Pub. 11 2014 Issue 1

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S Spring • 2014 11 captured by the Volcker Rule. But this was just one of many challenges regulators had in putting a vague law into practice. When the severity of this unintended consequence became clear, ABA and the state associations leaped into action. We alerted regulators to the urgent need for guidance and kept a continuous string of communications flowing about the specif - ic impact this would have not only on the affected banks’ bottom lines but – more importantly – on their ability to lend. Working together, ABA, state associ- ations and bankers engaged members of Congress, who weighed in with regulators and encouraged them to address our shared concerns. When it seemed that wasn’t enough to sway the agencies, ABA did the only thing that was left: we sued. This was a radical step, but appropriate for the situation. We estimated that around 300 banks would realize $600 million in capital losses if relief was not provided. Such precipitous write-downs were not only unjustified by any safety and soundness concerns, they would actually create safety and sound- ness concerns. The calendar was also a factor in the decision to sue. There was lit- tle time before serious damage would have been felt by banks, which had to prepare financial statements as of December 31. Ultimately, the regulatory agencies were persuaded. They announced their in- tention to fix the problemonDecember 27, and they issued a new regulation January 14. The new rule exempted CDOs made up primarily of TruPS issued by community banks and in so doing covered 95 percent of TruPS CDOs by assets. Though this issue directly affected only a few hundred banks, the significance of this victory is broader. It demonstrates that with the right combination of facts and force, we can successfully defend our industry from irrational, unfair reg- ulation. Ideally, a lawsuit won’t be needed to create future positive change. It’s far preferable to have banks and regulators engaged in an ongoing, candid dialogue – as occurred in December and January, albeit under duress – about how best to implement laws to the betterment, not detriment, of bank customers and com- munities. You can be sure ABA will continue that dialogue and our work to create a better policy environment for banking. n E-mail Frank Keating at keating@aba.com © 2014 American Bankers Association. All rights re- served. Reprinted with permission. Please consider Zia Trust, Inc. as your choice for Corporate Trustee. Zia Trust, The Advisors’ Trust Company sm . We are an independent corporate trustee, primarily serving the Rocky Mountain region. Zia Trust can meet a broad range of fiduciary needs working in collaboration with the grantor or beneficiary and their advisory team made up of their estate planning attorney, their investment advisor, CPA and others. We retain your investment advisor to manage trust assets. Personal Trust Services Contact John Attwood at 1-800-996-9000 www.z iat rust .com We have a team of 25 employees, including 10 full time Trust Officers demonstrating Zia Trust’s commitment to providing the highest quality fiduciary customer service. In addition to our Rocky Mountain focus, we serve clients in 41 states around the U.S. We welcome the opportunity to serve you. • Reliability • Expertise • Avoid Conflicts of Interest • Availability • Stabilized Family Dynamics