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May
13, 2011 l Vol. 3, No. 4 Treasury Releases SBLF Term Sheets for Mutual Institutions, Without
Tier 1 Treatment Treasury yesterday posted long-awaited terms sheets enabling
Subchapter S and mutual institutions to participate in the Small Business Lending
Fund, but failed to offer terms that would permit Tier 1 capital treatment.
ABA first emphasized the need for such materials and terms in a February 25
letter to Treasury, noting that mutual institutions and Sub S banks are
extensively involved in small-business lending and warning that keeping them
on the sidelines would likely inhibit the SBLF's effectiveness. Treasury explained that qualifying mutual institutions may
participate in the fund by issuing senior securities -- unsecured
subordinated debentures eligible for inclusion in an institution’s Tier 2
capital -- to Treasury. The interest rate payable on the senior securities
will be reduced as the participating institution increases its lending to
small businesses. The interest rates have been adjusted to reflect after-tax
effective rates equivalent to the dividend rate paid by other classes of
institutions participating in the SBLF through the issuance of preferred
stock. The application deadline for Subchapter S corporations and
mutual institutions is June 6. The deadline for C corporation banks and
savings associations is May 16. Read the term sheet for mutuals. Keating Reminds
Congress of Mutuals’ Role in Economic Development ABA
President and CEO Frank Keating wrote members of the
Senate and House this month to remind them that “during this time of
unprecedented change in the regulation of the financial sector” they have a
number of institutions in their state “which are uniquely equipped to promote
economic development.” “Known
as mutual community banks, these institutions have a long history and
continue to play an important role in promoting the economic life of their
communities,” Keating said. Mutual
institutions are making important contributions to the nation’s economic
recovery every single day, Keating declared. “American Bankers Association is
proud that these institutions are a significant part of our membership, and
we wanted to make sure that you are aware of the unique features and
capabilities that they provide. Keating
gave members of Congress the link to the ABA fact sheet, Today’s Mutual Community Banks, which provides information on the
history and role of mutuals, mutual holding companies and mutual governance.
For a copy of the Fact Sheet, click here. ABA
encourages bankers to set up meetings with members of Congress and their
staff, either at the Congressional in-district offices or at your bank, to
tell about the unique contributions of mutual banking. Mutuals need to take up the megaphone and
expand on Keating’s message in your local voices. Use the Fact Sheet. More
importantly, tell your bank’s story, including its long-standing commitment
to your community and its economic prosperity. Tips
on preparation for meetings with Members of Congress and their staff, and on
hosting them at your bank, are available on the Grassroots
Fundamentals page
of the ABA website. For further advice
on these meetings or to report on their successes, contact ABA’s Alex Maroulis-Cronmiller. http://www.aba.com/Grassroots/GrassrootsFundamentals.htm Wilbur Confirmed as
New Hampshire Banking Commissioner Ronald
Wilbur, who retired last year as president and CEO of the $592 million
Merrimack County Savings Bank in New Hampshire, was confirmed on Wednesday,
May 11, 2011, by the state’s Executive Council as commissioner of that
state’s Banking Department. The vote was 4-1. He
was nominated for the job last month by New Hampshire Governor John Lynch. Wilbur
is a former member of the ABA Board of Directors and ABA’s Government
Relations Council and former chairman of ABA’s Mutual Institutions Council. Frank
Keating, President and CEO of ABA, recognized Ron Wilbur for his leadership
for banking in general and the mutual community banking industry in
particular. “I congratulate Ron wholeheartedly upon his confirmation as the
Banking Commissioner of New Hampshire. This is a great honor and a great
responsibility. The people of New Hampshire will benefit from Ron’s integrity
and his expertise. I learned long ago that governors are judged by the
quality of their nominees. This was an excellent choice.” Ron
Wilbur “brings to the job a lifetime of professional experience, strong
leadership and management skills, and a reputation for integrity. He has the
right skill set and temperament to help ensure that the Banking Department is
functioning as an effective regulatory agency, and working with other
agencies to ensure the public interest is well-served,” the governor said in
nominating Wilbur. An
editorial in the Concord, N.H. Monitor headlined
“Confirm Ron Wilbur,” said he “is a perfect choice” for the job. “Wilbur knows
the banking industry inside out,” the paper said. “He sets exceptionally high
standards for himself, his employees and the institutions they serve. His
bank’s record of community service, and his own as a citizen, would be hard
to match. Those who have done business with him say his integrity is
unquestioned, and his concern for the best interests of his bank’s customers
genuine.” “Wilbur
is a nice guy, but not too nice to be a tough regulator precisely because his
ethical standards are so high. He will look out for the well-being of New
Hampshire banks but put their interests second to those of consumers,” the
editorial noted. According
to its web site, the Banking Department is responsible for the general
supervision of all state-chartered financial institutions, and licenses and
registers non-depository first mortgage bankers, brokers, servicers and loan
originators, money transmitters, retail sellers, sales finance companies,
small loan, title loan, payday lenders and debt adjusters. Wilbur
is a former trustee of Concord Hospital, served on the boards of the Greater
Concord Chamber of Commerce, the Capital Center for the Arts and the Society
for the Protection of New Hampshire Forests. He was the Concord Chamber’s
Citizen of the Year in 2010. Salem Five Deepens
Commitment to Mutuality Salem
Five Cents Savings Bank, which has been serving its customers and community
since 1855, has taken steps to make sure that its “unwavering commitment”
continues for at least another 150 years. The
mutual’s board recently changed the bank’s bylaws to deepen its commitment to
its mutual bank status. Among other changes, the bylaws prohibit any
director, officer, trustee or employee of Salem Five or its affiliates from
profiting from a conversion proposal. “As
a mutual bank, Salem Five has an unwavering commitment to our customers,
employees and community. This enhancement of our charter is our way of
ensuring that Salem Five remains committed to its mission and will retain its
mutuality for generations to come,” according to Joseph M. Gibbons, the
bank’s president and CEO. “Salem
Five is an organization with a history of 156 years of serving our
communities, and these communities have entrusted us with this legacy. We
have an obligation to do our best to ensure that Salem Five continues this
vital mission for another 150 years or longer,” Gibbons said. The
bank is a $2.7 billion institution headquartered in Salem, Massachusetts. Har-Co FCU Seeks
Mutual Charter to Gain Additional Business Flexibility Har-Co,
a $188 million federal credit union in Bel Air, Maryland, has told the Office
of Thrift Supervision that it wants to become a mutual savings association,
and it asked the FDIC for deposit insurance. The
credit union’s board believes that a mutual savings association charter would
give Har-Co additional business flexibility to meet the current and future
needs of its members. In addition, the board believes the tax impact of
converting from a credit union to a mutual institution should be more than
offset by its enhanced earnings capacity. Har-Co
is the first credit union to seek a charter change this year. There were none
in 2010. For
more information on issues of interest to mutuals, contact ABA’s Bob
Davis, Dawn Causey or Alex
Maroulis-Cronmiller at 1-800-BANKERS. This
email bulletin is a service of the American Bankers Association. ABA Members:
To unsubscribe and to manage your subscriptions, please visit ABA E-Mail Bulletins and
check or uncheck the appropriate boxes. Or send your request to ABA Mutual Exchange. For
other inquiries, please contact ABA’s Alex
Maroulis-Cronmiller or 1-800 BANKERS. American Bankers Association,
1120 Conn. Ave NW, Wash. DC 20036 |
