SDBA eNews: August 27, 2015

In This Issue

Hotel Reservation Deadline Nearing for SDBA Tech Conference

The hotel block for the SDBA’s 2015 Bank Technology Conference will be released on Tuesday, Sept. 1.

The Conference will be held Sept. 22-23 at the Hilton Garden Inn Sioux Falls South. The special room rate is $134 per night.

The annual conference will provide information to help community banks as they continue the transition to a more technologically-sophisticated institution in this ever-changing world of mobile devices and electronic payment systems. Learn more and register.

ABA CRCM and CTFA Boot Camps: Nov. 2-6, 2015

ABA’s Institute for Certified Bankers (ICB) offers professional certifications in many areas including certified regulatory compliance manager (CRCM) and certified trust and financial advisor (CTFA).

A banker must meet certain eligibility requirements and then sit for a rigorous examination to achieve the certification. To maintain the certification, bankers must earn a certain number of continuing education credits every three years.

To help meet the demand of bankers around the country who want to earn these certifications, ABA is hosting a CRCM Boot Camp and a CTFA Boot Camp, both Nov. 2-6 in San Diego. Both are designed to prepare bankers for the exam, which they have the option of taking at the conclusion of the Boot Camp. Register for CRCM  Boot Camp. Register for CTFA Boot Camp.

Question of the Week

Our customer lost his ATM card sometime in the last 10 days. There have been several unauthorized transactions on his account. He wrote his PIN on the back of the card. Do we have to credit his account with the money, even though he was negligent?

Answer: Reg E does have a provision for consumer negligence, however it also provides that the liability is limited by state law or by agreement. 12 CFR 1005(b)(6) Liability under state law or agreement. If state law or an agreement between the consumer and the financial institution imposes less liability than is provided by this section, the consumer's liability shall not exceed the amount imposed under the state law or agreement.. 

Also, in the official interpretation to 6(b) – 2. Consumer Negligence - Negligence by the consumer cannot be used as the basis for imposing greater liability than is permissible under Regulation E. Thus, consumer behavior that may constitute negligence under state law, such as writing the PIN on a debit card or on a piece of paper kept with the card, does not affect the consumer's liability for unauthorized transfers. (However, refer to comment 2(m)-2 regarding termination of the authority of given by the consumer to another person.); which states:

2 (m).“Unauthorized electronic fund transfer” means an electronic fund transfer from a consumer's account  initiated by a person other than the consumer without actual authority to initiate the transfer and from which the consumer receives no benefit. The term does not include an electronic fund transfer initiated:

  1. By a person who was furnished the access device to the consumer's account by the consumer, unless the consumer has notified the  financial institution that transfers by that person are no longer authorized;
  2. With fraudulent intent by the consumer or any person acting in concert with the consumer; or
  3. By the financial institution or its employee.

If a customer reports a card lost or stolen within two business days of learning of the loss or theft, the customer is liable for a maximum of $50. The liability can increase to $500 if the loss is reported after two business days. The customer may have additional liability if they do not report the card lost or stolen and also do not report the unauthorized activity within 60 days of receiving their periodic statement.

Learn more by attending a live Compliance Alliance demo on Tuesday, Sept. 1, 10-11 a.m. CDT.

Compliance Alliance offers a comprehensive suite of compliance management solutions. To learn how to put them to work for your bank, call 888.353.3933 or email.

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

Deadline To Order SDBA's 2016 Scenes of SD Calendar Is Sept. 1

The deadline to order the SDBA's 2016 Scenes of South Dakota Calendar is Tuesday, Sept. 1. The calendar will feature photos of South Dakota submitted by bankers, their family members and customers.

The Scenes of South Dakota calendar is exclusive to SDBA member banks and associate members.The calendar is a great opportunity to thank your customers for their business and promote your bank or business. A bank, branch or business' logo and name can be printed on each calendar. Place your order today. All orders will be shipped Nov. 1, 2015.

Amateur photographers can send the SDBA photos of farms, barns, agricultural activities, historical South Dakota locations, county fairs, carnivals, parades or festivals, fall colors, winter snowfalls, spring flowers, or summer fun. The deadline to submit photos is Sept. 1. Learn more.

First PREMIER Bank Named to 'Best Bank to Work For' List

South Dakota-based First PREMIER Bank has been named one of the 2015 Best Banks To Work For by American Banker and Best Companies Group. The special recognition follows hundreds of surveys completed by employees and a review of the organization’s practices. Only 50 banks across the country are selected best to work for.

“We’re excited and honored to receive this recognition from American Banker. To all of our employees, I want to say thank you. We’re fortunate to work with such a great group of people,” says Dave Rozenboom, president, First PREMIER Bank. “We’ve worked hard over the years to build the kind of company and culture that people want to join. This award validates those efforts. At PREMIER, we believe that happy employees translate into satisfied customers.”  

Banks that entered the contest must provide workplace policies, practices and demographics to American Banker and Best Companies Group which analyzes the information and conducts online surveys. Employees are asked nearly 80 multiple-choice questions as well as two open-ended and seven demographic questions.

First PREMIER is the only bank in South Dakota to receive the “best bank to work for” designation. Only six banks in the Upper Midwest were recognized by American Banker, including Bell State Bank & Trust, an SDBA associate member. View the list.

SNL Article Spotlights Farm Credit System Abuses

An article on Tuesday in SNL Financial shone a spotlight on the Farm Credit System’s “dangerous and abused advantages” and the efforts of recently hired ABA SVP Steve Apodaca to highlight them publicly.

“The FCS is both unfairly competing with private lenders and expanding its activities well beyond farm country, potentially putting taxpayers at risk,” reporter Kevin Dobbs wrote in summarizing Apodaca’s point of view. As the FCS grows, “it is venturing outside of its expertise and if it runs into trouble it would put taxpayers on the hook to bail it out,” Dobbs continued.

The author also highlighted Apodaca’s personal experience as a banker attempting to compete with the FCS. “Apodaca said an FCS lender had no interest in a start-up farmer in need of a loan, which is the kind of farmer the system is supposed to support,” Dobbs said. “But after a bank financed that farmer's operation and that farmer proved both successful and reliable in terms of paying down debt, the FCS then stepped in with a lower rate and stole that farmer's business away from the bank. Apodaca said it is an example of the FCS' widespread practice of cherry-picking pristine credits and leaving banks to grapple with the more challenging loans.” Read the article.

FCS Lender Reports Loan Fraud Losses of Nearly $50 Million

A “massive loan fraud” at a southwestern Farm Credit System association is estimated to be nearly $50 million, Bert Ely reported yesterday in ABA’s Farm Credit Watch e-bulletin. Farm Credit Services Southwest, Tempe, Ariz., sent a letter to borrowers and stockholders announcing “cumulative losses resulting from [certain] identifiable loans totaled $49.7 million.”

As a result of the losses, FCS Southwest is being forced to merge with Farm Credit West. Ely noted that FCS Southwest nearly a year ago removed financial statements from its website and that the Farm Credit Administration, FCSSW’s regulator, has removed from its website the association’s call reports dating back to 2009. “How many other FCS associations face this type of problem?” Ely asked. “Is this the tip of an iceberg?” Read Farm Credit Watch.

Agencies Issue 2014 CRA Small-Biz, Small-Farm Loan Data

The federal banking agencies on Tuesday issued aggregate data on 2014 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 about 5.6 million small-business loans, totaling $214 billion, and about 173,000 farm loans, totaling more than $12.9 billion.

The number of small-business loans rose 12 percent from 2013, and the dollar amount of small business loan originations rose by 2 percent. The number of small-farm loans rose by about 1 percent and the dollar amount increased by 5 percent.

Just more than 93 percent of the small-business loans and 78 percent of the small-farm loans were for amounts under $100,000, according to the analysis. It also said nearly 45 percent of the small-business loans and nearly 60 percent of the small-farm loans were extended to firms with revenues of $1 million or less. Read more.

FEAI Ads Tell Congress: 'Untie the Hands of Bankers'

To help build momentum for regulatory relief this fall with key members of Congress, the Financial Education and Advocacy Initiative (FEAI) is running radio and print ads this week in Indiana, Montana, North Dakota and Virginia. FEAI is the 501(c)(4) nonprofit created by ABA to help strengthen the banking industry’s voice in Washington and funded by donations from bankers across the country.

“Is the American dream still alive in Montana?” asks the ad that will run in the Billings Gazette. The ad tells the story of a newly-minted graduate in Bozeman who wanted a $16,000 loan to buy a mobile home for his young family. “The banker wanted to make that loan, but arbitrary regulations from Washington, D.C., tied his hands. Tell Congress to untie the hands of America’s hometown bankers.”

The ads tell real-life stories of how excessive regulatory burdens on banks have prevented ordinary Americans from accessing financial products and services for which they would otherwise qualify. View and listen to the ads. Learn more about FEAI.