SDBA eNews: October 9, 2014

In This Issue

IRA Update/Current Events Seminar on Oct. 30


The SDBA will offer the IRA Update/Current Events Seminar on Oct. 30 in Sioux Falls at the Ramkota Inn.

IRA Update builds on the attendees’ knowledge of IRA basics to address some of the more complex IRA issues their financial organizations may handle. This course will also include all changes that have occurred and discuss any pending legislation.

This is a specialty session; previous IRA knowledge is assumed. The instructor uses real-world exercises to help participants apply information to job-related situations.

Learn more and register.


Free Compliance Alliance Live Demo: Oct. 23


Join Compliance Alliance for a free live demo on Oct. 23 at 1 p.m. CT.

With unlimited access to document reviews, more than 900 tools and templates, a compliance hotline and more, researching new regulations, performing reviews and scouring the Internet for tools will no longer be part of your job description. 

Compliance Alliance understands time is precious. Allow Compliance Alliance to help you work more efficiently, increasing the time you spend serving your bank and customers.

Register for the live demo. Learn more about Compliance Alliance.


SDBA Taxation Equality Awareness Campaign

 

Learn more and get involved.


Upcoming Events

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Sponsorship Opportunity

Learn more about sponsoring the SDBA eNews.


Questions/Comments

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

CFPB Scrutinizes Checking Account History Databases


The Consumer Financial Protection Bureau is looking into financial institutions’ use of checking account history databases, CFPB Director Richard Cordray said yesterday at a forum in Washington, D.C. He said the bureau is concerned about the accuracy of reports from these databases, whether customers can access and dispute reports and how they are used overall.

“We are especially interested to learn more about how the screening system could be used to help institutions better meet the needs of these consumers, rather than simply excluding them from the banking system altogether,” Cordray said. “We will consider how to balance the needs of banks and credit unions with the needs of consumers for access and protection.”

ABA has expressed caution about limiting use of these databases. “Just as a credit report helps banks determine whether to issue a loan, checking history databases help banks ensure that customers are offered the kind of financial products that work for them,” said ABA SVP Nessa Feddis. “And as with any information they use to make business decisions, banks seek to ensure these databases are accurate and reliable.” Read Cordray’s speech.


Senators Caution Justice Department on 'Choke Point'


Six Republican senators on Monday urged the Justice Department to rein in “Operation Choke Point,” which uses enforcement actions and threats to pressure banks to cut off financial services to businesses it deems risky or objectionable.

The senators’ letter followed the FDIC’s withdrawal earlier this year of controversial lists of “high-risk” merchant categories that had led many financial institutions to cut ties to third-party payment processors serving those industries. The senators -- including Senate Banking Committee Ranking Member Mike Crapo (R-Idaho) -- called the FDIC’s withdrawal an “encouraging first step” and urged DOJ to “revise its implementation” of Choke Point accordingly.

“The DOJ must focus on combating fraud and stop politicizing its enforcement policies,” the senators wrote. “It should promptly cease seeking to use subpoenas and legal actions to unfairly impose liability on parties not involved in fraud and to put out of business merchants engaged in legal and legitimate commerce that DOJ disfavors.” Read the letter.


FDIC to Host Free Mortgage Compliance Teleconference


The FDIC will hold a free teleconference on the Consumer Financial Protection Bureau’s ability-to-repay/Qualified Mortgage and loan originator compensation rules on Oct. 22.

 

The 90-minute teleconference is part of the agency’s initiative to help bankers understand emerging issues in compliance. Participants must register by Oct. 20. Read more.


Keating Responds to Credit Union Lobbyist Errors


ABA President and CEO Frank Keating forcefully responded Tuesday to a recent op-ed in The Hill by Jim Nussle, the new head of the Credit Union National Association. Keating offered "some truths that credit unions may be unwilling to share" to Nussle, who indicated that he is still learning about the industry he now represents.

Specifically, Keating emphasized that cooperative status alone doesn't justify a tax exemption and that credit unions don't turn all their profits over to their members -- often instead building luxurious headquarters and buying stadium naming rights. He added that recent data show that just 1 percent of credit union mortgage loans went to low-income borrowers.

"Credit unions would like us to stop talking about their tax exemption because the conversation is interfering with their attempts to gain more powers and loosen what few membership restrictions remain," Keating wrote. "But credit unions are already getting something -- $2 billion annually -- for nothing. They shouldn't expect to get more without serious congressional scrutiny." Read the letter.


ABA, BAFT Urge FinCEN to Withdraw Due Diligence Proposal


ABA and its BAFT subsidiary on Friday urged the Financial Crimes Enforcement Network to withdraw its proposed rule making customer due diligence requirements under the Bank Secrecy Act explicit and adding a requirement for banks to identify the beneficial owners of customers incorporated as a legal entity.

“The proposal continues to impose substantial new costs on lawful American businesses -- and the banks that seek to serve them -- without a demonstration of compensating benefits that could not be more efficiently achieved by alternative means,” the groups said.

Under the proposal, banks must identify the natural person or persons that own or control a legal entity that is a customer. Banks would be expected to obtain this information from the customer on a form when an account is opened. The requirement would apply to all entities except those that are already exempt from FinCEN’s customer identification program rules.

ABA and BAFT described this initiative as a “new level of government imposed financial surveillance through executive fiat [that] is generally hidden from the average American business men, women, and families who are being presumptively treated as criminal shell companies until certified to the contrary.”

The groups urged FinCEN to withdraw the proposal, conduct a thorough cost-benefit analysis and consult with all parties affected by the rule, including banks, prudential regulators and business customers.


FHFA Extends Comment Period for FHLB Membership Changes


As ABA requested, the Federal Housing Finance Agency on Monday extended the deadline for comments on proposed changes to membership eligibility in the Federal Home Loan Bank system. Comments are now due on Jan. 12, 2015.

The FHFA’s proposed changes would require FHLB members to hold 1 percent of assets in home mortgage loans and require those subject to a 10 percent residential mortgage asset base to maintain that ratio on an ongoing basis. It would also revise insurer eligibility to exclude captive insurers.