Virginia Banking Sept/Oct 2015

September/October 2015

l o o h c S t s r n e e k m n e a g a B n a i a n i M Virg of Bank IN THIS ISSUE

Q&A WITH BRANDON ATKINS, CHAIRMAN OF THE VBA LEADERSHIP DIVISION

Our guts.

Your glory.

We’re better together.

It’s tough to compete out there. Constant challenges —regulatory, technology and changing consumer attitudes—force your institution to rethink the way you manage your clients’ wealth. We are the proven partner to provide the products, processes and people you need to succeed. Your team collaborating with the only firm focused on financial institutions for over 30 years—that’s the power of a real partnership.

Let’s get started at ceterafinancialinstitutions.com or call 800.245.0467, ext. 65014.

Cetera Financial Institutions is a marketing name of Cetera Investment Services LLC, member FINRA/SIPC. 400 First Street South, Suite 300 – St. Cloud, MN 56301.

© 2015 Cetera Financial Institutions 08/15

September/October 2015

2015-2016 Officers and Directors of the Virginia Bankers Association T. Gaylon Layfield, III, Chairman, Xenith Bankshares, Inc. John G. Stallings, Chairman-Elect, SunTrust Bank John R. Milleson, Immediate Past Chairman, Bank of Clarke County G. William Beale, Union Bank & Trust Christopher W. Bergstrom, Cardinal Bank Michael W. Clarke, Access National Bank Barry C. Elswick, TruPoint Bank Scott C. Harvard, First Bank, Strasburg William H. Hayter, First Bank & Trust Company Charles Henderson, Bank of America, NA Glen Kelley, Wells Fargo Bank, N.A. Brad E. Schwartz, Monarch Bank Joe A. Shearin, EVB Susan K. Still, HomeTown Bank Daniel G. Waetjen, BB&T Michael O. Walker, Benchmark Community Bank Robert Wojciechowicz, Capital One Financial Corporation AT-LARGE MEMBERS VBA Benefits Corporation Chair J. Peter Clements, The Bank of Southside Virginia Management Services Inc. Chair M. Andrew McLean, Middleburg Bank Government Relations Committee Chair Ronald D. Haley, River Community Bank, NA VBA Education Foundation Chair Charles H. Majors, American National Bank & Trust

EDITORIAL & EXECUTIVE OFFICES 4490 Cox Road Glen Allen, VA 23060 804-643-7469 Fax 804-643-6308 www.vabankers.org Bruce T. Whitehurst President and CEO Virginia Bankers Association Chandler Owdom Director, Communications & Strategy Virginia Bankers Association

PUBLISHED BY

280 Summer Street, Boston, MA 02210 Phone: 617-428-5100 Fax: 617-428-5118 www.thewarrengroup.com

SUBSCRIPTIONS If you would like to subscribe to Virginia Banking, contact Chandler Owdom at cowdom@vabankers.org

cover

12

Virginia Bankers School of Bank Management

features

16

Q&A with Brandon Atkins, Chairman of the VBA Leadership Division

Virginia Banking is published bi-monthly. Copyright 2015.

Statements of fact and opinion are made on the responsibility of the authors alone and do not imply an opinion or endorsement on the part of the officers or members of VBA.

The Warren Group Design / Production / Advertising www.thewarrengroup.com custompubs@thewarrengroup.com

Š 2015 The Warren Group Inc. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. Advertising, editorial and production inquiries should be directed to: custompubs@thewarrengroup.com Call 800-356-8805.

in every issue 4 Calendar of Events 6 Insights 7 Washington Update 8 Legislative Update 10 Legal Line 11 Worth Noting 18 Compliance Corner 21 New Associate Members 22 Bankers on the Move Send us your thoughts or ideas on Virginia Banking! Please email Chandler Owdom at cowdom@vabankers.org. Has your information changed? Please email Kellee Edelin at kedelin@vabankers.org with your new contact information.

Calendar of

Visit www.vabankers.org/event-calendar to learn more about these events.

INSTRUCTOR-LED SEMINARS

WEBINARS

CREDIT MANAGEMENT CONFERENCE – CHARLOTTESVILLE OCT. 5, 2015

FOUR COMPONENTS OF A SOCIAL TECH STRATEGY OCT. 15, 2015

LEADERSHIP CONFERENCE – PEMBROKE OCT. 15, 2015

STRESS TESTING THE LOAN PORTFOLIO: REGULATOR OCT. 15, 2015

COMMERCIAL LENDING SCHOOL – GLEN ALLEN OCT. 21, 2015

FEEDBACK YOU NEED TO HEAR OCT. 15, 2015

ENTERPRISE RISK MANAGEMENT WORKSHOP – GLEN ALLEN OCT. 27, 2015

REGULATION CC UPDATE & REVIEW: ANNUAL TRAINING FOR FRONTLINE OCT. 16, 2015

MID-ATLANTIC EXECUTIVE CYBERSECURITY CONFERENCE – GAITHERSBURG, MD OCT. 29, 2015

GETTING IN THE DOOR WITH PROSPECTS OCT. 19, 2015

WOMEN IN BANKING CONFERENCE – RICHMOND NOV. 16, 2015

COMMERCIAL REAL ESTATE LOAN DOCUMENTATION OCT. 19, 2015

COMPLIANCE FUNDAMENTALS TRAINING PROGRAM – GLEN ALLEN NOV. 19, 2015 – OCT. 20, 2016

CRE CASH FLOW: ANALYZING INCOME-PRODUCING OR RENTAL REAL ESTATE, PLUS GLOBAL CASH FLOW ISSUES, PART 1 OCT. 20, 2015

MASTERING HMDA – CHESAPEAKE DEC. 1, 2015

CRE APPRAISALS: REVIEWING AND INTERPRETING OCT. 20, 2015

MASTERING HMDA – RICHMOND DEC. 2, 2015

KEYS TO UNDERSTANDING PERSONAL AND GLOBAL CASH FLOW FROM TAX RETURNS, PART 1 OCT. 20, 2015

MASTERING HMDA – LYNCHBURG DEC. 3, 2015

WEBINARS TRUST-BASED SELLING: BECOMING A RESOURCE MANAGER OCT. 5, 2015 MANAGING A DYNAMIC ALCO OCT. 6, 2015 A BANKER’S GUIDE TO LETTERS OF CREDIT OCT. 6, 2015 IRA TRANSFERS AND ROLLOVERS OCT. 7, 2015 STOPPING THE HACKER: UNDERSTANDING TECHNIQUES USED BY CYBERCRIMINALS TO CIRCUMVENT YOUR CONTROLS OCT. 7, 2015 SUCCESSFUL WORKOUT STRATEGIES FOR PROBLEM LOANS OCT. 8, 2015 ADVANCED PERSISTENT THREATS: EXPLORE LAYERED CONTROLS FOR THE CRIMINAL UNDERWORLD OCT. 8, 2015

AUDITING FOR COMPLIANCE PART I: BSA/AML/CIP OCT. 20, 2015 IRA BASICS OCT. 21, 2015 RISK MANAGEMENT FOR COMMUNITY BANKS OCT. 21, 2015 MOBILE DEVICE SECURITY BEST PRACTICES OCT. 21, 2015 READING CREDIT REPORTS: PREVENTING FRAUD, USING CREDIT SCORES & COMPLIANCE ISSUES OCT. 21, 2015 COLLATERAL EVALUATION IN C&I LENDING OCT. 22, 2015 IS IT TIME YOUR BANK CONSIDERS A SOCIAL SELLING STRATEGY? OCT. 22, 2015 AUDITING FOR COMPLIANCE PART II: HMDA OCT. 22, 2015 THE PROFESSIONAL CREDIT ANALYST OCT. 23, 2015

MANAGING GENERATIONS IN TODAY’S WORKPLACE OCT. 9, 2015

LOAN UNDERWRITING MISTAKES OCT. 27, 2015

THE BUSINESS OF BANKING: UNDERSTANDING THE FACTORS OCT. 13, 2015

ADVANCED TAX RETURN ANALYSIS OCT. 27, 2015

IMPLEMENTING A CONTINUOUS IMPROVEMENT PROCESS OCT. 13, 2015

LANDSCAPE OF AGRICULTURE TODAY AND TOMORROW OCT. 27, 2015

IRA REPORTING OCT. 14, 2015

WHEN A LOAN CUSTOMER DIES: WHAT ARE THE TOP 15 ISSUES TO CONSIDER? OCT. 27, 2015

4 Virginia Banking | Sept/Oct 2015

www.vabankers.org

BUILD RELATIONSHIPS

With or Without Keeping Funds on Balance Sheet

REDUCE COLLATERAL BURDENS and Increase Asset Liquidity

DIVERSIFY FUNDING

in a Flexible, Cost-Effective Way

A Smart, Profit-Enhancing Solution To learn more, contact Dan Elder, Regional Director, at (866) 776-6426, ext. 3373 or delder@promnetwork.com.

Limits, terms, and conditions apply. Š 2015 Promontory Interfinancial Network, LLC.

Insights

The Captive Regulator

NCUA Proposing to Hand Credit Unions More Authority, Flexibility “The worst form of inequality is to try to make unequal things equal.”

E Bruce Whitehurst President and CEO, Virginia Bankers Association

— Aristotle

nough is enough. That is what bankers are telling Congress about the National Credit Union Administration’s (NCUA) recent proposal to hand over – on a silver platter – expanded business lending authority to credit unions, even though Congress has declined to so much as take up the credit unions’ legislative attempts to accomplish this for most of the last decade. Long known as more a cheerleader of credit unions than the regulator they are supposed to be, the NCUA has gone so far this time that it now faces questions from Congress, hundreds of comment letters from banks and others and even a recent Washington Times editorial that called the NCUA a “captured regulatory agency” doing nothing more than the bidding of the very institutions they are chartered to supervise.

How did we get to this place in our longstanding battle with credit unions over their tax and regulatory advantages? We have to go back to 1998, when the banking industry won a significant case before the United States Supreme Court, in which the court ruled that credit unions had illegally added membership groups beyond the single common bond required as part of the 1934 law that created credit unions and exempted them from taxation based on their limited membership and mandate to serve people of modest means. The AT&T Family Federal Credit Union in Winston-Salem, North Carolina, had added a nonAT&T membership group and the Supreme Court found that they were not legally allowed to do so.

What happened next changed and defined the importance of banker grassroots advocacy forever. The credit union industry mounted an all-out effort to overturn the Supreme Court ruling and they scored a significant victory with the overwhelming passage of the Credit Union Membership Access Act of 1998 in Congress. This act opened the door to multiple membership groups and community-based credit unions, resulting in rapid growth among the credit unions, which took full advantage of these opportunities. So, what was once the Virginia State Employees Credit Union is now the over $2 billion Virginia Credit Union, with hundreds of employer groups

6 Virginia Banking | Sept/Oct 2015

whose employees can join the credit union, while the credit union continues to be exempt from state and local taxes. What was the Newport News Shipbuilding Employees Credit Union now trades as Bayport, where anyone who lives, works, worships or volunteers in the entire Hampton Roads region can now join the credit union.

While having their cake and eating it too – tax exemption, less stringent regulatory standards and nearly unfettered access to new members – some credit unions have also ventured further and further into business lending, an area where Congress did place some limits in the 1998 legislation. After all, credit unions were established to serve people of modest means, with the clear implication that they were meant to serve individuals and families connected through a single common bond, like at least one person from every family all working at the same company.

Some of the rapid-growth credit unions became dissatisfied with the business lending caps, so the industry mounted an effort to more than double their business lending authority. Here is where the fact that we bankers learned a lot about grassroots advocacy in 1998 comes into play. We have rightly raised the inherent unfairness of the competitive landscape between banks and credit unions with Congress – repeatedly, consistently, forcefully and calmly – ever since 1998 and we will continue to do so until we reach a level playing field. As a result of our ceaseless efforts, the credit unions have gained no traction in Congress on their attempts to increase business lending authority, year in and year out, for quite some time.

Now comes the NCUA – the captive regulator – proposing to hand credit unions that which Congress will not give them: expanded business lending authority and more underwriting flexibility. Right away, bankers are reminded of the Savings & Loan Crisis of the 1980s, in which many thrifts that had greatly and quickly expanded into commercial lending failed, leaving a debt that the banking industry repaid through higher FDIC premiums. Suffice it to say that bankers are not at all interested in doing the same thing again should the NCUA’s proposed gift to credit unions become reality.

Continued on next page www.vabankers.org

Update

Washington

Tailoring Rules to Help Banks Succeed

W Frank Keating President and CEO, American Bankers Association keating@aba.com

hen we talk about advocacy, most people probably think of Congress – of lawmakers, bill introductions, committee actions and floor votes – culminating, perhaps, in a signing ceremony at the White House.

Yet, there’s another type of advocacy that’s equally important to our industry: regulatory advocacy. As you well know, how an implementing regulation is drafted, proposed and applied can have a significant impact on your customers and community, and your institution.

That’s why ABA puts significant effort and resources into shaping the rules that shape your business. We leverage the expertise we have on staff and the knowledge of our member bankers and the state associations to craft-detailed and meaningful comment letters on proposals. We supplement our letters with personal meetings with regulatory staff, and when necessary, we get Congress involved.

These efforts have produced results – successes that can be found in subtle yet important provisions of final and proposed rules.

For example, the CFPB – responding to our views – proposed lifting the small originator QM threshold and expanding the definition of rural and underserved areas. It also finalized helpful fixes to the TILA-RESPA mortgage disclosures.

Our advocacy on Basel III allowed most banks to opt out of running unrecognized gains and losses through their Basel capital calculations. We also secured a two-year extension of the Volcker Rule’s phase-in on funds investments, and the exclusion of bank custodial operations from the Labor Department’s proposed “fiduciary” rule.

And in response to an ABA/state association recommendation, regulators are now considering proposing regulations that would exempt highly capitalized banks from much of Basel III implementation.

Our regulatory outreach efforts go beyond the financial regulators, too. Thanks to our regulatory advocacy, the Federal Communications Commission approved a proposal to exempt mobile fraud alerts from Telephone Consumer Protection Act limitations.

We will continue to work to reduce other unnecessary burdens associated with arbitrary statutory and regulatory thresholds affecting mid-sized to smaller institutions, as well as to combat “trickle-down” regulation harming thousands of banks. And we will remain on guard as the CFPB turns its attention to new areas, including overdraft protection.

Sometimes, however, our collective efforts with the agencies are not enough to right-size regulation.

The political environment can make regulators skittish about providing relief that, while appropriate, could be second-guessed by Congress.

To help persuade them to take action, ABA and the state associations conceived of legislation – introduced by Rep. Scott Tipton (R-Colo.) in June as the TAILOR Act (H.R. 2896) – that would require regulators to tailor rules to a bank’s business model and risk profile. Simply put, it frees regulators to use common sense, applying rules only where appropriate while cutting back on those that come with high costs and add little to safety and soundness.

Such an approach to regulation is long overdue.

ABA’s 2015 Survey of Bank Compliance Officers found that growing regulatory compliance burdens have led nearly half of all banks to reduce their offerings for loan accounts, deposit accounts, or other services. And 46 percent said their banks had decided not to launch a product, open a new channel or enter a new market due to compliance concerns.

These findings are clear, objective proof that change is needed in order for banks to effectively and successfully serve their customers and communities. Please help us create that change by urging your representatives to support H.R. 2896.

The Captive Regulator continued from previous page Don’t you hate those occasions when you see a train wreck about to happen and know there is nothing you can do to stop it? In this case, the NCUA seems to be proposing the wreck itself, but we can help stop it. Thanks to all who sent commonsense comment letters to the NCUA and let’s hope they head

this one off at the pass. In the future, please continue to stay engaged with us on important advocacy issues such as this one.

Email Bruce Whitehurst at bwhitehurst@vabankers.org with any comments on this article.

Sept/Oct 2015 | Virginia Banking 7

Legislative

Update

Action, Not Motions

I Matt Bruning Senior Vice President, Government & Member Relations, Virginia Bankers Association

f you follow the news out of Washington, D.C. – whether by newspaper, talk radio, cable television or your Twitter feed – you may get the sense that our nation’s leaders are constantly doing something newsworthy. Indeed, weighty issues are being debated. Foreign relations in the president’s deal with Iran, immigration policy and college debt raised in presidential campaigns and even trade and business issues have received extensive coverage.

Topics with broad implications are at the forefront of much of the debate and activity along with the usual frivolity and superficiality. But Ernest Hemingway summed up our current state of affairs at the federal level when he intoned to “never mistake motion for action.”

To the unfortunate detriment of the American populace, this Congress and our federal elected leaders have caused and generated an abundance of motion with scant real action to show for it.

Where action has occurred and outcomes decided, it is usually either the result of inaction – letting the Export-Import Bank expire – or made through controversial processes – Environmental Protection Agency clean energy regulations, executive orders on immigration and short-term highway funding fixes.

In the meantime, lines in the sand are drawn by all parties and divergent “solutions” are announced that stand little chance of enactment but come with a healthy dose of grandstanding and finger-pointing.

More motion, less action.

Earlier this summer, the banking industry was optimistic that real action was possible to achieve meaningful regulatory relief, especially for community banks. Five years out from the passage of the Dodd-Frank Act and after scores of targeted measures to relieve the regulatory pressures at financial institutions had passed the House of Representatives only to languish in the U.S. Senate, Senate Banking Committee Chairman Richard Shelby (R-AL) put forward a comprehensive bill to rebalance and ameliorate the burdensome regulatory environment. The vast majority of the components related to community bank relief have broad, bipartisan support, and efforts to rationalize regional and mid-size bank regulation garnered backing from Federal Reserve Board Governors and even Barney

Frank. Unfortunately, arguments over the process, concern over specific provisions, and steadfast opposition by some to any substantive alterations to Dodd-Frank have weighed down the bill from the start. Advancing the bill out of Committee on a partyline 12 to 10 vote was a first step towards action, but just more motion if an agreement that garners the sufficient bipartisan votes to pass the Senate and be signed by President Barack Obama cannot be reached.

Over three months have passed since the Banking Committee took “action.” Since that time, Democratic members of the Committee have re-proposed a watered-down alternative that was offered at the initial hearing where the Democratic Ranking Member called the chairman’s bill “a sprawling industry wish-list of Dodd-Frank rollbacks.” The VBA and several Virginia bankers have discussed the proposals with Sen. Mark Warner, a member of the Senate Banking Committee and a key player in any possible agreement, who continues to reiterate his desire to reach a compromise and signaled support for several important provisions. However, little has been displayed publically that either side is truly negotiating or making progress towards such a deal.

In late July, Shelby, who also serves on the Senate Appropriations Committee, attached his full proposal to a funding bill which passed a Subcommittee on another party-line vote. Whether that spurs or repels potential dialogue – actual action or more motion – remains to be seen.

Hundreds of Virginia bankers engaged in our grassroots advocacy outreach efforts to urge Warner to support the commonsense improvements contained in the Shelby bill. That is not motion; that is action. As Bruce notes with past credit union battles in his Insights column (page 6), those efforts can make a difference to ignite action. With Congress returning from their summer recess, the window for action is closing as other measures take up floor debate time – government funding bills to avoid a government shutdown at the end of September – and the presidential campaigns further dictate the agenda. We must keep the pressure on so that the early summer optimism of action does not fade into the fall and turn into mere motions of futility.

Email Matt Bruning at mbruning@vabankers.org with any comments on this article.

8 Virginia Banking | Sept/Oct 2015

www.vabankers.org

Smart Credit StartS with You This October, join the thousands of volunteer bankers participating in the national Get Smart About Credit campaign. Our 2015 program will focus on four critical areas: Paying for College, Protecting Your Identity, Knowing Your Credit Score and Managing Your Money.

Take advantage of this opportunity to raise your bank’s profile in the community while bringing the lessons of sound money management to young people.

Get Smart about Credit daY is October 15 or participate any day this fall.

aba.com/GetSmart

Line

Legal

U.S. Supreme Court Upholds Disparate Impact Claims Limitations Imposed to Protect Against Abusive Claims

I

Mel Tull General Counsel, Virginia Bankers Association

n Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., the U.S. Supreme Court recently held that disparate impact claims are viable under the federal Fair Housing Act (FHA), but imposed several important limitations to protect defendants against abusive claims. In a disparate impact claim, a consumer (or an enforcement agency) attempts to prove discrimination based on a lender’s policy or practice that, while facially neutral, nonetheless has a disproportionately negative impact on a protected class and cannot be justified by the lender’s legitimate business objectives.

The Supreme Court’s decision applies only to the FHA. While the federal Equal Credit Opportunity Act (ECOA) does not contain many of the FHA provisions cited by the Supreme Court as supporting disparate impact claims, lower courts have permitted disparate impact claims under the ECOA. Also, the federal Consumer Financial Protection Bureau (CFPB), which supervises the ECOA, believes that disparate impact applies to the ECOA, as evidenced by its recent consent order against American Honda Finance Corporation based on the disparate impact caused by Honda’s discretionary dealer markup program. For those reasons, lenders should guard against disparate impact claims under the ECOA as well as the FHA. “To protect defendants against abusive disparate impact claims,” the Supreme Court announced “cautionary standards” to be applied to disparate impact claims under the FHA. The court stated that disparate impact does not impose liability “solely on a showing of a statistical disparity,” and that a “claim relying on a statistical disparity must fail if the plaintiff cannot point to a defendant’s policy or policies causing that disparity.” It instructed lower courts to “examine with care whether a plaintiff has made out a prima facie showing of disparate impact” and to “avoid interpreting disparate-impact liability to be so expansive as to inject racial considerations into every housing decision.”

The Supreme Court further provided that the defendant must be given the ability to demonstrate a business rationale for its policy or pro-

10 Virginia Banking | Sept/Oct 2015

cedure. The court stated that a business must be “able to make the practical business choices and profit-related decisions that sustain the free-enterprise system.” To sustain a disparate impact claim, the plaintiff then must prove that an alternative policy or procedure exists that would not place an undue burden on the defendant.

The court also warned that remedial orders in disparate impact cases should concentrate on the elimination of the offending practice, and that remedial orders that impose racial targets or quotas may be unconstitutional.

While the Supreme Court’s Inclusive Communities analysis only applies to the FHA, a federal district court in California recently dismissed an ECOA-based disparate impact claim for failing to meet a causation standard similar to the one described in Inclusive Communities. In Mora v. US Bank, the district court dismissed an ECOA-based disparate impact claim because, among other things, the plaintiff failed to plead facts demonstrating a causal connection between the specific challenged practice or policy and the alleged disparate impact.

As Mora demonstrates, in the wake of Inclusive Communities, consumers and regulators should be held to a demanding causation standard. In other words, for the claim to proceed, the facts must show a disproportionately negative impact on a protected class of persons caused by a challenged practice or policy. Correlation (a statistical disparity) alone does not imply causation.

Lenders can reduce their exposure to such claims by: • requiring regular training for all employees involved in credit decisions, as well as for officers and board members; • carefully reviewing discretionary lending practices with consideration towards eliminating discretion in favor of objective credit factors; • documenting the business rational for all policies and procedures and any exceptions to those policies and procedures; and • analyzing available data for all loan products Continued on next page www.vabankers.org

Noting

Worth

Pictured, from left: Gary Shook, president and CEO, Middleburg Bank; Billy Beale, ABA treasurer and president and CEO, Union Bank & Trust; Gaylon Layfield, VBA chairman and president and CEO, Xenith Bank; W. Wes Hoskins, BankPAC chairman, president and CEO, First Community Bank; Rob Nichols, incoming president and CEO, ABA; John A. Ikard, ABA chairman, president, FirstBank Holding Co.; Jeff Szyperski, chairman, president and CEO, Chesapeake Bank; and Bruce Whitehurst, president and CEO, VBA.

VBA BANKPAC CONTRIBUTES $110,000 TO ABA’S FEDERAL PAC CAMPAIGN

BANK OF VIRGINIA NAMES NEW CEO

More than 150 state association executives and bankers joined together to discuss the industry’s most pressing priorities at the American Bankers Association Summer Leadership meeting in Baltimore this July. States at the meeting presented BankPAC checks exceeding $920,000. The Virginia Bankers Association contributed $110,000 to this total, thanks to the support and leadership of our members.

The VBA and ABA BankPAC campaigns coordinate closely on federal PAC contributions and are effective because of the support of so many banks and their dedication to the industry.

O.R. “Ed” Barham Jr. joined Bank of Virginia as the new president and CEO. Barham previously served as CEO of StellarOne Corp. for five years in Charlottesville, before its merger with Union First Market Bankshares. He started his career in banking at Bank of America where he held credit and lending positions in North Carolina. Barham will be based in Richmond and has also been appointed to the Bank of Virginia board of directors.

U.S. Supreme Court Upholds Disparate Impact Claims continued from previous page to determine whether any unexplained disparities exist among protected classes.

On this last point, while the ECOA generally prohibits non-mortgage lenders from collecting consumers’ demographic information, lenders are allowed to conduct voluntary self-tests for ECOA compliance. A voluntary self-test must meet two criteria: it must be designed and used to determine ECOA compliance and it must yield data that is not otherwise available from the loan application or other record related to the transaction. If both criteria are met, the results of the self-test are privileged from discovery by an applicant in any lawsuit alleging an ECOA violation. The findings are also privileged from discovery by any government agency in an ECOA examination, investigation or legal proceeding. www.vabankers.org

The Supreme Court’s ruling in Inclusive Communities strengthens the CFPB’s hand in enforcing the ECOA. Institutions that fall below the CFPB’s $10 billion direct supervision threshold still must consider the power of state attorneys generals to bring actions to enforce ECOA, in addition to the constant threat of individual consumer actions. Against this backdrop, lenders should create and monitor strong compliance programs to reduce their ECOA disparate impact risk.

For more information about disparate impact claims and the U.S. Supreme Court’s Inclusive Communities decision contact Mel Tull, VBA general counsel, at mtull@vabankers.org or (804) 819-4710.

This article has been prepared for informational purposes only and is not legal advice.

Sept/Oct 2015 | Virginia Banking 11

Bank School

l o o h c S t s r n e e k m n e a g a B n a i a n i M Virg of Bank Area Bankers Wrap up Three Years of Hard Work Two hundred bankers convened at the University of Virginia’s Darden School of Business during the last week of July for the Virginia Bankers School of Bank Management, a program comprised of three, weeklong summer sessions all culminating in the third year with the BankExec bank simulation exercise. The bankers return to their banks following their Bank School experience with a renewed excitement about the industry and a much broader appreciation for the decisions made by their management teams.

Essex Bank’s Marshall Jett, first-year class president, said, “While just having finished up the first year of Bank School, I can honestly say that it is the most thorough and relevant training we could ever have as bankers. We are always so focused on our individual jobs that we don’t take the time to think about how the different parts of the bank work towards the whole goal. Bank School helps us go from ‘people who work at a bank’ to truly well-rounded bankers.”

12 Virginia Banking | Sept/Oct 2015

Giving back to the community is at the core of the banking business and this held true for the bankers during their week in Charlottesville. Led by the third-year class, the bankers this year raised $7,000 and donated 3,800 pounds of food and 100 hours of community service to the Blue Ridge Food Bank. Third-year class president and C&F Bank assistant vice president and branch manager Don Hillbish said, “I am honored and humbled to be a member of this year’s exceptional class. We have built upon our knowledge, forged new relationships, and developed new competencies, while giving back to the communities we serve. We look forward to applying our new knowledge, skills, and abilities as servant leaders to better enhance Continued on page 14 www.vabankers.org

Mark Faircloth of Faircloth Performance Partners engaging the second-year class during his Effective Negotiations class.

Virginia Bankers School of Bank Management 2015 Graduates Daniel E. Adamson Melissa G. Alexander Lori A. Arceo Claudine S. Beaman Maurice D. Bevins Thomas B. Blatt, IV Jennifer M. Books Bart R. Burgwyn Ronald B. Burley Oscar Caglar Melissa Campbell Robert J. Campbell G. Scott Carter J. William Clements Eric L. Crawford Stacy F. Dail Charlene E. Davis Lisa M. Farwell Michael A. Franks John A. Gardner Lauren C. Garner Blaine L. Gilliam Jeffrey Gore Jacquelyn Gotham Dawn T. Grosik Amma Guerrier Gertrude B. Haynie Nancy E. Helbert Donald V. Hillbish Jenny Joudeh Cheryl L. Kirby Carolyn Kiser Sherry V. Kniceley www.vabankers.org

Burke & Herbert Bank Chesapeake Bank Wells Fargo Bank, N.A. Bank of Hampton Roads Sandy Spring Bank Union Bank & Trust Peoples Community Bank EVB United Bank, Inc. SunTrust Bank Brown Edwards & Company Essex Bank American National Bank & Trust The Bank of Southside Virginia The Bank of Southside Virginia Federal Reserve Bank of Richmond City First Bank of DC First Capital Bank TowneBank Carter Bank & Trust TowneBank New Peoples Bank Inc. The Bank of Charlotte County SunTrust Bank Citizens Bank & Trust Co. Bank of Hampton Roads Chesapeake Bank Miners Exchange Bank C&F Bank Middleburg Bank HomeTown Bank Union Bank & Trust SunTrust Bank

Kimberly LaRue Megan Ledger Ricky Lee Leonard, Jr. Christopher Lyle Steven K. Martus Landon D. McGlothlin Karen M. Meadows Bradley S. Melton Kasey R. Milby Amy Mitchem Maggie L. Morris Leslie Nicely James C. Pemberton Anna E. Pickeral C. Taylor Quicke Jennifer S. Register William Craig Reilly Alan Reynolds Paula A. Rhodes Elizabeth S. Robertson Jose A. Rodriguez II Pamela A. Ross James C. Saunders Steven E. Seaberg Phillip N. Smith III Robert Soniat Teresa B. Stine Michael J. Straub Carolina Vargas Susan E. Wilhelm Yasi Yamini Jamie W. Yates

Bank of Clarke County Middleburg Bank First Bank, Strasburg Monarch Bank Carter Bank & Trust New Peoples Bank Inc. New Peoples Bank Inc. Bank of Hampton Roads Chesapeake Bank Chesapeake Bank United Bank, Inc. Highlands Community Bank Essex Bank American National Bank & Trust Citizens Bank & Trust Co. Old Point National Bank Monarch Bank C&F Bank Bank of Botetourt Benchmark Community Bank Cardinal Bank EVB Farmers Bank Federal Reserve Bank of Richmond TowneBank Union Bank & Trust Middleburg Bank Cardinal Bank SunTrust Bank Old Point National Bank Access National Bank New Peoples Bank Inc.

Sept/Oct 2015 | Virginia Banking 13

Bank School Continued from page 12

Each class represented their year with a t-shirt. First-years in gray, second-years in green and third-years in bright orange.

banking for our customers, shareholders and communities.

Talent is alive and well in Virginia banks, and the VBA is actively cultivating it through programs like this. The future of banking is bright.�

Each year, the VBA recognizes the student in the thirdyear class with the highest GPA. This year, the honor graduate was class president Don Hillbish, with a GPA of 99.6. Congratulations to all the graduating bankers and to those who graduated in the top 10 percent of the class: 14 Virginia Banking | Sept/Oct 2015

Oscar Caglar, SunTrust Bank; Stacy Dail, Federal Reserve Bank of Richmond; Carolyn Kiser, HomeTown Bank; Jose Rodriguez, Cardinal Bank; and Phillip Smith, TowneBank.

For more information about the Virginia Bankers School of Bank Management and the admissions criteria, please visit the VBA’s website at www.vabankers.org.

Congratulations again to the graduates, and we look forward to seeing all returning students and the new firstyear class at the 2016 resident session. www.vabankers.org

Bank School Instructors Richard Coughlan Ph.D., Senior Associate Dean for Graduate & Executive Programs, Associate Professor of Management University of Richmond Robins School of Business Ed Seifried Ph.D., Co-Chairman Seifried & Brew First-year officers, pictured left to right: Marshall Jett, Essex Bank; Alicia Howard, Union Bank & Trust; Amanda Peay, Bank of Botetourt; and JoNika Yarborough, Old Point National Bank.

Kerry Sauley Ph.D., Instructor Department of Management at Louisiana State University Mark Faircloth Partner Faircloth Performance Partners Gary Higgins Risk Management Professional Tim Pannell President, CEO, Partner Financial Marketing Solutions

Second-year officers, pictured left to right: Jeromy Cox, EVB; Shareema Williams, Essex Bank; and Marcus Wade, Bank of Botetourt.

Billy Beale President & CEO Union Bankshares Corporation Scott Wayne Founder The Frontier Project Jimmy Sawyers Co-Founder and Member of the LLC Sawyers & Jacobs, LLC Brad Schwartz CEO Monarch Bank Andy Lock EVP Chief Risk Officer Monarch Bank

Third-year officers, pictured left to right: Ronald Burley, United Bank; Stacy Dail, Federal Reserve Bank of Richmond; Jennifer Register, Old Point National Bank; and Donald Hillbish, C&F Bank.

Bruce Whitehurst President & CEO Virginia Bankers Association Jake Lutz Partner Troutman Sanders LLP Chuck Lewis, CRCM Vice President Compliance Services Missouri Bankers Association Lynn Hamilton Associate Professor of General Faculty, Director of Management Communication Programs and Chair of the ICE Steering Committee University of Virginia McIntire School of Commerce

The second-years celebrate their kickball win. Victorious two years in a row! www.vabankers.org

Sept/Oct 2015 | Virginia Banking 15

Q&A with Brandon Atkins, VBA Leadership Division Chairman

Brandon, please tell us a little about yourself.

I’m a seven-year veteran of the banking industry, with all my experience at American National Bank & Trust Company, where I’ve worked in internal audit, commercial lending and risk management.

Prior to banking, I taught elementary school for five years, an experience that I once thought was unrelated to banking, but now I realize that the ability to convey an idea simply is important across disciplines. My education includes a bachelor of arts in economics from the University of Virginia and a master’s in teaching from Averett University, as well as completion of the Virginia Bankers School of Bank Management and the Graduate School of Banking

How long have you been involved with the VBA Leadership Division, and why did you decide to join?

I’ve been a part of the Leadership Division for three years. I decided to join during my third year at Bank School because I wanted to stay engaged with Virginia banking. I believe that becoming a leader requires a perspective beyond the four walls of your office.

How has being involved in the Leadership Division benefited your career, your bank and the banking industry?

Being involved in the Leadership Division has allowed me to practice leadership skills outside my day-to-day setting. I’ve had the

Brandon (far left) with Charley Majors, chairman of American National Bank; Randy Ferrell, CEO of The Fauquier Bank; Congressman Robert Hurt; and Jeff Haley, president & CEO of American National Bank at the VBA/ABA Government Relations Summit. at LSU. I live in Danville with my wife, Angela, and my daughter, Carrington, when she’s home from Radford University. If ever you can’t find me, come to Danville’s top-rated mountain bike trails, where I’m likely running or riding.

What would you say you love the most about being a banker?

Ever since undergrad econ 3-oh-something, “Money and Banking,” I’ve been fascinated by the role banks play at the macro level. So, what I’ve loved most about working at American National is learning how a bank operates from the inside. I’m still enthusiastic to learn how the decisions we make in the boardroom manifest on the balance sheet and income statement. In fact, risk management has been the perfect place for me to observe what’s happening throughout the entire bank.

16 Virginia Banking | Sept/Oct 2015

opportunity to shape the decisions of our steering committee, to plan regional events and to address bankers within the division and outside of it. For American National, the financial literacy efforts I help coordinate not only enhance its reputation in the community but also provide all-important CRA credit. For the industry, I believe that all bankers benefit from the government relations activities of the Leadership Division in the form of a business-friendly state.

As the new chairman of the Leadership Division, are there any specific goals you would like to achieve?

The Leadership Division has been successful in signing up new members. In fact, we have 420 emerging leaders who’ve registered for our group since 2009. This year, in partnership with our VBA liaisons, our goal is to deepen the engagement of the current membership. In www.vabankers.org

Brandon participating in Teach Children to Save Day.

effect, we’re focusing on quality of participation before the quantity of registrants.

What kind of involvement do you have with financial literacy and why is that important to Virginia students?

Even before I joined the Leadership Division, I initiated American National’s participation in ABA’s Teach Children to Save Day. My partners in the bank and I have visited hundreds of students in several local schools with lessons such as “The Money Tree” and “Just Saving My Money.” It’s good for the students and good for the bank. Evidence abounds that supports the need for financial education, and the VBA

What advice do you have for anyone who wants to get involved with the VBA Leadership Division?

The Leadership Division is no different from any organization you join: the output you receive is proportional to your input. I do encourage you to join. More importantly, I encourage you to participate. Participation can mean different things for different people. For example, if you lead a lesson on saving at a local Boys & Girls Club, you’re participating. If you have a quick conversation with your legislator at a Chamber breakfast, you’re also participating. Of course, I encourage you to attend Banker Day, regional events and the Leadership

Brandon Atkins (far right) at the Roanoke Mix & Mingle Leadership Division event last year.

has been a great leader in the effort to adopt the one credit course on economics and personal finance that Virginia students must now take before they graduate from high school. I’m happy for all the students who’ve benefited from the offering, but I’m personally glad that my daughter was able to take it during her senior year.

What is your favorite government relations event and why do you think other division members should attend that event?

My favorite event is Banker Day in Richmond. I highly recommend it to any Leadership Division member; it allows you to interact with your local legislators, many of whom you know and work with, in the setting where they are doing their most important work. Virginia bankers enjoy a very good relationship with the members of the General Assembly, and Banker Day is one reason why. www.vabankers.org

Conference, among other official events, but just don’t think they’re the end of what we’re doing in the Leadership Division.

Why is it important to attend events like the VBA Leadership Conference?

The VBA Leadership Conference is an excellent way to plug into Virginia banking with a network of peers. The conference programs always incorporate the three areas of focus of the Division: financial literacy, government relations and networking. In addition, it includes speakers and panels on leadership and industry hot topics. If you really believe yourself to be an emerging leader and want to be part of the “Succession Plan for Virginia Banking,” I highly recommend attending.

Sept/Oct 2015 | Virginia Banking 17

Compliance

Corner

Customer Due Diligence and Enhanced Due Diligence: What do CDD and EDD Mean?

By Melissa Hoeft, Director, and Brenda Payne, Senior Compliance Consultant, Thomas Compliance Associates

C

ustomer due diligence (CDD) and enhanced due diligence (EDD) are the areas that have been expanded the most in the past few years and changes will continue to come as the regulators try to standardize what is a very objective subject in terms of guidance and how requirements are applied at the examination level.

Let’s start with the root cause for the increased regulatory focus in this area. In August 2014, FinCEN submitted proposed rulemaking for beneficial ownership. The proposal included four elements, two of which focused on CDD and EDD. Although the proposal is not yet final, TCA has observed increased examiner scrutiny on your institution’s ability to identify and mitigate customer risk.

Why the regulatory focus? Are examiners in some way preparing the U.S. banking system for a fifth BSA pillar, especially since the banking system presumably is facing its Financial Action Task Force (FATF) examination in 2016? The proposed rules for beneficial ownership are actually a move to modernize BSA/AML enforcement in the United States.

Most of the rest of the world’s financial services communities are already subject to such requirements as dictated by the FATF. Although that is a driving factor behind the proposed rule, the answer also involves what we see as a natural evolution by the regulatory agencies. BSA program expectations continue to evolve. Long gone are the days when it was okay to say you know the customer; now bank staff must be able to prove that they indeed know their customers and are actively managing customer risk. In the current banking environment, risk management is an ongoing exercise, from the initial onboarding of the customer to the monitoring of the customer’s activity to determine if it is consistent with the known facts and circumstances of the customer to periodically evaluating the customer’s activity to determine whether they require more frequent monitoring and/or enhanced due diligence. It is not practical to devote the same amount of resources to every one of your thousands of customers. It is in your best interest to be able to identify the customers who, by reason of business type, other circumstances or account activity represent a higher amount of risk. New customers present unique challenges because there is a lack of a

18 Virginia Banking | Sept/Oct 2015

baseline of account activity to compare to current activity. In those cases, the customer due diligence gathered at account opening becomes even more critical.

The first opportunity to assess customer risk is during account opening. A bank’s customer identification program (CIP) is designed to verify the identity of the customer, but the complement to this process is identifying customer risk. CDD allows banks to predict with relative certainty the types of transactions in which a customer is likely to engage and should be designed based upon the bank’s risk profile. These CDD efforts should allow the bank to assign an initial risk rating, which drives the frequency, scope and depth of monitoring for a customer.

This information establishes an initial assessment, or a baseline, to use for comparison in future monitoring efforts. A lack of initial CDD increases risk for any bank, including reputational, operational, legal and compliance risk. Initial CDD allows for proactive risk management versus reactive due diligence to understand a customer’s risk profile.

Customer due diligence empowers the bank to fulfill its obligation to identify and report “suspicious activity.”

A key CDD challenge is not only collecting information from customers, but also determining how much due diligence is enough. As you evaluate your bank’s CDD processes, keep in mind you are completing an information-gathering process.

The Federal Financial Institutions Examination Council (FFIEC) manual establishes the following guidelines in the customer due diligence section.

BSA/AML policies, procedures and processes should include CDD guidelines that: • Are commensurate with the bank’s BSA/AML risk profile, paying particular attention to higher-risk customers.

• Contain a clear statement of management’s overall expectations and establish specific staff responsibilities, including who is responsible for reviewing or approving changes to a customer’s risk rating or profile, as applicable.

• Ensure that the bank possesses sufficient customer information to implement an effective suspicious activity monitoring system. www.vabankers.org

• Provide guidance for documenting analysis associated with the due diligence process, including guidance for resolving issues when insufficient or inaccurate information is obtained.

• Ensure the bank maintains current customer information.

The process should allow you to gather a sufficient amount of information about a given customer to allow for a reasonable determination about the customer’s activity. A common concern identified during TCA’s Independent BSA Reviews is that institutions fall into the trap of allowing CDD to be a one-time review. A customer’s activity and product usage almost inevitably changes over time, and procedures should allow risk ratings to be updated as part of the monitoring process.

There are many ways to complete CDD. For example, gathering information about a customer’s occupation or type of business, source of funds, anticipated activity, products and services that will be used. For businesses, CDD efforts could also determine whether the business will conduct higher risk activities or use higher risk services.

For example, will a commercial client conduct activities that qualify the customer as a money services business (MSB)? Is the customer a dealer in precious metals? Does the business own or operate an ATM or engage in internet gambling? Does the customer engage in marijuana activities or virtual currency?

ENHANCED DUE DILIGENCE Keep in mind one key component: Occupation or nature of business is a minimum. The FFIEC manual states, “The bank should obtain information at account opening sufficient to develop an understanding of normal and expected activity for the customer’s occupation or business operations.” However, for customers who rate as higher risk, or for whom you are not able to make a reasonable determination about the legitimacy of activity, enhanced due diligence (EDD) is required.

EDD is a critical component of your BSA program and an area where we have seen a significant increase in regulatory focus.

Analysis should consider various sources of information about the customer above and beyond transaction activity, and is typically completed by the BSA officer or qualified designee. The person who analyzes and documents EDD efforts requires advanced training and an understanding of the bank’s risk profile. This ensures monitoring is appropriate and comprehensive for the customer’s risk. For example, if your institution does not offer certain remote deposit capture products, the EDD preparer should focus training more on the red flags of the products and services the bank offers.

EDD should encompass periodic monitoring of the customer relationship to determine whether substantive change has occurred Continued on next page

SHAZAM is a financial services company offering you choice and flexibility to use the products and services that meet your needs, help you stay in control of your future and allow you to compete in the market. From debit cards to core processing to marketing services and more, we deliver.

Call SHAZAM today.

Delivering Unlimited Possibilities 855-314-1212 | shazam.net | @SHAZAMNetwork

www.vabankers.org

Sept/Oct 2015 | Virginia Banking 19

Compliance

Corner

continued from previous page

to original CDD information. For example, EDD may uncover a customer’s new business operations. Procedures should identify customers that are more likely to engage in higher risk activity and state the frequency of periodic EDD evaluations. For example, a gas station may open a store and say it does not have an ATM on-site.

During a routine site visit, staff might discover that not only is there now an ATM, but the customer also has a sign advertising check cashing or money transmission services. This change in business operations warrants a new assessment of the customer’s risk.

Another key focus is risk-rating cycle. In the past, examiners would primarily focus on high-risk customers, but now they are looking at procedures for monitoring low- or moderate-risk-rated customers. Risk-rating should be based upon your institution’s risk profile. It is crucial that your institution identify how often each risk category will be monitored and to stick with that schedule. Some institutions do this based upon a point value, while others group by categories. Regardless, ensure that your risk-rating clearly defines the monitoring process and when EDD will be performed. Remember, you can be monitoring a customer activity on a monthly basis, but EDD is that periodic analysis to summarize all due diligence efforts as a snapshot in time.

When is it time to evaluate and perhaps adjust risk ratings?

Here’s a hypothetical situation. A bank files a one-time suspicious activity report (SAR) on a customer for structuring in 2012, identifying the customer as high risk solely for this reason. Since there has been no additional suspicious activity, it could be considered reasonable, but not mandated, to adjust this customer’s risk rating lower after a reasonable amount of time based upon your risk-rating procedures. Tread carefully here, however; many regulators have deeply held opinions about changing risk ratings for highrisk customers. As with everything, documentation is the key and should be sufficient to make your case if you are challenged.

Besides considering the customer’s risk, EDD can be used to demonstrate that a higher-risk activity is not suspicious. To document this periodic analysis, some clients create EDD forms to

guide enhanced monitoring efforts. Remember, the type and depth of due diligence will depend on the type of customer and whether or not you are able to make a reasonable determination about a customer’s activity. You should always ask yourself this question: Does your bank have sufficient knowledge to be able to explain your determination to a regulator or, worse yet, FinCEN? Reviewing customer activity can be like a puzzle. You have to be able to think outside the box and put the pieces together. EDD is definitely an art and not a science.

Since CDD/EDD is one of the top areas of regulatory scrutiny, we want you to ask: • Does my bank have written policies and procedures for CDD/ EDD monitoring?

• How often does the bank monitor high-risk customers? Do we allow this to be adjusted?

• Who has the authority to adjust risk ratings?

• Do I document CDD/EDD efforts?

Keep in mind, an examiner does not consider “Transaction activity is normal for this customer” to be sufficient EDD analysis.

You want to be able to document your analysis sufficiently to act as an internal control if someone else needs to conclude whether activity is reasonable or suspicious. Just like a SAR narrative, explain the “who, what, where, why, when and how” to demonstrate your assessment of a customer’s risk.

Melissa Hoeft, CAMS, director of TCA, brings an impressive background as a BSA compliance specialist at a multibillion-dollar bank holding company with 15 bank charters to her role as a member of TCA’s BSA Review and Resource Team. Brenda Payne, senior compliance consultant, began her career as a teller and bookkeeper and has been a highly effective “go-to” executive during her banking career. She is a graduate of the Virginia Bankers School of Bank Management and the ABA Graduate School of Compliance.

Get Introduced To Your Best Prospects.

And start building stronger business relationships today!

The official magazine of the Virginia Bankers Association, Virginia Banking reaches approximately 11,700 banking industry professionals in 130 banks throughout the state. Financial leaders in Virginia rely on this bi-monthly magazine to gather information and move their businesses forward.

You can connect with the leaders of the banking community, increase your market share and grow your business. Visibility and repetition within your sales and marketing efforts to this powerful audience will establish the path to better relationships within this vital market. This is your direct route to get your message in front of successful C-level financial executives.

To learn more about Virginia Banking Magazine or to customize a marketing program unique to your business needs, call 800-356-8805 ext. 344 or email advertising@thewarrengroup.com.

20 Virginia Banking | Sept/Oct 2015

The Official Publication of the

www.vabankers.org

Welcome

New Associate Members

BANK ANALYSIS & DESIGN

ESD Architecture & Interior Design Address: 1300 South Mint St., Suite 300 Charlotte, NC 28203 CONTACT: DARCIE DYER Phone: (704) 910-6536 Fax: (704) 373-0902 Email: ddyer@esdarch.com ESD Architecture and Interior Design specializes in the design of financial facilities covering the entire spectrum from free-standing ATMs to corporate headquarters. ESD has been in business for over 26 years and has created a strategic partnership with sister companies, Reliance Project Management and Reliance Design Group.

CREDIT AND LENDING RESOURCES

Far West Capital Address: 20816 Waterbeach Place Sterling,VA 20165 CONTACT: C.TERRY ADKINS Phone: (757) 754-9329 Fax: (410) 721-3792 Email: terry.adkins@farwestcapital.com Far West Capital is a commercial finance company specializing in financing “tough” accounts receivable/inventory working capital facilities.

INVESTMENT AND TRUST SERVICES, LAW FIRMS

Vandeventer Black LLP Address: 101 W Main St. 500 World Trade Center Norfolk,VA 23510 CONTACT: LESLIE SCHIFF Phone: (757) 446-8519 Fax: (757) 446-8670 Email: lschiff@vanblk.com Vandeventer Black LLP is a full-service business law firm established in 1883 and headquartered in Norfolk, Virginia. It focuses on responsiveness and results while providing internationally recognized services across a wide variety of legal sectors.

IT CONSULTING AND SERVICES, MORTGAGE AND REAL ESTATE SERVICES

NotaryCam, Inc. Address: 2331 Mill Road, Suite 100 Alexandria,VA 22314 CONTACT: KYLE STEPHENSON Phone: (919) 395-7750 Email: kyle@notarycam.com NotaryCam is the innovation leader in online notary services that are valid in all 50 states. NotaryCam offers the only online e-closing www.vabankers.org

solution, built upon its unique online notary platform. With more than 12 years of experience in an emerging technology, NotaryCam is the only company that can securely and legally notarize documents, ondemand, online, anytime and from anywhere, through a professionally trained network of certified e-notaries via live conference.

SECURITY SERVICES

Praesidio Address: 526 1st Ave., Suite 314 Seattle, WA 98104 CONTACT: RANI KHAN Phone: (206) 604-0263 Email: rani@praesidio.com Praesidio is a cloud-based cybersecurity company that was formed by bankers and security experts to solve the critical, real-world problems of breach detection, remediation and governance insight that financial institutions (FI) are grappling with today. Praesidio bridges the gap between governance and IT by fusing your cybersecurity policies with the myriad of systems that generate millions of events where threats hide. It aggregates data across all cybersecurity tools to provide realtime management reporting that proves to your security team, board, auditors and regulators that your FI is actively managing and enforcing its policies. Praesidio’s integrated policies and best practices help FIs know definitively that they are safe.

VBA ASSOCIATE MEMBERSHIP VBA member banks consider VBA associate members primary candidates when searching for vendors to perform services for the banks. In addition to increasing your exposure and helping you form partnerships with member banks, associate membership with the VBA provides extra opportunities for your organization.

Becoming an associate member of the VBA allows you to take advantage of the following benefits: • A free subscription to and opportunity to advertise in Virginia Banking magazine.

• Your organization may be eligible to participate in a number of the VBA’s employee benefit programs.

• Receive all conference and seminar notices and first notice of exhibitor and sponsorship opportunities plus an invitation to attend our Annual Convention.

• Networking opportunities at many major VBA workshops and symposiums.

• Your company description and contact information will appear in the VBA Online Directory.

PLEASE EMAIL AMY BINNS AT ABINNS@VABANKERS.ORG IF YOU WOULD LIKE MORE INFORMATION OR TO APPLY FOR MEMBERSHIP. Sept/Oct 2015 | Virginia Banking 21

Move

Bankers on the

Are your bankers on the move?

Email submissions to cowdom@vabankers.org.

Zeigerman

Anderson

Barker

Frazier

Prillaman

Cardinal Bank Donna Avery, Assistant Vice President, Compliance Officer Jessica Zeigerman, Assistant Vice President, Fair Lending Specialist Carter Bank & Trust Caroline S. Anderson, Branch Manager D. Phil Barker, Branch Manager William “Ryan” Frazier, Branch Manager Richard A. Prillaman, Vice President of Loan Administration Brian C. Rodeffer, Branch Manager

Rodeffer

Letts

Kuhns

Pospichal

Essex Bank Robert Campbell, Vice President First Tennessee Bank Gail Letts, Market Executive John Marshall Bank Michael Kuhns, Senior Vice President/Commercial Lending National Bank Jason Pospichal, Senior Vice President/Loans

Assisting Community Banks in

Charting a Path to Success Since 1989

Consulting Services Implemented by Experienced Lenders and Risk Managers: LOAN REVIEW PROGRAMS • General Loan Review

• Portfolio Acquisition Review (Due Diligence) • Specialty/Structured Finance Review

LOAN LOSS RESERVE METHODOLOGY

LOAN PORTFOLIO STRESS TESTING • Bottom Up Loan Level Approach

• Top Down Capital Adequacy Assessment

CEIS REVIEW CONSULTING

• Methodology Validation

• Credit Risk Process Review • Loan Policy Maintenance

• Methodology Refinement

• Loan and Credit Seminars

888-967-7380 • www.ceisreview.com 22 Virginia Banking | Sept/Oct 2015

www.vabankers.org

START TEENS SAVING WITH

LIGHTS, CAMERA, SAVE! What’s a proven way to encourage young people to think creatively about saving money?

Participating as a local host of ABA Foundation’s Lights, Camera, Save! video contest.

You’ll help encourage sound money management by challenging youth to showcase the benefits of saving. You’ll also raise your bank’s profile with customers, the media and community organizations.

Free “how to” webinars and customizable marketing materials make it even easier for your bank to make the most of this turnkey event. Who knows? Your bank’s local winner could take home the national grand prize!

For more information and to sign up, visit aba.com/LightsCameraSave.

Sponsored by:

ABA FOUNDATION

Rethink value.

Think Spilman.

Virginia | West Virginia | Pennsylvania | North Carolina 310 First Street | Suite 1100 | Roanoke, Virginia 24011 | 540.512.1800 | 1.888.859.0004 Attorney Responsible For This Message, F. B. Webster Day This is an attorney advertisement.

Excellence. Value. Get There.

TM