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Virginia Banking Nov/Dec 2011

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In this issue of Virginia Banking, travel along with the VBA as it visits 523 bankers in 25 meetings over 10 days; see images from banks participating in Get Smart About Credit Day; and learn how to approach the social media footprint your bank already has.

    November/December 2011


    25 in 10: VBA Tour of


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    William Couper, Chairman, Bank of America

    Jeffrey M. Szyperski, Chairman-Elect, Chesapeake Bank

    Charles H. Majors, Immediate Past Chairman, American National Bank & Trust Co.

    O.R. Barham, Jr., StellarOne Corporation

    Frank Bell, III, Chesapeake 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 Heaton, Franklin Community

    Bank Gail Letts, SunTrust Bank John R. Milleson, Bank of Clarke

    County Samuel L. Neese, Highlands Union

    Bank Susan Ralston, Bank @Lantec Gary R. Shook, Middleburg Bank David P. Summers, Virginia Heritage

    Bank Daniel G. Waetjen, BB&T Richard T. Wheeler, Jr., Franklin

    Federal Savings Bank

    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.

    AT-LARGE MEMBERSBenefits Corporation Chair

    Richard M. Liles, Bank of McKenneyManagement Services Inc. Chair

    Frank Bell, III, Chesapeake BankGovernment Relations

    Committee ChairChristopher W. Bergstrom, Cardinal Bank

    VBA Education Foundation ChairJ. Peter Clements, The Bank of Southside Virginia

    EDITORIAL & EXECUTIVE OFFICES4490 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 Banker is published bi-monthly. Copyright 2011.

    featuresGet Smart About Credit Day 2011Virginia Bankers Teach Children about the Basics of Credit

    25 in 10: VBA Tour of Virginia VBA meets with 523 bankers for 25 meetings in 10 days.

    4 Calendar of Events 5 Insights 6 Legal Line 7 Worth Noting

    8 Compliance Corner14 Legislative Update18 Washington Update22 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.

    Editors Note: Our September/October issue of Virginia Banking incorrectly stated that William F. Tree Rountree began his career with Farmers and Merchants Bank. Tree started out with United Virginia Bank. We regret the error.






    in every issue

    The Social Bank How to Approach the Social Footprint Your Bank Already Has (Whether You Like It Or Not)

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    DIRECTORSTimothy M. Warren Chairman Timothy M. Warren Jr. CEO & Publisher David B. Lovins President Vincent M. Valvo Group Publisher & Editor in Chief

    FINANCE & ADMINISTRATIONJeffrey E. Lewis Controller / Director of Operations

    EDITORIAL Christina P. ONeill Custom Publications Editor Cassidy Norton Murphy Associate Editor

    ADVERTISINGGeorge Chateauneuf Publishing Division Sales Manager Richard Ofsthun Advertising Sales ManagerCara Inocencio Advertising Sales ManagerEmily Torres Advertising, Marketing & Events Coordinator

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    2011 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.


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

    November/December 2011 | Virginia Banking 3

    November/December 2011























    Live Event Online Seminar

    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 office 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 | November/December 2011 www.vabankers.org

    Calendar of Events2012 financial forecast

    downtown richmond marriottjanuary 6, 2012

    retail banking and marketing conference omni charlottesville hotel

    march 13-14, 2012

    compliance schoolomni charlottesville hotel

    april 2-6, 2012

    security workshopomni charlottesville hotel

    april 25-26, 2012

    hr & benefits symposiumomni charlottesville hotel

    may 6-8, 2012

    operations & technology workshopstonewall jackson hotel & conference center

    staunton, virginiamay 15-16, 2012

    annual conventionthe homestead

    june 17-20, 2012

    school of bank managementthe university of virginiajuly 29-august 3, 2012

    cfo conferenceomni charlottesville hotel

    august 27-29, 2012

    credit management conferenceomni charlottesville hotel

    october 1-2, 2012



    schedul e

  • Everywhere I go these days, people are talk-ing about the high degree of uncertainty that exists in our country, our economy and our industry. Having been through the Financial Crisis of 2008 and the Great Recession that followed, uncertainty would seem to be a natural result as we struggle toward economic recovery. Sadly, the de-gree of uncertainty has been amplified substantially by Congressional action and the current regulatory environment not just in banking, but more broadly in business.

    Our recent state legislative meetings 13 of them around the Commonwealth brought this point home as bankers and state legislators alike cited examples of regulatory challenges. I have written plenty about Dodd-Frank and its enormous and over-reaching impact on banking, but in these meet-ings, we also heard about EPA regulations that ei-ther add cost to new projects or lead to a denial of permits altogether. We heard from bankers about the challenges of lending at least in certain in-dustry categories given the expectation that bank examiners will force these loans to be classified. We heard from state legislators and bankers alike about the small businesses that are unwilling to borrow for expansion which would create new jobs because of uncertainty over how health-care reform and changes to the tax structure might affect them. We heard that some businesses in need of more human resources are hiring contract or temporary employ-ees to avoid making a commitment to hiring more full-time employees.

    All this uncertainty and the extremely cautious regulatory environment are working directly against what we all want to see: sustainable economic re-covery and a lower unemployment rate. It is truly a head-scratcher to observe so many ways our federal government is suppressing economic growth as it endeavors to micromanage business in America.

    Where does this leave us? Even for an optimist

    like me, it leaves us in a condition of malaise, as de-fined both ways. What do we do about it? We must stay in the fight, continue our legislative and regu-latory advocacy, and challenge Congress and the White House to strike a better balance between gov-ernment regulation and the free enterprise system. We can commiserate about the challenges we face, but we must also advocate for needed changes. We must discard our feelings of malaise and persevere.

    We are still learning what the full impact of healthcare reform will be. Thank goodness we have our VBA Benefits Corporation, which not only pro-vides health insurance and related benefits to over 100 community banks, but also keeps all VBA mem-ber banks up to speed on health care reform.

    We are still learning what the full impact of Dodd-Frank will be. Thank goodness we have a VBA ad-vocacy and legal team that is focused on how our industry can influence regulatory promulgation as new proposals come out. Thank goodness we have a VBA Education & Training team bringing valuable training as we enter uncharted waters, especially and unfortunately in the compliance arena.

    We are still fighting against an unfair portrayal of traditional banking, especially in the national me-dia and, sadly, from some of our national political leaders. Blaming banks for everything might be in vogue, but it is not right. Thank goodness we have a VBA Communications and Financial Literacy team interacting with the media frequently to change per-ceptions and to point out the incredible and positive role banks play in their communities.

    As we quickly approach a new year, one thing I know for sure is this: Virginia bankers will stay en-gaged in the political process, active in VBA advo-cacy and will continue to be leaders in their com-munities. We have real challenges before us, but we will do all that we can together to overcome this regulatory malaise and to get our economy and our country back on track.

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

    Bruce Whitehurst

    President and CEO,

    Virginia Bankers Association

    Malaise (from dictionary.com) 1. A condition of general bodily weakness or discomfort, often marking the onset of a disease. 2. A vague or unfocused feeling of mental uneasiness, lethargy or discomfort.

    Regulatory Malaise

    November/December 2011 | Virginia Banking 5 www.vabankers.org


  • 6 Virginia Banking | November/December 2011 www.vabankers.org

    Electronic Notary Law

    Banks will soon be able to notarize docu-ments without having to make custom-ers come into their local branch. This past session, the General Assembly passed a bill allow-ing electronic notary publics to notarize documents when the signer is not in the notarys presence if satisfactory evidence of the signers identity is estab-lished. Under previous law, satisfactory evidence of a signers identity could only be established in person for electronic notarizations. Beginning July 1, 2012, a Virginia electronic notary can electronically notarize documents using audio and video conference tech-nology to confirm the signers identity. Below are some FAQs on the new law.

    What is electronic notarization? Electronic notari-zation, as distinguished from traditional pen and pa-per notarization, is a process by which an electronic notary public affixes an electronic notary signature and seals information to an electronic document. Virginia law has allowed for such notarizations since 2007.

    How is the amended statute different from the previous version? The new law allows an electronic notary public to notarize a document when the signer is not in the notarys presence if satisfactory evidence of the identity is established. Before the most recent amendments, an individual had to make a personal appearance before an electronic notary public for an electronic notarization. The 2011 amendment allows the satisfactory evidence of identity to be based on video and audio conference technology that permits the notary to communicate with and identify the signer at the time of the notarial act. A personal ap-pearance is still considered satisfactory evidence of identity.

    What are the video and audio conference technol-ogy requirements? The parties must simultaneously see and speak to one another, the signal transmission must be live (real time), and the signal transmission must be secure from interception through lawful means by anyone other than the persons communi-cating.

    Do I have to be a notary public before I am com-missioned as an electronic notary public? Yes. In-dividuals can apply to become an electronic notary

    after they receive their notary public commission cer-tificates from the circuit court.

    What is the difference between an electronic notary public and a notary public? A notary public must complete a separate application to be an elec-tronic notary public. In the application, the notary must provide a general description of the technology the applicant will use to create an electronic signa-ture. The electronic notary public has the additional responsibility of keeping a copy of any video and au-dio conference that formed the basis for satisfactory evidence of identity. This electronic record must be kept for a period of at least five years from the date of the transaction.

    Does the notarial act need to be performed in Virginia? No. An electronic notarial act performed in accordance with the statute is deemed to have been performed within the Commonwealth and is gov-erned by Virginia law. It is important for the notary to be a commissioned Virginia electronic notary public.

    What parts of the law are in effect? The entire stat-ute is in effect with the exception of the provisions relating to the use of video and audio conference technology. Those provisions will have an effective date of July 1, 2012.

    How does the statute protect against fraud? The statute requires the electronic notary public to con-firm the principals identity by personal knowledge, an antecedent in-person identity proofing process in accordance with federal standards, a valid digital cer-tificate, or by use of a personal identity verification card designed, issued, and managed in accordance with federal standards. These requirements, in addi-tion to the obligation to maintain a copy of the re-cording of the video and audio conference, help to protect against fraud while allowing individuals and businesses to take advantage of the latest technology in an effort to facilitate transactions.

    How will this affect my banking practice? The new electronic notary law will allow banks to obtain notarized documents from individuals who are out of state or unable to appear at a local bank branch. This will facilitate the ability to complete financial transac-tions or functions that require many notarized docu-ments in an efficient manner.

    Mel Tull can be reached by email at [email protected]


    Mel Tull General Counsel, Virginia Bankers


  • November/December 2011 | Virginia Banking 7 www.vabankers.org


    The Alexandria Chamber of Commerce honored Peter A. Converse, president and CEO of Virginia Commerce Bank, as the 2011 Business Leader of the Year. Converse was recognized at the Chambers Business Awards Dinner on Oct. 6 at the U.S. Patent and Trademark Office.

    The Chambers selection of Converse as the recipient of its top business award was based on his dedication and exem-plary leadership in the business community. From the time he joined VCB as its CEO in 1994, the bank has grown under his leadership from two branches with $54 million in assets to what is now Northern Virginias largest community bank with over $2.9 billion in assets, 28 branches, a residential mortgage lending office and a wealth management services department. Converse joins a distinguished list of honored business leaders since the awards program began in 1994.




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    VBA BANKER DAY 2012: On Thursday, Jan. 12, 2012, we invite you to join bankers from across the Commonwealth in visiting the General Assembly to advocate on behalf of our industry. Please email Bobbi Weimer for more information and to register at [email protected] or visit us online at www.vabankers.org.

  • 8 Virginia Banking | November/December 2011 www.vabankers.org

    The ability to find and share reliable compli-ance trend information can be especially beneficial to VBA member institutions: There are, for example, some noteworthy themes that have emerged during the current cycle of BSA/AML examinations.

    It can take time for some trends to become appar-ent. The most recent FFIEC BSA/AML Examination Manual (April, 2010) included additional, expanded guidance on AML risk assessment a sure sign that risk assessments would receive additional scrutiny during examinations.

    Thats happening.The AML risk assessment is the key analysis that

    drives the depth and complexity of a banks BSA/AML management efforts. Understanding your insti-tutions risk profile allows you to design appropriate risk mitigation efforts.

    There are no prescribed or recommended meth-ods for assessing BSA/AML risk. Guidance from the FFIEC Interagency BSA/AML Examination Manual suggests, however, that banks begin by identifying specific risk categories products, services, custom-ers, entities, transactions and geographic locations. The second step suggested in the Manual is to con-duct a more detailed analysis of the data identified to better assess the risk within these categories.

    Financial institutions generally do a good job of identifying their relevant risks. Nonetheless, banks need to expand on the documentation of analysis re-lied upon to quantify risks for relevant factors.

    Regulators are paying attention to documentation, with documentation issues leading to citations in nearly two-thirds of examinations.

    Bottom line: The examination devil is in the details.

    RISK RATING FACTORSYour analysis should be sufficient to support the rat-

    ing assigned to the risk factor. To quantify risk from cash activity, your analysis may include the following: Number of CTRs filed. Cash shipment types and volumes. Use the query capabilities of your core processor to

    trend where cash activity is coming from or going to, i.e., average daily volumes of cash by account or customer type, and total amount and volume of cash ins and cash outs per day. The data will help

    you define how cash intensive your bank is. The number of cash-intensive businesses. Define

    what a cash-intensive business is for example, businesses which deposit over $5,000 per transac-tion more than five times a year.

    Analyze controls over cash reporting and moni-toring. Are all points of cash entry or exit identi-fied and considered for CTR and suspicious activ-ity monitoring and reporting?

    A comprehensive analysis looks at data from sev-eral different perspectives. This concept can also be applied to an analysis of wire transfer data. For ex-ample, to quantify risks for wire transfers, you might analyze the following: The number of international transfers as a percent-

    age of total wire transfers. The number of transfers originated or received by

    customers designated as high risk or by customers using other high risk products or services.

    The number of international transfers to higher risk geographies or jurisdictions (such as FATF or INSCR designated countries).

    Examiners are making certain institutions under-stand that the AML risk assessment should be a con-tinuing process, not a one-time exercise. When the banks risk profile changes, its AML risk assessment should be updated to reflect the changes.

    Examples of changes to relevant risks include new products and services; changes to existing products and services; and expansion through merger or ac-quisition, the opening of branches in different geo-graphic location, or the addition or deletion of ac-counts for higher risk customers.

    Even without these changes, keep in mind that the analysis to support assigned risk ratings should use current data. The AML risk assessment should be up-dated every 12 to 18 months, regardless of whether there are changes to risk factors.

    CIP NON-COMPLIANCE CITATIONSAnother area attracting attention is the Custom-

    er Identification Program (CIP). CIP requirements (mandated by Section 326 of the USA PATRIOT Act) became effective with a compliance date of Oct. 1, 2003. Examiners expect that, by now, your institution

    By Donna Rakes and Jim Dray Thomas

    Compliance Associates, Inc.

    CornerComplianceSA Examinations Hit Risk AssessmentsLack of Documentation Leads to Citations

  • November/December 2011 | Virginia Banking 9 www.vabankers.org

    is getting CIP right.Consequently, there is an increased

    focus during this exam cycle on compli-ance with CIP requirements. Examiners are commonly citing institutions for non-compliance in CIP exceptions, which are red-flags for examiners. The CIP rule is somewhat flexible in how it allows you to reach the standard of reasonable belief that you have verified the identity of a person opening an account.

    Based on your CIP risk assessment, you established standards for identification and verification of information provided. Expectations are that you follow the pro-cedures you have established. Otherwise, you are not meeting your own standards for reasonable belief you have verified the customers identity. Process for secondary review. Examin-

    ers review the end result, but they also focus on processes designed to ensure you remain compliant. Expectations are that your CIP efforts include a quality control process to ensure the require-ments of your CIP are being followed.

    Documentation of the resolution of dis-crepancies discovered when verifying identity or identifying information. It is a CIP requirement to document the resolution of any substantive discrep-ancies uncovered when verifying iden-tity. This issue is critical in this round of examinations.

    Ever since the ID Theft Prevention re-quirements under FACTA defined an ad-dress discrepancy as a potential indicator of identity theft, address mismatches un-der CIP have become an even bigger fo-cus. Address mismatches are a common-place occurrence. Whatever method you rely upon to resolve address discrepan-cies, be certain that your process includes documenting the resolution.

    VBA members seeking information or as-sistance on fair lending issues should call TCAs Donna Rakes or Jim Dray. The toll-free number is 800-934-7347. Rakes is manager of TCAs East Coast regional of-fice in Rustburg. Dray is president of TCA. TCA is the VBAs endorsed provider of compliance services.

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    Get Smart About Credit Day 2011

    G et Smart About Credit Day is an annual event put on by the American Bankers Association and one in which Virginia banks participate. This event allows bankers to enter the classroom to teach the fundamentals of money management, the meaning of good credit and credit scores, and the importance of saving. On Oct. 20, 132 Virginia bankers from 24 banks reached 5,816 students through 125 Get Smart About Credit Day presentations. Kudos to these bankers, who understand that working with students is a worth-while endeavor.

    Event highlights include:Oak View National Banks Senior Vice Presi-

    dent of Administration Colin Borgstrom partnered with Marshall Middle School and the Fauquier County Public Library to provide several classes for over 100 teens in sixth to ninth grades. Class discussions focused on different types of available credit, budgeting now and for the future, and the

    role that banks play in our economy.First Bank, Strasburg conducted three Get Smart

    About Credit sessions at Strasburg High School and taught 76 students. Bankers visit the senior government classes at Strasburg High School twice a year to make sure that all seniors hear their mes-sage prior to graduation.

    SunTrust Bank had a successful event in their Hampton Roads region, in which about 250 high school students participated.

    Pendleton Community Banks Dayne Davis made presentations to the Life Skills class at Turner Ashby High School in Bridgewater.

    American National Bank & Trust Companys Brandon Atkins and Mario Huffman spoke at Woodberry Hills Elementary Schools Career Day, giving a lesson on borrowing money.

    To see more pictures of Get Smart About Credit Day 2011, please visit us on Facebook at www.facebook.com/virginiabankersassociation.

    Virginia Bankers Teach Children about the Basics of Credit

    Joe Biddlecomb and Ward Currin presented at Northumberland High School for Bank of Lancaster.

    First National Bank held a Get Smart About Credit class at Amherst High School. They participated across seven periods, which totaled 16 government classes and a total of 318 students.

    Johanna Northstein, Chesapeake Bank, visited Gloucester High School. She met with multiple classes, teaching students the Four Cs of Credit and showing them how credit scores can affect their lives in various ways.

    Thank you to the following banks that participated!

    American National Bank & Trust CompanyBank of BotetourtBank of LancasterBank of the JamesBB&TBenchmark Community BankC&F BankChesapeake Bank

    Community BankCommunity Capital Bank of Virginia (VCC)First Bank & Trust CompanyFirst Bank, StrasburgFirst Community Bank, N.A.First National BankHomeTown BankNational Bank

    Oak View National BankPendleton Community BankPeoples Community BankStellarOne BankSunTrust BankThe Bank of MarionTruPoint BankUnion First Market Bank

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    November/December 2011 | Virginia Banking 11 www.vabankers.org

    are you thinking what were doing?

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    WelcomeNew Associate Members

    SEND US YOUR NEWS! Please send submissions for Worth Noting and Bankers on the Move to Chandler Dewey at [email protected]

  • 25 in 10: VBA Tour of


    12 Virginia Banking | November/December 2011

    October 6Abingdon

    October 6Danville-Leadership Division

    October 5Roanoke

    October 7Danville

    In just 10 days, the VBA Government Relations and

    Communications departments and the VBA Benefits

    Corporation held 25 meetings across the Commonwealth,

    reaching 523 bankers, media representatives and legislators.

  • September 30Virginia Beach

    October 4Charlottesville

    September 29Newport News

    October 5Lynchburg

    September 27Fairfax

    September 27Northern Virginia-Leadership Division

    September 27Leesburg

    October 4Lynchburg-Leadership Division

    September 20Richmond

    October 3Staunton

    September 28Fredericksburg & Manassas

    The initial tour of the Commonwealth was planned in order to hold a series of legislative meetings. The VBA completed a series of meetings with Virginia state legislators, making stops in 13 cities: Abingdon, Charlottesville, Danville, Fairfax, Fredericksburg, Leesburg, Lynchburg, Manassas, Newport News, Richmond, Roanoke, Staunton and Virginia Beach. The meetings were well attended and the legislators heard our messages of federal regulatory pressures; the ability and desire banks have to make loans, but the lack of qualified borrowers; the many ways banks continue to be the foundation of the communities they serve; and our industrys active role in financial literacy.

    While on the road, the VBA media relations staff met with the editorial boards from four Virginia publications to talk about the banking industry and the current economic environment. A combination of publishers, editorial staff and reporters from the Norfolk-based Virginian-Pilot, the Lynchburg News & Advance, the Danville Register & Bee and the Bristol Herald Courier interacted with us as we reviewed the foreclosure environment in Virginia, the tremendous work banks do in the community, the current supply vs. demand issue

    in lending, and the burden of the overregulation coming from the federal government.

    Finally, three Leadership Division meetings were held over this time span as well. On Sept. 27, the Northern Virginia region of the division had its first event a happy hour and networking meeting at American Taphouse in Reston. On Oct. 4, Lynchburg area Leadership Division members met up at Waterstone Pizza for happy hour and dinner. On Oct. 5, Leadership Division members attended Catfish and Crawdads in Danville, which was organized in part by Leadership Division Steering Committee member, Brandon Atkins, American First National Bank & Trust Company.

    Additionally, The VBA Benefits Corporation had five meetings in Abingdon, Lynchburg, Richmond, Manassas and Newport News. VBA Benefits Corp.s Annual Fall Meetings are specifically intended to cover any updates, plan design changes, carrier changes, rate actions, RFP results, etc. that will be occurring in the health insurance plans for the upcoming year. This included changes and updates to medical, dental, life, limited and vision plans.

    Thanks to everyone who participated in these important meetings!

  • 14 Virginia Banking | November/December 2011 www.vabankers.org

    Hearing Directly from Our Bankers

    F all at the VBA has been a busy time for our ongoing grassroots advocacy efforts across the Commonwealth. Over the course of three weeks, the VBA hosted 13 meet-ings between bankers and state legislators in all regions of Virginia. In total, 248 bankers attended these events, along with 90 legislators. Thanks to all those who took time out of their busy schedules to participate.

    These meetings serve as a great opportunity for bankers and elected officials to discuss the issues

    important to our industry. Throughout the course of our trip, it was insightful to hear many of the same refrains echoed despite the diversity of geography. Not surprisingly, the overall economic environment was front and center on everyones minds. While it was reassuring to hear the reminders that Virginia has weathered this recession far better than other locations, the uncertainty prevalent in all sectors of our economy, including financial services, remains

    the overriding concern.Our bankers did an outstanding job of commu-

    nicating the difficulty in the lending environment

    to the legislators. Bankers continually emphasized their desire and capacity to lend. However, as long as businesses and families are worried about forth-coming regulations, potential changes in tax policies and their overall fiscal future, the lack of demand

    for the loans necessary for our business model will linger. Acknowledging that the vast majority of that uncertainty has root in Washington, our state legislators were responsive to our requests to not further burden our industry or the customers we serve. Equally important as discussing our many challenges, our bankers reiterated the tremendous positive impact they have on their communities, both through their businesses as well as their com-munity involvement and efforts in financial literacy.

    Like our successful meetings with our state lead-ers, several bankers participated in meetings with members of the Virginia congressional delegation. Rep. Robert Hurt (VA-5) heard from bankers about

    the cost and time devoted to the overburden of regulations coming from Washington. As a member of the House Financial Services Committee, Hurt is keenly aware of the negative impact of the suffo-cating government regulatory environment. Our bankers were appreciative of the his comments, as well as his decision to co-sponsor HR 1965, modern-izing the SEC registration threshold requirements.

    Similarly, we were pleased to have Rep. Rob Wit-tman (VA-1) join us at our Fredericksburg state leg-islative breakfast. Including the congressman in our discussion with state legislators and our bankers proved beneficial to all in attendance. Contrasting

    the stark difference in approaches and outcomes between our General Assembly in Richmond and Congress in Washington reinforced not only how fortunate we are at the state level in Virginia, but also the frustrating environment at the federal level. Wittman clearly understands our issues and, thanks to opportunities for continued conversations like this, is willing to listen to our bankers.

    As we near the end of 2011, we can pride our-selves on the active engagement from our bank-ers over the past several months. Whether it was responding to calls to action on debit interchange votes in Congress or participating in one of our state legislative meetings, bankers throughout Virginia unquestionably recognize the importance of their involvement in the legislative and political process.

    While we could be content to rest on our laurels, succumb to the tryptophan-included Thanksgiv-ing slumber or be distracted by the hectic holiday schedule, it is imperative that we keep our momen-tum going in our aggressive advocacy outreach.

    There are two clear upcoming opportunities for you to be involved in those efforts. The first is

    Thursday, Jan. 12, as part of Banker Day in Rich-mond. We are hoping to grow our record number of participants from the last gathering as bank-ers from all over meet with their state legislators during the new General Assembly session. As we

    Matt Bruning Director of

    Government Relations,

    Virginia BankersAssociation

    Matt Bruning can be reached by email at [email protected]


    Continued on page 19

  • Promontory-ICS_BestCustomers-VA-Banker.pdf 1 10/21/2011 9:53:42 AM

  • 16 Virginia Banking | November/December 2011 www.vabankers.org

    L ike many conservative industries, many banks are still playing a dangerous wait-and-see game with social media. Mean-while, the public they serve have already begun amalgamating social media into their daily lives. In fact, many dont see social media as definitive thing

    but rather simply a baked-in experience for every in-teraction with the Internet. Consider the last time you made a purchase online: did you encounter a review or a star rating? Moreover, the entire Internet expe-rience is becoming defined bilaterally as the place

    where a company talks about itself (the traditional website) and the rest of the web where you find out

    how people really feel.



    This plainly carries over to financial services. In a 2011

    study for the Virginia Bank-ers Association (VBA), re-sults revealed that Virginians were far more verbose and curious about banking ser-vices online than the banks were at responding. With many of the discussions be-ing decidedly geographic, discussing a particular ser-vice in a distinct region, questions about everything from checking accounts for teens to debit cards working

    overseas were asked and answered by the average consumer and not always correctly with recom-mendations for specific banks. Interestingly, many of

    these questions and answers were several years old meaning they have been left out in the sun of the Internet, informing all who read them and going un-challenged for a long time. Consumers discuss their positive and negative experiences freely and in open,

    public channels. These customers do not see the in-ternal separation between marketing and customer service. To them, the experience is singular, a part of their everyday connection with their financial insti-tution. This means a significant opportunity for Vir-ginia banks to engage, listen and react to an audience of willing participants. But it also means there is a lot to learn about their targets as well as what those targets already think of and say about these financial

    institutions themselves.



    For the banks already engaging, theres more than just an overactive constituency to worry about theres the pace of the underlying technology itself. Technological trends, especially in social media, can be dizzying to keep up with. It seems like every day theres an update, a new feature, a new app, a new channel and maybe even a whole new twist on an old idea you thought was long gone. Meanwhile, long-standing channels go from frivolous maybes to must-haves as your target audiences voraciously adopt and adapt to a social media landscape some in your organization openly warned was a fad. Be-tween Apple product debuts, Consumer Electronic Show (CES) announcements and South By Southwest (SXSW) app unveilings, its easy to become too ob-sessed with the latest and greatest technology or to become so overwhelmed that you tune it out. The cacophony can rear its head in frustrating ways as your facility tries to keep up in message delivery and internal control of devices, channels, etc. The 2011 re-port exposes who in Virginia has successfully utilized what channels and who likely should have listened before wading in.


    Take internal policy development, for example, where social media has often been drawn into focus at such a fine level that we find ourselves actually

    Dean Browell, PhD, is the executive vice president of Feedback, a Richmond, Virginia-based social media consul-

    tancy firm. He is also the chair of the Emerging Media Task Force. He can be reached at 804-484-4245 or [email protected]

    feedbackagency.com. See Dean speak at the VBA Annual Convention, June 17-20, 2012.

    By Dean Browell, PhD Executive Vice


    The Social BankHow to Approach the Social Footprint Your Bank Already Has (Whether You Like It Or Not)

  • naming devices in the policy itself. Rarely do other policies get the same scrutiny, and frequently we trade a heavily-crafted (and sometimes heavy-handed) social media policy in exchange for permission to pursue these channels, sometimes as a gift from the IT, lawyer and administrative groups. Get-ting as granular as actually naming devices or channels in your policy could be a dan-gerous route that causes you to frequently revisit and likely re-fight battles on a

    frequent basis. I recommend aiming at the task itself. Try to conceptualize the basis for ones use of a particular social media chan-nel and begin your policing there.



    The most important concept surround-ing trend watching is this: focus on your specific publics. Take note of what the sav-vy are doing, perhaps even dabble or pilot a program or two, but really pay attention to what your core audiences are actually us-ing. In the 2011 report for the VBA, the best (and worst) practices of the financial indus-try were outlined, from successful single channels to the complete package of social experiences. It pays to evaluate what your audiences are doing even in light of social media channels you have already started. Geography truly does play a part in what channels are preferred by your audiences in rural areas we often see that mobile is in far stronger use because they have faster internet experiences on their phones than on their desktops, which can also lead to higher use of more mobile-friendly social channels such as Twitter. Always be careful to not generalize what your region is doing based on a national article.

    But of equal danger is basing your per-ception on your audiences use of various channels and trends on your own personal usage.


    In evaluating trends there are three clear rules that will help you save time and mon-ey while keeping your sanity:

    November/December 2011 | Virginia Banking 17 www.vabankers.org

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    Continued on page 22

  • 18 Virginia Banking | November/December 2011 www.vabankers.org

    Connecting the Dots on Price-Fixing

    With the national medias recent fo-cus on new bank service fees, the ABA has been quick to see that our industrys side of the story gets told.

    We also want to shape this discussion so con-

    sumers and policymakers clearly understand that

    the key driver of these new monthly fees is noth-

    ing less than government price-fixing.

    In an interview with ABC World News Tonight

    about bank fees, for example, I explained that

    regulatory changes, including government-

    imposed interchange fee restrictions, have forced

    some banks to re-price their services and eliminate

    free checking.

    This was also my message in a letter published

    in the Wall Street Journal, which followed up on

    an earlier letter by Sen. Richard Durbin (D-Ill.),

    who was defending his debit interchange price-

    control law. The real question is: Will retailers

    reward customers with lower prices from their

    billion dollar windfall or will they simply pocket

    the money? I asked. I think we already know

    the answer.

    We also issued a press statement explaining

    how the landscape for debit cards is changing,

    and how the Durbin amendment and its conse-

    quences are symptomatic of a broader problem.

    Massive amounts of new regulation, govern-

    ment constraints on earning revenue and a tough

    economy are preventing banks from helping our

    Frank Keating President and CEO,

    American Bankers Association


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    Register at aba.com/Community

  • www.vabankers.org November/December 2011 | Virginia Banking 19

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    economy get back on track.

    The Durbin amendment, which

    capped debit card fees below industry

    costs, provided big-box retailers with $7

    billion in windfall profits while forcing

    banks to lose money on every debit card

    transaction. Many economists predicted

    that this direct transfer of costs from re-

    tailers to everyday Americans would

    result in higher fees for basic banking

    services and threaten our nations com-

    munity banks. Unfortunately, we are

    now seeing that result.

    Were urging policymakers to take a

    hard look at the real cause of higher con-

    sumer fees. And you can help expand

    our communications outreach on this


    When the Times-Dispatch, the

    Virginian-Pilot or another local

    newspaper publishes an article about

    banking fees and falls short of the facts,

    or doesnt quite reflect our side of the

    story, write a letter and respectfully

    correct things.

    A friendly phone call can also help

    you tell our side of the story, as well

    as cultivate valuable relationships as

    a trusted source with reporters on the

    banking beat.

    As a banker, youre a spokesperson for

    the industry in your community. You can

    help ensure that the public and policy-

    makers better understand the issues that

    affect your business, and how you serve

    your customers and communities.

    Gov. Frank Keating can be reached by

    email at [email protected]

    tweeted (twitter.com/vabankers) from one of our recent state legislative meetings, a state senator noted, as citizen legislators it is so important to hear directly from our constituent bankers.

    Second, please save the date and plan on attending our Capitol Hill visits as part of

    the VBA/ABA Government Relations Sum-mit on March 19-21 in Washington. This is another way to tell your representatives how banking works and how you make a difference in your community. For more in-formation on either of these events, please contact Bobbi Weimer at [email protected] I look forward to seeing you.

    Continued from page 14

  • 20 Virginia Banking | November/December 2011 www.vabankers.org

    Like most of us, I get a lot of unsolicited mail except now its usually email in-stead of the old kind. Once youve been identified in a particular field, or with a certain

    interest, the flood gates open. Somehow they

    know Im in Employee Benefits, so the focused

    briefings multiply the latest on health care re-form, minimum loss ratios, essential benefits, and

    the like. Lately, though, Ive been noticing a trend as in my headline so I thought I would peel a few layers off the onion.

    The issue, it seems, is that medical costs con-tinue to go up, despite all our efforts to reduce them. Some say the cost-saving effect of HMOs is not what it used to be, and consumer driven health care (high-deductible plans with a savings account) still doesnt break the trend. Health care reform was supposed to save money, but the evi-dence is that costs are increasing for 2012 because of it.

    So who is to blame? The evil insurance com-panies? Evil doctors and hospitals? Evil corpora-tions? Maybe, as we hear far too often lately, its evil banks! Personally, I put a lot of faith in the great philosopher, Pogo.

    Before Doonesbury, before Pluggers, before Pearls Before Swine, there was Pogo a possum who lived in the swamp, and was very wise for his

    size. His most famous saying was We have met the enemy and he is us!

    I see a lot of depth to that, and a lot of relevance as well. It is becoming evident that fully half of health care claims can be attributed to lifestyle choices smoking, alcohol or drug abuse, seden-tary lifestyle and physical inactivity, seat belt use (or lack thereof) but the greatest of these is obe-sity.

    Obesity is often the underlying or contributing cause of diabetes, COPD, heart disease, stroke, breast and colon cancer, joint replacement and increasingly, mental health issues. Experts are making dire predictions, like the recent ABC World News story reporting a study which found that if trends continue, half of all American men will be obese by 2030.

    So how do we get at this ugly trend? More and more companies are offering Wellness Programs including such features as health risk assessments, health screenings, walking programs, healthy lunch and vending programs, health advocates (coaches), and gym memberships. And while not without cost, these programs are starting to show how they can pay dividends early.

    Recent news and email articles have talked of several success stories: MWV observed disproportionate claims from

    a small segment of their population, and initi-ated a five-step program to engage employees. By the second year, they achieved 56 percent enrollment, and 31 percent of participants im-proved their BMIs, while 23 percent lowered their blood pressure. Most encouragingly, they now expect a savings of $2 for every $1 invest-ed.

    Robinson Engineering (Chicago) has long pro-moted health education, competitions, and health screenings, and claims a 10 to 1 return on investment.

    A Georgia company that focuses on incentives and health coaching reports that health cost increases average less than 2 percent annually over the last 10 years.

    Delta Dental reported that employees who re-ceive the suggested preventive visit in the first year of coverage average almost 45 percent less in claims costs in the second year.

    VBA Benefits has been promoting wellness

    By Roy Allison Vice President

    of Marketing and Sales,

    VBA Benefits Corp.

    Wellness Doesnt Cost it Pays!

  • www.vabankers.org November/December 2011 | Virginia Banking 21

    Its only a sampling, but look whats in the compliance services package TCA provides VBA member banks:

    Hands-on help, with scheduled on-site audits. Timely, accurate information about compliance issues and trends. Advice about how to meet federal compliance requirements. An e-newsletter heads-up when the rules change. Access to the TCA compliance professionals, the people who make TCA the

    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.

    Thomas Compliance Associates, Inc.2846 N. Mildred Avenue, Suite 150Chicago, Illinois 606571-800-934-7347www.tcaregs.com

    through its Banking on Wellness pro-gram for several years, and a number of banks and associate members have been enthusiastic participants. This year our focus is on three specific areas: Increase overall awareness of health

    issues Motivate individuals to make healthy

    lifestyle changes Maintain healthy lifestyle initiatives

    Members who embrace the goals of the program by enrolling at least 10 em-ployees and offer at least three programs in 2012 health screenings, health risk assessments and future moms will be eligible for incentive rewards in 2013, based on percentage participation: At least 25 percent monthly rates

    lowered by 1 percent 50 percent or higher monthly rates

    lowered by 2 percent

    For an effective program, employees have to be engaged. A recent survey I saw indicated 73 percent of employees would be more likely to lose weight or quit smoking with company incentives. To reward employees, some suggestions are cash incentives, holding a raffle for

    participants, providing extra paid time off, or using promotional items like T-shirts, water bottles, etc.

    The fact is, weve got to change behav-ior. Chronic claims are driving our medi-cal insurance costs, and there is great opportunity for prevention if we take advantage of what we have available. In our VBA plan, most preventive screening is at no cost to an insured participant no copay, no deductible, no cost sharing at all. Yet last year our utilization report revealed some troubling statistics: of those eligible for mammography, only 47 percent took advantage of the free, life-saving test. And that was not an isolated number of those eligible for a Pap test, only 69 percent complied, and the per-centage for colorectal screening was too

    low to chart.Getting all of us and all employees

    thinking about wellness and preventive services is a long-term goal that will help control medical costs. An effective pro-gram must be consistent, insistent, have clear goals and management buy-in. Weve certainly heard the old adage, It

    all starts at the top and flows down, and

    it has never been truer than with well-ness programs.

    As always, VBA Benefits wants to help

    with all your employee benefit needs.

    Please call us at 800-643-5599.

  • Listen and observe: Using internal or external resources, see what your actual target audiences are doing; invest time and money into projects based on your regional trends, not nationwide trends. Your first

    move should be to study the 2011 report from the Virginia Bankers Association to give you a taste of what real social media research can provide.

    Dabble, note and move on: Take note of the macro-concepts behind new apps, trends and more but dont be too distracted until you see your audiences using and adapting.

    You cant sit on the sidelines if youre

    not even in the stadium: You can certainly pretend things wont move without you, but dont be surprised when your once-lud-dite boss comes in with an iPhone 5 playing Angry Birds 2.

    Ideally, you want your bank to be in-formed and just ahead of the curve not buried under it or so far ahead that you end up some place your audiences would never go.

    22 Virginia Banking | November/December 2011 www.vabankers.org

    MoveBankers on the Martin Slocum Angel ElliottClarence ReedFrank

    Are your bankers on the move? Email submissions to [email protected]

    Benchmark Community BankH. Nicole Martin, Vice President of

    Customer Relations and Compliance Officer

    Cardinal BankJanel M. Angel, Assistant Vice President of

    Commercial LendingSushil K. Clarence, Executive Vice President

    and Manager of the Government and Technology Group

    Travis R. Slocum, Vice President and Senior Cash Management Officer

    Highlands Union BankJeff Fritts, Tennessee Area Manager

    StellarOnePaige Hodge Bryant, Production AssistantJune Elliott, Mortgage Loan ConsultantKaren Frank, Mortgage Sales Manager

    Virginia Commerce BankHans Greser, Assistant Vice President of

    Virginia Commerce Wealth Management Services and Financial Advisor for Infinex Investments, Inc.

    Meredith Hartman, Assistant Vice President of Credit Administration

    Village Bank Mortgage Corporation

    Jamie T. Reed, Senior Loan Officer



    A ]

    Continued from page 17

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