SDBA eNews: April 17, 2014

In This Issue

IRA Rollover Rules Changing Webcast

Convergent Retirement Plan Solutions, LLC, SDBA’s newly-endorsed IRA vendor, is offering a complimentary webcast "IRA Rollover Rules Changing" on Monday, April 21 at 3 p.m. CDT. The webcast fee will be waived for all SDBA members.

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.

Learn more and register.

FDIC Urges Banks to Utilize Cyber Resources

In related news, the FDIC in a press release yesterday urged banks to use available resources to help identify and mitigate cyber risks.

While financial institutions and their technology service providers have been managing cyber threats well, they “may benefit from greater awareness of the resources available to identify cyber-related risks as quickly as possible," said Doreen Eberley, director of FDIC’s risk management supervision division.

Among the resources FDIC spotlighted in its release were the United States Computer Emergency Readiness Team, regional coalitions and the Information Sharing and Analysis Centers. Read more.

SDBA Taxation Equality Awareness Campaign

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Upcoming Events

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

SDBA Committee Appointment Request Deadline Is Friday

The SDBA is currently seeking bankers to serve on its standing committees for 2014-2015. The deadline to request appointment is Friday, April 18.

The SDBA's standing committees are: Agricultural Credit Committee, Credit Card Committee, Legislative Committee and Trust Committee. Committee terms are one year beginning May 1, 2014, and ending April 30, 2015, with the exception of Legislative Committee members who serve three-year terms.

Current committee members will not be automatically reappointed and need to complete the form.

Request appointment.

Curry: Cyber Criminals Likely to Target Smaller Banks

As large banks improve their resistance to cyber attacks, cyber criminals are “very likely [to] turn their attention to community banks,” Comptroller of the Currency Thomas Curry told an audience at a technology conference in Washington, D.C., yesterday. “These smaller institutions can provide a point of entry into larger networks, and they may have less sophisticated defenses than large banks,” he said.

One key area of risk for community banks is their greater reliance on vendors for IT and security services. “This can be particularly problematic for community banks and thrifts that may not have the resources or specialized expertise needed to identify and mitigate these vulnerabilities,” Curry said. “As a result, we are particularly focused on controls and risk management practices employed by vendors that provide services to banks and thrifts.”

The OCC is especially concerned about community banks’ exposure to a single vendor, their use of overseas-based vendors and the degree of vendor access to sensitive bank and customer data, Curry added. Read the speech.

ABA Seeks Regulatory Clarity on Flood Insurance

With the recent enactment of legislation to fix problems the Biggert-Waters flood insurance reform law, ABA on Tuesday asked the federal financial regulators to provide clear guidance to the banking industry as it implements the new law.

“Not unexpectedly, the new statute has introduced additional change and uncertainty to the already challenging task of flood compliance,” ABA said. “ABA urges your agencies to provide much needed information and guidance to the banking industry on flood compliance in light of these various statutory requirements.”

Specifically, ABA asked for the agencies to communicate timetables and implementation plans, share agency expectations for flood insurance changes and work with FEMA to update and maintain guidelines on mandatory flood insurance purchases. “It is critical that bankers understand the implementation plans of FEMA and banking agencies so they can explain current requirements and anticipated changes to their customers,” ABA explained.

In related news, ABA released a staff analysis of the recent legislative changes to the National Flood Insurance Program.

Moody's: Johnson-Crapo Would Boost Private RMBS

The housing finance overhaul bill introduced by Senate Banking Committee Chairman Tim Johnson (D-S.D.) and Ranking Member Mike Crapo (R-Idaho) -- currently scheduled for a committee vote on April 29 -- would increase the market share of private label residential mortgage-backed securities, according to a report on Monday from Moody’s.

Moody’s attributed the boost to the bill’s criteria for which mortgages can be included in government-guaranteed securities and to the proposed common securitization platform -- “if the new procedures are sufficiently transparent and standardized to provide comfort to investors and if new issuers or aggregators enter the securitization market as a result.”

Moody’s noted that the proposal could cut into the RMBS market, however, if investor confidence falls during the transition from a secondary market dominated by Fannie Mae and Freddie Mac.

Webinar: Heartbleed Bug's Impact on Community Banks

The recently identified Heartbleed Bug is a serious vulnerability in the popular OpenSSL cryptographic software library. Your bank may be running OpenSSL, exposing information and systems to hackers.

This vulnerability allows hackers to steal information protected under normal conditions by SSL/TLS encryption used to secure many of the Internet’s popular web applications. At the time of its discovery, an estimated 66 percent of the Internet’s Web applications were susceptible to Heartbleed, a vulnerability which has existed in the implementation of OpenSSL for two years.

Join Secure Banking Solution's Philip Egeberg for a GSB hosted webinar on Tuesday, April 22, at 2 p.m. CDT. Topics include: Heartbleed vulnerability, Heartbleed banking implications, resources to help the bank and a Heartbleed action plan.

Learn more and register.

More Than 10,700 Bankers Taught Children to Save

More than 10,700 bankers from 774 participating banks hosted financial education events Friday, April 11, and throughout April as part of Teach Children to Save Day activities. Thirty of those bankers co-hosted events with one of their members of Congress.

The bankers' presentations, which included games and activities about how interest makes money grow, how to create a budget and differentiating between needs and wants, were aimed at helping young Americans become financially confident and capable.

ABA President and CEO Frank Keating and Sen. Tim Kaine (D-Va.), also taught a savings lesson to 76 fourth-graders at Hollin Meadows Elementary School in Alexandria, Va.

Since 1997, more than 130,000 banking volunteers have reached more than 6 million kids through Teach Children to Save Day. The day takes place during April, which is designated as Financial Capability Month.