VACB Chairman 2014
Jeff Dick
Chairman, CEO,
and President
MainStreet Bank

Chairman's Letter

The Community Banker Magazine


Computer Services, Inc.

Update on HEARTBLEED Vulnerability

Secure Banking Solutions Heartbleed FAQs

Most of you have heard about the Heartbleed vulnerability virus that is traveling across the internet. We received an alert from a respected VACB technology pro via Banc Investment Daily this morning that provides a list of social network, internet service provider, email, shopping, tax service and other services Internet websites that have been affected by the Heartbleed vulnerability virus. If you personally use any of following Internet services, your user IDs and passwords may have been compromised. To safeguard your personal information and prevent unauthorized access, you should change your passwords on these account. Please note, these websites should not be accessed using the company's internet system.
  • Facebook
  • Instagram
  • Pinterest
  • Tumblr
  • Twitter
  • Google
  • Yahoo
  • Gmail
  • Yahoo Mail
  • Amazon
  • Etsy
  • GoDaddy
  • H & R Block
  • Intuit Turbo Tax
  • USAA
  • Box
  • Dropbox
  • GitHub
  • Netflix
  • OKCupid
  • SoundCloud
  • Wordpress
  • Wunderlist

Appeals Court Rules Against Merchant Effort to Increase Interchange Windfall
VACB is expressing "subdued satisfaction" with an appeals court ruling rejecting major retailers' efforts to increase the $6 billion annual windfall they secured with the passing of the Durbin debit interchange price caps.

The merchants, which had initiated a multi-year lobbying effort to impose price controls, sued the Federal Reserve Board in an effort to lower the board's caps even further. The ruling from the U.S. Court of Appeals for the District of Columbia Circuit overturns a lower court decision that would have required lower debit interchange price caps than those required under the Fed's interchange rule.

ICBA and a coalition of trade associations filed a friend-of-the-court brief in opposition to the merchants and participated in oral arguments. ICBA and the coalition argued that the Federal Reserve's existing price caps did not allow card issuers to cover their costs while receiving a reasonable return on their investments.

The Fed originally proposed capping debit interchange rates at 12 cents per transaction, then raised the cap to 21 cents plus 5 basis points of the transaction value. The price controls apply to interchange paid to debit card issuers with $10 billion or more in assets.

ICBA opposes government price fixing of interchange fees, which the association has repeatedly argued will harm consumers and community banks, despite the exemption for institutions with less than $10 billion in assets. All banks regardless of size must comply with the network routing provisions of the rule.

Representatives of the merchants said they will review possible next steps. The case is NACS v. Board of Governors of the Federal Reserve System.

"The decision does not represent a total victory for banks, of course,' said VACB President & CEO Steve Yeakel. The ruling leaves standing the limit of 24 cents per transaction, which is far better than what the retailer plaintiffs were seeking, but is still far short of what many banks require to cover the full cost of their debit programs. A quick reflection on the cost to banks of the recent Target data breach certainly brings that issue into focus."

ICBA Urging Community Bankers to Send Letters Against Costly Accounting Proposal

ICBA is calling on the nation's community bankers to send in custom comment letters opposing proposed accounting standards that would require all community banks to revise how they account for their loan-loss reserves (ALLL), loans and securities. Go to and click on the FASB Petition under the Advocacy tab on their site to see the FASB proposal and download a sample letter.

The Financial Accounting Standards Board proposal would implement a single approach for recognizing credit losses on loans, securities and trade receivables. The proposal would use an "expected loss" model, which would require banks to estimate expected credit losses and recognize the net present value of those losses at origination. It would replace the "incurred loss" model.

FASB's proposal would require complex modeling and compel banks to recognize losses much earlier than necessary in the credit-loss cycle, penalizing community banks for investing in loans and securities. The Office of the Comptroller of the Currency estimates that loan-loss reserves on average will increase by 30 percent to 50 percent with adoption of the proposal.

ICBA's customizable letter urges FASB to re-propose a simpler and more straightforward proposal that would not harm the nation's community banks. Community bankers can go online to sign the petition, send in a customizable comment letter to FASB, and access a summary and frequently asked questions on the proposal.

VACB Member Banks Excel
Two Local Banks Make SNL Financial's List

For the past half-decade, only 20 banks in the United States have managed to reward investors with cumulative dividend growth of at least 30% and annual 2% increases, according to a recent report from SNL Financial.

A full ten percent (two!) of those banks are VACB Members - Chesapeake Bank of Kilmarnock and Blue Ridge Bank of Luray! Heartiest congratulations to Jeff Szyperski, Monte Layman and their fine teams.

Tell Your Senators to Support Bill Delaying Flood Insurance Rate Hikes

ICBA continues calling on the nation's community bankers to urge their senators to support legislation to delay sharp increases in National Flood Insurance Program premiums.

The Homeowner Flood Insurance Affordability Act (S. 1846), introduced by Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.), would delay rate increases for up to four years by giving the Federal Emergency Management Agency time to develop a plan to help property owners who cannot afford higher premiums.

If Congress does not approve S. 1846, dramatic rate increases included in the 2012 Biggert-Waters flood insurance reforms would continue to be implemented. These increases would destabilize the still-recovering housing market in affected areas and negatively affect home values.

Technology Pioneers
VACB Member Bank Joins Technology Co-op

Sandra K. Dudding, CEO of The Farmers Bank of Craig County joined forces with five other community bankers to form The Bankers Community Cooperative, a not-for-profit corporation that will be the first-ever member-owned and controlled co-op of a core banking system.

The co-op was formed when Waldorf Computer Systems, provider of BANCADO, a core banking system went looking for a buyer. The six community banks banded together to purchase the software and gain the rights to use its core processing software. Co-op organizers are hopeful that the new model will deliver major benefits to participating community banks. The most important benefit by being a low-cost provider, and helping our independent banks to stay independent.

As more banks join the co-op, member banks will have a greater influence over software developments and will ensure that developments reflect the needs of its member community banks.

Compliance Conference CANCELLED
New Dates Available Soon

Due to the weather scheduled for Charlottesville, the VACB Compliance Conference scheduled for March 17 & 18 at the Omni Charlottesville HAS BEEN CANCELLED. We DO NOT have a new set of dates yet, but will post them as soon as they are determined. If you have questions, please call Katharine Garner at 804-241-9101.

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