SDBA eNews: March 17, 2016

In This Issue

South Dakota Banking Code Available from SDBA Website

The most recent South Dakota Banking Code is available from the SDBA's website.

South Dakota Banking Code is the state codified laws specific to banking: Title 51-A (Banks and Banking), Title 54 (Debtor and Creditor), Chapter 4-6A (Insurance of Public Deposits), Chapter 10-43 (Income Tax on Banks and Financial Corporations), and Chapter 43-41B (Uniform Unclaimed Property Act).

The South Dakota Banking Code webpage contains links to the latest state codified laws.

Hacker Hour: Whoops, You Clicked. Now What?

We know the situation well. An employee receives an email they think is coming from someone they know and open it. The email has an embedded link or attachment that has urgent information they are expecting, so they click on the link or open the attachment.

Nothing appears to be happening so they close the attachment or exit the website. Just then, they realize they shouldn’t have clicked. Panic sets in, and they wonder if they just infected their machine or network.

Join SBS on Wednesday, March 23, 2 p.m. CDT for "Hacker Hour: Whoops, You Clicked. Now What?" The webinar will take participants through the incident response procedures and malware impact analysis that forensic experts take to understand what the malware intended to do, and what it actually did. Register now.

Question of the Week

When doing a loan for the purchase of a 1-4 family dwelling but taking an interest in the sellers interest in a land contract as collateral for a loan (and not the dwelling), is the disclosure of right to receive a copy of appraisal applicable?

Answer: No, the appraisal notice is required for transactions that are to be secured by a first lien on a dwelling. The notice requirement is not dependent on the type of property being purchased (if it's not also being taken as collateral).

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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 Nearing for Bankers to Run for a Seat on the SDBA Board

The SDBA is seeking bankers to run for two open seats on the SDBA Board of Directors. The open seats are for geographic Group I and Group III.

The Group I seat has been vacant since the director, Dave Rozenboom, First PREMIER Bank, Sioux Falls, was elected SDBA vice chairman last June. Group I are banks located in Brookings, Clay, Kingsbury, Lake, Lincoln, McCook, Miner, Minnehaha, Moody, Turner, Union and Yankton counties.

Ron Kristensen, Farmers & Merchants State Bank, Plankinton, is the current Group III director. Kristensen has served two, consecutive terms and is not eligible to run for re-election. Group III are banks located in Aurora, Beadle, Bon Homme, Brule, Buffalo, Charles Mix, Davison, Douglas, Gregory, Hand, Hanson, Hutchinson, Hyde, Jerauld, Lyman, Sanborn and Tripp counties.

Those interested in running for one of the seats should contact a nominating committee member by Thursday, March 24, in order to be placed on the ballot. Please submit a brief paragraph about your career history and a headshot photo for the election ballot. Elections will be held in March/April. Newly-elected Board members will take office on May 1, 2016, and serve a three-year term expiring April 30, 2019. Learn more.

Celebrate National Ag Week

Joining states across the country, Gov. Dennis Daugaard has proclaimed March 13-19 as National Ag Week in South Dakota--a time to reflect on the importance of South Dakota’s farmers and ranchers and the state’s agriculture industry. This year’s theme is "Agriculture: Stewards of a Healthy Planet."

To help banks celebrate National Ag Week, the ABA has developed two customizable news releases (available to members only). The releases offer financial tips for young and beginning farmers and dealing with tough financial times on the farm. In addition, ABA has created tip sheets perfect for sharing on social media or as hand-outs in a bank's lobby.

Nationwide, farm banks increased their agricultural lending by 7.9 percent in 2015 and held $100.3 billion in ag loans at year’s end, according to the ABA Center for Agricultural and Rural Banking’s annual Farm Bank Performance Report released on Tuesday. With farm income forecast to decline in 2016, farm banks have prepared for turbulence by increasing the quality of capital and assets. Read the report.

Agriculture is a major contributor to South Dakota’s economy, generating $25.6 billion in annual economic activity and employing more than 115,000 South Dakotans. Read the press release.

SD Legislature Praised for Commitment to Fight Elder Abuse

Attorney General Marty Jackley praised the South Dakota Legislator’s approval of resources to help fight elder abuse in South Dakota. 

“All too often our seniors suffer physical and emotional abuse, neglect and financial exploitation,” said Jackley. “The important work of the South Dakota Elder Abuse Task Force helped identify areas of concern that our Legislature has now prioritized by providing resources for the Attorney General to fight elder abuse in South Dakota.The Attorney General will use this opportunity to work with local law enforcement and other state and public entities to identify, investigate and prosecute elder abuse cases and increase services to victims.”

The South Dakota Elder Abuse Task Force was created by the SD Legislature in 2015 at the request of SD Supreme Court Chief Justice David E. Gilbertson. The Task Force considered recommendations from nationally-recognized experts. The experts told the Task Force that elder financial exploitation and abuse cases are complex, urging South Dakota to utilize law enforcement and prosecutorial specialists to handle elder financial exploitation and abuse cases. The Task Force adopted the experts’ recommendations as part of the Task Force report and legislative package.

Nationwide, elder abuse is on the rise with up to a million elders being abused or neglected annually. Instances of reported abuse/neglect are between 1 in 14 and 1 in 23. In the area of elder financial exploitation, only 1 in 25 is reported, and it is estimated that $2.6 billion in financial exploitation occurs annually.

Be watching for more information from the SDBA regarding implementation of the new law that would permit, but not require, bankers to report suspected cases of financial exploitation or abuse.

In addition, the SDBA has joined the American Bankers Association (ABA) Foundation’s Safe Banking for Seniors campaign. Through this campaign, the SDBA will mobilize bankers across South Dakota to educate older Americans and their caregivers about elder financial abuse and how to prevent it. Banks can learn more about the initiative and resources available and register to participate at

SBA Regulatory Fairness Hearing To Be Held in Sioux Falls

U.S. Small Business Administration (SBA) National Ombudsman Earl L Gay will convene a regional regulatory fairness hearing to hear testimony from small business owners, representatives of trade associations and other members of the small business community regarding federal regulations and enforcement and compliance actions impacting America’s small businesses.

The hearing will be held Thursday, March 24, in Sioux Falls at Siouxland Libraries-Oak View Branch at 3700 E. Third St. Registration will open at 10 a.m. CDT, with the hearing to begin at 10:30 a.m.

SBA's national ombudsman convenes regulatory fairness hearings and roundtables across the country to give small business owners a means to comment on unfair enforcement actions, government audits, and excessive fines or regulations. It is anticipated that during this hearing small business stakeholders will testify on a number of wide-ranging issues. Issues reported by participants undergo a high-level fairness review at the appropriate federal agency, and the Office of the National Ombudsman works with its federal agency partners to address those concerns, reduce regulatory burdens and help small businesses grow.

Those wishing to testify must register and provide written statements in advance. Learn more.

Cordray: CFPB Will Provide Further TRID Guidance

In congressional testimony yesterday, Consumer Financial Protection Bureau Director Richard Cordray said that the bureau would provide further question-and-answer guidance to the financial and housing industries on complying with the TILA-RESPA integrated disclosures, which--since TRID took effect in October 2015--have been delaying mortgage closings, according to a recent ABA survey.

ABA is among the trade groups leading the effort to engage with the CFPB on TRID compliance and collect the industry's top TRID compliance questions to share with the bureau. "We'll attempt to be responsive to that," Cordray told the House Financial Services Committee. He also emphasized that the bureau's enforcement of TRID remains "corrective and diagnostic" for lenders making good-faith efforts to comply with the new disclosure requirements.

In related news, the CFPB will hold a free webinar on Tuesday, April 12, at 1 p.m. CDT to address industry questions on the interpretation and implementation of TRID. Register for the webinar.

House Members Ask CFPB for Financial Institution Exemption

A bipartisan group of 329 House members, including South Dakota Congresswoman Kristi Noem, wrote to the Consumer Financial Protection Bureau on Monday, urging the agency to exempt community banks and credit unions from certain rulemakings. Led by Reps. Adam Schiff (D-Calif.) and Steve Stivers (R-Ohio), the letter cited a provision of the Dodd-Frank Act allowing the bureau to adapt regulations by exempting “any class” of entity from its rulemakings.

“As you undertake rulemakings, we urge you to consider the benefits credit unions and community banks provide and ensure that regulations do not have the unintended consequences of limiting services or increasing costs for credit union members or community bank customers,” the letter said.

CFPB Director Richard Cordray has in the past declined to take this action. “It is not plausible to me that we could use such authority to override Congress’s own judgment on such a broad-based policy matter,” he said in a recent speech to a credit union group. “But ... Congress itself drew some thresholds and tiers that distinguished larger institutions from smaller institutions, such as its provision giving us supervisory authority over banks and credit unions with more than $10 billion in assets but not those with less.”

The congressional letter does not distinguish between smaller credit unions and the five credit unions with assets of more than $10 billion. Read the letter.