SDBA eNews: May 29, 2014

In This Issue

OCC Updates Guidance on Ag Lending, Collective Investment Funds

The OCC yesterday updated the Comptroller’s Handbook, replacing a 1998 booklet on agricultural lending and a 2005 booklet on collective investment funds.

Advanced School of Banking Offered in Topeka, Kan.

The Schools of Banking's Advanced School of Banking is the answer when training employees and managers. This two-year program requires junior-to mid-level bankers to attend year one Sept. 22-26, 2014, and June 1-5, 2015, in Topeka, Kan.

Year one curriculum covers bank financial analysis, deposit/funding strategies, economics of banking, lending, asset/liability management and investments. Year two covers strategic planning, ethical leadership, investments and A/L management, and BankExec computer simulation.

The school is co-sponsored by the Kansas and Nebraska Bankers Associations. Learn more.

SDBA Taxation Equality Awareness Campaign


Learn more and get involved.

Upcoming Events

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Sponsorship Opportunity

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

Still Time to Make Plans to Attend NDBA/SDBA Annual Convention

Don't miss out on the opportunity to network with fellow bankers and business partners at the upcoming NDBA/SDBA 2014 Annual Convention.

This year's event, June 8-10 at Ramada Plaza & Suites in Fargo, will celebrate how Dakota bankers are rock stars in their communities. The convention will offer nationally-acclaimed speakers, great networking opportunities and timely information on issues critical to the banking industry.

Attendees are encouraged to dress up as their favorite '80s rock stars for an '80s rock star party in the Exhibit Hall Monday night.

 See the full agenda and register to attend.

Democratic Bills Would Limit Campus Banking Services

Congressional Democrats last week introduced bills that would prohibit a variety of collegiate agreements with financial institutions, including revenue-sharing arrangements to provide on-campus financial services.

The bills -- sponsored in the Senate by Tom Harkin (D-Iowa), Dick Durbin (D-Ill.) and Elizabeth Warren (D-Mass.) and in the House by George Miller (D-Calif.) and Financial Services Committee Ranking Member Maxine Waters (D-Calif.) -- would ban agreements between colleges and financial institutions that involve revenue-sharing or other payments in exchange for preferential campus access. They would also require financial institutions to post details of their campus contracts online and submit these details to the Consumer Financial Protection Bureau.

“These bills are troubling because they would limit financial choices for students and parents and raise costs for everybody,” warned ABA EVP Ken Clayton. “The continued attempts by some in Congress to vilify financial institutions and require free services will limit consumer choice, increase the costs to students and universities and stifle innovation that has helped modernize higher education financing.”

ABA Wins Extension on Privacy Notice Comment Period

As advocated by ABA and other trade groups, the Consumer Financial Protection Bureau on Tuesday proposed extending the comment period on its rule that would ease the annual privacy notice requirement under the Gramm-Leach-Bliley Act. Comments will now be due July 14, a month later than originally scheduled.

Under the proposed rule, banks may post their privacy notices online rather than delivering them individually in certain circumstances.

“The proposal describes an alternative method for delivering privacy notices with numerous conditions and qualifications that have not been previously articulated,” ABA and other groups said in requesting an extension. “Our members need time to evaluate the proposal, discuss the operational ramifications, develop a position and coordinate a response.”

OCC Pledges Changes Based on International Peer Review

The OCC yesterday announced several changes to its large bank examination process in response to a peer review by bank supervisors from Australia, Canada and Singapore.

The agency will expand the lead expert team of specialists to improve perspective and analysis across supervised teams, while correspondingly reducing the number of on-site examiners. It will also rotate examiners every five years in cities that are home to more than one large bank.

The OCC intends to formalize an enterprise risk management framework, which will involve a risk appetite statement and decision tree to give examiners a consistent understanding of acceptable risk, and it will revisit CAMELS ratings in order to provide clearer guidance to 2-rated institutions when they are deteriorating. The agency also agreed with the peer reviewers’ recommendation to work harder at retaining experienced examiners, which ABA has also recommended regulators do. Read more.

FinCEN Warns of Mexican Funnel Accounts

The Financial Crimes Enforcement Network yesterday warned financial institutions about the increased use of so-called funnel accounts illicitly used to evade restrictions on U.S. currency in Mexico. Mexican criminal organizations are using funnel accounts to finance the purchase of goods through trade-based money laundering, FinCEN said.

Red flags for a funnel account associated with trade-based money laundering include an account opened in a border state with multiple cash deposits from unidentified persons who have no knowledge of the account’s stated business activity or the source of the cash. The accounts may issue checks that have different handwriting samples, and wire transfers may be deposited into the U.S. correspondent account of a Mexican bank. Read the advisory.

FASB Changes to Affect Corporate Borrower Financial Statements

The Financial Accounting Standards Board yesterday issued a sweeping new standard on how companies recognize revenues from contracts with customers.

While the new standard will have some impact on certain aspects of banking institutions, banking credit officers may find significant changes in the timing of revenue recognized in construction and technology companies’ financial statements.

The new standard takes effect in 2017 for public companies and in 2018 for private firms. Read more. For more information, contact ABA’s Mike Gullette.