South Dakota bankers today in Pierre had the chance to share with Federal Reserve Bank of Minneapolis President Neel Kashkari what they are currently seeing in their local economies and how those conditions are impacting their banks and their clients. Kashkari met with bankers this morning prior to holding a Town Hall Forum open to the public at 8 a.m. at the Ramkota Hotel in Pierre. 

"The tax change was probably one of the biggest surprises of the year, and not in terms of the fact that they did it, but it seems like it has led to a lot of optimism and enthusiasm," Kashkari told bankers. "Now whether that enthusiasm then translates into more investment and more expansion, I am interested in hearing what you are all seeing."

The SDBA will present the 2018 Agricultural Credit Conference April 11-13 at the Ramkota Hotel & Conference Center in Pierre. This conference focuses on the unique needs of ag bankers and the need for quality information and training to better serve their customers. The SDBA has lined up speakers on a variety of timely topics to help ag bankers navigate through challenging times. Experienced and new ag lenders, as well as CEOs, will all benefit from this conference.

The event will kick off Wednesday afternoon with a pre-conference session by Farmer Mac titled "Winning Secondary Market Strategies for South Dakota Ag Bankers." Learn about Farmer Mac’s ag lender tools available to compete and attract new business. Farmer Mac will also review the current  interest rate environment and dive into some recent South Dakota loan sale transactions. 

The U.S. Secret Service has issued an alert warning ATM owners and operators of cash-out criminals conducting “jackpotting” attacks on standalone front-loading ATMs located in drive-throughs and retail outlets in multiple locations across the United States. Jackpot attacks, also known as “logical attacks,” combine physical intrusion and malware to command ATMs to empty themselves out in a matter of seconds.

According to the alert, criminals dressed as service technicians use ATM access keys readily available online to gain entry via the ATM’s top hat, install malware on the ATM and take control of the machine in order to initiate ATM withdrawals. In some cases, the criminals swap out the ATM’s existing hard drive and replace it with one already infected with malware. Banks are recommended to contact their ATM service providers for the latest security updates and patches to mitigate the risk from these attacks, to ensure proper physical security controls limiting access to the machine and to monitor for communications failures and alarms.

Diebold Nixdorf, a major ATM vendor, recommended limiting physical access to the ATM; implementing protection mechanisms for cash modules; monitoring unexpected opening of ATMs’ “top hats”; and keeping operating systems, software stacks and configurations up to date. NCR, another major ATM provider, also issued an alert with specific recommendations to address common forms of logical attacks against ATMs. The Financial Services Information-Sharing and Analysis Center is also issuing information on the attacks; the American Bankers Association encourages all banks to join FS-ISAC to receive the latest security alerts.

• Read the Secret Service alert.
• Read the Diebold Nixdorf alert.
• Read the NCR alert.
• Learn more about joining FS-ISAC.
• For more information, contact ABA's Heather Wyson-Constantine.

First Dakota National Bank will host AgriVisions 2018 featuring Kevin Van Trump. The event will be held Feb. 13 in Sioux Falls and Mitchell, Feb. 14 in Pierre, and Feb. 15 in Yankton. Agri-business professionals and business owners are invited to attend. 

Kevin Van Trump from "The Van Trump Report" will give an update and challenge thought processes on agricultural marketing and analysis. With more than 20 years of experience trading professionally at the CME, CBOT and KCBOT, Van Trump is able to "connect the dots" and simplify the complex moving parts associated with today's markets in a thought-provoking yet easy-to-understand format. 

By a vote of 85 to 12, the Senate on Tuesday voted to confirm Federal Reserve Governor Jerome Powell as chairman of the Fed. Powell first joined the board in 2012 and has played a major role in bank supervision and payments system activities during his tenure. 

“We congratulate Jerome Powell on his confirmation to serve as chairman of the Federal Reserve Board,” said ABA President and CEO Rob Nichols. “His high integrity, intelligence and wealth of experience in both monetary policy and regulatory issues will serve him well in this critically important role.” Nichols added that “Chairman Powell has demonstrated his interest in reviewing and refining regulations to ensure they work to reinforce economic growth while preserving the important principles of prudential supervision.” 

Nichols also saluted outgoing Fed Chairman Janet Yellen for her leadership of the board over the past four years, noting that “her actions helped strengthen both our economy and the financial system.” 

In a comment letter to the Appraisal Qualifications Board last week, the ABA offered its support for a proposal by AQB to change the qualification criteria for real property appraisers--a proposal that came after intense advocacy by ABA and bankers seeking solutions to the rural appraiser shortage. ABA noted that “the current proposal presents workable solutions that will keep the industry viable with improved residential licensing criteria, while maintaining high certification standards as the industry demands.” 

ABA fully supported AQB’s plans to reduce the college-level education degree requirements for licensed residential and certified residential appraisers, create an alternative track for licensed residential appraisers to become certified without obtaining a bachelor’s degree and reduce the number of field hours needed to obtain certification. These proposed changes would be an important step toward encouraging new entrants into the profession and addressing the appraisal issues currently facing the industry, especially in rural areas, ABA said. 

South Dakota bankers are invited to a bankers-only meeting with Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, on Thursday, Feb. 8, in Pierre to discuss local and regional business conditions. The meeting will be held at 7:30 to 8 a.m. at the Ramkota Hotel & Conference Center in Pierre and in conjunction with the SDBA's State Legislative Day on Feb. 7.

Kashkari is looking for bankers to provide a sense of business conditions in the region and state which, in turn, helps inform the Fed’s monetary policy given his presence on the Federal Open Market Committee, where the Federal Reserve sets monetary policy. Kashkari will also save some time at the end of the meeting to answer a few questions from bankers, and any remaining questions can get the conversation going at a Town Hall Forum that is open to the public at 8 to 9 a.m.

The SDBA is offering holiday signs that banks can print and display to notify customers when the bank will be closed.

The signs are set up to be printed on 8.5" x 11" paper and are provided as a high-resolution pdf file. Banks can print the signs and use them how they see fit.

The 2018 South Dakota Legislature opened this Tuesday, Jan. 9, with Gov. Daugaard giving his State of the State address.

Bankers can stay current on legislative issues of importance to the banking industry by reading the SDBA Legislative Update and  Bill Watch. The Legislative Update is a recap of weekly key legislative action. The Legislative Bill Watch tracks the status of bills the SDBA is monitoring. Both publications are posted online on Fridays during session. To sign up for email notifications when the publications are posted, contact Alisa DeMers.

A good trademark can send a message about your company, products or services and is a way to obtain and keep the consumer’s attention. 

Before personal devices and Facebook, trademarks were used to distinguish products. Today, trademarks continue to distinguish products but also serve as an effective communication tool to reach an audience who expects to receive information quickly and efficiently.

Larry Ness, chairman and CEO of First Dakota National Bank, Yankton, has been named 2018 Banker of the Year by NorthWestern Financial Review magazine. Bell Bank partners with NorthWestern Financial Review as program sponsor to honor the 72-year-old banker. Ness started working at First Dakota National Bank when it was on the verge of failing and turned it into one of the nation’s leading agricultural lenders and one of South Dakota’s leading financial institutions.

"As chairman and CEO, Ness is reaping the rewards of a lifetime of work," says NorthWestern Financial Review publisher Tom Bengtson. "Ness shares many leadership traits with previous Banker of the Year selections, including having a knack for innovation, aggressively recruiting talent, recognizing opportunities in tough times, being engaged in helping the community, and gratitude.

The Dakota School of Lending Principles, hosted by the SDBA and co-sponsored by the NDBA on April 24- 27, 2018, in Aberdeen, S.D., is a learning event with one foot grounded in the classroom and one foot in the bank. This school allows students to learn the theory and process of basic lending and then put this knowledge to work in actual nuts and bolts sessions. 

This school provides basic instruction appropriate for loan officer trainees, loan support personnel and personal bankers. To ensure exposure to bank structure and terminology, it is recommended that applicants have a minimum of six months lending experience or one year of loan department experience. Applicants not meeting the suggested prerequisites will be contacted to discuss admission qualifications.

Last Friday, the SEC issued a staff bulletin and related guidance regarding accounting for tax reform. Addressing several key financial reporting issues expressed to the commission by ABA and other organizations, the guidance recognizes the challenges associated with the timing and complexity of the calculations required by the enactment of tax reform. It recognizes that estimates are required and that there may be a need for adjustments when information becomes available. 

The guidance generally provides a one-year period for making refinements to estimates, but notes that if actual or reasonable estimations of tax reform effects are available, they should be reported in the year of enactment, which is 2017. It also includes guidance on Regulation 8K disclosure requirements. 

ABA believes that the SEC guidance also effectively sets the framework for expectations by the banking agencies in examining non-SEC registrants. 

• Read the SEC press release
• Read the staff bulletin.
• Read the guidance. 

The CFPB is expecting to issue a final rule amending its prepaid rule “soon after the new year,” the bureau announced last week. The final rule is expected to also extend the current April 1, 2018, effective date. ABA in August had expressed general support for the Bureau's proposed amendments but also urged an extended compliance date to allow banks more time for implementation. For more information, contact ABA's Nessa Feddis. 

The federal regulatory agencies last week updated their rulemaking agendas for the remainder of 2017 and into 2018. In introducing the agendas, the Office of Management and Budget’s Office of Information and Regulatory Affairs noted that all federal regulators have been directed to reevaluate and eliminate burdensome regulations and reiterated the Trump administration’s position that guidance, FAQs and other sub-regulatory actions should not be used to impose new or additional legal obligations or requirements.

According to the schedules, the CFPB will conduct a review of inherited regulations, with a particular focus on open-end credit, including credit cards. As part of that effort, the CFPB will consider rules to modernize its database of credit card agreements and make the database more useful to the industry and the public. The bureau will also be in the “pre-rule activities” stage on small business lending data and overdrafts throughout 2018.

Additionally, the bureau is targeting February 2018 for a proposed rule on third-party debt collection, May 2018 for a proposed rule on the supervision of larger market participants in markets for personal loans, and December 2018 for a proposed HMDA rule on making permanent the adjusted threshold for collecting and reporting data on open-end lines of credit.

Meanwhile, the Financial Crimes Enforcement Network expects to issue technical amendments to customer due diligence requirements. The Federal Reserve, FDIC and OCC are planning to issue a final rule expanding the current exemption for appraisals of commercial properties, and a final rule to implement the Basel net stable funding ratio standards. The OCC and FDIC also plan to issue a final rule that would shorten the standard settlement cycle for certain securities purchased or sold by national banks, federal savings associations and FDIC-supervised institutions.

The Department of Labor is projecting October 2018 for issuing a proposed rule on the salary level for the executive, administrative and professional employee exemptions to the overtime and minimum wage requirements of the Fair Labor Standards Act. View the agendas. For more information, contact ABA's Virginia O’Neill or Jonathan Thessin.

The tax reform bill cleared its final procedural hurdle yesterday as the House voted again to approve the measure, marking the first fundamental changes to the U.S. tax code in more than three decades. The bill now goes to President Trump for signing, which may not happen until the first week of January.

“The changes in this bill, particularly the reduction in business tax rates, will help grow the economy and create jobs, which will benefit all Americans,” said ABA President and CEO Rob Nichols, who applauded the bill’s passage. “Thanks to this legislation, America’s banks will get to expand their role as the lifeblood of the economy by increasing financial services, investing in new and more convenient technologies, and opening more doors of opportunity for their customers.”

For technical reasons related to the budget, the President may delay signing the bill into law until the new year. This would shift the immediate accounting implications for earnings and capital to the next quarter, giving bankers more time to handle the impacts of, for example, devalued deferred tax assets. The delay, however, won’t alter the effective dates or substance of the legislation. Read highlights of the tax bill.

The tax code shouldn’t pick winners and losers, and businesses performing the same service should face the same rules, ABA Chairman Ken Burgess wrote in a letter to the Wall Street Journal posted yesterday. The letter was in response to a Dec. 5 article highlighting the fact that credit unions were left out of the tax reform bill.

“At a time when Congress is asking everyone from teachers to homeowners to give up tax breaks in the name of lowering rates, why is the trillion-dollar credit-union industry still getting a free ride?” wrote Burgess, chairman of FirstCapital Bank of Texas in Midland, Texas.

Burgess added that today’s credit unions look nothing like those of the 1930s, when Congress first exempted them from federal income tax and noted that there are now 282 credit unions with more than $1 billion in assets.

“These fast-growing and increasingly complex institutions are larger than 88 percent of the banks in this country, advertise that they are just like banks, take any customer who walks in the door (openly promoting that fact), devote significant resources to complex commercial lending and aggressively market to attract the affluent,” he said. “It’s time for Congress to end the uneven playing field and require the nation’s billion-dollar credit unions to pay their fair share.”

The SDBA 2018 State Legislative Day on Feb. 7 in Pierre is your opportunity to stay up-to-date on both state and federal legislation which could affect the banking industry and to visit with state legislators.

The day will feature two special events specifically for emerging leaders in the banking industry. Gov. Dennis Daugaard will address all attendees regarding the importance of banks on Main Street at 2 p.m. This session will be directed toward emerging leaders in the audience and will reinforce the necessity for and importance of the banking industry in building local economies. At 4 p.m., a reception for emerging leaders only will provide an opportunity to network exclusively with other emerging leaders.

Now is the perfect time to make plans to attend the NDBA/SDBA Bank Management Conference in Scottsdale, Ariz.The conference will be held Feb. 16-17, 2018, at The Westin Kierland Resort & Spa, a AAA Four Diamond resort located adjacent to Kierland Commons, an outdoor shopping center with 70 stores and restaurants.

The conference program will include six keynote speakers who will provide timely insight on banking trends, the economic landscape, FinTech opportunities and workplace culture. In addition, Lt. Col. Robert J. Darling will share how he experienced first-hand the crisis leadership decisions in the White House on 9/11.

As momentum continues to build in Congress for common-sense regulatory reform, ABA is calling on all bankers to contact their senators and urge them to support S. 2155, a solid step towards right-sizing regulations for the nation’s banks. ABA has created two letters--one thanking the bill’s co-sponsors for their efforts and one urging general support for the bill--for bankers to use when contacting their lawmakers. Contact your senators now.