SDBA eNews: February 18, 2016

In This Issue

SD Drought Tool Available, Assistance with Grasslands Conservation Plan

The Natural Resources Conservation Service (NRCS) South Dakota grasslands drought condition maps show current condition and projected grassland production and is useful for grassland managers.

Based on rainfall amounts received in the fall and precipitation forecast for spring, producers can determine if grass production on their acres will be close to normal or reduced this season. They can then develop and/or revise action items within their drought contingency plan as needed.

The most effective management for drought occurs before the drought happens with the development and implementation of a good grassland conservation plan. When implemented, this plan will reduce short-term and long-term drought effects.

For assistance in the development of a grasslands conservation plan, contact your local NRCS Office. Access the NRCS SD drought tool.

Dr. Schmidt Mentions South Dakota in Latest Column

Dr. Steffen Schmidt, professor of political science at Iowa State University, was the featured speaker and a hit at last week’s SDBA State Legislative Day in Pierre.

Dr. Schmidt mentioned South Dakota  in his recent column “Moving on from New Hampshire."

"Why should folks in South Dakota (where I am writing this column today) not get candidates campaigning and fishing for their delegates to the national convention just because the primary is June 7? A long campaign engages more people and spreads the joy to the entire country," Dr. Schmidt said. Read his full column.

Question of the Week

Will the bank lose its exempt status as a small creditor under the HPML escrow rule as a result of being required to escrow for flood insurance?

Answer: Yes. The small creditor exemption in the HPML escrow rule requires, among other things, that the bank, together with its affiliates, does not escrow for any mortgage it or its affiliates currently services (with two unrelated exceptions). If the bank is required to escrow for flood insurance on even one of its loans, it will fail to meet this requirement.

Not a Compliance Alliance member? Learn more about membership with Compliance Alliance by attending one of our live demos:

Compliance rules and regulations change quickly. For timely compliance updates, subscribe to Compliance Alliance’s email newsletters.

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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Registration Open for SDBA 2016
Ag Credit Conference

The SDBA’s 2016 Agricultural Credit Conference will focus on an agricultural economic reset that has not been experienced in two to three decades.  

There are ways banks can position for success in agriculture’s challenging times, and attending this year’s conference will be a step in the right direction. The SDBA has lined up a powerhouse of speakers to help bankers navigate through stressful times ahead.  

The SDBA Agricultural Credit Conference is a two-day conference designed for all ag lenders. This year’s conference will be held April 13-15, 2016, at the Ramkota RiverCentre in Pierre. Experienced and new ag lenders, as well as CEOs, will all benefit from this conference.

Featured presenters include Dr. Dave Kohl, Denny Everson, John Blanchfield, Ed Usset and Randy Blach. The conference will also include a panel discussion on how bankers can help their borrowers be successful as they prepare for challenging times and an optional program on leveraging Farmer Mac to compete in today's tough ag lending environment.

FDIC Proposes Deposit Account Recordkeeping Rule

The FDIC yesterday issued a proposal requiring banks with more than 2 million deposit accounts to upgrade their deposit recordkeeping systems to facilitate the determination of FDIC insured deposits in the event of a bank failure. The FDIC would use the failing bank’s systems, data and staff to calculate the insured and uninsured amounts for each depositor and place holds on portions of uninsured deposits.

The proposal -- which would affect 36 of the nation’s largest institutions -- would require the banks to collect and maintain more depositor information and make changes to information systems so that prompt and accurate determinations could be made regarding FDIC insurance.

“Enhancing their internal systems to be responsible for determining what is and isn’t insured will involve significant staff time and cost for the banks subject to the final rule,” said ABA senior economist Rob Strand. He added that it is critical the FDIC give banks a reasonable amount of time to implement the system upgrades.

The FDIC will accept comments on the proposal for 90 days after publication in the Federal Register. Read more. For more information, contact ABA's Rob Strand.

Comments Invited on Rural Area Designation Application Proposal

The Consumer Financial Protection Bureau today invited comments on new agency procedures by which businesses can appeal the CFPB’s designation of a rural or underserved area. The proposal implements a regulatory relief measure long advocated by ABA that Congress passed in December.

The Dodd-Frank Act gave the CFPB discretionary authority to exempt certain loans from the qualified mortgage rule for banks serving areas that it deems “rural” or “underserved.” Given the CFPB’s struggle to appropriately define what constitutes rural or underserved, and the significant impact that the designation -- or lack thereof -- can have on small lenders and their customers, ABA urged Congress to require a formal process by which banks can appeal for rural or underserved status.

Since Congress imposed a 90-day deadline to institute the new appeals process, the CFPB is expediting OMB and other clearances and plans to issue enabling procedural rules by March 3. The CFPB will accept comments for 60 days after the notice is published in the Federal Register. Read more.

Visa: 2015 Was a 'Watershed' Year for EMV Adoption

Adoption of EMV chip technology among both retailers and consumers grew exponentially in 2015, according to new data from Visa. The card issuer reported that more than 212 million Visa chip cards were in circulation in the U.S. as of the end of 2015 -- a 644 percent increase over the year prior. December saw the highest volume of chip transactions to date, with chip payments accounting for 72 percent of Visa’s total transactions for that month. The data also suggest that consumers’ awareness of chip technology is at an all-time high -- 93 percent of consumers surveyed said that they knew about the ongoing migration to chip technology.

Retailers also saw a significant rise in EMV adoption in 2015, with 766,000 merchants enabling chip technology -- an 872 percent year-on-year increase. The U.S. is now the largest chip market in the world, with seven out of every 10 American consumers reporting that they have at least one chip card in their wallet, Visa said. Read more.

ABA Partners in Release of Cyber Insurance Purchaser's Guide

As cybersecurity continues to rank among top concerns of CEOs and board members across the industry, ABA, in partnership with the Financial Services Sector Coordinating Council, has released a Purchaser’s Guide to Cyber Insurance to help organizations weigh their insurance options. ABA unveiled the guide Monday during a session at ABA’s National Conference for Community Bankers.

This guide provides an overview of various types of cyber insurance and the current cyber insurance market, along with tips for determining how to get started, what types of insurance to purchase, existing policy cyber coverage exposure gaps and what to be aware of when shopping for a cyber policy. View the purchaser’s guide. For more information, contact ABA's Kevin McKechnie.

Don't Miss Spring New Accounts Training

With all the new compliance regulations, it seems like we are now conducting new account ”interrogations” rather than new account “interviews."

The SDBA is offering Legal Issues New Account Documentation on April 7 at the Clubhouse Hotel & Suites in Sioux Falls. This full-day annual review teaches new account personnel:

  • Proper account opening procedures and compliance requirements.

  • The five crucial pieces of information including proper identification and the correct TIN for every new account.

  • The four fundamental questions that should be asked of every potential accountholder.

The seminar manual, which is customized to each state's law, has become known as the "technical reference handbook" for new account departments across the country. Learn more and register.