SDBA eNews: April 9, 2014

In This Issue

Complimentary Webcast on IRA Rollover Rules Changes

On March 20, the IRS informed the financial services industry that it will be changing its longstanding policy concerning IRA-to-IRA rollovers. The IRS has put the industry on notice that it will begin applying a more restrictive interpretation of the IRA rollover limitation often referred to as the "12-month rollover rule."

While the IRS will not begin enforcing the new, more restrictive interpretation earlier than Jan. 1, 2015, IRA providers should begin preparing now for changes that will likely require update training for staff as well as updates to IRA plan documents, IRA transaction forms and consumer literature.

Convergent Retirement Plan Solutions, LLC, SDBA’s newly-endorsed IRA vendor, is offering a complimentary update webcast for all SDBA members on this important change. The IRA Rollover Rules Changing Webcast will be held April 21 at 3 p.m. CDT. Learn more and register.

Federal Reserve Bank's 2014 Payments Fraud Survey

The Federal Reserve Banks of Boston, Chicago, Dallas, Minneapolis and Richmond are conducting a payments fraud survey. This survey addresses the payments-related fraud experiences of businesses and financial institutions.

Survey responses will aid in the understanding of payments fraud issues for banks, as well as strategies used to cope with these issues. The survey is open through May 9 and takes about 30 minutes to complete.

A high-level summary of the results will be prepared and distributed to participating regional associations and survey respondents as a thank you for their participation. Learn more. See the survey.

SDBA Taxation Equality Awareness Campaign

Learn more and get involved.

Upcoming Events

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Contact Alisa DeMers, SDBA, at 800. 726.7322 or via email.

SDBA To Launch New Website

The SDBA will be launching a new website later this week. The site layout will be similar to the SDBA current website, but members' internal profiles will be revamped.

The new website offers a social community that operates similar to Facebook, LinkedIn and Google Circles (all in one). New social community features include:

  • My Community: Gives a summary of members, recent activities, who's online, new photos, etc.
  • My Profile: View contact information, change profile picture, manage privacy settings, upload photos, start a circle, view transaction history.
  • Connections: View connections, browse the SDBA's directory, search for members, view sent requests and requests pending approval.
  • My Features: View, create or search circles, photos and notes.
  • Inbox: Write messages to current connections, view sent messages and view messages from the SDBA.
  • Forums: Join and take part in members-only forum discussions. Forums are: technology/IT, commercial lending, ag lending, compliance, and a general public forum.
  • Blog: Easily share latest news articles and comment on stories.

Input from Community Bankers Sought

Meetings To Be Held May 12-16 Across South Dakota

The South Dakota Division of Banking, South Dakota Bankers Association and Independent Community Bankers of South Dakota are holding a series of town hall meetings across South Dakota May 12-16 to gather input from community bankers. The meetings are part of an ongoing nationwide community bank project sponsored jointly by the Conference of State Banking Supervisors (CSBS) and the Federal Reserve System.

An electronic survey will be sent to banks before the roundtable meetings. Responses will be used to guide the development of legislative recommendations which CSBS, state regulators and banking trade associations can use to engage key members of Congress and to encourage their support of legislation that will improve the outlook for community banks across the country. 

The meetings will be held:

  • Aberdeen: May 12, 1 p.m. CDT, Dacotah Bank, 308 S. Main St.
  • Sioux Falls: May 14, 9 a.m. CDT, ONE AMERICAN BANK, 515 S. Minnesota Ave.
  • Mitchell: May 14, 2 p.m. CDT, CorTrust Bank NA, 100 E. Havens
  • Rapid City: May 15, 10 a.m. MDT, Dacotah Bank, 125 Main St.
  • Fort Pierre: May 16, 9 a.m. CDT, Dakota Prairie Bank, 1204 Yellowstone St.

A great deal of momentum was gained following last year's survey and meetings, and many lessons were learned by working more closely with the academic community. Register to attend.

Time-Sensitive Online Seminar for NEW FFIEC ATM Guidelines

ATMs are becoming the new target for hackers. Consequently, the FFIEC released new guidance for all banks and credit unions surrounding the threat of Unlimited Operations on Automated Teller Machines (ATMs). In response, the Graduate School of Banking will present an online seminar "New FFIEC ATM Guidance" on Monday, April 14, aimed at helping CEOs, COOs, ISO, chief risk officers, auditors, risk assessors, compliance personnel, IT officers and boards protect themselves.

The increasing number of cyber-vulnerabilities with ATMs is being leveraged by criminals to withdraw significant fraudulent cash disbursements from multiple ATMs. While many techniques are being deployed by hackers to compromise ATMs, the new regulation outlines concerns which involve a hacker gaining access to ATM administrative interfaces in order to modify withdrawal limits to use stolen or cloned cards to empty the ATM.

The FFIEC requirements to secure and demonstrate compliance surrounding ATMs have increased, and this webinar will describe how the cyber heists are occurring and what your bank should do to protect against these large-scale withdrawals. The webinar will be held April 14 at 11 a.m. CDT. The program is being offered at a reduced fee of $97, and the recording will be available through July 14. Learn more and register.

Considerations Offered on End of Windows XP Support

With Microsoft support for most applications of Windows XP ending yesterday, the Financial Services Information Sharing and Analysis Center -- of which ABA is an active member -- offered considerations to mitigate the threat to some ATMs using versions of the XP operating system. ATMs running on unsupported software may become vulnerable and exposed to attacks that exploit an unpatched vulnerability.

FS-ISAC encouraged banks to investigate their situations, as not all ATMs run XP and some firms can arrange custom support from Microsoft as they transition to a new OS for their ATMs. FS-ISAC also encouraged banks to contact their ATM providers to see if extended support for security patches and hotfixes is available. For more information, contact ABA’s Heather Wyson.

Fed Delays Volcker CLO Prohibition

The Federal Reserve on Monday said it would extend for two years the compliance period for the Volcker Rule’s prohibition on ownership interests in collateralized loan obligations. Banks now have until July 21, 2017, to divest interests in prohibited CLOs, provided they were in place by the end of 2013.

“A banking entity would not have to include ownership interests in CLOs to determine its investment limits under the final rule, and a banking entity would not be required to deduct CLO investments from tier 1 capital under the final rule until the end of the relevant conformance period,” the Fed said.

ABA President and CEO Frank Keating said he was “puzzled” that CLOs remain covered by the Volcker Rule. “The extension doesn’t address the underlying problem,” he said. “These instruments and others like them were created and exist to meet customer needs, not for proprietary trading purposes nor are they investments in hedge funds.”

ABA has been aggressively advocating for a solution to the Volcker CLO issue. In a bipartisan March vote, the House Financial Services Committee passed H.R. 4167, which would largely protect preexisting bank investments in CLOs from Volcker Rule restrictions. Sen. Mark Kirk (R-Ill.) in January introduced a similar bill. Read the Fed's statement.

FDIC Reissues Brochure on Technology Outsourcing

The FDIC on Monday reissued three informational documents on technology outsourcing for community banks. The documents -- which the agency said are not exam procedures or official guidance -- provide tips on how to select technology vendors, draft contracts and manage multiple vendor relationships.

The reissued documents, originally released in 2001, come as examiners heighten their scrutiny of banks’ third-party risk management and as community banks increasingly rely on vendors for complex technology needs.