SDBA eNews: September 10, 2015

In This Issue

Onsite Training Offered for Certified Community Banking Technology Professional

The 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 Institute is offering the onsite training: Certified Community Banking Technology Professional Oct. 14-15 at the Holiday Inn City Centre in Sioux Falls.

This certification provides a deep dive into critical components of an information security program to explore the technical design and implementation of security controls. The topics included in this program are critical to the successful implementation of an information security program, and this will explore their relationship.

An understanding of risk management, documentation and auditing will be explored in addition to possible solutions, implementation approaches, and technical considerations and configurations. 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

The alternate delivery method for annual privacy notices requires the notice to be included "on" a statement, coupon book, or other required customer notice or disclosure. However, some statement forms don't lend themselves to putting a message right on the statement. Instead, can we insert a notice with the statement that contains the required language, indicating that the privacy notice is available on our website?

Answer: Providing the required language on a separate notice, but included within the statement would not meet the technical requirements of providing the notice to the borrower. If the statement does not allow enough room to include the required verbiage, the bank would not be able to take advantage of the alternate delivery method.

Learn more by attending a live Compliance Alliance demo:

Tuesday, September 15, 2015 @ 10 AM - 11 AM Central

Thursday, September 17, 2015 @ 1 PM - 2 PM Central

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.

ABA Offers Outlook for Fall Congressional Calendar

With Congress returning this week for its fall session, ABA EVP James Ballentine offered bankers an outlook for congressional action on banking priorities.

Ballentine noted behind-the-scenes work ABA and state association staff and bankers have done meeting with lawmakers during the August recess, urging action on regulatory relief legislation. Those efforts have focused specifically on the Senate, where some moderates are attempting to craft a compromise between broad relief legislation championed by Senate Banking Chairman Richard Shelby (R-Ala.) and a much narrower version put forth by Ranking Member Sherrod Brown (D-Ohio).

“Should a compromise be struck, Chairman Shelby will work with leadership to seek floor time on a crowded fall congressional calendar,” Ballentine said. He added that Shelby will likely continue to simultaneously pursue attaching relief provisions to other must-pass legislation.

ABA will wage another battle over a highway funding bill provision -- strongly opposed by a united banking industry -- that reduces the dividend paid to Federal Reserve member banks with more than $1 billion in assets. In addition, several ABA-supported bills are expected to be up for a vote in the House, including legislation to make more banks eligible for 18-month exam cycles, while other priorities -- such as a bill to increase the SIFI designation threshold -- could see action in committee.

ABA will continue to lead the way on other priorities, Ballentine said, such as gaining support for the TAILOR Act, engaging lawmakers on the National Credit Union Administration’s overreach and pressing for Farm Credit System oversight hearings. Read the memo.

Free Resources Available for Cybersecurity Awareness Month

To mark National Cybersecurity Awareness Month in October, ABA has developed a number of resources to help bankers promote consumer awareness about cybercrime. The campaign materials focus on how consumers can protect themselves, their small businesses, their identities and their mobile devices online.

The resources -- available at -- include a social media toolkit to help banks communicate with their customers about cybersecurity, customizable tip sheets and news releases.

Also in October, ABA’s Get Smart About Credit Day will include a “protecting your identity” component that will coincide with ABA’s National Cybersecurity Awareness Month efforts. Download the cybersecurity resources.

FHA Proposes Lender Certification Changes

The Federal Housing Administration last week proposed changes to its lender certification rule in an attempt to clarify when it might seek to recover losses for defective loans.

Among other things, the changes require a lender to certify that it has not been convicted of fraud or other disqualifying crimes within the past three years, except for cases the lender has reported to HUD and for which explicit clearance was given. Similar certification would be required at the individual loan level.

The new loan-level certification requirements are expected to take effect by the end of the year, with the new lender certification standards kicking in early next year. Read the proposal.

ABA Launches New Succession Planning Guide

To help bankers navigate growing shareholder and regulatory expectations for well-laid-out personnel succession plans, ABA has launched “Succession Planning for Banks,” a comprehensive guide to managing the talent pipeline for board, C-suite and management positions.

The guide includes scenarios and customizable materials to help management and bank HR personnel plan for succession, identify and cultivate internal candidates, and document and monitor progress. It also includes resources to help banks assess their organizational readiness and focus areas for succession planning. Order now.

FDIC: Loan Growth Drives Bank Earnings Increase

FDIC-insured banks and savings institutions earned $43 billion in the second quarter, up 7.3 percent from the industry’s earnings a year before, the FDIC said last week. A $3.6 billion rise in net operating revenue -- including a 2.3 percent increase in net interest income and a 1.9 percent increase in noninterest income -- drove the earnings increase.

Total loans and leases increased $185 billion, or 2.2 percent, during the quarter – up 5.4 percent from a year earlier. For community banks, loan balances grew 2.7 percent during the quarter and were up 8.8 from a year earlier.

“The good news is that the bread and butter of banks -- which is making loans -- is at the forefront of what’s driving these earnings,” said ABA Chief Economist James Chessen in a Bloomberg radio interview. “Banks are a reflection of the economy. If the economy’s strong, loan demand’s up, banks are going to do well.” He added that lending increased across all loan categories.

Community banks earned $5.3 billion in the quarter, a 12 percent increase from a year ago; and nearly 60 percent of community banks saw higher year-over-year earnings. Net interest income rose 6.2 percent at community banks, while noninterest income increased 14.2 percent year-on-year.

The average industry-wide return on assets edged up to 1.09 percent. Asset quality continued to improve; charge-offs were $1.1 billion in the second quarter, down 11.2 percent from a year earlier, and noncurrent loan balances fell for the 21st straight quarter. The number of institutions on the problem bank list dropped to 228, the lowest in seven years, and the Deposit Insurance Fund balance rose to $67.6 billion, bringing the DIF reserve ratio to 1.06 percent.

In releasing the results, FDIC Chairman Martin Gruenberg noted broad improvements but added that the banking industry continues to face challenges. “Revenue growth has lagged behind asset growth, as exceptionally low interest rates put downward pressure on net interest margins,” he said. “Many institutions have responded by reaching for yield, which is a matter of ongoing supervisory attention. Read the reportListen to the Bloomberg story.

ABA Files Third Comment Letter on Regulatory Burden Review

ABA last week filed its third comment letter in response to the decennial EGRPRA regulatory burden review that the federal banking agencies must conduct.

The letter covered several issues related to flood insurance and money laundering, including currency transaction reports, suspicious activity reports and BSA exams. Read the letter.

To share perspectives on outdated regulations or burdens that are a part of the EGRPRA review or for more information, contact ABA’s Shaun Kern