ABA Banking Journal
February 3, 2017

This ABA Banking Journal newsletter is a free, twice-monthly supplement to the ABA Banking Journal magazine intended to help you stay on top of industry and policy news. You can also stay abreast of banking news by visiting aba.com/BankingJournal, home to ABA Daily Newsbytes and other email bulletins.

Industry News
Small business loans are the bread and butter of banking—especially for community banks. Loans to non-farm businesses and commercial real estate loans account for just under half of community bank loans, compared to 38 percent for the banking industry overall. But as business lending remains a critically important part of the community bank portfolio, small businesses are increasingly in the hands of younger, less seasoned business owners and entrepreneurs—many of whom are looking outside of the banking sector for their growth capital. (ABA Banking Journal)
 
The number of identity fraud victims rose 16 percent in 2016, marking the highest level since Javelin Strategy & Research began tracking the trend in 2003. In a press release highlighting the results of their 2017 Identity Fraud Study, the research firm said that despite efforts by the industry, bad guys successfully adapted to net 2 million more victims in 2016. What’s more, the amount the fraudsters stole rose by close to $1 billion to $16 billion. (PYMNTS.com)
 
Fewer Americans filed applications for unemployment benefits last week, marking 100 straight weeks of claims below 300,000. That’s the longest streak since 1970 and indicates a healthy job market. Jobless claims declined by 14,000 to 246,000 in the week ended Jan. 28, a Labor Department report showed Thursday in Washington. The median forecast of economists surveyed by Bloomberg called for 250,000. Continuing claims also fell. (Bloomberg)
 
Data Center, Inc. (DCI)
Verint Systems
While we don't know exactly what's going to happen, 2017 promises to be a big year in finance—especially for fintech. Companies that were once considered "start-ups" will come into their own as "companies." The promise of fintech will move from potential to palpable, perceptible to present. (TechCrunch)
 
Sales of small businesses reached record levels in 2016. A total of 7,842 closed transactions were reported this past year, the highest annual total of small business sales since online business for sale market place BizBuySell first started tracking data in 2007, according to the company’s quarterly Insight Report published this week. Sixty-three percent of respondents to the survey also said they experienced more deals in 2016 than in 2015. (Washington Post)
 
Nearly 40 percent of student loan borrowers are either in default or more than 90 days past-due on their payments, according to a new report from the think tank Demos. More than half of people struggling to pay owe less than $20,000. Students who borrowed less than $10,000 were about as likely to default as those owing more than $100,000. (NPR Marketplace)
 
New Year, New Growth!
D+H
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Policy News
On Wednesday, the Senate Finance Committee voted to advance Steven Mnuchin’s nomination as secretary of the treasury. The move came as Democrats boycotted the vote, with all Republicans voting in favor of Mnuchin.
ABA welcomed the news. "The Treasury Secretary has a critical role in promoting the overall strength of the economy and examining regulatory programs to ensure they do their part to support economic growth," said ABA President and CEO Rob Nichols. (ABA Banking Journal)
 
The Federal Reserve left its benchmark interest rate unchanged on Wednesday, amid enduring uncertainties about where the tax cuts, infrastructure spending and other proposals of the Trump administration could take the economy in the near future. However, the Fed’s carefully worded statement hinted that expectations for economic growth and inflation are strengthening, as consumer and business sentiment improves and oil prices rebound from ultra-low levels in recent months. (Washington Post)
 
Technology Association of Georgia
LexisNexis Risk Solutions
The Federal Reserve issued a final rule this week that will exempt many regional banks from the complex qualitative requirements of its annual Comprehensive Capital Analysis and Review, or CCAR, process. The rule takes effect for the 2017 CCAR cycle for bank holding companies with between $50 billion and $250 billion in assets. As ABA recommended in its comment letter, the Fed offered additional clarity on the supervisory review process, specifying that it plans to conduct its reviews "in a manner similar to existing supervisory programs." (ABA Banking Journal)
 
The Federal Reserve has released a status update on its "faster payments" initiative, reporting progress on five key strategies: stakeholder engagement, faster payments, payment security, payment efficiency and enhanced Fed services. A final report with recommendations on faster payments is due in mid-2017. ABA has taken a leadership role with the faster payments initiative. Seventy-one of the 80 bankers on the Faster Payments Task Force represent ABA member banks, as do 36 of the 46 bankers on the Fed’s Secure Payments Task Force. (ABA Banking Journal)
 
Harland Clarke
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