SDBA eNews: August 21 2014

In This Issue

Webinar on SBS Institute Certifications: Aug. 28

The Secure Banking Solutions (SBS) Institute serves community banks by providing educational programs that will certify a banker has the knowledge and skills to protect against today's information security threats.

SBS will hold a brief Q & A webinar on Thursday, Aug. 28, at 2 p.m. CDT to introduce the suite of certifications, along with explanation of two upcoming certifications: Certified Community Banking Incident Handler and Certified Community Banking Vendor Manager.

The certification programs offered by the institute are uniquely designed to address community banking needs, using community banking problems and solutions. Properly trained banking professionals will improve the security around customer data and other sensitive information entrusted to them.

Register for the free webinar.

Seminar on Valuation of Donated Real Estate: Sept. 5

The 2014 IRS Seminar "Valuation of Donated Real Estate, including Conservation Easements" will be held Sept. 5 at the Best Western Plus Ramkota Hotel in Sioux Falls.

Attendees will hear the IRS address the Federal Tax Code and regulations pertaining to the valuation of real estate interests, including the donation and valuation of conservation easements. Appraisers, CPAs, land trusts and attorneys should all be familiar with these requirements and recent tax court decisions.

The seminar is sponsored by the North Star Chapter of the Appraisal Institute with support from the South Dakota Chapter of the American Society of Farm Managers and Rural Appraisers.

 Learn more and register.

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

Agencies Issue 2013 Small-Biz, Small-Farm Loan Data

The federal banking agencies on Tuesday issued aggregate data on 2013 small-business, small-farm and community development loans that institutions reported under the Community Reinvestment Act.

The data, which commercial banks and savings institutions with about $1.2 billion or more in assets are required to report and others can report voluntarily, show that such institutions made just under 5 million small-business loans, totaling $208 billion, and about 171,000 farm loans, totaling $12.3 billion.

The number of small-business loans fell 15 percent from 2012, although the drop was mostly due to an unusual spike in 2012 as a single lender purchased a large credit card loan portfolio. The dollar amount of small business loan originations rose by 3 percent. The number of small-farm loans dipped by about 3.5 percent and the dollar amount fell by less than 2 percent.

Just over 92 percent of the small-business loans and 79 percent of the small-farm loans were for amounts under $100,000, according to the analysis. It also said nearly 49 percent of the small-business loans and 59 percent of the small-farm loans were extended to firms with revenues of $1 million or less. Read the analysis.

SEC to Begin Municipal Adviser Exams

The Securities and Exchange Commission on Tuesday sent a letter to newly-registered municipal advisers explaining its approach to upcoming compliance exams over the next two years. The exams will apply to municipal advisers registered with the SEC but not with FINRA, the securities industry’s self-regulatory entity.

The SEC’s examiners will evaluate municipal advisers for compliance with rules issued both by the SEC and the Municipal Securities Rulemaking Board on registration, fiduciary duty, disclosures, fair dealing, supervision, recordkeeping and staff training. The SEC staff said firms would be contacted individually when selected for examination.

The SEC finalized its municipal adviser rule under the Dodd-Frank Act earlier this year, and firms subject to the rule had until July 1 to register as advisers. Read the letter.  View ABA resources on muni adviser registration.

MSRB Proposes Extending 'Pay to Play' to Muni Advisers

The Municipal Securities Rulemaking Board on Monday proposed to extend its “pay to play” rule to municipal advisers. The proposed amendments to Rule G-37 would add municipal advisers to the existing framework for brokers and dealers -- generally prohibiting them from engaging in advisory business with municipal entities for two years after making certain political contributions to public officials who can influence the hiring of advisers.

The rule would also require municipal advisers to disclose their political contributions to officials and bond initiatives on the MSRB’s publicly available Electronic Municipal Market Access website.

The MSRB proposed a similar rule in 2011 that was eventually withdrawn after ABA and others urged the board to wait until after the Securities and Exchange Commission finalized its own rule. Comments on Monday’s proposal are due on Oct. 1, and the MSRB will host a webinar on the proposed changes on Sept. 11. Read more.  Read the proposal. For more information, contact ABA’s Cris Naser.

FHFA Releases Fannie-Freddie Strategic Plan

The Federal Housing Finance Agency on Friday unveiled a 2015-2019 strategic plan for Fannie Mae, Freddie Mac and the Federal Home Loan Banks that stresses maintaining broad liquidity in the housing finance market, improving the effectiveness of operations and reducing risks to taxpayers.

In managing the ongoing conservatorships of Fannie and Freddie, the FHFA intends to reduce taxpayer risk by conducting more risk-sharing transactions involving private capital, develop the GSEs’ Common Securitization Platform, improve the liquidity of the GSEs’ securities through a Single Security and implement uniform mortgage data standards.

The agency warned that continued weakness in the housing market could pose risks to the plan, citing continued distress sales, tightened mortgage credit standards and growing levels of student debt among young adults that is reducing homeownership. The FHFA will accept public comments on the strategic plan through Sept. 15. Read the plan.

OCC Updates Guidance on Merchant Processing

The OCC on Wednesday issued a new Comptroller’s Handbook booklet on merchant processing.

The new booklet -- which replaces 2001 guidance -- incorporates references to thrifts and updates guidance on assessing and managing risks associated with settling credit and debit payment transactions on merchants’ behalf.

In particular, the booklet updates guidance on third-party oversight, inspections and audits, data security standards, BSA compliance and capital relating to merchant processing. Read the booklet.

OCC Increasing Focus on SCRA Compliance

The OCC is increasing its focus on Servicemembers Civil Relief Act compliance and now requires examiners to evaluate SCRA compliance during every exam cycle, OCC Deputy Comptroller for Compliance Policy Grovetta Gardineer told a trade group for military banks on Monday.

“While not mandated by law, this closer scrutiny is necessary because we believe that the cost of compliance failures in this area, both for the bank and our servicemembers, are too great not to be evaluated every time we go into an institution,” she said.

Gardineer also encouraged banks that serve the military to develop new products to meet the needs of servicemembers and their families -- based, for example, on the FDIC’s Military Small-Dollar Loan Template, which she said “can serve as the basis for innovative products that lead to profitable, long-term customer relationships and may receive positive consideration during Community Reinvestment Act examinations.” Read the speech.