ABA staff experts: Wayne Abernathy, Mark Tenhundfeld, Denyette DePierro, Mary Frances Monroe, Dawn Causey, Bob Davis

Deposit Insurance. ABA championed deposit insurance legislation and proposed regulatory solutions to FDIC that enabled the agency to cut more than $9 billion or about 12 basis points from banks' special assessment, originally set at 20 bp. Two ABA task forces – one of state associations and one composed of community bankers – considered a range of options but ultimately did not support the change FDIC made in the assessment base for the special assessment. Such a change affects banks disparately, with those that rely on nondeposit sources of funding (such as FHLB advances), or non-standard business models (like bankers banks and banks with major trust operations) likely paying more. ABA encouraged each bank to determine what works best for its balance sheet and to submit comments to the FDIC, which more than 5,500 did. The change, which some are seeking to apply to regular premiums, is also likely to drive banks to make changes in balance sheets and reduce diversity in non-deposit sources of liquidity to lower costs. ABA will continue working to minimize any additional special assessments and will take a comprehensive approach in seeking solutions that are in the entire industry's best interest.
ABA staff experts: Jim Chessen, Rob Strand

Fair Value Accounting. ABA stood apart in launching an aggressive advocacy campaign last year to raise awareness of the procyclical effects of mark-to-market accounting. The campaign – profiled in a recent front-page Wall Street Journal story – culminated in critical changes early this year to the way FASB's fair value and other-than-temporary impairment rules are applied. ABA continues to pursue additional changes, believing that FASB's emphasis on the "exit price" to determine fair value does not work in a distressed market. In addition, more work is needed by FASB to determine the validity of mark-to-market for institutions, like traditional banks, that have business models that are not based on buying and selling in the markets. ABA's advocacy, assisted by a team of tax and accounting experts, will become ever more important as pressure grows to align U.S. rules with international fair value standards.
ABA staff experts: Bob Davis, Donna Fisher, Michael Gullette

Industry Image. ABA continues to leverage our extensive nationwide media contacts to promote traditional banking and assure policymakers and the public that banks are strong and continue to lend. In September and October alone, ABA spokespeople fielded nearly 1,000 media calls on the financial crisis and offered reassuring messages that the vast majority of banks are safe and well capitalized. We also have offered bankers ads, talking points, sample speeches and columns to help them reinforce this message in their communities. ABA's Ed Yingling and Diane Casey-Landry have appeared numerous times on networks and programs like Good Morning America, CBS Evening News, CNBC, and Fox Business News to advocate on issues ranging from bank safety to mark-to-market accounting.

ABA also is working to ensure policymakers – including President Obama himself -- make the proper distinction between traditional banks and the unregulated entities – including mortgage brokers and hedge funds -- that spurred the economic crisis. In a February letter to Obama, ABA President and CEO Ed Yingling chastised the president for speeches in which he labeled all financial firms involved in the economic crisis "banks." Yingling clarified that most of the country's 8,000-plus banks never made a sub-prime loan.
ABA staff experts: Ginny Dean, Floyd Stoner, John Hall, Jim Chessen

Protecting Interchange. ABA opposes proposals to allow the government to set price controls or otherwise arbitrarily regulate interchange rates, which currently are set by the private market through contractual relationships. Several attempts to attach interchange restrictions to the credit card bill enacted in May were defeated after ABA and its grassroots bankers generated more than 20,000 customized letters in opposition. This issue is likely to remain on the front burner, as retailers have made a priority of seeing some sort of legislation pass this year.
ABA staff experts: Ken Clayton, Nessa Feddis

Executive Compensation. ABA is very concerned that the government has hastily enacted compensation restrictions that will unfairly disadvantage the healthy banks participating in Treasury's Capital Purchase Program. Furthermore, the Obama administration has signaled its intention to pursue additional executive compensation restrictions for all publicly traded companies, and bank regulators are working on new standards that will become part of the supervisory process. ABA will continue to fight such rules and exam guidelines that might have a negative impact on bank compliance and employee retention efforts.
ABA staff experts: Sally Miller, Carolyn Walsh

Mortgage Banking/Cramdowns. ABA's extensive grassroots network – which generated thousands of letters and contacts to congressional offices this spring -- helped defeat legislation that would have given bankruptcy judges the broad power to cram down the remaining balances on mortgages and modify or change the interest rate or loan terms. ABA, with the most experienced mortgage banking staff at any bank trade association, will continue to work to block such legislation. ABA also continues to urge regulators to scrap troublesome RESPA changes that are scheduled to take effect at the beginning of 2010, and we will work closely with policymakers as they determine the fate of Fannie Mae and Freddie Mac. ABA's goal is a strong a resilient secondary mortgage market that preserves the cooperative nature of Federal Home Loan Banks.
ABA staff experts: Bob Davis, Joe Pigg, Rod Alba

TARP/CPP and Similar Regulatory Programs. No other trade association has done more to ensure all banks, regardless of charter type or size, have access to government capital programs. ABA has also worked closely with regulatory staff to address the specific needs of banks participating in programs like the Capital Purchase Program. We aggressively pressed Treasury to release term sheets for Subchapter S banks and mutual institutions. We also recently formed a CPP Peer Group to enable ABA members to share experiences, ideas and issues related to their institutions' CPP participation.
ABA staff experts: Mark Tenhundfeld, Cathy McTighe

Exam Issues. ABA continues to solicit feedback from bankers about their latest exam experiences and to channel important issues to regulators. Discussions at a recent America's Community Bankers Council meeting revealed an increased attention to liquidity, CRE loans, internal stress testing and pandemic preparedness. Some also commented on additional scrutiny of the loan review process, loan participations and reserve levels. ABA routinely alerts regulatory leaders in Washington to situations in which an examiner appears to be out of sync with headquarters. Exam trends will also be analyzed by a new ABA task force (see below).
ABA staff experts: Mark Tenhundfeld, Denyette DePierro

Community Bank Solutions Task Force. ABA is concerned that the wide range of government programs initiated since last fall has not done enough to help community banks manage the fallout of the economic crisis. We have heard from bankers that more needs to be done to ensure community banks have access to capital-raising alternatives and that unduly harsh examinations are having unintended consequences. To address this, ABA has assembled a task force of bankers from areas hit hardest by the recession. The task force is exploring regulatory solutions to community bank-specific challenges and plans to meet frequently with regulators in Washington.
ABA staff experts: Diane Casey-Landry, Wayne Abernathy, Mark Tenhundfeld, Christy Walika

Credit Unions. ABA has long been the leader in containing the growth of large, aggressive credit unions. Through a long-term, multi-pronged strategy, ABA is checking credit union expansion in the courts, at the regulatory level and in Congress. The most recent threat has come in the form of a potential bill, spearheaded by New York Sen. Charles Schumer, that would eliminate the cap on credit unions' business lending. ABA has held back passage of similar legislation for several years, and we are actively working to discourage introduction and co-sponsorship of this bill.
ABA staff experts: Keith Leggett, Carter McDowell

Overdraft Protection. Overdraft protection is an important and valued service for bank customers and a significant revenue source that is under attack. ABA has taken the lead in opposing legislation (H.R. 1456) that would seriously limit banks' ability to accommodate customers who overdraw their accounts. By requiring banks to decline checks other payments, the legislation would diminish consumer choice and convenience. ABA has also worked closely with the Federal Reserve to improve the workability of its proposed regulations in this area. ABA believes the Fed's proposal should be given a chance to work before additional legislation is considered.
ABA Staff Experts: Rich Riese, Nessa Feddis