Daily News

July 30, 2012

California Issues

CBA Supports Supreme Court Review of Adverse Mechanics Lien/Stop Notice Decision

CBA filed a friend of the court letter to the California Supreme Court supporting review of a decision in which construction lenders were not permitted to file a motion to compel a mechanics lien/stop notice claimant to prove the probable validity of its claim.We argued that the court of appeal misconstrued the prevailing authority when it decided that only the developer/borrower could file such a motion.The case is important to lenders when the construction loan is in default and the developer may not be motivated to oppose contractor claims. The case is Cal Sierra Construction Inc. v. Comerica Bank, East West Bank and Pacific Western Bank.


CBA Requests Depublication of Bank Defamation Case

CBA asked the California Supreme Court to depublish the court of appeal’s decision of Summit Bank v. Rogers, which struck down California’s law making it illegal to publish false statements about a bank that are derogatory to its financial condition. CBA argued that the decision was gratuitous as the statute was peripheral to the dispute in which the bank’s single cause of action against its former employee was for garden variety defamation under a different general statute. The constitutionality of the bank libel statute had not been litigated at trial nor by the parties on appeal, but was first raised by the court of appeal itself. The issue was simply not ripe for adjudication and it was inappropriate for the court to take the extraordinary action. CBA’s letter was ably prepared by Ken Russak with the firm of Frandzel Robins Bloom & Csato.


CBA Sends Comments to the Attorney General’s Office on Child Support Orders to Withhold

Last year CBA urged the California Department of Child Support Services (DCSS) to clarify whether banks that are served with orders to withhold from DCSS are required to stack accountholder exemptions found in two separate statutes: Family Code Section 17453(j)(2) ($3,500 exemption) and Civil Procedure Code Section 704.080 (category-based exemptions). At our urging, the DCSS asked the attorney general to issue an opinion. CBA commented that the legislature did not intend for the amounts under the exemption statutes to be applied cumulatively.



Membership Issues


Safety & Soundness 2012

Each banking crisis brings enhancements to our model and as we begin to recover from this one, all of us are trying to introduce improvements in such areas as strategic planning, credit underwriting, auditing procedures and ALCO, to name a few. This year, our workshop will include team discussions that encompass the six CAMELS issues including highlights from the speakers as to the issues they view as most relevant.

Representatives from the FDIC, OCC, Federal Reserve Bank of San Francisco and the California Department of Financial Institutions will first respond to these issues, then share their experiences and guidance with our bankers. Throughout the day we will focus on the issue of “stress testing” and how each CAMELS topic is impacted by these tests. Between the best practices already in place by our participants and the enhancements our regulators are seeing, we expect to have a much better understanding of stress testing in today’s complex banking world.

CEOs, CFOs, COOs, general counsels, chief credit officers, directors, compliance officers, controllers, credit officers, compliance, operations managers, bank counsel, audit and accounting managers, financial analysts, treasurers and cashiers should attend this workshop.

This program will be led by Karl Nelson, CEO, KPN Consulting, who will be joined by: California Department of Financial Institutions, Assistant Deputy Carol Rhyne and Examinations Manager Emil Mikhail; Office of the Comptroller of the Currency, Senior Safety & Soundness Examiner Mike Venardi; Federal Reserve Bank of San Francisco, Banking Supervision and Regulation, John Byrd; and Federal Deposit Insurance Corporation, Field Supervisor Melissa Carlson.

We will be offering this event just once on Thursday, September 13 at Disney’s Grand Californian Hotel in Anaheim.

For more information/registration please visit the CBA website or contact John Lingvall at 916/438-4428, jlingvall@calbankers.com.


Advanced Credit Analysis Workshop

This workshop will focus on the development and use of cash flow analysis in the risk assessment and structuring of commercial loans, including projected cash flows to help ensure repayment. The skills developed in these sessions will also bring the bank into the current regulatory guidelines for commercial loan underwriting and workout credits.

We will explore the use of cash flow analysis in the risk assessment and structuring of commercial loans. Borrowing causes are discussed to allow the banker to understand the business activities that give rise to the need for cash. The most effective loan officers are able to serve as consultants to their customers. You can help your customers make better business decisions without entering into the risk of lender liabilities. This class will also cover projection of cash flows to answer the question; will you be able to pay the bank in the future?

Commercial loan officers, business bankers, credit analysts, loan underwriters, loan review analysts, credit support officers, credit administration, portfolio managers, branch managers and personal bankers will all benefit from this program.

The workshop will be delivered by David Kemp, president of Bankers Management, Inc. (BMI). Prior to forming BMI, he served as vice president, director of credit services for Canon Financial Institute in Athens, Georgia. Before joining Cannon, he was vice president of corporate finance with Citicorp. He has delivered credit and sales training to more than 30 banking associations and numerous financial institutions throughout the United States.

We will offer this course just once this year, on Tuesday and Wednesday, October 23 and 24 at the Hyatt Regency Century Plaza. For more information/registration please visit the CBA website.

For questions on this or any other CBA program, please contact John Lingvall at 916/438-4428 or jlingvall@calbankers.com.


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