The Arkansas Banker Fall 2022

FALL 2022

FinTech Summit Draws National, International Leaders to Arkansas pg 36

Bank Commissioner

Concerned About Economic Pressures pg 10

The New Face of

The Fed Matuschka Lindo Briggs pg 20

Congressman French Hill Wants Rule 1071 Changes pg 30

THE ARKANSAS BANKER

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A PUBLICATION OF THE ARKANSAS BANKERS ASSOCIATION

CONTENTS

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VOLUME CV, NO. 3

ARKANSAS BANKERS ASSOCIATION STAFF

President/CEO Lorrie Trogden VP/Controller Carla Brinkley VP/Professional Development Kami T. Coleman

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Executive Administrative Assistant Peggy Cecere

EDITORIAL STAFF

Editor Roby Brock Creative Director Ashlee Nobel

Lee Lee Arts + Design

Contributing Writers

Steve Brawner, Derek Eckelhoff, French Hill, Susannah Marshall, Rob Nichols, Randy Scott, Carl White, and Brooke Ybarra

The Arkansas Banker (ISSN 004-1726) is published quarterly by the Arkansas Bankers Association, 1220 West Third Street, Little Rock, AR 72201. Phone: 501.376.3741.

Periodical postage paid at Little Rock, AR. Postmaster: Send address changes to Arkansas Bankers Association, 1220 West Third Street, Little Rock, AR 72201. Subscription to The Arkansas Banker magazine is included in the membership fees to the Arkansas Bankers Association. Cover price is $5.95 each. Annual subscription rates are $40.00 for members and $60.00 for non-members.

Federal tax law prohibits the deduction of lobbying expenses for federal incomes tax purposes. Organizations like ABA, which assess member dues, are required by law to notify their members of the portion of their dues attributable to lobbing/and therefore non-deductible on your federal tax return. For the year 2021, it is estimated that 13.32% of your dues will be attributable to lobbing as defined by the IRS. Contributions to ABA are not charitable contributions, however, they may be deductible as a legitimate business expense.

02 President’s Message 06 Professional Development

Departments

Columns

12 The Millennial Minute:

04 Chairman’s Column 08 Washington Update 10 Commissioner's Column 14 Emerging Leaders

Features

26 Multiple Re-Presentment NSF Fees

The FDIC is issuing guidance and warning against risks

COVER STORY

20 Meet the Fed

Matuschka Lindo Briggs leads the Federal Reserve Bank's Little Rock branch ON THE COVER

Matuschka Lindo Briggs, vice president and regional executive for the Little Rock Branch of the Federal Reserve Photo courtesy Federal Reserve Bank of St. Louis

BANKER Q&As

Stacey Landero

16 Five Minutes With ...

Daniel Robinson

INDUSTRY UPDATES

18 Meet the Graduates

Commencement ceremonies were held for Graduate Schools of Banking

30 Rule 1071 in Need of Changes U.S. Rep. French Hill introduces the Small LENDER Act

32 D.C. Roundup

The Arkansas Bankers Association returned from D.C. with updates on three important industry topics

36 Banks Looking Into Crypto Banks want to offer cryptotechnology services

Changed Banking 38 COVID-19 There was a shift from the use of cash to other payment methods

40 NEWS & MOVES

THE ARKANSAS BANKER

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PRESIDENT’S MESSAGE

Lorrie Trogden | President & CEO | Arkansas Bankers Association

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ootball, pumpkin spice latte and the general election – three exciting things in our near future! (Although I prefer the crème brulee latte) Most of us

don’t like others to pick our favorite football teams or our lattes, so why would we sit back and allow others to pick who leads our state and our nation? Regardless of your party, it is important that we all vote to put candidates in office that are friendly to banking and understand our industry. Those are the candidates we need at the table when important decisions are being made.

In addition to candidates, there will also be four issues on the ballot for voters to decide, and I’ll give a brief recap of those here. Credit goes to the UofA Cooperative Extension Service, it provides non-partisan research-based information about each constitutional amendment. Additional details can be found on its website, which is linked to ABA’s Advocacy > Legislative Update webpage.

Issue 1: Giving State Senators and Representatives the Authority to Call Special Legislative Sessions and Set the Agenda. This constitutional amendment would allow the General Assembly to convene in extraordinary session upon the issuance of a joint written proclamation of the Speaker of the House of Representatives and the President Pro Tempore of the Senate or upon the submission of a written proclamation containing the signatures of at least 2/3rds of the members of the House of Representatives and at least 2/3rds of the members of the Senate to the Speaker of the House of Representatives and the President Pro Tempore of the Senate requesting that the General Assembly convene in extraordinary session. Currently, only the Governor can call a special session and decide what will be on the agenda. For the record, it costs about $28,000 per day for legislators to be in session.

Issue 2: Requiring 60% Voter Approval for Constitutional Amendments and CitizenProposed State Laws. Currently, any measure submitted to the people takes effect and becomes a law when approved by a majority of the votes cast (50% plus one). Thus the “majority” threshold would be replaced with requiring the measure to have a 60% approval of the total votes cast.

“Someone struggled for your right to vote. Use it.”

- Susan B. Anthony

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Issue 3: Arkansas Religious Freedom Amendment. This proposal sprung from debate surrounding COVID-19 restrictions, but it’s unclear how it might be applied, if approved. In short, the measure declares state government may never burden a person's freedom of religion except in the rare circumstance that the government demonstrates that application of the burden to the person is in furtherance of a compelling government interest and is the least restrictive means of furthering that compelling government interest.

Issue 4: Arkansas Adult Use Cannabis Amendment. An amendment to authorize the possession, personal use, and consumption of cannabis by adults, to authorize the cultivation and sale of cannabis by licensed commercial facilities, and to provide for the regulation of those facilities. As of April 2022, 18 states have both medicinal and recreational cannabis, and another 16 states have pending legislation. Only five states have no current or pending laws. The SAFE act has passed the

ABA

OFFICERS Randy Scott, Chairman

Farmers Bank and Trust, Blytheville

Jim Taylor, Chairman-Elect First Security Bancorp, Rogers

Brad Chambless, Vice Chairman

Farmers and Merchants Bank, Fayetteville

Lori Ross, Treasurer

Citizens Bank, Arkadelphia U.S. House of Representatives six times, but continues to be held up by the Senate. Senator Mike Crapo, who is in his last term, has vowed that he will continue to attach SAFE language to every bill he can until it passes.

Check out the ABA’s Legislative Update page for information on all things voting and fun items you can purchase for customers and employees centered around voting. (I’ve ordered the socks!)

Good luck to your favorite football teams, and pick up one of your favorite coffee drinks on your way to the polls!

Lorrie Trogden, President & CEO

Jim Cargill, Past Chairman Arvest Bank, Little Rock

Lorrie Trogden, President & CEO

Arkansas Bankers Association, Little Rock

BOARD OF DIRECTORS

Kenya Davenport, Little Rock Joe Dunn, Little Rock Derek Eckelhoff, Rogers Robert Husong, Rogers Gary Kleck, Springdale Cody Knight, Piggott Wilson Moore, Little Rock Scott Saffold, Monticello Loren Shackelford, Fayetteville Rob S. Tiffee, Little Rock Jamie Waller, Magnolia Scott Walker, El Dorado Jay Wisener, Little Rock

THE ARKANSAS BANKER

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CHAIRMAN’S C O LU M N

What Keeps Me Awake at Night?

Randy Scott | Chairman | Arkansas Bankers Association

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any years ago, at bank management meetings, our bank owner asked, “What is keeping you awake at night?” I never sleep well at

night, so he was not referring to the answers in my head, such as “Why is Def Leppard spelled Def Leppard and not Deaf Leopard?” “Why are they even called Def Leppard?” (Go ahead and Google it now–I am sure you are wondering the same thing.)

“What are the lyrics to the Alan Parsons Project song from 1984?” “Why am I counting sheep in multiples of three? Why not multiples of four?”

I cannot avoid worrying about the ripple effects and severe impact on our industry as these national economic shifts continue. I lose sleep, hoping we are not facing another year like 2008. Or even worse, another year like 1980. Bankers, however, are tough, and we will overcome whatever hurdles the economy throws in front of us, but that does not prevent us from losing sleep over the struggle.

It seems we are always on the defensive with our federal government, and the only way to keep them from stealing our sleep is to get on the offense. That means getting engaged and getting active.

“It seems we are always on the defensive with our federal government, and the only way to keep them from stealing our sleep is to get on the offense. That means getting engaged and getting active.”

Traditionally, the concerns that have kept me awake over the years were commercial loan customers hitting weekly overdrafts and creeping up on 25 days past due. Or the upcoming Consumer Affairs examination. (Did we correctly check box 27 on the HMDA LAR on each of our 2,453 loans?) Or maybe I was thinking about that young banker who has so much potential but just doesn’t have the drive to succeed. From time to time, I suspect we all have lost sleep over such issues.

The recession is looming, and interest rates are continuing to rise. Like you, 4 • FALL 2022

For the last few years, we have been campaigning for two bills that will reposition us to the offense, and unless you are a Rip Van Winkle who has been asleep for twenty years, you know the details of these programs. The SAFE ACT (Secure and Fair Enforcement) would allow banks to serve cannabis-related businesses in states where cannabis is legal. SAFE also specifies that handling proceeds from the legitimate transactions of cannabis-related companies is not money laundering and does not violate any provision of federal law. We want to be bankers—we do not want to wear the law

enforcement badge. ECORA (Enhancing Credit Opportunities in Rural America) is a bill that allows traditional banks to compete on a level playing field with Farm Credit. This bill would remove taxation on income from farm real estate loans, rural home mortgage loans, and towns of less than 2,500 in population. These legislative acts will strengthen our banks and help us better serve our customers.

Here is another call to action. With upcoming elections, we each should work hard to elect " bank-friendly officials.” We need legislators in Washington D.C. and Little Rock who understand the adverse effects of over-regulation. We need legislators who see our perspective and defend our industry against burdensome legislation. We are one of the most highly regulated industries in the country, and while new regulations are added, none are removed. This rule-heavy system is eroding our customer base. People are turning to far less encumbered credit unions or to digital currency, which is essentially rule-free, damaging the traditional banking system.

With the right legislators, we can accomplish more and accomplish it quicker, mitigating these negative trends in our banking.

As chairman of ABA, I cannot help but lose a little sleep about our industry. Are we becoming dinosaurs? Or are we the same resilient financial backbone of our country, state, and communities that we have always been?

The best defense is a potent offense, and we have the knowledge and skill to charge ahead, winning for our industry and our customers.

By the way, the Alan Parson Project song from 1984 was “Eye in the Sky.” Google the lyrics.

Sweet Dreams!

THE ARKANSAS BANKER

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PROFESSIONAL D E V E LO P M E N T

Calendar of Events OCTOBER - DECEMBER 2022

Oct 03

MO NDAY 9 A .M.­– T UES DAY 4 P.M.

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R E TA I L L E N D I N G : B E YO N D T H E BASICS

This intermediate, enhanced virtual session will take you beyond basic consumer, mortgage, small business, and small investment real estate lending training. This real-world program will prepare retail lenders to have more informed and effective conversations with credit partners and build stronger, more profitable relationships with customers.

This two-day course meets the needs of lenders who serve consumers, small real estate investors, and/or small business clients. It will prepare lenders for success in today’s community banking environment, where they must have the skills and flexibility to serve a variety of loan requests.

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INSTRUCTOR: Barry Thompson

& Arvin Clar

LOCATION: ABA

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MO N DAY 9 A. M. ­– FRI DAY 4 : 30 P. M.

COMMERCIAL LENDING SCHOOL

This school is an intensive, one-week school that exposes students to the major issues commercial lenders face. Eleven different instructional modules throughout the week along with group case study work will address multiple topics, and are taught and led by top-notch banking veterans who will give you plenty of opportunity to ask questions, share concerns, and learn from the best!

INSTRUCTOR: Ron Rushing & Mike Wasson LOCATION: ABA

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MONDAY 9 A.M.­– 4 P.M.

REAL ESTATE LENDING COMPLIANCE: PART I

This program has an emphasis on coverage and exemption rules, determining which disclosures are required, the content of the required disclosures and prohibited acts or practices.

INSTRUCTOR: Jack Holzknecht & Kimberly Boatwright LOCATION: Virtual Learning

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LOCATION: ABA

WEDNESDAY 9 A.M.­– 4:30 P.M.

Join industry experts for this interactive program featuring the most current topics in bank security. This program will cover a variety of subjects. There is something for everyone in this information-packed session!

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INSTRUCTOR: Suzie Jones

LOCATION: Virtual Learning

BANK SECURITY HOT TOPICS

OPENING NEW AC C O U N T S

This workshop, customized to your state law, teaches essential new account opening procedures, best practices, and compliance requirements. It answers complex questions while focusing on vital information for every account type.

INSTRUCTOR: Dianne Barton

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THURSDAY 9 A.M.­– 4 P.M.

MO N DAY 8 : 30 A .M .­– TU E S DAY 3: 30 P.M .

E M E RG I N G L EA D ER S LE A DE RS HI P CO N F E RE N C E

This event offers a unique educational experience focused on banking industry trends and leadership development skills.

The Emerging Leaders Section works to engage, connect, and empower banking professionals from across the state to shape and lead the future of the financial industry. Why should you attend? Get access to top industry thought leaders and grow your network. Share ideas with your peers and get strategies for solving your challenges. Get answers to professional problems that you can put into action. Gain insight to help you influence positive change within your organization. So, what are you waiting for? Join us and gain the momentum you need to take your career to the next level!

LOCATION: Embassy Suites, Rogers

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MONDAY 9 A.M.­– 4 P.M.

REAL ESTATE LENDING COMPLIANCE: PART II This program has an emphasis on coverage and exemption rules, determining which disclosures are required, the content of the required disclosures and prohibited acts or practices. Big changes are pending with Fair Lending. Regulation B, and flood insurance. The program and the manual have been completely updated for these rules.

INSTRUCTOR: Jack Holzknecht & Kimberly Boatwright LOCATION: Virtual Learning

FOR MORE INFORMATION ABOUT ABA TRAINING & EVENTS, AND TO REGISTER, LOG ON TO WWW.ARKBANKERS.ORG.

Nov 03

T H URS DAY 1 0 A .M.­– 3 P.M.

EDUCATION AND TRAINERS FORUM: PART III

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The final part to this threepart virtual series provides an opportunity for bank trainers to exchange ideas freely, brainstorm challenges and examine pressing issues in today’s ever-evolving environment.

INSTRUCTOR: Dianne Barton LOCATION: Virtual Learning

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T H URS DAY 9 A .M.­– F R I DAY 12 P.M.

CALL REPORT PREPARATION UPDATE

This two-part webinar will provide information and comprehensive training on new, proposed, and revised changes to the Call Report with identification of specific Call Report line items impacted.

INSTRUCTOR: Cynthia Dopjera LOCATION: Virtual Learning

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REAL ESTATE VALUATION COMPLIANCE IN TODAY’S MARKET

BANK DIRECTORS WORKSHOP I

This program lays a foundation for the base knowledge and duties, and responsibilities of Board Members. We will have discussion of the Director’s responsibility to the key constituent groups (customers, stockholders, regulators, executives & staff) and much, much more!

INSTRUCTOR: David Kemp LOCATION: ABA

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BSA/AML YEAR END WRAP-UP

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Are your real estate valuation policies and procedures compliant? Are you using appraisals and evaluations to their full potential? Do you continue to see higher fees and longer turntimes? This program will focus on the key points that banks need to be aware of relating to the policies and procedures for their real estate valuation program to ensure they are operating in compliance with the regulatory requirements. Discussion will include items that could be considered in your program when deciding what product to order for real estate transactions.

TU E S DAY 9 A. M. ­– W E D N E S DAY 4 P. M.

THURSDAY 9 A.M.­– 4:30 P.M.

AT A GLANCE

Be sure and register for this timely program which will provide in-depth coverage of current trends and tools for today's BSA officers and team members. We will review real-world situations and develop take-aways that can be implemented back at your banks. This training assists financial institutions in fulfilling the annual requirements by the BSA regulations.

INSTRUCTOR: Dianne Barton

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Live events are subject to a virtual learning environment. For more information, contact the ABA at (501) 376-3741 or Kami Coleman at kami.coleman@arkbankers.org.

LOCATION: Virtual Learning THE ARKANSAS BANKER

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WASHINGTON U P DAT E

Breaking Down the Debate over Digital Assets Rob Nichols | President and CEO | American Bankers Association

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s I traveled the country this summer speaking at various state bankers association conventions, I’d always ask this question of my audience: How many of you have clients

and customers that are asking you about cryptocurrencies and digital assets? And nearly everywhere I went, nearly every hand would go up.

The interest in cryptocurrencies and digital assets is undeniable—even in the face of recent volatility in digital asset markets. Americans want them: from the casual dabbler to the serious investor, from Gen Z’ers to boomers, everyone it seems wants a bite at the crypto apple.

Many banks want to engage, too—as digital assets become more popular, and those banks are exploring ways to meet the needs of customers who want their bank to be the custodian of these assets.

I’ve written previously about the merits of banks being able to take on custodial roles for digital assets—there are many— and the need for a regulatory architecture that will support them taking on these roles if they choose. That’s an area where ABA continues to advocate for banks’

8 • FALL 2022

ability to enter the digital asset space in a safe and sound manner. But it’s just one of the debates that are currently brewing over crypto. There are several others that bankers should be aware of: Who should regulate? One key quandary facing policymakers right now is: what’s the right way to regulate crypto, and to which agency should that authority be delegated?

Currently, the Securities and Exchange Commission and the Commodity Futures Trading Commission are both vying for the role of crypto cop. Two separate bills have been introduced this summer—one

by Sens. Cynthia Lummis (R-Wy.) and Kirsten Gillibrand (D-N.Y.) and another by Sens. Debbie Stabenow (D-Mich.) and John Boozman (R-Ark.)—that would delegate most of this authority to the CFTC. Simultaneously, there are some in the crypto community who are calling for the creation of a whole new regulatory agency dedicated to digital asset supervision, though this seems far less likely.

Regardless of which entity ultimately ends up with regulatory authority, it is imperative that it develops clear definitions of digital asset products that are based on the risk that each category of

digital asset carries. Working with the banking agencies, any prospective crypto regulator must also ensure a level playing field between bank and non-bank entities in the digital asset markets and establish clear guidelines for risk management and consumer protection.

Payments system access? Another key question is the extent to which nonbank crypto firms should have access to the payment system. The Federal Reserve took a significant step toward answering this question in mid-August when it finalized a framework for assessing which entities may be granted payments system access.

This framework creates a tiered system for evaluating incoming requests, and under it, institutions that engage in novel activities would undergo a more extensive review.

Access to the payments system is a significant privilege and comes with many responsibilities. As the Fed begins evaluating new requests for access, we’ll be watching carefully to ensure that these new guidelines are appropriately accounting for the inherent risks that come with some of these new financial players.

Is there a use case for a CBDC? Finally, there’s the question of a central bank digital

“One key quandary facing policymakers right now is: what’s the right way to regulate crypto, and to which agency should that authority be delegated?

Currently, the Securities and Exchange Commission and the Commodity Futures Trading Commission are both vying for the role of crypto cop.”

currency and whether there’s a use case for it in the U.S. As ABA told policymakers in several comment letters and testimonies over the last year, our view is that no such case exists—for every problem that proponents say a CBDC could solve, the fact is that there are already solutions available that don’t involve a government-created currency. Financial inclusion is just one example: Banks are already making great strides to bring more unbanked households into the financial system by offering Bank On-certified accounts.

Not only would a CBDC be duplicative of private-sector solutions that already exist, but it also has the potential to have an incredibly damaging effect on bank balance sheets and the flow of credit to households and businesses if the Federal Reserve were to become a competitor for bank deposits.

All of these ongoing debates underscore an urgent need for a fair, well-calibrated regulatory framework for digital assets—one that promotes responsible innovation while minimizing systemic risk and protecting consumers. And that’s a framework we’ll continue to fight for.

Email Rob at nichols@aba.com.

THE ARKANSAS BANKER

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COMMISSIONER'S C O LU M N

Letters of the Alphabet Susannah Marshall | Commissioner | Arkansas State Bank Department

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e all know that there are certain letters of the alphabet that are very important to the banking industry. The integral

letters are C-A-M-E-L-S, and they are the foundation for bank regulators and the supervisory process. I am sure that everyone is very aware of what these letters stand for: Capital Adequacy - Asset Quality – Management – Earnings - Liquidity and Funds Management - Sensitivity to Market Risk. While these letters encompass the aggregate risk for an institution and are each significant in analyzing the overall condition of an institution, in this article I want to focus on the last three letters.

I think we can all agree that we are operating in a very challenging economic and business cycle. So many issues we are facing today have not been present in recent history: the rising rate environment, lingering supply chain pressures, labor market shifts and staffing shortages, the Russia-Ukraine war, bond market fluctuations and the list goes on. Each of these issues are impacting our economy and the banking industry both nationally and here in Arkansas.

I am pleased to report that the overall health and financial condition of Arkansas banks remains very positive through midyear 2022. Despite the unplanned volume of deposit and asset growth during the pandemic, regulatory capital levels remain favorable, and we continue to outpace the national average in the leverage ratio. Recently completed examinations continue to reflect solid performance and strength within loan portfolios. Overall, classified assets remain minimal which positions our institutions well for the uncertainty of prospects and performance metrics. Management, which is always an evaluation of executive management and

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“Despite the recent rate increases, which would generally lead to an increase in income in an asset sensitive institution, I remain concerned about the additional pressures and rising costs on a bank’s profit margins.” the board, has continued to evolve and engage on topics in a strong fashion. Ongoing supervisory matters are addressed in a timely and efficient manner. I encourage each management team to spend the remainder of this year reviewing and addressing any outstanding supervisory findings from your recent examinations and audits.

With that summary of the letters C-A-M, I turn your attention to the last three letters. The letters E-L-S represent some of my areas of focus and concern in the coming months. Earnings performance has been favorable and consistent during the past two years, which has been a very pleasant surprise especially considering the historically prolonged low-rate environment. Despite the recent rate increases, which would generally lead to an increase in income in an asset sensitive institution, I remain concerned about the additional pressures and rising costs on a bank’s profit margins. Earnings performance will continue to be pressured due to increased deposit costs and availability, rising overhead and personnel expenditures, and the likelihood for increased provision expense with the implementation of CECL, to name a few.

Over the past two years, the mention of liquidity and funds management among bankers has resulted in a common theme of too many deposits and not enough loan demand. However, I am beginning to see and

hear that the “excess” deposit base is changing. Before March 2020, I was concerned about the availability of liquidity and core funding sources. I believe we can quickly find ourselves in a position where ample, affordable and stable funding sources may not be as readily available. Now, is the time to evaluate your bank’s future liquidity prospects and needs and begin to make any adjustments to your asset-liability management and contingency funding plans, today.

Currently, sensitivity to market risk is leading to a higher risk profile in many institutions. The impact of rising rates on both sides of the balance sheet warrants constant attention, analysis and strong risk management practices. Effective management of interest rate risk must include the timely evaluation and analysis of accurate data and the measurement of that data in relation to board approved risk tolerances. Management’s ability to appropriately identify, measure, monitor and control interest rate risk and implement needed actions will be a key focus of the regulatory process in the coming months.

As I visit with Arkansas bankers, I receive the same comments and concerns regarding Earnings, Liquidity and Funds Management and Sensitivity to Market Risk. We encourage you keep elevating the discussions and responses internally and with your regulators as we all work to navigate this challenging environment.

THE ARKANSAS BANKER

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BANKER Q&A

THE

MILLENNIAL MINUTE with Stacey Landero Loan Officer Grand Savings Bank, Rogers

WHEN AND WHY DID YOU DECIDE TO BECOME A BANKER?

WHAT IS THE BEST ADVICE YOU EVER RECEIVED?

I became a banker as soon as I graduated from High School. I took a banking and financing class my senior year and was interested to learn more about it. I applied and immediately fell in love with the industry!

Don’t ever stop learning and growing both in your day-to-day life and career. If you are comfortable, you are not growing!

WHAT’S YOUR FAVORITE THING ABOUT BEING A COMMUNITY BANKER?

WHAT IS THE NERDIEST THING YOU DO IN YOUR FREE TIME?

My favorite thing about being a community banker is being able to grow relationships by building a foundation of trust and friendships. It is important to share my knowledge and to help provide financial tools for them to be successful. Their success helps to make our community Grand.

The nerdiest thing about me is Sudoku, it has become a nightly routine. Before bed I turn on jazz music and open my Sudoku book, it is the best way for me to unwind.

“My favorite thing about being a community banker is being able to grow relationships by building a foundation of trust and friendships. It is important to share my knowledge and to help provide financial tools for them to be successful. Their success helps to make our community Grand.”

12 • FALL 2022

THE ARKANSAS BANKER

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EMERGING LEADERS

We're Always Recruiting Derek Eckelhoff | President | Emerging Leaders Section

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he Emerging Leaders Section (ELS) of the Arkansas Bankers Association was established to provide leadership training, networking opportunities, and to enhance the banking careers of emerging talent within Arkansas banks. Personally, I can speak with

certainty about how ELS has enriched my career through access to some of the best and brightest banking minds in the State of Arkansas. Through trips to Washington DC and access to the ABA Board of Directors and Arkansas banking leaders, I’ve been mentored by some of the more remarkable men and women in our industry. None of this would have been possible without my participation in the Emerging Leaders Section of the ABA. Additionally, the networking aspect has allowed me to connect with my banking peers, and gain knowledge and gather advice on some of the issues facing us as emerging leaders within the Arkansas banking industry.

One of my duties as an ELS officer is to effectively communicate with banks across the state about ELS programs and priorities. In this article, I will share the important issues we’ve focused on as a council.

Currently, the ELS’s immediate focus is on the upcoming Emerging Leaders Conference slated to kick off on October 25, 2022, at the Embassy Suites in Rogers, AR. The primary focus for this conference is to allow emerging talent to gather, share ideas, and learn leadership skills to enhance their banking careers. Through great programming and networking, rising talent throughout Arkansas will come away from

14 • FALL 2022

the conference with fresh leadership skills and a new network of idea-sharing peers.

More to come from Kami Coleman, ABA VP of Professional Development, about the 2022 ELS Emerging Leaders Conference.

On a macro level, the Council has set three main priorities of focus: 1. Promote Banking as a Career 2. Educating and Promoting Political Advocacy to Emerging Leaders 3. Enhancing the Promotion of the ABA Emerging Leaders Section The Council has currently assigned action groups to explore, gather information, and provide recommendations to address these priorities. The action groups are split into the State’s three group divisions. Group One is assigned to Promoting Banking as a Career, Group Two is assigned to the Education and Promotion of Political

Advocacy, and Group Three is assigned to the Promotion of ELS and its programming. Anyone reading this article can contribute with ideas and recommendations.

If you, or an emerging leader in your bank, want to get involved, please contact me and I will make sure to place them with the contact for their corresponding group.

In conclusion, please encourage the emerging leaders in your banks to get involved with ELS, as these bankers are the future of our industry. The ELS provides the skills necessary to equip emerging bankers in Arkansas to become leaders at their organizations, and in our industry. Also, if you know a current ELS Council Member, thank them for their service and dedication to helping Arkansas banks build great leaders through their commitment to Arkansas Bankers Association and its Emerging Leaders Section. I want to thank the ELS Council for allowing me the privilege to serve as the president for 2021-22, and I look forward to continuing to be of service to our industry and the Arkansas Bankers Association.

“Through great programming and networking, rising talent throughout Arkansas will come away from the conference with fresh leadership skills and a new network of idea-sharing peers.”

FIRST SECURITY BANK Rogers Group 2

DUNCAN BELLINGRATH VICE PRESIDENT SIMMONS BANK Hot Springs Group 3

LATRECIA BRANCH SECRETARY/TREASURER STONE BANK Little Rock Group 1

ELS COUNCIL MEMBERS AARON BELL

AMBER MURPHY

FIRST SECURITY BANK Jonesboro Group 1

FIRST FINANCIAL BANK El Dorado Group 3

IAN BRYAN

BRANDI RAY

SIMMONS BANK Russellville Group 2

FARMERS BANKS AND TRUST COMPANY Malvern Group 3

TAMMY ENGLE

TY TEAGUE

ARVEST BANK Siloam Springs Group 2

FIRST NATIONAL BANK Little Rock Group 1

S E C T I O N

DEREK ECKELHOFF PRESIDENT

EMERGING LEADER

ELS EXECUTIVE COMMITTEE

THE ARKANSAS BANKER

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BANKER Q&A

FIVE VE minutes with...

Daniel Robinson

Regional Community President Simmons Bank, Pine Bluff

Q. HOW DID YOU GET

STARTED IN BANKING?

A.

I started my career as a teller for Simmons during my last semester of college at Arkansas, summer and fall of 2005. After I graduated, I started full-time as a management trainee in Pine Bluff, January 2006.

Q. WHERE DO YOU FIND YOUR SUPPORT/ INSPIRATION?

A.

My family and mentors. I am very blessed with a supportive family. My wife, kids, parents, brother, etc. are always there encouraging me to be the best version of myself. I’m also fortunate to have a group of mentors that let me lean on them for guidance and their knowledge.

Q. TELL US ABOUT YOUR

EARLY CAREER...LOOKING BACK, HOW WOULD YOU DESCRIBE YOURSELF?

A.

When I was in the management trainee program I was exposed to different departments of the bank- loan review, mortgage, trust, credit card, financial analysis, lending, loan operations, etc. It was

“I started my career as a teller for Simmons during my last semester of college at Arkansas, summer and fall of 2005. After I graduated, I started full-time as a management trainee in Pine Bluff, January 2006.”

16 • FALL 2022

My wife says I am like Ted “ Lasso. I like to consider myself an optimist that finds the best in people or situations.

”

neat to spend time in all these different areas because I learned how they work and everything they did. It really helped me when I started as a lender. After I completed the trainee program, I worked in Fort Smith for several months and then transferred to our Jonesboro office where I spent the next 10 years. I was eager to learn and wanted to grow my portfolio.

I was a little nervous in the beginning as well. I did not want to make a bad loan or decision.

The nervousness slowly went away thanks to good mentors who helped me gain confidence in my decision making.

Q. WHAT DO YOU CONSIDER YOUR BIGGEST

ACCOMPLISHMENT - CAREER OR OTHERWISE?

A.

Being a father to my three kids. I never knew how rewarding and challenging being a parent could be, but to see your kids grow and develop is something I am so thankful for every day.

Q. WHAT MOVIE CHARACTER ARE YOU MOST SIMILAR TO?

A.

My wife says I am like Ted Lasso. I like to consider myself an optimist that finds the best in people or situations.

THE ARKANSAS BANKER

• 17

INDUSTRY U P DAT E S

MEET THE 2022 G R A D UAT E S C H O O L S O F B A N K I N G

Graduates The Graduate School of Banking at Colorado

by Jim Bullard

T

he Graduate School of Banking at Colorado (GSBC) is proud to announce the graduation of ten Arkasas-based banking professionals from its state-of-the-art graduate school of banking program.

Graduates receive their GSBC diplomas upon successfully completing three annual two-week sessions of classroom training on the University of Colorado Boulder campus. These individuals were among 168 students honored in a ceremony on July 28, 2022.

The graduates also completed six immersive intersession research projects throughout their time in the program, including a strategic topic project which they tie directly to an issue or opportunity facing their organization.

The program’s capstone course is an in-depth bank management simulation, where students assume the roles of senior management of a commercial bank, involving themselves in the group dynamics and managerial skills of managing a bank in a competitive environment with changing economic conditions.

Congratulations!

18 • FALL 2022

“It gives them a true appreciation of the role they and others play in reaching the goals of the organization. This unique perspective not only advances their careers but also transforms the face of banking, especially as new challenges are overcome and new technological breakthroughs take shape.”

- JEFFREY R. SCHMID -

President and CEO of the SWGSB Foundation

Southern Methodist University’s SW Graduate School of Banking at Cox

T

he SW Graduate School of Banking, Southern Methodist University (SWGSB-SMU), held its 2022 commencement on June 9th for Class 62, the 62nd class to fulfill the requirements of this graduate program renowned for its dynamic faculty, challenging curriculum, and exceptional student body from throughout the world.

The 2022 graduates represent more than 60 financial institutions in 7 states. They each have at least five years of banking experience, either in a financial institution or a federal or state regulatory agency. Most hold a senior level post in their organization, or are on a fast track within their management ranks.

SWGSB-SMU Arkansas Graduates Matthew Cramblett

Dakotah Provence

CITIZENS BANK, ROGERS

BANK OZK, LITTLE ROCK

VP COMMERCIAL LENDING

Andy Jenkins SVP & CIO

RELYANCE BANK, PINE BLUFF

Eileen Jennings

VP CREDIT ANALYST

Michael Shelton

MARKET PRESIDENT GENERATIONS BANK, CAMDEN

SVP

ARVEST BANK, FAYETTEVILLE

THE ARKANSAS BANKER

• 19

Meet the

Fed Matuschka Lindo Briggs Leads the Federal Reserve Bank's Little Rock Branch

by Roby Brock

20 • FALL 2022

Matuschka Lindo Briggs THE ARKANSAS BANKER • 21

I

n June, the Federal Reserve Bank of St. Louis named Matuschka Lindo Briggs as vice president and regional executive for the Little Rock Branch, which serves the majority of Arkansas.

Briggs succeeds Robert Hopkins, who retired in mid-June after 38 years at the St. Louis Fed. As regional executive, Briggs represents the St. Louis Fed with business leaders, bankers, local government officials and other stakeholders. She also supports the Little Rock Branch’s board of directors.

Briggs joined the St. Louis Fed in the Treasury division in 2015. Since April 2020, she has been director of the community development department’s special projects and strategic support.

Before joining the St. Louis Fed, Briggs spent 23 years as a broadcast news reporter and host for various outlets, including ESPN and NBC affiliate television stations in St. Louis and Des Moines, Iowa. She also was the press secretary for a Missouri gubernatorial campaign.

Briggs earned her bachelor’s degree in journalism and communications from William Woods University in Fulton, Mo., and her master’s in business administration from Washington University in St. Louis.

She serves on several nonprofit boards and is a voting member of the Screen Actors Guild.

She sat down for a Q&A with The Arkansas Banker magazine.

Q

: Tell me a little bit about yourself and how you found your way to the Federal Reserve Bank.

M

atuschka Briggs: I'm from Central

America, believe it or not. I was born in Panama City, Panama, an Air Force brat. We traveled

around quite a bit. I learned English in second grade in Sacramento at Mather Air Force Base, and then our traveling landed us in Enid, Oklahoma. That's pretty much what I did with my childhood.

I was mostly in the central part of the United States, so I'm used to rural America and that's where I grew up. As far as education, I went to William Woods in Fulton, Missouri. Back then, back in the day, it was an all-girls school. And I met a lot of my girlfriends that I'm very close with from Arkansas, Oklahoma, and Texas there. So it's nice to reunite with them. Then, I got my MBA at Washington University in St. Louis.

From there, I started with NBC in Des Moines, Iowa and I was really in the thick of rural America.

I was doing seed corn, feed corn, soybean reporting.

Gradually, I came out and started doing general reporting, health reporting, and political reporting, so I do feel that it has brought me full circle into storytelling, which is what I do here. I'm talking to civic and business and government leaders and bankers and trying to understand their story and what's going on.

The other part of it, I'll say, is that I've always learned to be part of my community. I love to volunteer and I've sat on many boards throughout my career. So for me, another big part of this position is being able to understand the talent pool and what I'm looking for when it comes to our industry councils as well as my board of directors.

Q

: So you're telling me, if I needed to send you on assignment as a correspondent for the Iowa caucuses - since there may be 3 or 4 or 10 Arkansans running for president - you might be up to the task.

“I started doing general reporting, health reporting, and political reporting, so I do feel that it has brought me full circle into storytelling, which is what I do here. I'm talking to civic and business and government leaders and bankers and trying to understand their story and what's going on.”

22 • FALL 2022

Q

: Who are some of the mentors in your life. Who helped shape you into the person that you are today?

B

riggs: The same two people that I rely upon

now and I speak to every day, my parents. Being from another country and coming to the United States back in the day was not easy. I just remember my parents always saying, "If you do good things and you do the right things, you'll be surrounded by the right people." And I think that's true.

My mom, if I would come home because a group didn't want to be with me, she'd be like, "We're not trying to be part of any group. We're not trying to be part of any clique. Just do the right thing and work hard."

And our faith is a big part of my family. So to this day, I really thank my parents. They gave me all the tools that I needed and I will be forever grateful to them.

Q

: This is not your first stop in the Federal Reserve Bank. Tell me a little bit about how you exited reporting and got into the Federal Reserve Bank.

B

riggs: Most of my jobs, I would say, had to deal with communications, relationship building, everything that you do as a journalist. You're out there, you're trying to talk to people, you're trying to understand what's going on. I started about eight years ago in the Treasury relations support office at the Fed, and it was working with a business line and a product that the U.S. Treasury and Fiscal Service was working to get out. I was out there talking to individuals about that product and building relationships, so it really just fell in line lock and step with what I do.

And then from there, I went to public affairs at the Fed. And again, same thing, it's communications. I worked a lot with the regional executives.

So I’ve been working with our three branches - Little Rock, Louisville and Memphis - and understanding what the regional execs did, as well as working with the regional economist and supporting them. The public affairs department really supported President [ James] Bullard. I really got a bird's eye view on what this role would be and understanding all that it took to do this role. That's when I really started developing my interest.

– OF THE LITTLE ROCK BRANCH OF THE FEDERAL RESERVE BANK OF ST. LOUIS –

riggs: Absolutely. I did the Iowa caucuses. I will tell you, I had a wonderful dance with Tom Brokaw one night. So it was great. That NBC family sticks together.

BOARD OF DIRECTORS

B

Millie A. Ward, Chair PRESIDENT, STONE WARD LITTLE ROCK, AR

(Term expiration: Dec. 31, 2022)

Christopher B. Hegi PRESIDENT AND CEO, FIRST FINANCIAL BANK EL DORADO, AR

(Term expiration: Dec. 31, 2022)

Jamie J. Henry

VICE PRESIDENT, FINANCE, EMERGING PAYMENTS, WALMART INC. BENTONVILLE, AR (Term expiration: Dec. 31, 2024)

Vickie D. Judy

CHIEF FINANCIAL OFFICER AND VICE PRESIDENT, AMERICA'S CAR-MART INC. ROGERS, AR (Term expiration: Dec. 31, 2023)

Vincent G. Logan

CHIEF FINANCIAL OFFICER AND CHIEF INVESTMENT OFFICER, NATIVE AMERICAN AGRICULTURE FUND FAYETTEVILLE, AR (Term expiration: Dec. 31, 2023)

Jeff Lynch

PRESIDENT AND CEO, EAGLE BANK & TRUST CO. LITTLE ROCK, AR (Term expiration: Dec. 31, 2024)

Darrin Williams

CEO, SOUTHERN BANCORP INC. LITTLE ROCK, AR (Term expiration: Dec. 31, 2023)

THE ARKANSAS BANKER

• 23

PHOTO: With her television background, Matuschka Briggs is comfortable on camera.

Photo courtesy Federal Reserve Bank of St. Louis

From there, I moved to community development, which I would say rounds it out because it's taking an even deeper dive in something that the Fed looks at and they're always looking in the low-to-moderate income community. So I was able to see how they're working in the Delta with the Delta forum, and not only in my region of Arkansas, but also looking at the entire Eighth district.

Q

: You've touched on this in a couple of answers that you've given, but what will your role be with the Little Rock branch? What are you going to focus on specifically?

24 • FALL 2022

B

riggs: First, I want to say I am so honored to be here in Little Rock and to serve the state of Arkansas, most of it. I will say that the Northeast part from Jonesboro up, that's really my Memphis colleague, but the rest of the state is mine.

What I'm going to start doing is just listening and understanding and meeting people where they are when I'm out there talking to leaders in the community. I say that because some people want to meet one-on-one.

Others want me to come to an event or their annual meeting to understand what they're doing. Others want a round table. Some just want me to present. They understand that I know what's happening in the Fed, so they want to understand and have me demystify the Fed.

“As you know, data and research is so important to the Fed, but there is a lag to that. That's stuff that has happened in the past... it makes my job pretty critical in understanding and talking to people and being able to find out what's happening in real time.”

So that's really where I'm going to start. As you know, data and research is so important to the Fed, but there is a lag to that. That's stuff that has happened in the past. Even though it's important, it makes my job pretty critical in understanding and talking to people and being able to find out what's happening in real time, getting that anecdotal information. So that's really my role and what I'll be trying to understand.

I will tell you, I have been traveling and there is a lot of good stuff happening in the Natural State. But I also need to understand the pain points and the challenges because what I do is I take all that information, I share it with our researchers, I share it with President Bullard to help them inform monetary policy.

Q

: I know you have made some rounds. What has been the reception as you've been around the state? Has anything stood out to you so far?

B

riggs: The hospitality is overwhelming. I will

say the big surprise is the food. I'm a foodie, and the food is good in Arkansas, no matter where you are, just driving through the state. I really like the way the state has welcomed me and opened their arms to me. It's really, really meant a lot to me.

Again, when you're talking about the Fed, two things that are important to us are stable prices and maximum employment. So my goal is to help maximize the quality of participation for the economy of this state. When I'm talking and listening to people, that's something that I'm really hearing about a lot is there are a lot of jobs and we really need to help with that job growth, so however I can do that. I'm a convener, so if I can get leaders at the Fed or leaders within the state to work together and help with that job growth, I'm excited to do that. I'm a convener, I'm a connector, and I'm a storyteller. That's really my role.

Q

: I see from your bio that you are a voting member of the Screen Actors Guild. What does that entail and how did that accomplishment come about?

B

riggs: When I married my husband - who at the time was a sportscaster for NBC - and we both worked for Gannett, there was a nepotism clause in our contracts with the television station. One of us had to leave and I also had a non-compete so I could not work for another station for six months.

My agent asked me if I would like to do some commercials and acting during that hiatus.

As a reporter, I was a member of the American Federation of Radio and Television Artists but to do commercials and act I needed to also join the Screen Actors Guild. So for over 20 years, I have done many commercials and a few movies. To vote, you need to be an active member in good standing and your dues must be paid. I get to pre-screen and vote for big screen motion pictures and television shows which takes up a lot of time. They come in CD format and I view them all during my spare time and on weekends.

We also have the opportunity to hear from the actors in conversation about how they get into their role or maybe the challenges of their character. These are called “Screenings” that we must RSVP for. It's a hobby that I love even though it is time consuming.

I consider it to be such an honor. I can’t do all the screenings with the actors as there are so many and all hours of the day, but I do pick my favorites. Then, they mail us a ballot before the awards and I have to vote on the various categories. Final voting for the next awards will open on Wednesday, January 18, 2023 - the 29th Annual Screen Actors Guild Awards will take place on February 26, 2023.

THE ARKANSAS BANKER

• 25

26 • FALL 2022

SUPERVISORY GUIDANCE

on Multiple Re-Presentment NSF FEES

T

he Federal Deposit Insurance Corporation (FDIC) is issuing guidance to ensure that supervised institutions are aware of the consumer compliance risks associated with assessing multiple non-sufficient funds (NSF) fees arising from the re-presentment of the same unpaid transaction. Additionally, the FDIC is sharing its supervisory approach where a violation of law is identified and full corrective action is expected.

BACKGROUND Many financial institutions charge NSF fees when checks or Automated Clearinghouse (ACH) transactions are presented for payment, but cannot be covered by the balance in a customer’s transaction account. After receiving notice of declination, merchants may subsequently resubmit the transaction for payment. Some financial institutions charge additional NSF fees for the same transaction when a merchant re-presents a check or ACH transaction on more than one occasion after the initial unpaid transaction was declined. In these situations, there is an elevated risk of violations of law and harm to consumers.

During consumer compliance examinations, the FDIC has identified violations

of law when financial institutions charged multiple NSF fees for the re-presentment of unpaid transactions. The FDIC found that some disclosures provided to customers did not fully or clearly describe the institution’s re-presentment practice, including not explaining that the same unpaid transaction might result in multiple NSF fees if an item was presented more than once.

POTENTIAL RISKS ARISING FROM MULTIPLE REPRESENTMENT NSF FEES Consumer Compliance Risk: Practices involving the charging of multiple NSF fees arising from the same unpaid transaction results in heightened risks of violations of Section 5 of the Federal Trade Commission

(FTC) Act, which prohibits unfair or deceptive acts or practices (UDAP). While specific facts and circumstances ultimately determine whether a practice violates a law or regulation, the failure to disclose material information to customers about re-presentment and fee practices has the potential to mislead reasonable customers, and there are situations that may also present risk of unfairness if the customer is unable to avoid fees related to re-presented transactions.1 • Deceptive Practices: In a number of consumer compliance examinations, the FDIC determined that if a financial institution assesses multiple NSF fees arising from the same transaction, but disclosures do not adequately advise customers of this practice, the

1 These practices may also violate Section 1036(a)(1)(B) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (12 U.S.C. § 5536(a)(1)(B)), which prohibits any covered person or service provider from engaging in, among other things, abusive acts or practices in connection with a consumer financial product or service.

THE ARKANSAS BANKER

• 27

I N S T I T U T I O N S A R E E X P E C T E D T O M A I N TA I N

adequate oversight of third-party activities and appropriate quality control over products and services P R O V I D E D T H R O U G H T H I R D - PA R T Y A R R A N G E M E N T S .

misrepresentation and omission of this information from the institution’s disclosures is material. The FDIC found that if this information is not disclosed clearly and conspicuously to customers, the material omission of this information is considered to be deceptive pursuant to Section 5 of the FTC Act. • Unfair Practices: In certain circumstances, a failure to adequately advise customers of fee practices for re-presentments raises unfairness concerns because the practices may result in substantial injuries to customers; the injury may not be reasonably avoidable; and there may be no countervailing benefits to either customers or competition. In particular, a risk of unfairness may be present if multiple NSF fees are assessed for the same transaction in a short period of time without sufficient notice or opportunity for customers to bring their account to a positive balance in order to avoid the assessment of additional NSF fees. While revising disclosures may address the risk of deception, doing so may not fully address the unfairness risks.

Third-Party Risk: Third parties, including core processors, often play significant roles in processing payments, identifying and tracking re-presented items, and providing systems that determine when NSF fees are assessed. Such third-party arrangements may present risks if not properly managed. Institutions are expected to maintain adequate oversight of third-party activities and appropriate quality control over products and services provided through third-party arrangements.2 In addition, institutions are responsible for identifying and controlling risks arising from third-party relationships to the same extent as if the third-party activity was handled within the institution. Institutions are encouraged to review and understand the risks presented from their core processing system settings related to multiple NSF fees, as well as understand the capabilities of their core processing system(s), such as identifying and tracking re-presented items and maintaining data on such transactions.

Litigation Risk: Multiple NSF fee practices may result in heightened litigation risk. Numerous financial institutions, including some FDIC-supervised institutions, have faced class action lawsuits

2

FIL-44-2008, “Guidance for Managing Third-Party Risk” (June 6, 2008).

28 • FALL 2022

alleging breach of contract and other claims because of the failure to adequately disclose re-presentment NSF fee practices in their account disclosures. Some of these cases have resulted in substantial settlements, including customer restitution and legal fees.

RISK MITIGATION PRACTICES Institutions are encouraged to review their practices and disclosures regarding the charging of NSF fees for re-presented transactions. The FDIC has observed various risk-mitigating activities that financial institutions have taken to reduce the potential risk of consumer harm and avoid potential violations of law regarding multiple re-presentment NSF fee practices. These include: • Eliminating NSF fees.

• Declining to charge more than one NSF fee for the same transaction, regardless of whether the item is re-presented.

• Conducting a comprehensive review of policies, practices, and monitoring activities related to re-presentments and making appropriate changes and clarifications, including providing revised disclosures to all existing and new customers.

• Clearly and conspicuously disclosing the amount of NSF fees to customers and when and how such fees will be imposed, including: » Information on whether multiple fees may be assessed in connection with a single transaction when a merchant submits the same transaction multiple times for payment; » The frequency with which such fees can be assessed; and

» The maximum number of fees that can be assessed in connection with a single transaction.

• Reviewing customer notification or alert practices related to NSF transactions and the timing of fees to ensure customers are provided with an ability to effectively avoid multiple fees for re-presented items, including restoring their account balance to a sufficient amount before subsequent NSF fees are assessed.

Numerous financial institutions ... have faced class action lawsuits alleging breach of contract and other claims because of the failure to adequately disclose re-presentment NSF fee practices in their account disclosures.

If institutions self-identify re-presentment NSF fee issues, the FDIC expects supervised financial institutions to: • Take full corrective action, including providing restitution to harmed customers, consistent with the restitution approach described in this guidance; • Promptly correct NSF fee disclosures and account agreements for both existing and new customers, including providing revised disclosures and agreements to all customers;

• Consider whether additional risk mitigation practices are needed to reduce potential unfairness risks; and • Monitor ongoing activities and customer feedback to ensure full and lasting corrective action.

FDIC’S SUPERVISORY APPROACH When exercising supervisory and enforcement responsibilities regarding multiple representment NSF fee practices, the FDIC will take appropriate action to address consumer harm and violations of law. The FDIC’s supervisory response will focus on identifying

re-presentment related issues and ensuring correction of deficiencies and remediation to harmed customers.

In reviewing compliance management systems, the FDIC recognizes an institution’s proactive efforts to self-identify and correct violations. Examiners will generally not cite UDAP violations that have been self-identified and fully corrected prior to the start of a consumer compliance examination.3 In addition, in determining the scope of restitution, the FDIC will consider an institution’s record keeping practices and any challenges an institution may have with retrieving, reviewing, and analyzing re-presentment data, on a caseby-case basis, when evaluating the time period institutions utilized for customer remediation.4 Failing to provide restitution for harmed customers when data on re-presentments is reasonably available will not be considered full corrective action.

If examiners identify violations of law due to re-presentment NSF fee practices that have not been self-identified and fully corrected prior to a consumer compliance examination, the FDIC will evaluate appropriate supervisory or enforcement actions, including civil money penalties and restitution, where appropriate.

Page II-6.4 of the FDIC's Consumer Compliance Examination Manual.

In recent examinations, the FDIC has identified instances where institutions have been unable to reasonably access accurate ACH data for re-presented transactions beyond two years. In these cases, the FDIC has accepted a two-year lookback period for restitution. The FDIC expects supervised institutions to promptly address this issue. Institutions with challenges readily accessing accurate ACH data that self-correct this issue and provide restitution to harmed customers, as appropriate, for transactions occurring two years before the date of this Financial Institution Letter will generally be considered as having made full corrective action.

3 4

THE ARKANSAS BANKER

• 29

INDUSTRY U P DAT E S

Rule 1071

is in Need of Changes

by U.S. Rep. French Hill

T

he Consumer Financial Protection Bureau (CFPB) is moving forward with a rulemaking that should concern small banks and lenders across Arkansas.

30 • FALL 2022

The CFPB, under the leadership of Chairman Rohit Chopra, is working on a small business data collection rule, commonly referred to as “Rule 1071,” that will require lenders to collect and report data on credit applicants. While the rulemaking’s intent has

with the proposed timeline for implementation and the proposed definitions for “financial institutions” and “small business.”

I share these concerns and that’s why I introduced H.R. 6732, the Small LENDER Act, alongside Rep. Blaine Luetkemeyer (MO-03) and Rep. Roger Williams (TX25) to protect small banks and lenders from the CFPB’s overreach.

In their comments on CFPB’s proposal, the American Bankers Association expressed concern with CFPB’s definition of a “credit institution” as one that originates 25 transactions, stating, “The proposed 25-loan threshold is much too low and would force many community banks to raise prices, set minimum loan amounts, or even exit banking entirely to avoid the costs of the 1071 rule.” I agree. This is far too

“The Proposed Rule’s 18-month mandatory compliance schedule would be aggressive even for the largest most technologically savvy credit unions. [T]he vast majority of credit unions likely to be covered financial institutions under the Proposed Rule will be forced to rely on multiple IT vendors to develop, redeploy, and cross-test section 1071-compliant small business lending programs and tools.” Our bill extends the compliance date with the final rule to be three years after publication in the Federal Register, plus a two-year grace period, instead of the 18-month implementation period in CFPB’s rule.

Too often, one-size-fits-all rulemakings from Washington have a detrimental impact on small and local lenders. Having been involved in community banking on

“This threshold would unreasonably classify some clearly large businesses as small for purposes of the rule and vastly increase the size of 1071 data collection, the risk to data privacy, and the costs associated with compliance for covered financial institutions.”

merit – ensuring all Americans regardless of race, ethnicity, or gender have access to capital and credit – CFPB’s onerous reporting requirements will hurt small businesses by making the cost of credit more expensive and impose significant compliance costs on smaller companies, especially those owned by women and minorities.

The comment period for the rulemaking closed on January 6, 2022, and the CFPB received over 2,100 comments on its proposed rule with several organizations voicing their concerns with CFPB’s costly and excessive compliance standards, specifically

narrow of a definition, which is why my bill would change the definition of “financial institution” as one that originates at least 500 covered transactions in each of the last two years, as opposed to the 25-transaction threshold proposed in the rulemaking.

Additional commenters expressed concern with the CFPB’s proposal to codify “small business” as one with revenues of $5 million or less. In their comments, The Credit Union National Association said, “This threshold would unreasonably classify some clearly large businesses as small for purposes of the rule and vastly increase the size of 1071 data collection, the risk to data privacy, and the costs associated with compliance for covered financial institutions.” The Hill, Williams, Luetkemeyer bill codifies “small business” as one with gross annual revenues of $1 million or less in the last year instead of $5 million or less as defined in CFPB’s rule.

In regard to the 18-month timeline for implementation of the rule, The National Association of Federally-Insured Credit Unions expressed their concern, stating

and off for 40 years, I’ve seen first-hand how important access to capital is for small businesses. It is the lifeblood of our local communities and smaller lenders often lead the way in investing in the neighborhoods they serve. We should be making it easier for small banks and lenders to invest in our local businesses, not harder. While the comment period has closed, I encourage you to continue to make your voices heard and express your concerns to the leadership at CFPB as they move forward with their final rulemaking.

ABOUT THE AUTHOR U.S. Rep. French Hill, R-Little Rock, represents the 2nd Congressional District of Arkansas.

He is a former banker and U.S. Treasury official.

THE ARKANSAS BANKER

• 31

INDUSTRY U P DAT E S

32 • FALL 2022

–D.C. ROUNDUP–

Fed Launches Second Tool

TO HELP COMMUNITY BANKS

Meet Accounting Standard

by Carl White Federal Reserve Bank of St. Louis SVP of Supervision, Credit and Learning Division

I

n mid-June, the Federal Reserve released the Expected Losses Estimator (ELE), a spreadsheet-based tool designed to help community banks calculate their allowances for credit losses under the new Current Expected Credit Losses (CECL) accounting standard. As with

the SCALE tool released last summer, the ELE will assist small and less complex banks in complying with CECL.

TALE OF TWO TOOLS

The SCALE method and its accompanying spreadsheet tool were developed for the smallest community banks—those with less than $1 billion in assets. The method and tool use peer data derived from publicly available regulatory reports (Call Reports) of larger community banks as a starting point to assist small banks that don’t have complex loan portfolios.

The ELE tool, like SCALE, is designed for banks with less complex loan portfolios, but is aimed at a broader range of community banks than SCALE. The ELE tool essentially automates an existing CECL methodology, the Weighted Average Remaining Maturity (WARM) methodology. Under the WARM method, financial institutions

use their average annual historical loss rates on loans, much like they do now, and apply them to the remaining life of the loan pools to determine lifetime historical charge-off rates for the allowance under CECL. The ELE tool is Excel-based and can be used as the main tool in calculating the allowance for credit losses or as a supplementary tool to other CECL processes. The tool uses a bank’s own loan-level data and allows for qualitative adjustments. The code and formulas used to construct expected credit losses can be viewed, which allows the user to verify calculations.

MULTIPLE OPTIONS, ONE GOAL

The choice of a methodology for calculating expected credit losses is solely up

to bank management. When the move to CECL for estimating credit losses was announced, the Fed also noted that it is not a “one size fits all” requirement; it is scalable based on a bank’s size and complexity. The introduction of SCALE and now the ELE for smaller institutions is concrete evidence of our commitment to that pledge.

Full implementation of CECL is just around the corner. The new standard is required for years beginning after Dec. 15, 2022; banks that follow a calendar year will need to adopt CECL by Jan. 1, 2023. In addition to the SCALE and ELE tools, numerous other resources such as webinars and supervisory guidance are available for banks at the CECL Resource Center.

“The ELE tool, like SCALE, is designed for banks with less complex loan portfolios, but is aimed at a broader range of community banks than SCALE. The ELE tool essentially automates an existing CECL methodology, the Weighted Average Remaining Maturity (WARM) methodology.”

THE ARKANSAS BANKER

• 33

–D.C. ROUNDUP–

Central Bank

D I G I TA L C U R R E N CY ( C B D C )

by Brooke Ybarra American Bankers Association

P

olicy makers in the U.S. and around the world have begun examining a form of digital asset called central bank digital currency (CBDC). CBDCs are a digital asset that would be issued by a central bank

and remain as a liability on the central bank’s balance sheet. Contrary to popular belief, CBDCs are not intended to “digitize the dollar” as the dollar is largely digital today. Instead, the issuance of a CBDC would fundamentally rewire our banking and financial system by changing the relationship between individual customers and the Federal Reserve.

While there are several potential models for CBDC, in a January 2022 discussion paper the Fed indicated it is exploring a model where the CBDC is a liability of the Fed and widely available to the general public.

The Fed also promised not to move forward “without clear support from the executive branch and from Congress, ideally in the form of a specific authorizing law.” ABA responded to the Fed’s paper and has continued to advocate that there is no compelling use case for a CBDC. The Biden administration’s March 2022 executive order on digital assets called for additional examination of CBDC, and work on those is ongoing. Congress is also contemplating next steps.

WHY IT MATTERS TO YOUR COMMUNITY

The implementation of a CBDC would change the nature of our industry, financial

system, and economy. While proponents claim they could bring benefits, many of these benefits are theoretical and will be hard or impossible to realize. The risks associated with the issuance of a CBDC are tangible and in many cases unavoidable.

Importantly, the issuance of a CBDC would set the Fed up as a direct competitor for bank deposits.

Because a CBDC would be a liability of the Fed, it will inevitably sit on the Fed’s balance sheet instead of a bank’s. Even if delivered through a bank, a CBDC would be more akin to cash in a safety deposit box than an actual bank deposit. This deposit substitution would drain our nation’s deposit base and limit banks’ ability to make the loans that power economic growth.

More generally, it is unclear what policy goals a CBDC would achieve in the United States that cannot be better achieved by other means. For some

countries, a CBDC could enhance weak or nonexistent financial systems, whereas a CBDC does not appear well-positioned to enhance underlying financial capabilities or extend the reach of financial services in well-developed markets like the United States, despite the overly optimistic promises from proponents.

RECOMMENDED ACTION ITEMS

• Tell Congress to refrain from authorizing a CBDC until the purpose is clearly articulated and careful analysis demonstrates that the proposed model will deliver on the purported benefits while also mitigating the significant risks.

• Tell regulators not to issue a CBDC, unless they can ensure it will not threaten the health of the U.S. financial system by destabilizing existing banking and payments systems that are the backbone of our economy and markets.

“The implementation of a CBDC would change the nature of our industry, financial system, and economy. While proponents claim they could bring benefits, many of these benefits are theoretical and will be hard or impossible to realize.”

34 • FALL 2022

–D.C. ROUNDUP–

Data Aggregation 1033

by Brooke Ybarra American Bankers Association

D

ata is playing an ever-increasing role in all aspects of our economy, and banking is no different. Today, both banks and fintech companies offer products that rely on access to a consumer’s finan-

cial data, which is often housed at another institution. These products range from budgeting tools to income verification for underwriting.

Section 1033 of the Dodd-Frank Act guarantees consumers the right to access their financial records in a standardized electronic format. This has been widely interpreted to extend to consumers’ ability to share this data with authorized third parties. In 2017, the CFPB issued a set of principles that outline the Bureau’s vision for realizing a robust and safe market that gives consumers protection and value.

Since the principles were released, industry collaboration has led to the development of technical standards, industry utilities, and other technologies and practices that can help enable responsible sharing.

For example, banks, data aggregators, and other technology companies have worked together to invest in API-based standards that give consumers transparency and control when they share their financial data.

Traditionally, financial data was shared via a process known as “screen scraping,” where a user would give their login

credentials to the third-party – creating risks and leaving the consumer exposed.

A July 2021 Executive Order highlighted implementation of Section 1033 as a priority for this Administration. The CFPB issued an Advanced Notice of Proposed Rulemaking in 2021 and expects to continue rulemaking with a Small Business Regulatory Enforcement Fairness Act (SBREFA) outline and panel in November 2022.

In July 2022, ABA along with seven national trades, petitioned the CFPB to create a larger participant rule for data aggregators.

The petition has been posted for public comment and comments are due in October.

WHY IT MATTERS TO YOUR COMMUNITY

Banks support their customers’ ability to access and share their financial data in a secure, transparent manner that gives the customer control. Consumer financial data is extremely sensitive and must be protected appropriately. Accordingly, Congress has

recognized the sensitivity of financial information and has provided protections for it under the Gramm-Leach Bliley Act of 1999 (GLBA), which creates a legal framework for protecting consumer data, and for sharing that data with third parties. Importantly, when data leaves the secure bank ecosystem it is not always afforded these protections, exposing consumers to potential harm.

RECOMMENDED ACTION ITEMS

• Tell the CFPB to support existing market developments that protect consumers and to coordinate with banking regulators in any new rulemaking.

Overly prescriptive standards risk undermining the progress that has been made and if not well crafted, may leave consumers exposed.

• Urge the CFPB to create a larger participant rule that brings data aggregators under direct supervision to ensure consistent protections and outcomes for consumers.

“Section 1033 of the Dodd-Frank Act guarantees consumers the right to access their financial records in a standardized electronic format. This has been widely interpreted to extend to consumers’ ability to share this data with authorized third parties.”

THE ARKANSAS BANKER

• 35

INDUSTRY U P DAT E S

36 • FALL 2022

–FINTECH– FED GOVERNOR

Banks

Looking to Get into

Crypto

by Steve Brawner

B

anks are wanting to offer cryptotechnology services, so the Federal Reserve is studying how those activities should be supervised while reminding them to manage risks and act legally, said Michelle Bowman, one of the Fed’s seven members of the Board of Governors.

Bowman spoke in Little Rock at the inaugural VenCent Fintech Summit in mid-August. The summit is a gathering of banking and information technology professionals sponsored by The Venture Center, an entrepreneur support organization based in Little Rock. “Fintech” stands for “financial technology.” Bowman first spoke and then answered questions from Arkansas State Bank Commissioner Susannah Marshall and from the audience.

Bowman said banks want to better understand and potentially provide cryptotechnology services in light of consumer demand. Deposits are flowing to crypto firms, so banks want to offer those services themselves. But before a bank offers crypto services, it needs to consider the risks to itself and to its customers.

Bowman said the Fed is working to identify how it will supervise banks on a variety of digital asset activities, including crypto asset custody, purchases and sales, and loans collateralized by crypto. On Aug. 16, it released supervisory guidance reminding banks to have adequate systems, risk management and controls in place.

“We understand that everyone involved in this space is looking for clarity,” she said.

“One of the most important tools that we have as regulators is the ability to articulate clearly our supervisory expectations. That’s our most direct path to encouraging and supporting responsible innovation.”

She said the Fed is taking a similar approach to artificial intelligence, which banks are increasingly using for credit underwriting, back office operations, risk management and customer service. The Fed last year joined four other financial agencies seeking comment on the use of AI and machine learning. Risks exist for explainability,

arising where nonbank tech firms provide financial services and maintain the customer relationship while the bank provides the underwriting and underlying financial infrastructure. She said the Fed supports responsible banking innovations.

“Traditionally, banking regulators viewed innovation as a risk on a very long list of risks that need to be appropriately managed,” she said. “While that perspective won’t change, I recognize that evolving customer preferences require banks to meet these technology-enabled expectations.”

In response to a question from an audience member, Bowman said the Fed

“Deposits are flowing to crypto firms, so banks want to offer those services themselves. But before a bank offers crypto services, it needs to consider the risks to itself and to its customers.” data governance, cybersecurity, third party risk management and consumer compliance. She said regulators have received more than 100 responses that are helping them better understand questions banks have.

Bowman said the Fed’s developing FedNow Service will allow safe and instant payment services. Consumers and businesses will be able to make payments in real time any day and provide funds immediately to receivers. She expects the service to be available in mid-2023.

She said technology is changing how banks operate fundamentally. More and more banking is being done through digital channels rather than customers visiting a bank branch. New business models are

should not have the same risk expectations for community banks that it does for much larger financial institutions. She noted 2050 new banks were created annually in the past, but since 2008 few have been.

“That’s something that we really have to revisit and take a much closer look at why are the requirements so incredibly onerous and difficult, and at what point would an investor even think that they might see a return on investment if the capital requirements are so incredibly high that maybe 10 years from now they might be able to get a dividend?” she said.

She said the Fed’s mergers and acquisitions framework is “incredibly antiquated and outdated,” which is causing problems with succession in family-owned banks.

THE ARKANSAS BANKER

• 37

INDUSTRY U P DAT E S

38 • FALL 2022

–FINTECH– SUMMIT SPEAKERS

COVID-19 Changed Banking, Payments

by Steve Brawner

T

he COVID-19 pandemic altered customers’ expectations and the way they operate within the banking and finance sector, two presenters said Aug. 16 at the inaugural VenCent Fintech Summit held in Little Rock.

The summit brought together banking and information technology professionals from around the U.S. Damon Moorer, president and CEO of Tampa-based TCM Bank, and Tina Giorgio, president and CEO, ICBA Bancard and Vice Chair, TCM Bank, hosted a presentation, “How the pandemic changed the way we pay and what the future may hold.” Moorer said after the shutdown ended, the bank experienced a strong rebound in sales volume.

“Compared to pre-pandemic levels, credit spend went up, the average dollar amount of monthly payments also went up, and balances carried went down,” he said. “We saw a sizable shift from use of cash to other payment methods, debit and credit included.

I would say venues going cashless became a thing – all of a sudden, no cash accepted.”

Moorer said his bank saw a lot of “set it and forget transactions” where the seller had the customer’s card and account on file. He said credit spending is still high. Customers are still using their cards, earning their rewards and paying their cards off. He said rewards have always mattered but today matter more, especially travel rewards.

He said applications for cards have increased, and issuers are competing for their business with specialized products for niche markets, lucrative introduction offers, the return of balance transfers, and a focus on capturing new credit users including younger ones.

two quarters of 2022, Paypal had 429 million active users with an average balance of $485.

All of that money had temporarily left the banking system, she noted.

Moorer said most community banks do not have big research and development budgets and don’t do a good job of establishing and maintaining fintech partnerships. Community banks including his are still hampered by manual, paper-intensive processes. Custom solutions are needed that would let banks automate and streamline their operations.

“...any given time there are $3 billion sitting in PayPal wallets. In the first two quarters of 2022, Paypal had 429 million active users with an average balance of $485. All of that money had temporarily left the banking system.”

Giorgio said consumers compare financial institutions represented at the summit to the Big Tech companies like Amazon, which takes care of payments with one click. She noted that Amazon provides a “frictionless redemption experience,” although it’s a closed loop process involving only Amazon.

She said that any given time there are $3 billion sitting in PayPal wallets. In the first

Asked what low-hanging fruit exists, Giorgio said many don’t have credit cards.

She said they can eliminate the friction in their processes and must figure out how to digitize in order to attract younger customers.

She encouraged banks to ask their younger workers what it’s like to open an account.

They are potentially a great focus group whose members don’t have to be paid.

THE ARKANSAS BANKER

• 39

NEWS & MOVES AMBER MURPHY, ZAC PRICE ASSUME

NEW ROLES AT FIRST FINANCIAL BANK

F Amber Murphy Vice-President of Marketing

Zac Price

Retail Market President

irst Financial Bank recently announced the promotion of Amber Murphy as Vice-President of Marketing for the bank. Murphy will succeed Beth Weldon, who recently retired after 15 years as VP of Marketing.

“I’m really excited to lead our marketing team as we promote the FFB brand in our local communities and across the nation,” said Murphy. “We are growing as a department and as a bank and I look forward to working with our team and leaders in our community to bring our brand to life.”

Murphy has been with First Financial for nine years, serving in various roles within the marketing department.

“Amber has a great array of professional experience within our marketing team and can put that experience to work for those she serves,” said Chris Hegi, CEO of First Financial Bank. “We are fortunate to have someone with her experience and skill set to make the transition seamless for our employees and our customers,” he said.

Zac Price was recently announced as Retail Market President for First Financial Bank in Harrisburg.

Price has been a VP of Commercial Lending for FFB since 2020 in Harrisburg, and will succeed Bill Elliott in his role as Retail Market President.

Price received his BS in Finance from Arkansas State University in 2013. Additionally, he graduated from the LSU Graduate School of Banking in 2019.

“I’m really excited to lead our Harrisburg team in providing amazing products and services to our wonderful customers,” said Price. “Bill has been a wonderful mentor to me and many others, and I’m honored to follow in his footsteps.”

“Zac has played a key role in our growth and success, joining the Harrisburg team while still in college,” said Sean Williams, EVP and Chief Retail Officer for FFB. “His commitment to service and to people are significant and we are thrilled to have him lead the Harrisburg team. As Zac assumes market leadership, we appreciate Bill Elliott’s continued involvement as he transitions to less time inside the bank.”

BOK FINANCIAL PROMOTES FAYETTEVILLE BANKER

TO ARKANSAS MARKET PRESIDENT

T

ulsa, Okla.-based BOK Financial announced that Chris Schaechtel of Fayetteville is the company’s new Arkansas market president. He replaces Jacob Hudson, who took a new job with the company earlier this year.

“I have no doubt that Chris will do an excellent job of leading the Arkansas market,” Hudson said in a statement. “He has been part of the team since 2010, and our customers already have a great appreciation for his work ethic and commitment to providing the best customer service in the industry.”

40 • FALL 2022

BOK Financial is a publicly traded company with roughly $45 billion in assets and branches in eight states. In Arkansas, there are two offices in Bentonville and Fayetteville. BOK entered the market in 1994 when its subsidiary Bank of Oklahoma acquired a bank holding company with operations in Northwest Arkansas, which later became Bank of Arkansas.

Bank of Arkansas rebranded to BOK Financial in late 2019. The company has approximately 75 employees in Arkansas.

“HE HAS BEEN PART OF THE TEAM SINCE 2010, AND OUR CUSTOMERS ALREADY HAVE A GREAT APPRECIATION FOR HIS WORK ETHIC AND COMMITMENT TO PROVIDING THE BEST CUSTOMER SERVICE IN THE INDUSTRY.”

FARMERS BANK & TRUST NAMES SONJA YATES HUBBARD AS NEW DIRECTOR

T

Sonja Hubbard

Board of Directors / Audit Committee Chair

he Farmers Bank & Trust board of directors recently announced the addition of Sonja Hubbard as a director. In addition, Hubbard will serve as the audit committee chair for the bank. While Farmers Bank is majority female-owned, Hubbard will be the first female to serve on the board of directors.

“Adding Sonja Hubbard to our Farmers Bank & Trust board of directors is an enormous win for the bank,” said Farmers Bank & Trust Chief Executive Officer and Chairman of the Board, Chris Gosnell.

“Sonja’s proven leadership and an extensive list of national accomplishments will be tremendously valuable as we look to the future of the bank.”

Reared in Ashdown, Arkansas, Hubbard is a Certified Public Accountant who received her Bachelor of Science in Business Administration from the University of Arkansas in Fayetteville.

She is currently a principal for the Yates Group, Inc., which manages retained assets from E-Z Mart Stores, Inc., where she was formerly CEO

for 20 years. The family-owned convenience store assets were sold in 2018.

Hubbard has served as a member of the board of directors for the Federal Reserve Bank of St. Louis after serving as a director and president of the Little Rock Branch of the Bank. From 2009-2010, she served as Chairman of the National Association of Convenience Stores, representing the nation’s 152,000 stores and its members. She was the first woman and legacy, following her father’s footsteps, to serve in this capacity.

“When my parents, Jim and FaEllen Yates, founded E-Z Mart in 1970, they were young, visionary entrepreneurs but not wealthy. They relied on the support of community banks, including Farmers Bank & Trust, to get them started. Farmers financed stores #25 and #26 in Magnolia, Arkansas beginning a relationship that continued for many decades, meeting many more expansion needs. Having lived and seen the value of these relationships, I am excited to now be able to serve and support from the other side of the relationship.” Hubbard said.

RON WITHERSPOON TO LEAD

LITTLE ROCK MARKET FOR ARVEST BANK

R Ron Witherspoon President and CEO

on Witherspoon was named as the new local bank president and CEO for Arvest Bank in Little Rock, which includes parts of central and southwest Arkansas, effective Nov. 1.

Witherspoon is returning to Little Rock after serving as local bank president for Arvest in Oklahoma City since March 2014. Prior to that, Witherspoon served as sales manager in Little Rock from 2001-2014. He began his career with Arvest in 1997.

“Ron has been a strong leader within our bank for many years now,” Arvest regional executive Craig Rivaldo said. “His experience, leadership capabilities

and deep knowledge of Little Rock and all of central Arkansas make him an ideal fit for this position.

We have enjoyed and sustained significant growth in Central Arkansas, and I’m confident Ron will continue to lead us on that trajectory.”

Witherspoon replaces Jim Cargill, who will retire at year-end. Cargill and Witherspoon will work together during a two-month transition period.

Witherspoon is a graduate of the University of Arkansas, the American Bankers Association School of Bank Marketing and Management at the University of Colorado, and the Graduate School of Banking at Louisiana State University.

THE ARKANSAS BANKER

• 41

NEWS & MOVES SOUTHERN BANCORP NAMES

LATRICIA HILL-CHANDLER NEW CHIEF DEI OFFICER

L

LaTricia Hill Chandler

Chief DEI Officer

ittle Rock-based Southern Bancorp Inc. said that LaTricia Hill Chandler of Rogers is the company’s new chief diversity, equity, and inclusion (DEI) officer.

“We are thrilled to welcome LaTricia to our leadership team,” CEO Darrin Williams said in a statement. “When searching for a candidate to fill this position, we knew we needed someone with both a wealth of experience in the field along with values that align with our mission-focused work. LaTricia’s expertise, principles, and guidance will be invaluable as we prepare for growth that is reflective of our inclusive founding principles, which have from the beginning included a strong focus on increasing economic mobility in minority communities.”

Hill-Chandler has nearly 30 years of experience

Meredith Duke Loan Assistant

Jessica Boswell Internal Auditor

in DEI work. In 2019, she was named Arvest Bank’s first DEI officer, overseeing the initiative across the company’s four-state footprint. Before that, she worked in Walmart’s global DEI office, responsible for creating strategy and implementing the inclusive leadership initiative.

Hill-Chandler, a Magnolia native, said she would continue living in Rogers, working remotely and traveling to Little Rock as needed.

Southern Bancorp and its subsidiaries — Southern Bancorp Bank, Southern Bancorp Community Partners and Premier Bank of Arkansas — has $2.3 billion in assets with 54 locations in two states. Southern Bancorp is a certified Community Development Financial Institution (CDIF).

Tia Hamon

Associate Trainee

STONE BANK ADDS

3 TO STAFF

M

eredith Duke has joined Stone Bank as a Loan Assistant. She is a graduate of Rocky Mountain College of Art and Design and the University of Arkansas with degrees from both schools. Duke was most recently with Riverside Bank in Little Rock.

She will work in the Little Rock office.

Stone Bank also added Jessica Boswell as an

42 • FALL 2022

Internal Auditor. She is a graduate of University of Arkansas at Little Rock, with a degree in accounting. She was an Internal Auditor with Bank OZK and the State of Arkansas.

Tia Hamon has joined the bank as an Associate Trainee. She is a graduate of the University of Arkansas with a degree in Business Administration /Finance.

Stone Bank has offices in Little Rock, DeWitt, Gillett, Mountain View, Harrison and White Hall.

FIRST COMMUNITY BANK PROMOTES

JONES TO SENIOR VICE PRESIDENT

F Randy Jones

Senior Vice President, Commercial Lender

irst Community Bank has promoted Randy Jones to senior vice president, commercial lender in the financial institution’s Little Rock market. Jones joined First Community Bank in 2020 with nearly 30 years of experience in finance, 20 of which were in lending.

“I’m thankful and honored for the promotion,” said Jones. “In just two years with First Community Bank, I feel our West Little Rock team has made a positive impact for our customers and their businesses due to the bank’s willingness to truly invest in the community.”

He is currently working from the organization’s Saddle Creek location at 8201 Ranch Boulevard in Little Rock, but will be making the move to the new full-service banking center at the southeast corner of Chenal Parkway and Rahling Road next month.

“Randy is a great asset to our company. He brings a wealth of experience in the banking industry, which benefits his clients and the bank. His promotion is well deserved, and I am confident he will continue to serve his clients in the best manner possible,” said René Julian, community president in Little Rock.

ARKANSAS STATE BANK DEPARTMENT

PROMOTES 3, HIRES 4

T

he Arkansas State Bank Department has promoted three to Commissioned Bank Sr. Examiners and hired four new Bank Examiners.

Lance Black, Elliot Hartle, and Caleb Hamilton were promoted in August to their new roles.

Black earned a Bachelor of Science Degree with a Major in Financial Economics from Oklahoma Wesleyan University in 2013, and a Juris Doctor Degree from University of Arkansas at Little Rock William H. Bowen School of Law in 2016. Black has served the Arkansas State Bank Department in the Trust Examination Division since September 18, 2017.

Hartle earned a Bachelor of Business Administration Degree in Finance from University of Central Arkansas in 2009. Hartle is a veteran of the U.S. Air Force and has served the Arkansas State Bank Department in the Information Systems Examination Division since September 18, 2017.

Hamilton earned a Bachelor of Science in Business Administration with a concentration in Financial Services from Emporia State University in 2013, and a Master of Education from Rockhurst University in 2015. Hamilton has served the Arkansas State Bank Department at the Springdale Regional Office since November 16, 2020.

Shawn Smith, Paige Whitley, Tyler Lucas, and

Thomas Griggs were hired in late June as new bank examiners.

Smith earned a Bachelor of Science Degree in Business Management with a concentration in Leadership, from Arkansas State University in Jonesboro in 2002.

Smith has 18 years of work experience with the Arkansas Treasury. Smith will be working as a Commercial Examiner in the Little Rock office.

Whitley earned a Bachelor of Science Degree in International Business with a concentration in Marketing and a minor in Spanish, from the University of Arkansas in Fayetteville in December 2021. Whitley has prior work experience at Southern Bancorp Bank. She will be working as a Commercial Examiner in the Little Rock office.

Lucas earned a Bachelor of Business Administration Degree in Finance from University of Central Arkansas in Conway in 2018. He worked as a Teller/Senior Teller for Arvest Bank and worked at Bank OZK serving as an Assistant Branch Manager, Fraud Analyst and, as the VP Fraud Intelligence Manager. Lucas will be working as a Commercial Examiner in the Little Rock office.

Griggs earned a Bachelor of Science Degree in Finance and Banking from Arkansas State University in Jonesboro in May 2022. Griggs has banking experience with Centennial Bank in Jonesboro and six years of military experience including serving as a Staff Sergeant in the United States Air Force. Griggs will be working as a Commercial Examiner in the Jonesboro office.

Additionally, the Arkansas State Bank Department has hired Elizabeth Swaim as a Research Project Analyst. Swaim earned an Associates of Arts Degree in General Education from Arkansas State University Three Rivers in Malvern in 2007. She has prior work experience with both DHS and most recently with the Arkansas Insurance Department. Swaim will be working in the Administrative Division of the department’s Little Rock office.

THE ARKANSAS BANKER

• 43

NEWS & MOVES NATALIE BARTHOLOMEW TO LEAD

FIRST COMMUNITY BANK INTO NORTHWEST ARKANSAS

F

Natalie Bartholomew

Community President

irst Community Bank announced that Natalie Bartholomew has been hired as community president in Rogers and she’ll be leading future expansion efforts in Northwest Arkansas.

In her new role, Bartholomew will be responsible for securing a dedicated banking team, building lead relationships with area businesses, operational oversight in her territory, and establishing the financial institution’s presence in the region.

“First Community Bank has established a loan production office in Rogers slated to be open later this month, and pending regulatory approval, we intend to transition that location into a full branch by fall 2022. Entering the Rogers area is our initial step to grow our footprint in Northwest Arkansas. We are very fortunate to have a veteran banker like Natalie join our team and spearhead our efforts in the region.

Her phenomenal reputation precedes her, and we feel that she is the perfect fit for this role,” said Dale Cole, chairman and chief executive officer for First Community Bank.

With an accomplished 21 years of experience in banking, Bartholomew has previously worked in several areas of finance including, but not limited to

retail, customer service, credit analysis, marketing, human resources, strategic planning, commercial/ consumer/mortgage lending and executive leadership.

Bartholomew earned her bachelor’s degree in agricultural business and master’s degree in agricultural economics from the University of Arkansas. She was voted as class representative at the Graduate School of Banking Colorado of which she is a graduate and current faculty member.

Bartholomew notably founded the Girl Banker Platform in 2017 to serve as an advocate for women in banking and young women considering careers in banking. Within the platform, an online community has been created on various social media platforms including the Girl Banker Facebook Group that includes over 6,000 women in banking from over 36 states.

“As a fifth generation Northwest Arkansas resident, I am thrilled to be joining an Arkansas based bank that will support the communities that mean so much to my family,” said Bartholomew. “I look forward to utilizing First Community Bank's focus on developing strong relationships to build a strong team and branch network to support the Northwest Arkansas region.”

CROSS COUNTY BANK TO UNIFY

OPERATIONS UNDER CROSS BANK NAME

C

ross County Bank of Wynne announced a plan to unify the organization under a new name: Cross Bank.

Currently, Cross County Bank operates four offices in Cross County under the Cross County Bank name and six offices in Craighead, Monroe, and Mississippi Counties under the First Commercial Bank name.

“Unifying our bank under one name, Cross Bank, simplifies matters for our customers and our communities,” said David Dowd, President and CEO of

44 • FALL 2022

Cross County Bank. “Our First Commercial customers often don’t recognize they are part of a bank with a 131-year legacy in the community. Our Cross County Bank customers often don’t recognize the ability to conduct banking transactions at our six First Commercial Bank offices when it may be more convenient to do so. The name Cross Bank honors our heritage and solidifies our future as a locally owned and operated community bank.”

Cross County Bank was established in 1891 and is the second oldest bank charter among state-chartered banks in Arkansas. The bank plans to be known as Cross Bank in all 10 offices beginning November 21, 2022. Cross Bank will use a new logo, incorporating the familiar blue of Cross County Bank and a symbol that helps tell the story.

GOVERNOR HUTCHINSON APPOINTS

LISA HUNTER TO STATE BOARD OF EDUCATION

G

Lisa Hunter

Executive Vice President and Chief Data Officer

overnor Asa Hutchinson has appointed Lisa Hunter of White Hall to the Arkansas State Board of Education.

“Lisa will provide excellent leadership experience to Arkansas schools and communities,” Governor Hutchinson said. “She is as experienced as she is passionate and I believe she will have a meaningful impact on education within the state.”

Mrs. Hunter currently serves as executive vice president and chief data officer for Simmons Bank.

Prior to joining Simmons, Lisa started her career as an internal auditor at Premier Bank ( JP

Morgan Chase) in Baton Rouge, Louisiana, and later served as the assistant controller at Andrew Jackson Savings Bank in Tallahassee, Florida. She was part of the de novo Thomasville National Bank in Thomasville, Georgia.

“It is an honor to be selected, and I am very excited to serve the state of Arkansas,” Mrs. Hunter said. “I am grateful to the Governor for his confidence in me and for giving me an opportunity to make a positive difference in the lives of Arkansas children.”

Mrs. Hunter's term expires on June 30, 2029. She will replace Beth Anne Rankin.

TRUCKING INDUSTRY LEADER SHANNON NEWTON

NAMED TO COUNCIL AT FEDERAL RESERVE BANK

S

hannon Newton, president of the Arkansas Trucking Association, has been named to the Transportation Industry Council of the Federal Reserve Bank of St. Louis.

The St. Louis Fed created four District Industry Councils in 2006, each designed to provide the Fed with important feedback about economic conditions in key Eighth District industry sectors.

The members’ observations, along with the economic data developed through the Federal Reserve Board’s Beige Book and meetings of the Reserve Bank’s board

of directors, help ensure conditions in Main Street America are represented in monetary policy deliberations in Washington.

Each council is supported by one of the St. Louis Fed’s four offices: St. Louis (real estate); Little Rock, Ark. (agribusiness); Louisville, Ky. (health care); and Memphis, Tenn. (transportation). The councils meet twice a year.

ARVEST EXEC DONNY STORY,

FAYETTEVILLE MARKET LEADER, TO RETIRE

D

onny Story, president and CEO of Arvest Bank’s Fayetteville market, will retire after an almost four-decade career with the company.

Story’s retirement is effective at the end of the year. His banking career has spanned 43 years, with close to 37 of those with Arvest in multiple markets in Oklahoma and Arkansas. The company named him president and CEO in Fayetteville in 2004, just two days after former market leader Gary Head resigned to start Signature Bank of Arkansas.

“Donny’s contributions to Arvest are innumerable, and we can’t thank him enough for what he has done not just for the bank but for our customers, associates and communities,” said Craig Rivaldo, regional executive for Arvest. “He will be greatly missed as a friend and colleague, but we have known this announcement would be coming for some time and appreciate Donny working carefully with us to plan ahead.

Arvest maintains its charter in Fayetteville but operates over 200 bank branches in Arkansas, Oklahoma, Missouri and Kansas through a group of 14 locally managed banks, each with an independent board and management team. By assets ($26.6 billion), Arvest is Arkansas’ largest bank.

THE ARKANSAS BANKER

• 45

NEWS & MOVES CITIZENS BANK PROMOTES

KEVIN ANDERS TO VP RETAIL TRAINER

C

Kevin Anders

Vice President of Retail Training

itizens Bank also announced that Kevin Anders has been promoted to vice president of retail training.

In this position, Anders’ role includes content management, development, maintenance, design and delivery of retail training programs. He will be responsible for training, coaching and developing retail banking associates in line with Citizens Bank’s strategic plan.

“We are proud to support Kevin’s growth here at Citizens,” said Sarah Lane, chief retail officer at Citizens Bank. “He truly is a determined leader who loves seeing people succeed. I am excited to see him continue to flourish in his new role.”

Anders brings years of expertise in retail training to this new position.

“It is an awesome feeling seeing people you have trained and coached along the way get promoted and move on to do great things,” said Anders. “This role gives me the opportunity to invest in our associates and watch them grow.”

“IT IS AN AWESOME FEELING SEEING PEOPLE YOU HAVE TRAINED AND COACHED ALONG THE WAY GET PROMOTED AND MOVE ON TO DO GREAT THINGS.”

SEWARD PROMOTED

TO LOAN & BANKRUPTCY OFFICER

F Marcus Seward

Assistant Vice President, Loan & Bankruptcy Officer

46 • FALL 2022

armers and Merchants Bank and The Bank of Fayetteville, a division of The Farmers and Merchants Bank, announced the promotion of Marcus Seward to the role of Assistant Vice President, Loan & Bankruptcy Officer. In his new role, Seward will maintain a diverse loan portfolio and develop commercial relationships in the Northwest Arkansas area.

"Marcus is an astute banker with a broad range of experience”, stated Vice President Commercial Loan Officer Darien Wells. “We feel fortunate to have him as part of our bank family. He is a vital part of our team’s continued strength, and we look forward to seeing all he can accomplish in his new banking role."

Since starting his career with The Bank of Fayetteville 20 years ago, Seward has served in branch management, loan operations, and special assets. Based at the Bentonville branch, Seward will continue to manage delinquent cases and oversee bankruptcy proceedings on behalf of the financial institution in addition to his new lending role.

In addition to two decades of banking experience, Seward holds a Bachelor of Science degree in Corporate Finance from Post University. He has also earned consumer and commercial lending diplomas from the Center of Financial Training in Little Rock.

Farmers and Merchants Bank, headquartered in Stuttgart, is a locally-owned community bank with 27 locations across the state of Arkansas, including eight operating as The Bank of Fayetteville. With assets in excess of $1.6 billion, Farmers and Merchants is the 10th largest bank chartered in Arkansas.

BASED AT THE BENTONVILLE BRANCH, SEWARD WILL CONTINUE TO MANAGE DELINQUENT CASES AND OVERSEE BANKRUPTCY PROCEEDINGS ON BEHALF OF THE FINANCIAL INSTITUTION IN ADDITION TO HIS NEW LENDING ROLE.

5 EARN PROMOTIONS

AT FIRST COMMUNITY BANK

F Mandy Vaughan

Senior Vice President, Special Assets Manager

irst Community Bank has announced that Debra Taylor has been promoted to senior vice president, commercial lender. A longtime banker, Taylor joined First Community Bank in 2013 and she has been in the banking industry since 1987.

Taylor is a graduate of the Barret School of Banking in Memphis, Tennessee, and she successfully completed Leadership Jonesboro.

“I am grateful for my recent promotion and really enjoy being able to help our customers obtain financing,” Taylor said, “First Community Bank’s commitment to serving the financial needs of our local communities and beyond is a true testament to our motto, ‘Where community comes first.’”

First Community Bank promoted Mandy Vaughan to senior vice president, special assets manager.

Vaughan began her banking career over 20 years ago and has been with First Community Bank since 2000.

During her tenure, she has served in the credit, legal, and loan review departments before moving to her position in the special assets department where she is responsible for managing a multi-state portfolio associated with bank owned properties and repossessed assets. This includes renovations to bank owned real estate, realtor listing agreements, and disposal of assets. She is also responsible for managing the banks facilities department and addressing all related needs in each of the bank’s network, as well as assisting with planning and oversight of new branch construction projects.

Vaughan is a 2007 graduate of the Barret School of Banking in Memphis, Tennessee.

Paul Hindman has been promoted to senior vice president, chief regional lending officer in the Jonesboro area.

Hindman has nearly 30 years of experience in banking, and prior to assuming the role of chief regional lending officer, Hindman served as senior regional lender. He joined First Community Bank in 2014 as senior vice president, senior credit officer.

Hindman earned his bachelor’s degree in finance and banking from Arkansas State University.

First Community Bank announced that Amy Tuggle has been promoted to senior vice president, secondary mortgage production manager for the organization’s home lending division. In her new role, she will oversee and manage all secondary market originators while serving as a liaison for the department throughout the bank’s market network.

Tuggle joined the bank in 2006 in the customer service department before joining the mortgage department in 2009. A lifelong White County resident, she and her husband, Bart, are deeply rooted in the community and knowledgeable about mortgage and real estate practices. She earned her degree in business administration from Arkansas State University.

Tabitha Eddington has been promoted to community president for the Harrison region for First Community Bank. With 21 years of experience in banking, Eddington previously served as branch manager and commercial lender upon joining the financial institution in 2019 to open the bank’s first location in the Harrison market.

Eddington earned her bachelor’s degree in finance from the University of Central Arkansas. She is an active member in her community and currently serves as president of the Harrison school district PTA council, chairperson for the city of Harrison homeless committee, and chairperson of the fundraising committee for Camp Jack, a local veteran’s resource center.

“FIRST COMMUNITY BANK’S COMMITMENT TO SERVING THE FINANCIAL NEEDS OF OUR LOCAL COMMUNITIES AND BEYOND IS A TRUE TESTAMENT TO OUR MOTTO, ‘WHERE COMMUNITY COMES FIRST.’”

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NEWS & MOVES ARVEST PROMOTES

MAGNESS AND LAFFERTY

A

April Lafferty

Business Banker II

rvest Bank’s mortgage division has promoted Randy Magness to the position of regional mortgage loan manager. Magness has 11 years of industry experience, most recently serving as mortgage loan manager for Arvest in Fort Smith.

In his new role, Magness is responsible for the ongoing development of sales and operational excellence for mortgage associates throughout Arvest’s four-state footprint. He will assist in recruiting efforts, conduct advanced sales training and work with local bank leadership on a variety of initiatives, among other duties. Magness will remain based in Fort Smith.

“Randy really proved himself as a leader managing our team in Fort Smith and we look forward to him playing a larger role with this promotion,” said Shawn Karnes, executive director of mortgage sales and development for Arvest. “Randy understands how to help others succeed, which in turn, allows our associates to help more customers with their mortgage needs.”

Arvest Bank has also promoted April Lafferty to the position of business banker II in Cabot. Lafferty has 14 years of industry experience and most recently served in a commercial lending-related role. In her new position, Lafferty will focus on small business lending, among other responsibilities, in Cabot and the surrounding areas.

She earned an associate degree from Arkansas State University-Beebe and holds an American Bankers Association certificate in small business.

LAFFERTY HAS 14 YEARS OF INDUSTRY EXPERIENCE AND MOST RECENTLY SERVED IN A COMMERCIAL LENDING-RELATED ROLE. IN HER NEW POSITION, LAFFERTY WILL FOCUS ON SMALL BUSINESS LENDING, AMONG OTHER RESPONSIBILITIES, IN CABOT AND THE SURROUNDING AREAS.

CITIZENS BANK PROMOTES

KATHRYN PANNELL

C

Kathryn Pannell

Senior Vice President, Director of Treasury Management

48 • FALL 2022

itizens Bank, headquartered in Batesville, has announced the promotion of Kathryn Pannell, who will be serving as senior vice president, director of treasury management.

In this position, Pannell’s role will expand to include additional responsibilities.

She will now manage the entire treasury management department, including both sales and servicing. Pannell reports to Anastasia Blaylock, Citizens Bank’s EVP, Chief Strategy Officer.

“Simply put, Kathryn is a pro,” said Blaylock. “She has been an integral part of the success of treasury management at the bank and will no doubt lead the team to continued growth. Her knowledge of treasury and background in management make her the perfect fit for this position. I couldn’t be more excited to see her step into this role.”

Pannell has been with Citizens Bank since 2019 and has quickly proven to be an integral addition to the team.

“I have a true passion for treasury management and the solutions we offer our clients,” said Pannell. “I look forward to guiding our team as we continue to grow and add additional services. Through excellent customer service and management skills, we will be able to offer the most creative solutions for every challenge and opportunity that comes our way.”

“SHE HAS BEEN AN INTEGRAL PART OF THE SUCCESS OF TREASURY MANAGEMENT AT THE BANK AND WILL NO DOUBT LEAD THE TEAM TO CONTINUED GROWTH. HER KNOWLEDGE OF TREASURY AND BACKGROUND IN MANAGEMENT MAKE HER THE PERFECT FIT FOR THIS POSITION.”

LONGTIME REGION’S BANKER

RETIRES AFTER 46 YEARS

A

fter 46 years, Rogers bank executive Jerry Vest retired on Aug. 31 as Regions Bank’s top Northwest Arkansas market executive.

Vest, 68, has worked for Regions Bank in various positions in Fort Smith and Rogers since May 1976.

An Arkansas native, he went right to work after graduating with a finance degree from the University of Oklahoma. He was a four-year letterman and scholarship basketball player for the Sooners.

Vest has worked in Rogers since 2000, overseeing Regions Bank operations in Northwest Arkansas, Fort Smith and southwest Missouri.

Jacyln Henderson, who previously served as vice president and commercial relationship manager, takes over the bank’s top regional leadership position. She is a Rogers native and has worked for Regions Bank for 16 years.

Regions Bank has four offices in Benton and Washington counties and four in Fort Smith. It’s a subsidiary of Regions Financial Corp. (NYSE:RF), with more than $161 billion in assets and approximately 1,300 banking offices in 16 states.

VENTURE CENTER NAMES TWO

TO BEEF UP FINTECH PROGRAMMING

T

he Venture Center announced it is growing its team of leaders to focus on building its fintech programming and to expand entrepreneurial support in the global financial technology industry.

Hamza Qadir has been promoted to managing director of fintech programs and will lead the Venture Center’s efforts working with the most promising fintech founders and the world’s top financial services industry leaders seeking innovation to better serve their customers. Pierce Sloan has been promoted to senior program manager for fintech programs and Camille Santrach has been hired as program manager for fintech programs.

The moves come on the heels of the Venture Center’s recent inaugural VenCent Fintech Summit in Little Rock held in August.

“Our influence in the fintech space is growing as we continue to build strong partnerships with bankers and entrepreneurs around the world,” said Wayner Miller, executive director of The Venture Center. “A welcome spotlight is on Little Rock to continue as a desirable hub for fintech, and this strategic move to focus more of our time and resources on fintech programs and grow our industry reach makes sense as we keep an eye on what’s ahead for Arkansas. Hamza, Pierce and Camille are highly capable and passionate about equipping the entrepreneurs with whom we work.”

RANDY BEARCE TO LEAD FARMERS & MERCHANTS BANK IN JONESBORO MARKET

T

he board of directors of Farmers & Merchants Bank has appointed Randy Bearce as market president for its Jonesboro operations. In his new role, Bearce will oversee the retail and lending operations in Northeast Arkansas’ largest city. He served as a commercial lender.

“I’m excited for Randy to move into this leadership position,” private banking manager Gary Childers said. “He is well-respected by the bank staff, his customers and the Jonesboro community. Randy is a person that goes above and beyond to serve his customers as well as Jonesboro, and he has the experience necessary to be a successful Market President. Congratulations Randy.”

A Jonesboro native, Bearce is an alumnus of Valley View High School and Arkansas State University, where he earned a degree in finance. Bearce started his career in the

financial industry more than 27 years ago and has worked as a lender in the Jonesboro region since 1999.

He joined the Farmers & Merchants Bank and Integrity First team in 2013.

Farmers & Merchants Bank, headquartered in Stuttgart, is a locally-owned community bank with 27 locations across the state. Farmers & Merchants recently expanded its footprint in the Jonesboro area with a second branch at Parker Road and Southwest Drive. With assets in excess of $1.6 billion, Farmers & Merchants is the 10th largest bank chartered in Arkansas.

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50 • FALL 2022