Headlines
WASHINGTON’S ECONOMIC NEXUS BILL POSES THREAT TO WBA MEMBERS
The legislature is considering a bill that would create an “economic nexus” standard for assessing business and occupation taxes. The Department of Revenue has indicated that primary targets for this legislation are out-of-state banks that operate in Washington, especially in the credit card arena. While this may be their intended target, we believe that the bill also could impact Washington’s community banks that may outsource their credit card operations via agent banking relationship with out-of-state institutions. Extra expenses incurred by the card-issuing agent bank could, and likely would, be passed on to the participating local community bank. WBA is gathering impact data from member banks – if you haven’t already sent information on your credit card operations to Jim Pishue, please contact him immediately.
REGULATORS: BANKS WON’T BE PUNISHED FOR “PRUDENT” SMALL BUSINESS LENDING
The federal financial regulatory agencies and the Conference of State Bank Supervisors last week issued a joint statement emphasizing that financial institutions engaging in prudent small business lending after performing a comprehensive review of a borrower's financial condition will not be subject to supervisory criticism for small business loans made on that basis. The regulators indicated that they would not adversely classify loans solely due to a decline of collateral value below the outstanding loan balance, provided the borrower has the willingness and ability to repay the loan on reasonable terms. They also indicated that examiners will not classify loans due solely to a borrower’s industry segment or geographic area experiencing financial difficulties. Finally, they urged banks not to overreact to the economic downturn by curtailing credit. WBA joins other bank advocates in Washington, DC welcomed the statement, but indicated that they will continue to work to ensure that the policy set in the nation’s capital hold true during exams in the field, as there have been a number of examples of that not happening. If your bank exam experience contradicts today’s statement, contact Jim Pishue at WBA so that the situation can be raised with the appropriate regulatory leaders.
DODD: REGULATORY REFORM LEGISLATION TO MOVE THIS MONTH
Senate Banking Committee Chairman Chris Dodd (D-Conn.) said last week that he will move forward on regulatory reform legislation – with or without Republican support. Dodd acknowledged that the creation of an independent Consumer Financial Protection Agency, a move opposed by WBA and many other bank industry advocates, remains the major stumbling block to finding a consensus in his committee. Dodd also that he plans to incorporate many of the agreements that have been developed through bi-partisan negotiations on the regulatory reform package into the next version of the legislation, and that he hopes the committee ultimately will reach a consensus.
SIGN UP FOR ABA GOVERNMENT AFFAIRS SUMMIT IN DC IN MARCH
These are truly extraordinary times for our industry. Bankers across the country are facing extremely difficult economic and political challenges that could forever alter the landscape of the banking industry. Experience has demonstrated that when bankers come together and speak with a consistent voice, it is heard by the people shaping new policies. The ABA Government Affairs Summit, scheduled for March 16-18, will be a prime opportunity for WBA members to join other bankers in bringing a message of rational reform to members of Congress. For more information on the Summit, contact Jim Pishue or click here.
