SDBA eNews: May 26, 2016

In This Issue

Learn Creative Cost-Cutting Strategies to Lower Efficiency Ratios

Banks have made great strides in adjusting to the disruptive forces that embattle their financial institutions. And they are actually getting accustomed to the “new normal”- with one exception. The efficiency ratio is still too high.

Deluxe is offering the webinar "Creative Cost-Cutting Strategies to Lower Your Efficiency Ratio" on Wednesday, June 1, at 1 p.m. CST.

Participants will gain an infusion of new ideas from Deluxe's experts, including those related to:

  • Digital cross-sell and active-buyer marketing
  • Branch real estate and staffing
  • Inventory management and purchasing
  • Transaction migration and maximizing digital channels

Learn more and register.

Reliabank's Hugh Bartels Set to Retire

Reliabank is holding a retirement open house in honor of its fifth president, Hugh Bartels, on Friday, June 3. The open house will be held from 11 a.m. to 4 p.m. at Reliabank at 1401 Fourth St. NE in Watertown.

Everyone is welcome to stop by and wish Bartels a happy and relaxing retirement.

South Dakota Summit on Civic Education and Engagement To Be Held in Pierre

Elected officials play a key role in the success of our communities, our state and our nation. How can we get more citizens involved in the democratic process of public policy making and participatory government? 

Throughout the country, discussions are taking place initiated by civic education organizations, media and other groups to determine if enough is being done to encourage active citizen participation not only in self-governance but also in the very fabric of their communities.

The South Dakota Summit on Civic Education and Engagement will be held Thursday, June 23, in Pierre at the Ramkota Conference Center. The purpose is to bring together citizens, civic leaders, educators, elected and appointed officials to discuss civic engagement and education for all people in all communities.

The registration deadline is June 17. Learn more. Register online.

Question of the Week

Scenario: New $50,000 loan request, secured by a second lien on an apartment building (behind our first lien). Existing note amount is more than $900,000. Original appraisal was dated May 15, 2015, and valued property at $1,221,000. 

Do we have to get a new appraisal, or would it be appropriate/legal to send an engagement letter to the original appraiser and have him re-certify the value and show that the value has not changed on the property?

Answer: You can use an old appraisal, you just have to validate it. Sending it to the appraiser to re-certify is certainly acceptable. Read more.

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

SDBA Encourages Bankers to Take Lawmakers to Work in August

Registration is now open for ABA’s Take Your Lawmaker to Work program, and the SDBA  encourages all South Dakota banks to participate.

Participating banks invite local elected officials to visit their institution in August to experience a “day in the life” of a banker. Through the Take Your Lawmaker to Work program, lawmakers get a firsthand look at how banks operate, meet the customers the bank serves and experience the value banks bring to their communities.

“Face-to-face time with local legislators can be powerful, and is particularly important this year with every seat in the House of Representatives and a third of the seats in the Senate up for election in November,” said SDBA President Curt Everson. “We believe just one day at a local bank will help lawmakers understand how regulations can hinder banks’ abilities to serve their customers effectively and stimulate their local economies.”  

The program runs the entire month of August—when representatives are home for August recess—allowing time to arrange a visit.

Bankers can register for Take Your Lawmaker to Work online. Once registered, ABA will provide materials including invitation templates, resources to prep staff and tips for following up with a lawmaker. Learn more and register.

Farm Credit Regulator Defends FCS at Recent Hearing

A recent oversight hearing of the Farm Credit System (FCS) produced some “interesting revelations” from Farm Credit Administration (FCA) officials about FCS’s operations and lending practices, Bert Ely wrote yesterday in the latest edition of Farm Credit Watch.

At the May 19 hearing, FCA Board Member Dallas Tonsager faced tough questions from members of the Senate Agriculture Committee on the FCS’s non-agricultural business lending practices, the $10 billion line of credit recently issued to FCS by the Treasury Department and deposit taking activities, among other things.

Tonsager claimed that FCS institutions “can lend to full-time farmers for other [i.e., non-agricultural] businesses,” Ely reported, adding that there is no specific provision in the Farm Credit Act that grants FCS such authority. Tonsager also defended the $10 billion line of credit that was granted to the Farm Credit System Insurance Corporation in 2013, arguing that because the FDIC and National Credit Union Share Insurance Fund have Treasury lines of credit, FCSIC should also have one. In the cases of the FDIC and NCUSIF however, Congress authorized the credit lines --which was not the case for FCS, Ely pointed out.

In a written follow-up to the hearing, the FCA further claimed that community banks have numerous competitive advantages over the FCS, including broader investment authority and more funding sources. Omitted from the answer was any mention of the tax exemptions FCS enjoys, particularly on real estate lending.

The oversight hearing was the result of persistent advocacy by ABA, state associations and bankers to rein in the taxpayer-subsidized entity, a staple of the association’s Agenda for America’s Hometown Banks. Banker Leonard Wolfe, president and CEO of United Bank and Trust in Marysville, Kan., and chairman of ABA’s Agriculture Credit Task Force, testified on behalf of the banking industry, calling out the FCS on its mission creep, the risk it poses to taxpayers, and the system’s shrinking efforts on behalf of young, beginning and small farmers. Read Farm Credit Watch.

Learn Warning Signs of Possible Elder Exploitation

There are many "red flags" which can be potential signs of elder exploitation.

The South Dakota State Bar Elder Law Committee, whose goals is to educate people about elder exploitation, has created a list of warnings signs of possible elder exploitation. The list can be shared with bank employees and customers or posted at the bank.

If a bank employee suspects wrongdoing, he or she should report it to his or her supervisor. If that person is the supervisor, he or she should report it to local law enforcement.

The list is posted on the SDBA's website as part of its Safe Banking for Seniors Campaign. View the list.

ABA Issues Free Staff Analysis of Overtime Rule

ABA has posted a staff analysis of the Department of Labor’s final overtime rule, which changes the tests for determining which employees are exempt from overtime pay under the Fair Labor Standards Act. The analysis summarizes the rule changes, which take effect Dec. 1, and suggests next steps to help banks implement them.

The overtime rule is also the topic of a June 16 ABA briefing that will provide insight on the likely impacted positions, self-audit steps to evaluate compliance options, and practical implementation tips. Read the staff analysis. Register for the briefing.

FDIC Report Outlines Mobile Strategies for Banking the Underserved

As part of its broader effort to identify ways mobile banking can help meet the needs of the unbanked and underbanked, the FDIC yesterday released a report identifying possible strategies for financial providers. The FDIC report is based on focus groups conducted with unbanked or underbanked people, as well as interviews with industry executives and consumer advocacy groups.

The six strategies identified by the focus groups include improving customer access to timely account information, expediting access to money, making banking more affordable through better account management, addressing real and perceived security shortfalls, increasing awareness of mobile tools and encouraging long-term financial management. Consumers report that mobile banking is already improving the banking experience by enhancing individual control over financial behaviors, the FDIC said.

Mobile is an especially promising channel for reaching the underbanked, the FDIC said, noting that underbanked households are four percentage points more likely to have a smartphone than fully banked households. More than 90 percent of underbanked millennials--those aged between 18 and 34--have smartphone access.

Bankers are invited to provide feedback on how they are currently employing these strategies, how best to shape a demonstration project and how interested they are in participating in a demonstration. Comments are due by June 15 and may be emailed to [email protected]. Read the report. For more information, contact ABA's Nessa Feddis.

GSB-Madison Enrollment Deadline is June 15, Space is Limited

Incoming enrollment for the Graduate School of Banking (GSB) at the University of Wisconsin-Madison remains extremely robust; for the fourth consecutive year the school anticipates more than 200 students will begin the program this summer.

The application deadline for the 2016 session, which begins July 31, is June 15. Individuals planning to participate in 2016 are encouraged to apply as early as possible to ensure a place in class as space is limited. Information regarding online registration is available at

GSB offers a variety of residential programs designed to help bankers explore critical banking and leadership topics under the guidance of world-class faculty and to network with hundreds of colleagues. 2016 programs include:

  •  Graduate School of Banking: July 31-Aug. 12, 2016 (The application deadline is June 15.)
  •  Bank Technology Security School: Oct. 23-28, 2016 (The application deadline is Sept 23.)
  •  Financial Managers School: Sept. 18-23, 2016
    (The application deadline Aug. 18.)