Community Banking Advisor: Is Your Bank a Public Business Entity?

Classification as a public business entity (PBE) can have a big impact on a bank’s financial statements. For example, non-PBEs are exempt from certain GAAP requirements, usually have more time to adopt new accounting standards, may elect to follow some private company accounting alternatives and often enjoy less stringent disclosure requirements than PBEs.

Generally, under the FASB’s definition, PBEs are SEC filers and other entities that have publicly traded securities. In addition, they include entities 1) that have one or more securities not subject to contractual restrictions on transfer, and 2) that are legally required to prepare U.S. GAAP financial statements and make them publicly available on a periodic basis.

Banks whose total assets exceed $500 million are subject to the Federal Deposit Insurance Corporation Improvement Act (FDICIA), which requires them to file annual audited U.S. GAAP financial statements with the FDIC and make them publicly available upon request. If a FDICIA bank also has one or more securities not subject to contractual restrictions on transfer, it meets the definition of a PBE.

What Guidance is Available on Mortgage Servicing Rules?

The Consumer Financial Protection Bureau’s final mortgage servicing rules take effect on October 19, 2017 (though certain provisions don’t kick in until April 19, 2018). Several resources are available to help bankers comply with these complex new rules. For example, the American Bankers Association (ABA) recently published its Reference Guide to Mortgage Servicing, which is free to ABA members. According to the ABA, the publication is “organized based on the lifecycle of a mortgage loan, making it easier to find information.” In addition to a linked table of contents, the guide contains several quick­reference compliance aids, plus practical tips for compliance. The Independent Community Bankers of America (ICBA) also offers a free summary of the new rules. Click here to read.

How Do You Attract Millennials?

A 2016 survey commissioned by Kasasa (a provider of products and services to community banks) and conducted online by the Harris Poll provides insights into the banking preferences of Millennials. Here are a few highlights:

  • 83% would switch to a bank that offered more or better rewards, such as a high interest rate on checking, cash back on purchases or ATM fee refunds.
  • 65% would be more open to switching to a community bank if it offered mobile services, such as mobile apps or mobile check deposit.
  • 93% say no-fees banking is important when choosing an institution for their everyday banking needs.
  • 90% say convenient location is important when choosing an institution for their everyday banking needs.