liability: From Prevention to Loss Allocation | March 13  IRA Death Distributions to Beneficiaries - Options and IRS Reporting | March 13 Adding the WOW Factor to Credit Analysis | March 14  Striking a Balance Between Organizational Growth and Operational Efficiency | March 19 Most Common TRID Issues | March 19 Understanding Qualified Mortgages | March 19 Dealing with Appraisals: Regulations and Requirements | March 20  Fraudulent Cashier’s Checks - Best Practices for Avoiding Losses | March 20 2024 Call Report Update All Day Streaming | March 21 Excelling in Your Role of the Bank Board Secretary | March 21   Three Key Risk Assessments in Your ERM Program: ERM, IT and Internal Controls | March 21  Tax Returns and Personal Financial Statements | March 22  Commercial & Business Lending Basics for Support Personnel | March 25  BSA and OFAC Staff Training | March 26 Courageous Conversations | March 27 Building an IT Strategic Plan that Helps You Make Decisions | March 27 ACH Rules Update | March 28 Coaching Tellers to Excellence | March 28 CBS Spotlight SRM Announces Its 2024 Payments University Event – Register Today! SRM, a leading advisory firm serving community banks in vendor sourcing, contract negotiation, strategic planning, and advisory services, has developed the premier educational and networking event for payments professionals, called Payments University.  SRM, a leading advisory firm serving community banks in vendor sourcing, contract negotiation, strategic planning, and advisory services, has developed the premier educational and networking event for payments professionals, called Payments University.  Now on the cusp of the second installment of the event, which will occur April 30 through May 2, 2024, it’s the ideal chance to learn from SRM’s payments experts on the pace of change in the field while also networking with fellow leaders and practitioners from across the country.  Learn More & Sign Up   Industry Update Peoples Bancorp Announces Cash Dividend Alliance Bank & Trust to Merge with Commercial Bank The Board of Directors of Peoples Bancorp of North Carolina, Inc., Newton, NC (PEBK) declared the company’s regular cash dividend for the first quarter of 2024 in the amount of $0.19 per share. The first quarter cash dividend will be paid on March 15, 2024 to shareholders of record on March 4, 2024. Commercial Bancgroup, Inc., the parent company of Harrogate, TN-based Commercial Bank, and AB&T Financial Corporation, the parent company of Gastonia, NC-based Alliance Bank & Trust Company, announced the signing of a definitive agreement providing for the merger of AB&T with and into Commercial Bancgroup. On the Lighter Side Why do dogs always race to the door when the doorbell rings? It’s almost never for them. -  Norm MacDonald NC Bankers Association | 3601 Haworth Drive | Raleigh | NC | 27609 | US If you no longer want to receive emails regarding the NCBankers Bulletin, please Opt-Out.