News

• ABA Banking Journal: AI in mortgages: Reshaping the lending lifecycle
• ABA Banking Journal: ABA Chair Kelly discusses growing fraud threat, need for banks of all sizes
• ABA Banking Journal: ABA, associations offer recommendations for veterans homeownership program reforms
• CISA News: Florida Man Working as a Ransomware Negotiator Pleads Guilty to Conspiracy to Deploy Ransomware and Extort U.S. Victims

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• 2027 Scenes of South Dakota Calendar Contest

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• 2026 FDIC Directors College
• Graduate School of Banking: AI Innovation Series
• 2026 SDBA Intro to HSAs Webinar
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• Graduate School of Banking: July 26-August 6, 2026

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ABA Banking Journal: AI in mortgages: Reshaping the lending lifecycle

Experts advise bank leaders to ensure AI is deployed responsibly, governed transparently and secured carefully.

The mortgage lending landscape is being fundamentally reshaped. Artificial intelligence no longer is an emerging trend. It is a dominant operational force.

AI technology is rapidly and relentlessly injecting itself into every stage of the mortgage lifecycle, from initial loan origination to servicing. This is not incremental change; the technology is advancing by leaps and bounds, driving a profound and immediate need for awareness and adaptation. At minimum, banks are rigorously evaluating AI tools in testing environments to gauge viability.

The financial markets are seeing the development of AI-powered financial tools that claim to navigate every stage of the residential finance process. The tools range from initial customer interface to loan repayment and everything in between.

And adoption is increasing. According to a 2025 survey by Stratmor Group, a mortgage consulting firm, 38% of mortgage lenders in 2024 reported using artificial intelligence and machine learning, up from 15% in 2023. The survey also noted that 48% of lenders used robotic process automation, or “bots,” in the past year to streamline processes such as ordering appraisals and credit scores — up from 30% in 2020.

“Mortgage lenders are increasingly investing in automation and AI as foundational technologies to improve efficiency and productivity,” says Nicole Yung, a senior partner at Stratmor Group. “This represents a fundamental transformation in how mortgage operations are being conducted.”

Yung also says that increased investment in AI includes a “growing trend” of lenders building internal capabilities to “develop and maintain their own bots,” with 21% of lenders reporting that they are developing internal AI capabilities.

“Lenders are strategically prioritizing front-end digital capabilities that directly impact the application process,” she notes. “The industry is at a critical juncture where investments in technology foundations will determine which organizations thrive in the increasingly digital mortgage landscape.”

Some examples of the services and capabilities AI has provided, include:

• AI agents created to guide borrowers through the mortgage application process, automatically extracting and populating data (e.g., income, employment, credit) into forms like the Uniform Residential Loan Application.
• AI programs simulating and processing human conversation, either written or verbal, allowing consumers to interact with digital representatives, often called “chatbots,” as if they were communicating with a real person.
• Mortgage document processing technologies that can be used to handle paperwork such as bank statements, tax forms, income verifications and other documents that need to be considered, summarized and retained in the mortgage approval process.
• AI solutions that can detect fraud and financial crimes by analyzing large datasets for anomalies, verifying document authenticity and identifying suspicious patterns in borrower and transaction behavior in real time.
• AI tools at the mortgage settlement table that are automating closing package reviews, fee reconciliation and compliance checks, and often cutting processing times significantly.
• Mortgage servicing operations automated by AI functions that handle customer interactions, predict delinquencies and manage payment plans through intelligent agents that provide real-time support and personalized outreach.

As AI capabilities advance, mortgage banking executives are increasingly concerned about whether they are moving fast enough to align with the accelerating AI revolution, and many fear that delays could leave them at a competitive disadvantage. These concerns are well founded, but the real compass that should guide bank leaders is that while it is true that the AI revolution is already underway, its transformative impact is only beginning — we are only starting to understand the contours of an AI future where real estate lending operations will evolve in diverse ways.

Commencing the AI “voyage” is the single most important action a mortgage lender can take right now. As Gabe Minton, EVP and chief information officer at Mortgage Connect, advises in a recent American Bankers Association webinar, AI’s power is not magic — it is a deeply potent, results-driven tool that must be integrated into your operations. The goal is momentum, not perfection. Managers must reject the notion of an “all-or-nothing” commitment. The immediate focus should be on exploring targeted AI solutions, identifying specific applications and strategically weaving the technology into the fabric of the bank’s systems.

As banks begin this journey, leadership must focus on what many experts have coined as the “three pillars” of responsible AI adoption: risk management, governance framework and security and compliance. In terms of risk management, executives must remember that AI technology introduces new risks into banking operations; these risks include model bias, inaccurate predictions, operational failures and reputational harm. The governance pillar refers to AI decisions being transparent, explainable and aligned with regulatory and ethical standards. In addition, there must be clearly defined roles and responsibilities for AI oversight across business, compliance and technology teams. The third pillar is security and compliance, which recognizes that AI systems must handle sensitive borrower data, making cybersecurity and regulatory compliance critical and requiring enforcement of data privacy protocols (the Gramm-Leach-Bliley Act in the U.S., the E.U.’s General Data Protection Regulation, the California Consumer Privacy Act and U.S. fair lending laws).

The importance of these three pillars is perhaps best explained by describing their interaction. When taken together, they create a hard shell of trust: governance sets the rules and apportions roles, security enforces them, and risk management monitors outcomes — ensuring AI adoption is responsible, resilient and effective.

In addition, banks should understand that there currently are no federal AI-specific regulations for banks. However, transactions assisted by AI are subject to existing consumer protection laws such as the Truth in Lending Act and Equal Credit Opportunity Act and frameworks like SR 11-7 and the National Institute of Standards and Technology’s AI Risk Management Framework to evaluate AI use. SR 11-7 is a foundational supervisory guidance on model risk management issued jointly by the Federal Reserve and the Office of the Comptroller of the Currency in April 2011 (the Federal Deposit Insurance Corporation later adopted it in 2017).

While written 15 years ago, SR 11-7 remains the primary framework used to examine AI and machine learning in banking. Regulators use their principles to ensure that “black box” algorithms are transparent, fair and free from bias. Likewise, NIST’s AI Risk RMF is a voluntary, customizable non-sector-specific guide developed to help organizations manage risks associated with AI. Released in early 2023, it is considered a “gold standard” for trustworthy AI governance because it provides a flexible, structured way to identify and mitigate AI risks across the entire system lifecycle, from initial design to decommissioning. It includes a generative AI profile as a companion document.

“AI adoption in mortgage lending is inevitable; unmanaged AI risk is not,” observed Eric Lapin, managing partner at Finfusion Consulting. “As AI reshapes the entire mortgage lifecycle, leadership must ensure it is deployed responsibly. It must be governed transparently, secured rigorously and managed with the same discipline we apply to credit, capital and consumer protection.”

Rod Alba is ABA’s SVP for real estate finance.

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ABA Banking Journal: ABA Chair Kelly discusses growing fraud threat, need for banks of all sizes

American Bankers Association Chair Kenneth Kelly appeared on Bloomberg TV today to discuss the banking industry’s fight against fraud and the need for a diverse bank sector to support the various facets of the U.S. economy.

Kelly – who is chairman and CEO of First Independence Bank in Detroit – was questioned about the nomination of Kevin Warsh to be Federal Reserve chairman and the policy priorities of the banking industry. As for the former, Kelly said that he takes Warsh at his word that the Fed will remain independent. As for policy, one concern for bankers is the implications for deposits if the payment of interest loophole for stablecoins remains in place, he said. Another concern is fraud.

“Right now, we’re seeing trillions of dollars being impacted in fraud, and typically it is hitting the people who are the most vulnerable,” Kelly said. “So we need an all-hands-on approach to fraud, being sure that social media companies are taking care of their responsibilities and not turning a blind eye to allow fraud to happen to our seniors and others. That’s an area that all bankers can agree on.”

Kelly called the diversity of the U.S. banking system one of its greatest strengths, with its mix of large, midsize and community banks. But “we have a challenge” in supporting the formation of de novo banks, he said.

“I think about the rural community I grew up in, Eufaula, Alabama, with 15,000 people,” he said. “I got my very first loan … because someone in the community knew me and knew my character and was willing to loan me money. So having that ability to have, as I call it, the capillaries in rural communities, is very important in the banking system.”

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ABA Banking Journal: ABA, associations offer recommendations for veterans homeownership program reforms

'When young people are empowered to teach and create, financial literacy becomes more relatable, engaging and memorable.'

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CISA News: Florida Man Working as a Ransomware Negotiator Pleads Guilty to Conspiracy to Deploy Ransomware and Extort U.S. Victims

April 20, 2026

A Florida man, formerly employed as a ransomware negotiator, pleaded guilty to conspiring to commit ransomware attacks against U.S. companies in 2023.

According to court documents, Angelo Martino, 41, of Land O’Lakes, Florida, collaborated with the operators of the Blackcat/ALPHV (“BlackCat”) ransomware variant used by cybercriminals to attack and extort institutions and companies. Beginning in April 2023, Martino abused his role at a U.S.-based cyber incident response company to assist BlackCat actors. Working as a negotiator on behalf of five different ransomware victims, Martino provided BlackCat attackers with confidential information about the negotiating position and strategy of his company’s clients without the clients’ or his employer’s knowledge or permission. This confidential information assisted the ransomware actors and maximized the ransoms that the victims were required to pay. The confidential information included the victims’ insurance policy limits and internal negotiation positions. The BlackCat actors paid Martino for this confidential information.

Additionally, Martino has admitted to conspiring with Ryan Goldberg of Georgia and Kevin Martin of Texas to successfully deploy BlackCat ransomware between April 2023 and November 2023 against multiple victims located throughout the United States. All three men worked in the cybersecurity industry and leveraged their knowledge and skills to commit these crimes. After successfully extorting one victim for approximately $1.2 million in Bitcoin, the men split their share of the ransom three ways and laundered the funds through various means.

To date, law enforcement has seized $10 million of assets from Martino, including digital currency, vehicles, a food truck, and a luxury fishing boat that Martino obtained using proceeds of the offense or acquired as a result of the offense.

“Angelo Martino’s clients trusted him to respond to ransomware threats and help thwart and remedy them on behalf of victims,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division. “Instead, he betrayed them and began launching ransomware attacks himself by assisting cyber criminals and harming victims, his own employer, and the cyber incident response industry itself.”

“Ransomware victims turned to this defendant for help, and he sold them out from the inside,” said U.S. Attorney Jason A. Reding Quiñones for the Southern District of Florida. “As he admitted in court, he abused his position at a cyber incident response company to feed confidential information to BlackCat actors, helping them maximize ransom payments from American victims. He then went further, joining the conspiracy himself to deploy ransomware and profit from extortion. This guilty plea makes clear that if you weaponize insider access and cybersecurity expertise against victims in South Florida or anywhere in this country, you will be prosecuted. And as the seizure of more than $10 million in assets shows, you will not get to keep the proceeds of your crime.”

“The FBI works every day to dismantle the ransomware ecosystem,” said Assistant Director Brett Leatherman of the FBI’s Cyber Division. “That includes apprehending key facilitators like Angelo Martino, who abused the trust placed in him as a private sector negotiator by collaborating with ransomware criminals. Martino provided BlackCat ransomware actors with confidential information to maximize ransom payments. He also conspired with other U.S. residents to launch attacks on victims across the country. His guilty plea demonstrates that, for all the international aspects of cybercrime, the threat is also here in the United States. The FBI is proud of the close collaboration with partners that led to this outcome.”

Martino pleaded guilty to one count of conspiracy to obstruct, delay or affect commerce or the movement of any article or commodity in commerce by extortion. He is scheduled to be sentenced on July 9 and faces a maximum penalty of 20 years in prison. Martin and Goldberg separately entered guilty pleas to the same charge in December 2025. Martin and Goldberg are scheduled to be sentenced on April 30 and each face a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Today’s announcement follows the Justice Department’s prior actions in December 2023 to disrupt BlackCat ransomware, during which the FBI developed a decryption tool that allowed FBI field offices across the country and law enforcement partners around the world to offer hundreds of victims the capability of restoring their systems, saving victims approximately $99 million in ransom payments. At that time, the FBI also seized several websites operated by the BlackCat ransomware actors.

The FBI’s Miami field office is leading the investigation, with assistance provided by the U.S. Secret Service.

Trial Attorneys Christen Gallagher and Jorge Gonzalez of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorneys Thomas Haggerty and Quinshawna Landon for the Southern District of Florida are prosecuting the case. Assistant U.S. Attorney Mitchell Hyman for the Southern District of Florida is handling asset forfeiture.

Significant assistance in this investigation was provided by Assistant U.S. Attorney Merrilyn Hoenemeyer for the Middle District of Florida and former Assistant U.S. Attorney Marx P. Calderón of the Southern District of Florida.

CCIPS investigates and prosecutes cybercrime and intellectual property (IP) crime in coordination with domestic and international law enforcement agencies, often with assistance from the private sector. Since 2020, CCIPS has secured the conviction of over 180 cyber and IP criminals and court orders for the return of over $350 million in victim funds. 

Private sector organizations can report any suspicious activities and threats to the FBI’s National Threat Operations Center by calling 1-800-CALL-FBI (225-5324), visiting www.tips.fbi.gov or contacting their local FBI field office.

If you are a victim of ransomware, contact your local FBI field office or file a report at ic3.gov.

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SDSU Second Annual Employer Relations Forum

May 13, 2026 | 10-11am CDT | Virtual

You are invited to attend our Second Annual Employer Relations Forum. This event will include updates on our office and a review of the year 2025-2026 academic year. Throughout the event we will highlight the following:

• A look at the upcoming career fairs for the 2026-2027 academic year
• Updates on the process of hiring international students
• A showcase of several ways to engage and support recruiting and career development at SD State

We are looking forward to connecting with you so we can provide the details above but also gain some insights from you via live polling during the event. Thank you for considering attending and we look forward to seeing you on May 13^th.

Add this Zoom link to your calendar:   https://sdstate.zoom.us/j/97161140835

We look forward to sharing information with you.

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