SDBA eNews: May 19, 2016

In This Issue

Hacker Hour Webinar: What to Expect From Your Next IT Exam

It is no secret that cybersecurity is top of mind for governing bodies of financial institutions. In fact, we have seen more information security guidance and updates in the financial industry over the last few years than we have seen in 10 years. So the question is: What should I expect from my next exam? 

Rather than spending time worrying about what can possibly happen in your next IT exam, banks can be actually preparing for it. Join Secure Banking Solutions for its free Hacker Hour Webinar: What to Expect From Your Next IT Exam on Wednesday, May 25, at 2 p.m. CDT. The webinar will cover some simple steps that can help banks get ready for their next IT exam.

Register for the webinar.

National Farm Business Management Conference Seeks Sponsors

The South Dakota Center for Farm/Ranch Management is looking for sponsors to assist in hosting a national conference in Sioux Falls for farm business management educators who work directly with ag producers.

The National Farm Business Management Conference is scheduled for June 12-16, 2016, at the Holiday Inn Sioux Falls-City Centre.

Available are general sponsorships, meal sponsors, break sponsors and tour lunch sponsors. Sponsors will receive signage at the event, voice recognition and a listing in the printed conference notebook.

Learn more about sponsoring. Learn more about the national conference.

Question of the Week

What do you do when you have taken a verbal request for a stop payment on a check, but the stop pay form has not been signed and the item is presented for payment?

Answer: If you have an oral stop payment on a check, it's good for 14 days if no written request is completed/given. So, if the item is presented for payment within 14 days, you would not pay it. Otherwise, you would.

  • UCC 4-403: (b) A stop-payment order is effective for six months, but it lapses after 14 calendar days if the original order was oral and was not confirmed in a record within that period. A stop-payment order may be renewed for additional six-month periods by a record given to the bank within a period during which the stop-payment order is effective.

Note that this is the model UCC language, which can vary from state to state. Your bank may also alter the stop pay requirements by agreement, so check with your customer’s account agreement to be sure of the proper procedures for your bank.

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.

Upcoming Events

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

Senate Committee to Hold Hearing Today on Farm Credit System

Following persistent advocacy by ABA, state bankers associations and bankers, the Senate Committee on Agriculture, Nutrition and Forestry will hold a hearing today to discuss the oversight of the Farm Credit System. Leonard Wolfe, president and CEO of United Bank & Trust, Marysville, Kan., and a chairman of ABA’s Agricultural Credit Task Force, will testify on behalf of the banking industry.

Reigning in the taxpayer-subsidized Farm Credit System has long been a core element of ABA’s Agenda for America’s Hometown Banks. In December 2015, the Association’s advocacy efforts led to an oversight hearing on the Farm Credit Administration--FCS’ top regulator--before the House Agriculture Committee. Lawmakers at the hearing challenged the FCS on mission creep, retained mineral rights following foreclosures and the risk to taxpayers posed by the GSE’s “similar entity” financings of telecomm giants like Verizon and AT&T.

ABA Encourages Congressional Action on Botnet Legislation

Testifying before the Senate Judiciary Committee yesterday on behalf of ABA, Citigroup’s Charles Blauner called on Congress to enhance the government’s ability to combat cyber threats posed by botnets used to distribute malware, ransomware or distributed denial of service attacks. Blauner, Citi’s global head of information security, highlighted the ongoing collaborative efforts of banks, government entities and federal law enforcement in disrupting a number of recent large-scale cyber attacks, but stressed the need for additional action at the legislative and executive level.

In particular, Blauner urged Congress to pass the Botnet Prevention Act of 2016 (S.2931), which would expand the Department of Justice’s ability to issue injunctions against botnets engaged in a broad range of illegal activity and give judges discretion to impose harsher penalties on those that intentionally damage critical infrastructure systems. Additionally, the bill would prohibit the sale of access rights to a compromised computer if the seller has reason to believe the buyer intends to use the computer for criminal purposes.

Blauner also encouraged the administration to issue an executive order authorizing the Treasury to impose sanctions on individuals and entities determined to be responsible for or complicit in malicious cyber-enabled activities that pose a threat to national security or financial stability. Such an order should clearly define actions considered to be significant cyber-enabled activities, he added. Read Blauner's testimony.

Labor Department Issues Final Overtime Rule

The Department of Labor on Wednesday released its final rule doubling the salary level used to determine whether employees are exempt from overtime pay under the Fair Labor Standards Act. Starting on Dec. 1, the new salary level for exemptions will rise from $23,660 to $47,476, or $913 per week.

"If this rule were supposed to help workers, it misses the mark," said ABA President and CEO Rob Nichols. "It will be harmful to bank employees and the banks who employ them. As it stands, throngs of employees across the country, especially those at small banks and branches where a handful of employees wear many hats, will face reduced opportunity and flexibility in the workplace."

The final rule sets the salary threshold at the 40th percentile of earnings of full-time salaried workers in the lowest-wage region identified by the U.S. Census Bureau--currently the South. The salary threshold in the final rule is nearly $3,000 lower than when the rule was proposed, a nod to comments from ABA and other groups noting that the rule ignored regional disparities in pay. The salary threshold will automatically update every three years, instead of annually as proposed.

Meanwhile, the salary level for highly-compensated employees--at which employers may conduct only a minimal duties test for exemption--will rise from $100,000 to $134,000. Up to 10 percent of the standard salary level can come from non-discretionary bonuses, incentive payments and commissions, paid at least quarterly.

In response from advocacy by ABA and others, DoL declined to make any changes to the "duties tests" for exemption. ABA will thoroughly review the final rule and provide a staff analysis soon. The association will also hold a briefing on June 16 to help bankers understand how to comply with the final rule and communicate the changes to employees.

ABA Hosts Meeting on Appraiser Issues

ABA on Monday hosted a meeting with congressional staffers and representatives from various appraisal industry groups to discuss appraiser shortage issues in rural areas and how regulations are affecting the industry.

Among other topics, attendees discussed strategies for recruiting, training and retaining appraisers in rural and underserved markets; rural property valuation concerns; and the implications of various regulatory actions, including the Economic Growth Reduction and Paperwork Reduction Act process, the definition of “federally related transaction,” and de minimis rules. For more information, contact ABA's Steve Apodaca.

Still Time to Enroll in Graduate School of Banking at Colorado

Applications are still being accepted for the Graduate School of Banking at Colorado’s (GSBC) 66th annual school session, to be hosted on the University of Colorado campus in Boulder, Colo., July 17-29, 2016.

GSBC offers a comprehensive banking education tailored specifically to up-and-coming community bank leaders. The 25-month program delivers more than 200 hours of classroom interaction with community banking experts and intersession research projects that offer direct takeaways to enhance bank performance and improve individual leadership abilities.

Candidates wishing to attend in 2016 should contact Josie Bunch, or visit for an application.

Learn What Financial Institutions Can Do to Protect Older Account Holders

The CFPB will hold a free webinar on Wednesday, May 25, at 1 p.m. CDT on how banks can protect older consumers from financial exploitation. The call will begin with remarks from CFPB Director Richard Cordray and will be followed by a presentation from the CFPB’s Office for Older Americans and an opportunity for questions.

This presentation will highlight a recent CFPB report that provides an in-depth look at financial exploitation, case scenarios and detailed recommendations for banks on how to prevent, recognize, report and respond to financial exploitation of older Americans.

Register for the May 25 webinar.