virginia banking july/august 2012

IN THIS ISSUE BANK DAY SCHOLARSHIPS AWARDED | ANNUAL CONVENTION COVERAGE

July/August 2012

VBA Welcomes Jeff Szyperski, NEW CHAIRMAN

Diebold ATM security. Not like a security guard, like a security army.

With losses at $1 billion a year, threats to ATM security are increasing and alarming. It’s why Diebold is relentlessly proactive with an entire team dedicated to keeping its customers

safe. From ATM security alert e-mails and ATM educational seminars to developing security solutions that combat sophisticated attacks, Diebold delivers a multilayered security

approach. It’s another example of Diebold doing more to build the relationships that have inspired us to become security leaders and innovators for more than 150 years.

For the entire story, visit www.diebold.com/boldsecurity.

1.800.806.6827 www.diebold.com [email protected]

die7614-06_ATM Security_ConnBanker_v01AR_20120627.indd 1 6/27/12 10:14 AM

2012-2013 OFFICERS AND DIRECTORS OF THEVIRGINIA BANKERS ASSOCIATION

Jeffrey M. Szyperski, Chairman, Chesapeake Bank

Gary R. Shook, Chairman-Elect, Middleburg Bank

William Couper, Immediate Past Chairman, Bank of America, NA

O. R. Barham, Jr., StellarOne Corporation

Christopher W. Bergstrom, Cardinal Bank

Katherine E. Busser, Capital One Financial Corporation

Tim Butturini, Wells Fargo Bank, N.A.

Larry G. Dillon, C&F Bank

Randy K. Ferrell, The Fauquier Bank

Larry A. Heaton, Franklin Community Bank, NA

T. Gaylon Layfield, III, Xenith Bankshares, Inc.

John R. Milleson, Bank of Clarke County

Susan Ralston, Bank @Lantec

John G. Stallings, SunTrust Bank

David P. Summers, Virginia Heritage Bank

Daniel G. Waetjen, BB&T

Michael O. Walker, Benchmark Community Bank

AT-LARGE MEMBERS

Benefits Corporation Chair

Richard M. Liles, Bank of McKenney

Management Services Inc. Chair

Frank Bell, III, Chesapeake Bank

Government Relations Committee Chair

Monte L. Layman, Blue Ridge Bank

VBA Education Foundation Chair

H. Watts Steger, III, Botetourt Bankshares, Inc.

EDITORIAL & EXECUTIVE OFFICES

4490 Cox Road Glen Allen, VA 23060804-643-7469 Fax 804-643-6308www.vabankers.org

Bruce T. WhitehurstPresident and CEOVirginia Bankers Association

Chandler DeweyManager, Communications/

Marketing and Financial LiteracyVirginia Bankers Association

SUBSCRIPTIONSIf you would like to subscribe to Virginia Banking, contact Chandler Dewey at [email protected]. Virginia Banking is published bi-monthly. Copyright 2012.

Statements of fact and opinion aremade on the responsibility of theauthors alone and do not imply anopinion or endorsement on the partof the officers or members of VBA.

features

VBA Welcomes Jeff Szyperski, New ChairmanThe chairman, president & CEO of Chesapeake Bank starts his one-year term.

4 Calendar of Events 5 Insights 6 Worth Noting 8 Legal Line 10 Legislative Update

11 Washington Update 15 Welcome New Associate Members 20 Compliance Corner 22 Bankers on the Move

Send us your thoughts or ideas on Virginia Banking! Please email Chandler Dewey at

[email protected]. Has your information changed? Please email Kellee Edelin at

[email protected] with your new contact information.

12

16

18

20

in every issue

Ashley Baboota Wins VBA Bank Day Scholarship ProgramSix additional winners take home $1,000 scholarships.

VBA’s 119th Annual Convention a Success Coverage and photos of the annual meeting.

Compliance, Possible Legal Issues Loom for Banks That Lag New ATM-ADA Requirements Initial compliance deadline is past and banks need to catch up.

The Warren GroupDesign / Production / [email protected]

©2012 The Warren Group Inc. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. Advertising, editorial and production inquiries should be directed to: The Warren Group, 280 Summer Street, Boston, MA 02210. Call 800-356-8805.

PUBLISHED BY

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

July/August 2012 | Virginia Banking 3

July/August 2012

INSTRUCTOR-LED SEMINARS

CFO CONFERENCE, CHARLOTTESVILLE AUGUST 27

CONSUMER LENDING 2012, GLEN ALLEN SEPTEMBER 18

HOW TO ENSURE COMPLIANCE WITH DEPOSIT REGULATIONS SEMINAR, VIENNA

SEPTEMBER 25

HOW TO ENSURE COMPLIANCE WITH DEPOSIT REGULATIONS SEMINAR, SANDSTON

SEPTEMBER 26

COMPLIANCE HOT TOPICS, GLEN ALLEN SEPTEMBER 26

HOW TO ENSURE COMPLIANCE WITH DEPOSIT REGULATIONS SEMINAR, CHESAPEAKE

SEPTEMBER 27

CREDIT MANAGEMENT CONFERENCE, CHARLOTTESVILLE OCTOBER 1

COMMERCIAL LENDING SCHOOL, GLEN ALLEN OCTOBER 17

HOW TO ENSURE COMPLIANCE WITH DEPOSIT REGULATIONS SEMINAR, LYNCHBURG

NOVEMBER 1

ONLINE SEMINARS

AIB PRINCIPLES OF BANKING AUGUST 13

AIB BASIC ADMINISTRATION DUTIES OF A TRUSTEE AUGUST 13

ABA ONLINE REVIEW COURSE FOR THE CRCM EXAMINATION

AUGUST 13

IRA ONLINE INSTITUTE SEPTEMBER 4

WEBINARS

ADVANCED COLLECTION TECHNIQUES SEPTEMBER 11

INTERVIEWING SKILLS SEPTEMBER 11

BUILD AN EFFECTIVE REFERRAL PROGRAM IN 60 DAYS SEPTEMBER 12

EFFECTIVE COMMERCIAL BUSINESS DEVELOPMENT PROGRAMS SEPTEMBER 12

MERGERS AND ACQUISITIONS IN THE CURRENT ENVIRONMENT SEPTEMBER 12

STRATEGIC PLANNING FOR A NEW ENVIRONMENT SEPTEMBER 13

LEADING THE PROSPECTING EFFORT SEPTEMBER 17

LOAN REVIEW: THE BEST TIME FOR BEST PRACTICES IS NOW SEPTEMBER 18

PROBLEM LOAN IDENTIFICATION AND PREVENTION SEPTEMBER 18

FIVE STEPS TO A SUCCESSFUL IT RISK ASSESSMENT SEPTEMBER 19

IRA BASICS SEPTEMBER 19

UPDATE ON HOT TOPICS IN COMPLIANCE SEPTEMBER 19

GROWING PROPERLY-PRICED, LONGER-TERM CORE DEPOSITS SEPTEMBER 20

REBOOTING LEADERSHIP: PRACTICAL TOOLS FOR FRONTLINE LEADERS IN THE NEW WORLD OF WORK SEPTEMBER 20

PROACTIVELY ASSESSING YOUR MANAGEMENT TEA SEPTEMBER 25

IRA BENEFICIARY DISTRIBUTIONS SEPTEMBER 26

Live Event Online Seminar Webinars

Information and online registration is available at the VBA website. Please either go to www.vabankers.org or use this form to check the box next to the program you want information about, then fax the form to the VBA offi ce at 804-643-6308. The VBA will send you information about the program as soon as it is available, usually eight weeks before the program.

Name___________________________________________________ Bank/Firm _____________________________________________

Address ____________________________________________________________________________________________________________________

City________________________________________________________________ State/Zip ___________________________________

Phone___________________________ Fax_________________________ Email ___________________________________________________

For more information go to www.vabankers.org.

4 Virginia Banking | July/August 2012 www.vabankers.org

Calendar of Events

“What we see depends mainly on what we look for.”

— Sir John Lubbock, 1823-1913English Banker, Politician and Scientist

Our theme for the 119th VBA Annual Con-vention in June was “Perspectives.” We had a great program including perspec-

tives on the banking industry, the economy, social media and the political landscape. To be sure, our speakers talked about the various challenges we face as a nation and as bankers, but there was a decidedly more upbeat feel to the convention and more optimism in both prepared remarks and in-formal discussion than we have seen in several years.

At the VBA, we have been getting a lot of per-spectives on the economy, the industry and the political landscape from bankers and from other interested observers. As I mentioned in my re-marks at the annual convention, it is clear that we are in a time of sea change, which means there is turbulence before calm is restored. It is increasingly evident that we will ride out the sea change and emerge stronger on the other side, even if that is hard to fully believe at present.

This spring we held six regional Leadership Divi-sion events around the commonwealth. Emerging bank leaders, CEOs and other executives partici-pated and we had great discussion about current industry challenges and opportunities. One ques-tion I posed – so we would think in a glass-half-full kind of way – was, “what keeps you asleep at night?” There were some humorous answers about various sleeping aids (as I’m sure you can imag-ine), but there was also a range of very positive re-sponses. Here are some to consider:•Knowing the positive impact my bank makes on

our customers and the communities we serve.•Banking is a noble profession; we do really

good things for people and for businesses.•The important financial literacy work we do

and the difference it will make.•Seeing the bright young talent we are attracting

to this industry even while our industry’s im-age has been unfairly tarnished.

•Knowing we will figure out what it takes toadjust to new regulations and new compliance requirements; even though it won’t be fun, we are up to the task.

All of these insights resonated with me and gave me hope for where bankers see the industry go-ing. We are a noble industry that makes people’s dreams come true. We invest in our communities in many ways. We have awesome young people com-ing into the industry who are clear future leaders; we are fortunate that we can say the same about the VBAstaff.And,despite the significant challengeswe face on the regulatory compliance front, we are the industry most likely to succeed; just look at the past 100 years or so and how resilient our great in-dustry has been.

Without a doubt, we have a lot of near-term chal-lenges. We must remain vigilant to seek improve-ments to the banking environment so that we are not overburdened with regulations that are unnec-essary, yet add cost to the banking business which ultimately must be passed on to customers. We mustfindthatbalancebetweenappropriateregu-lation and the ability to run banks as the privately held companies that they are. We must forge ahead as we have always done, with a single-minded focus on maintaining the best possible position from which to serve our customers effectively so we can help them realize their dreams. Confucius said, “When it is obvious that the goals cannot be reached, do not adjust the goals, adjust the action steps.” Our goals are clear, so we will continue to adjust the action steps needed to accomplish them.

We all have different perspectives based on our own experiences. That fact makes it even more amazing that, through the VBA, Virginia bank-inghasunifiedfornearly120yearstoaccomplishshared goals for our industry. Year 119 – under the leadership of VBA Chairman Bill Couper, the VBA and affiliated boards, VBA committees andthe thousands of bankers who participated in our grassroots legislative efforts – was no exception. My sincere thanks to all member banks for another great year and here is my perspective: I am incred-ibly proud to represent this noble industry.

Bruce Whitehurst can be reached by email at [email protected].

Bruce Whitehurst

President and CEO,

Virginia Bankers Association

Perspectives

July/August 2012 | Virginia Banking 5 www.vabankers.org

Insights

WE WILL MISSCharlesFranklinScottJr.,85,ofPetersburg,Va.,diedpeacefullyinhishomeonMay7,2012,lovinglysurroundedbyfam-ily. Scott served as president, CEO and chairman of the board of Virginia Commonwealth Bank (formerly First Federal Savings & Loan Association, formed in 1936). He will be missed.


IMMEDIATE PAST CHAIRMAN BILL COUPER RECEIVES AWARD

City Year Wash-ington, DC, re-cently presented their2012Lifetimeof Idealism Award to Bill Couper. Couper, Mid-At-lantic president for Bank of America, who has worked in the banking indus-

try in the Greater Washington, DC and Baltimore areas for 40 years. Throughout his career, he has dedicated himself to giving back both personally and profes-sionally through a variety of channels. Congrats to our Immediate Past Chair-man on this award!

ALICE P. FRAZIER NAMED TO ICBA BOARD OF DIRECTORS

Alice Frazier, chief operating of-ficer of CardinalBank, has been appointed to the board of directors for the Indepen-dent Community Bankers of Amer-ica. Frazier joined Cardinal Bank as executive vice

president in 2009, and was appointedchiefoperatingofficerinFebruary2010.Congrats Alice!

SCHMIDT RE-ELECTED TO FAIRFAX CITY COUNCIL

Ellie Schmidt, executive vice president andchiefcomplianceofficeratCardinalBank, was re-elected to the Fairfax City Council. Schmidt grew up in the city of Fairfax after her family moved there in 1969. She has been a community leader in the city from a young age and takes great pride in her hometown. She was firstelectedtoCityCouncilin2010.KudostoEllie on this achievement!

JOHNSON TO RETIRE FROM FEDERAL RESERVE

Gene Johnson, vice president of su-pervision, regulation and credit, has an-nounced his retirement, effective Sept. 30,2012. Johnson joined theFederalRe-serve Bank of Richmond in 1973 as anassistant examiner in bank supervision, waspromotedtoofficerin1984,andhasoverseen community and regional super-vision since the late 1990s. Best of luck to Gene in retirement!

DUFFEE NAMED 2012 ITZKOWITZ FAMILY DISTINGUISHED FACULTY AWARD RECIPIENT

During the May 5 commencement ex-ercises of the University of RichmondSchool of Continuing Studies, Timothy M.Duffee,GB’02,adjunctassociatepro-fessorofliberalarts,wasnamedthe2012recipient of the Itzkowitz Family Distin-guished Faculty Award. The award is giv-en to the adjunct instructor who, accord-ing to the student body, has challenged students to be better thinkers, organizers, students, and/or persons. Duffee is an adjunct associate professor in the School ofContinuingStudiesandintheRichardS.ReynoldsGraduateSchoolofBusiness.

Duffee is vice president of First Com-munity Bank in Richmond. He helpedfound the VBA Leadership Division to ensure development of future leaders in Virginia banking. He also co-developed the curriculum for Virginia’s high school teachers to use in a new, required course ineconomicsandpersonalfinance.Con-grats on your award, Tim!

COMMUNITY BANKERS’ BANK AND CBB FINANCIAL CORP. ANNOUNCE NEW CHAIRMAN AND DIRECTORS

The annual meeting of CBB Financial Corp was held at Farmington Country Club in Charlottesville, Virginia on May 23, 2012. This year the company cel-ebrates its 25th anniversary of servingcommunity banks.

The following three directors were re-elected to serve three-year terms expir-ingatthe2015annualmeeting:RobertR.Chapman, III, Bank of the James; G. Lyn Hayth, The Bank of Botetourt; and Monte L.Layman,BlueRidgeBank.

At the Board of Directors’ meeting, alsoheldonMay 23,MonteL.Laymanwas elected to serve as chairman of the boardfor2012andEllisL.Gutshall(Val-leyBank,Roanoke,Virginia)waselectedvice-chairman. Layman succeeds John E. (Ed) Stringer of The Bank of Marion in Marion, Virginia, who served as chair-man for 2011. Stringer will continue toserve as a director. The other current di-rectors are: Christopher J. Honenberger, Clearpoint Financial Solutions, Inc.; Charles K. Collum, Jr., Burke & Herbert Bank and Trust; Jerri D. Cowan, Human ResourcesConsultants;RobertW. Jonte,Jr., Bank of Greeleyville; and William H. McFaddin, Community Bankers’ Bank.

NotingWorth

Bill Couper

Alice P. Frazier


On the Web!Virginia banking magazine is available as a digital edition!Go to www.vabankers.org and click on “Virginia Banking” under the Communications tab.

Check it out on your computeror iPad today!

In ThIs Issue HEALTH AND WELLNESS | FLOOD INSURANCE | INTERCHANGE FEES

success building a digital dialogue with customers

your way to marketing

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In ThIs Issue Preventing Data Breaches | temPorary sBa refinancing changes

March/April 2012

VIrgInIa Bankers assocIaTIon — serVIng VIrgInIa’s FInancIal communITy sInce 1893

RecoRd AttendAnce at 12th Annual Banker Day

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March/April 2012

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In ThIs Issue Government relations summit | ComplianCe allianCe | Bank Day sCholarships

May/June 2012

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16Th annual Teach children To Save day a SucceSS

16Th annual Teach children To Save day a SucceSS

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November/December 2011

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theGreen ShootsGreen ShootsGreen ShootsGreen ShootsGreen ShootsGrowth

VBA STAFF NEWS

The summer has brought many changes to the VBA. Laurie Milligan was hired as chief operating officer ofthe VBA Benefits Corporation. JohnSnead comes to us as the new direc-tor of sales and marketing for the VBA Benefits Corporation as well. We alsocongratulateRoxanneSheppard,formerchiefoperatingofficerof theVBABen-efitsCorporation,andRoyAllison,for-mer vice president of sales and market-ingfortheVBABenefitsCorporation,asthey head into retirement. Eddie Desch, government relations specialist, has left the VBA to begin his active duty service withtheU.S.Navyasheheadstoflightschool in Pensacola, FL.

Matt Bruning has been promoted to vice president of government relations, and Courtney Fleming has been pro-moted to vice president of education and training/communications. Lastly, Courtney has been elected to the Vir-ginia Society of Association Executives’ board of directors. We are so proud of our staff members and wish them the best of luck in their new roles.

VIRGINIA BANKERS GRADUATE FROM THE GRADUATE SCHOOL OF BANKING AT LSU

For over a half century, the Graduate School of Banking at Louisiana State Uni-versityhasbeenamajorproviderofadvancedfinancialeducationintheUnitedStates.Theschool’spurposeistofill theneedforgraduatelevelstudybybankofficers and othersmeeting admission requirements leading toward a broaderknowledge and understanding of major banking functions.

Congratulations to the following bankers who graduated from the Graduate School of Banking at LSU (from left): Kevin Wood, Chesapeake Bank; Becky Fos-ter,ChesapeakeBank;JonathanComer,BlueRidgeBank;JimButler,TheFauquierBank; pictured with Bruce Whitehurst, Virginia Bankers Association.

I n response to a significant issue raised bymany of our members, the VBA successful-ly spearheaded an effort to pass legislation

to improve the confession of judgment practice in Virginia. Without a single dissenting vote, the Virginia Senate, House of Delegates and governor approved VBA sponsored legislation (H.B. 648 and S.B. 416) that allows a substitute attorney-in-fact to confess judgment. The new law became ef-fectiveonJuly1,2012.

Many commercial loan agreements contain confession of judgment provisions in which the debtor appoints an attorney-in-fact with author-ity to confess judgment on behalf of the debtor for the amount of the debt. These provisions allow the attorney-in-fact toenterafinal judgmentagainstthe debtor in favor of the creditor for the unpaid amount of the debt without expensive and time consuming litigation. Only commercial loans may contain confession of judgment provisions – they

are generally prohibited in residential real estate loans.Under prior law, only the person specifically

identifiedasanattorney-in-factinthenote,bondor loan document was allowed to confess judg-ment, and a substitute attorney-in-fact was not al-lowed.Thisinflexibilitycreatedasignificantprob-lem because the need to confess judgment often arose many years after a note or loan document was prepared, by which time the attorney-in-fact specifically named in the instrument was oftenretired, deceased or otherwise unavailable to con-fess judgment.

Under the revised law, the payee, obligee or person otherwise entitled to payment under any note, bond or loan document can appoint a substi-tute attorney-in-fact to confess judgment against a defaulting debtor. This new ability improves the debt collection process by allowing a debt holder to obtain a judgment on an unpaid debt without a

lengthy court process in sit-uations where the original attorney-in-factspecificallyidentifiedinthedebtdocu-ment is no longer available to confess judgment.

Under the revised Virgin-ia Code Section 8.01-435, a payee, obligee or person otherwise entitled to pay-ment under a note, bond or loan agreement may ap-point a substitute attorney-in-fact to confess judgment by specifically naming thesubstitute attorney-in-fact in an instrument appoint-ing the substitute. That in-strument must be recorded and indexed in the clerk’s officewheretheconfessionof judgment is to occur.

If the note, bond or loan document does not con-tain a notice informing the

The new law preserves the usefulness of confession of judgment provisions while ensuring that debtors remain informed of who has authority to confess judgment.”“


VBA Successfully Improves Confession of Judgment Practice in Virginia

LineLegal

Mel Tull General Counsel, Virginia Bankers

Association


debtor that the person entitled to pay-ment may appoint a substitute attorney-in-fact, then the person appointing the substitute attorney-in-fact must provide notice of the appointment to the debtor. This notice must be sent by certifiedmail to the debtor’s last known address within ten days after the creditor records the substitution instrument in the proper court. Initially, most debt holders will need to send this notice within ten days after they appoint a substitute attorney-in-fact because most existing notes, bonds and debt documents will not con-tain the requisite notice to the debtor. Go-ing forward, banks should begin includ-ing provisions in their notes, bonds and loan documents that notify the debtor that a substitute attorney-in-fact may be appointed by the payee. By doing so, banks can avoid the need to provide ad-ditional notice to the debtor after they appoint a substitute attorney-in-fact.

In sum, the new law preserves the use-fulness of confession of judgment provi-sions while ensuring that debtors remain informed of who has authority to confess judgment. For more information, please give me a call.

This article is designed to provide informa-tion on the subject addressed. It is provided with the understanding that none of the au-thors, contributors or publisher is engaged in rendering legal, accounting, or other expert or professional services. If legal or other ex-pert assistance is required, the services of a competent professional should be sought. This article in no way intends or effectuates a restraint of trade or other illegal concerted action.

Mel Tull can be reached by email

at [email protected].

It’s only a sampling, but look what’s in the compliance services package TCA provides VBA member banks:

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most respected source of compliance information and assistance in banking.

Whether your need is BSA/AML, IT vulnerability scans and web site security reviews, or training that keeps your staff — and directors — up-to-date, TCA is your Compliance Advantage.

Call us . . . today . . . to learn more. 1-800-934 -7347.

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A View from Inside

How has the United States remained the economic world leader, but bank-ing is now regarded as an evil occupa-

tion? Why do countries send their young men to war in the hopes of eventually creating a democ-racy, but “politics” has become a dirty word? How do the most informed legislators continue to make decisions based on advice from indus-try experts, but lobbyists rank among the most hated professions?

One of the fastest growing groups in our pop-ulation, Generation Y (those between the ages of 18 and 35), have become some the most out-spoken on the above issues. Those in Generation Y, for the most part, have grown up in an age of constant communication. If it is mentioned on television, they believe it. If it refers to poli-tics,theyhateit.Ratherthanworkingtoelevatethemselves, they protest the success of others. This places me in a very curious position, and affords me a unique perspective – a view from the inside.

Not only does my age place me squarely with-in Generation Y, but for the last two years I have worked as a registered lobbyist, representing the banking industry in Virginia. As is the cus-tom with my generation, I entered this post with skepticism. However, I can sincerely report that after two years in this role, I can walk away feel-ing reassured that bankers do want what is best for their communities, legislators do want what is best for their constituents, and that both work hard every day to ensure thatVirginia is finan-cially stable.

A very successful businessman once told me that if you observed a small town in rural Vir-ginia, and removed the local community bank, it would only be a matter of time before that town withered and disappeared. Few understand the pressures that banks face on a day-to-day basis. I believethatonemightbehardpressedtofindtheaverage American who knows what the Dodd-Frank Act encompasses, or what the CFPB is. These are very real issues that affect community banking every day, squeezing their margins, and

in some cases, forcing banks to close their doors. Yet, even with the tightened margins and the in-cessant regulations, bankers have found a way to work with their customers and give back to the community.In2012alone,Virginiabankshelpedto reinvest in nearly 600 community groups and organizations. This is why I am proud to have been able to represent Virginia banks.A similar, if notmore intensified, public dis-

dain exists in the political arena. Politics has be-come a social taboo, and legislators are viewed as corrupt individuals only out to serve themselves and further their political career. While I can only truly speak for our state government, I can tell you that this is not the case. Our state legislators are made up of regular citizens from all walks of life. These doctors, cattle farmers, barbers and schoolteachersworklonghours,traveltoRich-mond to pen laws that best serve their communi-ties, and then return to live in those communities. Being from all walks of life, they are not experts in all subjects. They rely heavily on the lobby-ingcorps,whoareexperts in theirfields.Goneare the days of vote buying and under-the-table contributions. Honesty and integrity are now paramount in this profession. Legislators require truthful answers to make the best decisions for their constituents. These people truly care for the individuals and businesses they represent.

I have been proud to represent Virginia banks over the past two years. I will be leaving the in-dustry at the end of the month, not because I have lost faith, but because I have been afforded the opportunity to pursue my lifelong dream. I have been accepted into the U.S. Navy Flight Training Program, and I will be leaving for active duty serviceonJuly29,2012.UnlikemanyinGenera-tion Y, I will be able to enter our nation’s service withthefullconfidencethatourpoliticalsystemis improving, and that banking will continue to be the backbone not only of our economy, but of our communities as well. My time at the Virginia Bankers Association has afforded me a unique view from the inside, one which gives me great faith in our country.

By Eddie Desch

UpdateLegislative

Eddie Desch is the former government relations specialist for the Virginia Bankers Association.


Can You Dot-Bank on It?

The Internet Corporation for Assigned Names and Numbers (ICANN) recent an-nounced the 1,930 applicants for new ge-

neric top-level domain names (gTLDs) that range from .aaa to .zulu. (A top level domain is the text totherightofthefinal“.”inaURL,suchas.com,.org or .net.)

Thirteen companies, including Amazon and Google, are going after .app. Seven companies want.love,12arepursuing.homeor.homes,andone hopes for .unicorn. ABA and the Financial Ser-vicesRoundtablehaveappliedfor.bankonbehalfof the financial services community – an initia-tive endorsed by, among others, the Independent Community Bankers of America, British Bankers’ Association, European Banking Federation, Aus-tralian Bankers Association and the International Banking Federation.Onlyoneotherapplicant,Radixregistry,filedan

application for .bank. This company was formed to apply for 31 separate top level domains – which suggests its interest has more to do with running a

large number of domains than concentrating sole-ly on making the Internet safer for banking. The ABAandtheRoundtable,bycontrast,filedwhatis known as a “community-based” application, which if accepted on that basis would give our ap-plication priority during the evaluation process.

Why should your bank care about this new rash of domain names or our .bank initiative? If you’re like most of the bankers we talk to about this sub-

ject, you already have your Web presence estab-lished. But once you were alerted to the poten-tial for a .bank domain, you asked us to protect it, recognizing that only trusted representatives ofthefinancialservicescommunityshouldcon-troltheoperationsoffinancialdomains.

The majority of you who responded to our banker survey on this issue also told us that you would like to have a presence in .bank, and would reorient your marketing and Internet banking efforts toward .bank.

ICANN has trumpeted this domain-name expansion as a way to benefit consumers byincreasing competition among registries. But early on the ABA saw the potential for this in-fluxofnewdomainnamestoalsocreateafloodof opportunities for scammers, cyber squatters, phishers and other fraudsters.That’s why the ABA and the Roundtable

formedfTLDRegistryServicestoprepareandfileourapplicationfor.bank.Ifwearesuccess-ful, fTLD will operate the .bank domain on our industry’s behalf, including overseeing the reg-istration process to ensure applicants meet the standards of integrity and security that our in-dustry demands and our customers expect.

The ABA’s advocacy efforts over a num-ber of years succeeded in convincing ICANN that financial domains require higher securitystandards – and it has pointed to the 31 recom-mendations we submitted in concert with the Roundtableback in2011asanexampleof thelevelofsecurityexpectedforfinancialdomains.

Still, no one can or will protect bankers’ in-terests the way we can. The Internet may not recognize borders – but when it comes down to who will control .bank, bankers must de-fineandprotectourterritory.Youcanhelpbysubmitting a comment to ICANN endorsing our .bank application. It is easy to do. Contact ABA’s Doug Johnson at [email protected] to findouthow.

Frank Keating President and CEO,

American Bankers Association

UpdateWashington

Gov. Frank Keating can be reached by email at [email protected].

The majority of you who responded to our

banker sur vey on this issue also told us that you

would like to have a presence in .bank, and would

reorient your marketing and Internet banking

effor ts toward .bank.”

“

VBA WELCOMES Jeff Szyperski, New Chairman


How did you become a banker?

I became painfully aware that I didn’t want to be a CPA anymore! I actually had an opportunity to move back to where my wife grew up and work for the bank where her father was CEO. I started in loan administration during the early 1990s recession and was provided with a lot of good lessons working through the issues at that time, most of which transferred to how we approached lend-ingthroughthe2000sandkeptourheadabove water during the most recent re-cession.

What highlights, turning points, or significant events have shaped your career so far?

In my prior job I was involved in train-ing in addition to my other duties within thefirm.Idevelopedasincereinterestinprofessional development that we have carried forward into Chesapeake Finan-cial Shares. I strongly believe in the ad-age, “You don’t know what you don’t know,” and external professional devel-opment as well as internal is the only way to break that pattern.

How did you first become involved with the VBA?

After attending the conventions, I initially servedon theTrainingOfficersCommittee. As a hardcore, analytical, objective thinker, I was thrust into a committee very different from me, and

it was extremely helpful. The committee did good work and eventually morphed intotheHRCommittee.SincethenIhaveserved on and chaired the Management Services Board. I have also served on the Bankers Investments Board as well as the Bankers Insurance Board, both of which are affiliatedwith the VBA. I currentlyserve on the VBA Board as well as the VBA Education Foundation Board.

How has your impression of the VBA changed over the years you have been actively involved?

The depth and breadth of the VBA has greatlyexpandedsinceIfirstbecamein-volved with the VBA. It has expanded its scope to better serve the advocacy needs, products and services needs, and ben-efitsneedsof itsmemberbanks. I trulyfeel the VBA “covers the waterfront” of the needs of Virginia banks and does each of their initiatives well. The staff is totally helpful, knowledgeable and pro-fessional.

What do you hope to bring to the association during your time as chair-man? What are your goals for 2012-2013?

The last several years have been dif-ficultones forbanks.There isnodeny-ing that. I feel as an industry we’re at a point where we need to collectively lift ourselves out of the emotional morass that we’ve been in and promote the im-

portance of our industry to our commu-nities and state economy. We feel every-oneknowstheimportantrolewefill,butthe regulation raining down on us from Washington shows that we need to do a better job both with our legislators and our communities. I think the VBA has a unique role in helping us collectively co-alesce this message as well as get it out. In short, let’s bring back the optimism to our industry … our mojo.

How has the banking industry changed these past couple of years, in the midst of Dodd-Frank?

Where to start? I have diligently at-tempted to keep up to date on the issues facing our industry over the past years, but I still run across areas or nuances that I didn’t even know existed. The sheer vol-ume, let alone the punitive nature, many of the regulations will have on our indus-try is sort of like a tsunami hitting. This is the discouraging element to many of the bankers today. I feel that those who choose to continue to play will have to step up their game and will prosper. Our industry is much needed, so we need to make sure we’re committed. We will all be better for it.

How must the banking industry change going forward?

We need to be more proactive and not assume everyone understands our im-portance to Virginia and our locales. We need to tell our story and not wait to be

Jeffrey Szyperski, chairman, president and CEO of Chesapeake Bank, was elected chairman of the Virginia Bankers Association on June 19, 2012, ser ving a one-year term and succeeding William Couper, president, Mid-Atlantic , Bank of America, NA. The VBA welcomes Jeff, and we invite you to learn a little more about your new chairman:


asked, or, as a worst case scenario, wait until misguided leg-islation is introduced and play a lot of defense. I feel the best defense is a good offense.

You’ve been a regular participant in VBA grassroots events, like Banker Day. Why should bankers be active in legislative policy and advocacy?

Events like this are ex-pansive for the first-time at-tendee. In attending these, the light bulb went off to me that our interests would not be protected unless we pro-tected them! I would encour-age all banks to send as many employees and directors to these as they’re able. They matter!

You’re involved with some of the VBA’s key product offer-ings like our CDARS and the VBA Check Program. What would you say to a bank that is considering using one of VBA’s products or services?

The great thing about the VBA offerings is you know due diligence has been done on the product as well as the company. Both the VBA staff and the Management Services Board have reviewed these so you have a good feeling that the vendors have been properly vetted. With as many vendors as there are in our industry now, this means a great deal and is a huge time-saver.

Engaging the next generation is important. How would you like the VBA to reach out to younger bankers this year? What advice would you want to pass on to them?

Under Watts Steger’s term as VBA chairman, the Leadership Division was initiated. This was a much-needed enhancement to groom the “collective succession plan” for Virginia bankers and provide better continuity for the VBA. I think this can be even better integrated into the core VBA offerings going for-ward. I’m not sure there is quite as much interplay between this division and the other active entities within the VBA as there could be.

What role has professional development and training played in your career?

I knew nothing about banking when I started in the in-dustry in 1990. I was a business administration/accounting major at the University of North Carolina and went straight into public accounting. Everything I learned about banking I learned on the job and through schools. The Graduate School of Banking at LSU helped me immensely in connecting all of the dots regarding banking. The thing I enjoy about banking so much is the change. What is a solid skillset today will be adeficientskillsetinseveralyears,withoutcontinuedprofes-sional development.

You’ve been a big proponent of social media. What would you say to someone that is looking to get connected to banking through social media?

OMG! I hardly know where to start! (Just kidding.) With four children and a lot of young employees, I’ve come to realize that this is a core communication channel for a lot of people, not just the young “whippersnappers.” I think many people

have a bias against it and never get started. Some say pridefully, “I’m not on Face-book!” or something of that sort. I personally feel far too much interaction happens this way, but I would sug-

gest everyone stick a toe into the water to see that, despite the many negatives for some, there are a lot of positives also.

What do people say you do best?

I try to keep humor injected into almost anything I’m in-volved in, hopefully in appropriate ways. A little levity goes alongwayingettingthroughsometimesdifficultissues.Bothmy mom and dad had this gift and imparted some of it to me.

Is there anything else you would like to add?

I’m really looking forward to my year as chairman. The VBA staff are professionals at making it as easy as possible on the chairmen. I hope they continue this practice!

A little levity goes a long way in getting

through sometimes difficult issues. ”“


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The Virginia Bankers Association (VBA), together with the VBA Education Foundation and the

VBA Leadership Division, is pleased to announce Ashley Baboota as the state-wide scholarship winner of the VBA Bank Day Scholarship Program. The VBA Bank Day Scholarship Program began in 1991 when the third Tuesday in March was declared Bank Day in Virginia by the Virginia General Assembly. On this day, Virginia high school seniors spend a day in banks across the commonwealth shadowing a banker in their daily du-ties. The purpose of this experience is for the students to learn about banking, fi-nancial services, and the vital role banks play in their communities. From their experience, the students are required to write an essay on the topic, “How Bank-ingBenefitsMyCommunity,”andsevenscholarships (six regional and one state-wide) are awarded on the basis of the es-says.

From those six regional winners, Ash-ley was chosen as the statewide winner andreceivedanadditional$2,000schol-arship.Scholarshipcertificateswerepresented

at the winners’ individual senior nights or awards ceremonies. Bobbi Mason was present at Tabb High School to present BrandonEukerwith his certificate, andCathy Snowden attended Owen Holt’s

ceremonyatChristchurchSchool.RoyceOwen presented the award at Castle-wood High School’s ceremony where Taylor Banner was a senior. Charlie Mantorana participated by giving Kelsey Smithhercertificate,andKatieMcLarenpresented Megan Harvey with hers. Union First Market employees Mark Wright, Kista Fleming and Alicia How-ard were on hand at Ashley Baboota’s scholarshipceremonyonJune12topres-ent her regional scholarship certificateand surprise her with the news of her statewide scholarship. Congratulations Ashley!

The VBA Bank Day Scholarship Pro-gram will take place again next year on March 19. Please contact Chandler Dew-ey at [email protected] to learn how to get involved.

Ashley Baboota Wins VBA Bank Day Scholarship Program


From left: Mark Wright, regional president, Union First Market Bank; Ashley Baboota; Deepak Baboota, Ashley’s father ; and Kista Fleming, market manager, Union First Market Bank.

Megan Harvey with her Bank Day certificate.

Taylor Banner at her scholarship ceremony,accepting her award.

THIS YEAR, BANK DAY TOOK PLACE ON TUESDAY, MARCH 20, AND THE SIX REGIONAL $1,000 SCHOLARSHIPS WERE AWARDED TO:

• CapitolRegionWinner: Owen Holt, Christchurch School, shadowed at Chesapeake Bank

•Central/SouthsideRegionWinner: Megan Harvey, E.C. Glass High School, shadowed at StellarOne Bank

•HamptonRoads/TidewaterRegion Winner: Brandon Euker, Tabb High School, shadowed at Old Point Na-tional Bank

•Northern Virginia Region Winner:Ashley Baboota, Lake Braddock Secondary School, shadowed at Union First Market Bank

• SouthwestVirginiaRegionWinner:Taylor Banner, Castlewood High School, shadowed at TruPoint Bank

• Valley Region Winner: Kelsey Smith, Turner Ashby High School, shadowed at StellarOne Bank

Owen Holt with his scholarship certificate and his teacher, William Taylor.

HEADS OR TAILS…NO MATTER HOW YOU FLIP IT,YOU’RE A WINNERBY PARTICIPATING IN THE RFI!

Regulatory risk is one of the biggest challenges every banker faces

in today’s post Dodd-Frank environment. That’s why the Virginia

Bankers Association joined with bankers associations across the

country to create the Regulatory Feedback Initiative.

The RFI is a brief, anonymous online survey that bankers

complete immediately following each safety and soundness and

compliance examination at their bank. The data we collect will

allow us to track regulatory practices around the state, from state

to state and from regulator to regulator.

The survey is completely anonymous. The data is only

available in aggregate form and there is no way your specific data

and comments can be traced back to your bank.

The data will enable us to identify any inconsistencies or misguided

regulatory treatment as it unfolds. It will also enable us to work

more effectively with the various regulatory agencies and suggest

ways to make necessary changes in the examination process.

We’ll also prepare custom exam preparation reports for

individual banks, including a summary of reports filed by similarly

situated institutions, that will help banks better prepare for the

next examination.

This long-term initiative is vital to improving the regulatory

environment for banks across Virginia and across the country.

There is no cost to your bank to participate in the survey.

Please contact Richard Owen, senior vice president of the

Virginia Bankers Association, at [email protected]

or 804-819-4715 with questions or for more information.


VBA’s 119th Annual Convention A Success

The VBA’s 119th Annual Convention took place June 17-20atTheHomesteadinHotSprings,Virginia.Ourtheme was “Perspectives,” and we had speakers pro-

viding just that on everything from the banking industry, the economy, social media and to the political landscape.

We kicked off our convention with a welcome reception and the VBA BankPAC Silent Auction. The event was sponsored by Investors Title Insurance Company, and all proceeds from the auction were contributed to VBA’s BankPAC. Thanks to all attendees, who helped us raise over $18,000 for our BankPAC campaign!

On Monday morning, we hosted bankers for two power breakfasts. The firstwas sponsored byMountainSeedAdvi-sors, LLC, who discussed “The Battle for Independence: Man-aging the Appraisal and Evaluation Process.” MountainSeed is amulti-disciplinedconsultingfirmthatspecializesinmeetingtheneedsoffinancialinstitutionsacrosstheUnitedStates.Thesecond was sponsored by PNC Bank. Presenter Gus Karris, managing director for PNC Bank’s foreign exchange business in the capital markets group, discussed “Going Global – Ex-pandingRelationshipswithGlobalBankingProducts.”PNC’sFinancial Institutions Group is an experienced team of profes-sionalsdedicatedtohelpingfinancialinstitutionsbetterman-age assets, risks and operations.Ourfirst business sessionwas kicked off byDennisGart-

man, who provided us with a detailed economic outlook. Gart-man has published “The Gartman Letter,” with commentary on the global capital markets, distributed daily since 1987. The letter addresses political, economic and technical trends from both long-term and short-term perspectives.

Following Gartman was Frank Keating with his perspective on banking legislative and regulatory issues. Keating is presi-dent and CEO of the American Bankers Association, which represents banks of all sizes and charters and is the voice for the nation’s $13 trillion banking industry and its two million employees.

Tuesday morning began with another power breakfast, pre-sented by the Compliance Alliance. Compliance Alliance is an exciting and innovative collaboration between state bankers associations across the United States, with the goal of provid-ing critical compliance services to the banking industry. Com-pliance Alliance is the only compliance solution owned, man-aged and directed by state bankers associations.

At our last business session, we heard from Dean Browell, Ph.D.,andJeffThompsononTheSocialRevolution.DeanandJeff lead a company called Feedback, and their approach en-courages brands to listen and observe audiences before devel-oping innovative plans and stewarding creative solutions that engage and develop relationships.

Our keynote speaker, Michelle Bernard, then wrapped up

President & CEO of Virginia Bankers Association Bruce Whitehurst, Roxanne Sheppard, President & CEO of Bank of McKenney and VBA Benefits Corporation Chairman Dick Liles, and Roy Allison. As they headed into retirement, Bruce and Dick presented Roxanne and Roy with resolutions honoring their service.

Dean Browell and Jeff Thompson.

Dennis Gartman.

www.vabankers.org July/August 2012 | Virginia Banking 19

Gary Shook (left) and his wife Ann Rodman listen as Bill Couper installs Gary as VBA Chairman-Elect.

Marshall Warner, Chesapeake Bank, joins LIQUID PLEASURE for a song.

Bill Couper (right) presents Chris Bergstrom with a plaque, thanking him for his service as Government Relations Committee Chairman.

Michelle Bernard.

our business session with “The View from Washington.” Michelle Bernard is the chairman, founder, president and CEO of the Bernard Center for Women, Politics & Public Policy and appears regularly on TV as a political and legal analyst.Asour2011-2012programyear came

to an end, it was time to elect our new leaders. The election and installation of thenewVBAofficersanddirectorstookplace, and the convention closed with a reception and banquet for the instal-lation of the new VBA chairman and chairman-elect. The VBA is pleased to welcome Jeffrey M. Szyperski, chairman, president and CEO of Chesapeake Bank, as the 2012-2013 VBA chairman, andGary R. Shook, president and CEO ofMiddleburg Bank, as the new chairman-elect. Attendees celebrated their instal-lation with dancing and musical enter-tainment provided by the band LIQUID PLEASURE.

Thanks to everyone who attended this year’s event. We hope that the per-spectives you heard were enlightening and perhaps even challenged your own opinions. See you on June 16-19, 2013,atTheHomesteadforour120thAnnual Convention!

THANK YOU TO OUR SPONSORS:

PLATINUM LEVELInvestors Title Insurance Company

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Cintas

Dixon Hughes Goodman LLP

FHLBank Atlanta

Harland Clarke

MountainSeed Advisors

OfficeDepot

PNC Bank

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Sageview Consulting Group

Troutman Sanders

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Thomas ComplianceWende Szyperski pins her husband, Jeff Szyperski, as he is installed as VBA Chairman and their family looks on.


ATMs are the latest bank service to come un-der attack from regulators and, especially, consumer activists. Among the allegations:

Banks do not have the proper fee notices in place on their ATMs. That’s actually a pretty simple prob-lem to solve. Most banks have combated this issue by establishing procedures to regularly inspect their ATMs for proper signage. The inspection process in-cludes taking photographs with date and time stamp information.

(There may be changes to the fee notice require-ments – if legislation in both the U.S. Senate and HouseofRepresentatives thatwouldeliminate theplacard requirement passes.)

More serious are allegations that banks are ignor-ing new ADA ATM-related requirements.

In comparison, fee notices are for most banks a minor ATM compliance issue. It is the new ADA re-quirements that have raised new concerns for ATM operators – especially banks that have not bothered to meet the changed ADA requirements.

COMPLIANCE ISSUES

In today’s consumer-friendly, post-Dodd-Frank environment, the ADA ATM compliance issues should be covered as part of your bank’s regular independent IT review. To prepare, VBA member banks that have not already done so should review the ADA Guidelines to ensure they are conforming tothe2010standards.

The Americans with Disabilities Act of 1990 (ADA) wasrevisedtoincorporatethe2010ADAStandardsfor Accessible Design. ATM machine owners had untilMarch15,2012, toupgradeexistingATMma-chinestocomplywiththe2010standards.

If your bank is operating an ATM that is not yet in compliance, just having a plan in place to replacetheATMisnolongersufficient:Youwererequired to have a compliance plan in place a year earlier, by March 15, 2011. And your bank wasrequired to be in compliance (or structural safe harbor)byMarch15,2012,unlessyoucanproveundue burden.

Many ATM operators have not been able to up-grade their machines because of demand-related

scheduling issues of ATM installation companies. Nonetheless, not having your bank’s ATMs upgraded afterMarch15,2012,regardlessofreason,putsabankin violation of the ADA.Thereisnofudgingtheissue.OnApril23,thePitts-

burgh Post Gazettereportedthataconsumerhadfiledlawsuits against “at least seven banks” claiming that their ATMs do not support the audio requirements of the 2010ADA Standards. TheADA requires, amongother things, that ATMs be equipped with voice-en-abling technology to serve visually impaired consum-ers.

Expect this type of lawsuit to come to other parts of the country.The2010standardsinclude:Speech output: ATMs must be speech enabled. Op-

erating instructions and orientation, visible transaction prompts,userinputverification,errormessages,andalldisplayed information for full use shall be accessible to and independently usable by individuals with vision impairments.

Speech, the ADA update says, shall be delivered through a mechanism that is readily available to all us-ers, including but not limited to, an industry standard connector or a telephone handset. Speech shall be re-corded or digitized human, or synthesized.

Two advisory notices have also been included:Advisory 707.4: Privacy. In addition to people who

are blind or visually impaired, people with limited reach who use wheelchairs or have short stature, who cannot effectively block the ATM screen with their bod-ies, may prefer to use speech output. Speech output userscanbenefit fromanoptiontorenderthevisiblescreen blank, thereby affording them greater personal security and privacy.

Advisory 707.5: Speech output. If an ATM provides additional functions such as dispensing coupons, sell-ing theater tickets, or providing copies of monthly state-ments, all such functions must be available to customers using speech output. To avoid confusion at the ATM, the method of initiating the speech mode should be easily discoverable and should not require specialized train-ing. For example, if a telephone handset is provided, lifting the handset can initiate the speech mode.

By Steve Field Information Technology Compliance Consultant,

Thomas Compliance

Associates, Inc.

CornerCompliance

Compliance, Possible Legal Issues Loom for Banks That Lag New ATM-ADA RequirementsInitial Compliance Deadline Was March 15


NUMERIC KEYPADS

Numerickeysshallbearrangedina12-keyascendingorde-scendingtelephonekeypadlayout.Thenumberfivekeyshallbetactilely distinct from the other keys.

Function key surfaces shall have tactile symbols as follows: en-ter or proceed key, raised circle; clear or correct key, raised left arrow; cancel key, raised letter X; add value key, raised plus sign; decrease value key, raised minus sign.

DISPLAY

Visibility: The display screen shall be visible from a point located40 inches(1015mm)abovethecenterof theclearfloorspace in front of the machine.

Characters displayed on the screen shall be in a sans serif font. Characters shall be 3/16 inch (4.8 mm) high minimum based on the uppercase letter I. Characters shall contrast with their back-ground with either light characters on a dark background or dark characters on a light background.

FLOOR SPACE, HEIGHT AND REACH

The clear floor or ground space shall be 30 inches (760mm)minimumby48inches(1,220mm)minimum.

Where a forward reach is unobstructed, the high forward reach shall be 48 inches (1,220mm)maximum and the low forwardreachshallbe15inches(380mm)minimumabovethefinishflooror ground.

The wording here is pretty close, but for exact wording, please seetheADAStandardsatwww.ada.gov/regs2010/2010ADAStandards/2010ADAstandards.htm

VBA members seeking information or assistance with IT, ATM or other information systems compliance issues should call Stephen Field, a CISSP (Certifi ed Information Systems Security Professional) and TCA’s compliance consultant for information technology. The toll-free number is 800-934-7347. TCA is the VBA’s endorsed provider of compliance consulting and support.

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