SDBA eNews: July 7, 2016

In This Issue

South Dakota Title Fee, Lien Fee Increases 

The South Dakota Division of Motor Vehicles title fee and lien fee both increased effective July 1, 2016. Both fees increased from $5 to $10.

TRID: The When and Why of Revised Disclosures

TRID continues to be a hot topic for financial institutions. Total Training Solutions has added an additional TRID webinar on Aug. 17, 2016.

Proper handling of revised disclosures can, in certain circumstances, reduce creditor liability. Mishandling revised disclosures can result in Truth-in-Lending Act violations and violations of Section 5 of the FTC Act (Unfair or Deceptive Acts or Practices). The rules are complex, and CFPB guidance on this aspect of TRID is lacking.

The "TRID--The When and Why of Revised Disclosures" webinar will answer questions and provide a thorough review of the timing, content and cover requirements for revised disclosures. TRID veterans and TRID rookies will benefit from this review of the rules for revised disclosures.

Learn more and register.


Question of the Week

Following a flood map change is the bank required to force place flood insurance during the 45 days following the notice to the borrower, or can the bank wait 45 days after notifying the borrower?

Answer: The regulations permit a bank to force place flood insurance beginning on the date the borrower’s policy lapsed or did not provide sufficient coverage to ensure continuous flood coverage for both the bank and the borrower and any time after that date. However, if a borrower fails to obtain flood insurance within 45 days of the bank’s notification to the borrower of the need to obtain flood insurance, the bank must force place flood insurance at that time.

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 Seeks Interest in Forming a Western Compliance Users Group

The SDBA is seeking interest from member banks in forming a compliance users group in the western part of the state.

Currently, the SDBA facilitates a compliance users group for member banks in the central part of the state which meets quarterly in Pierre. In addition, a compliance users group meets monthly in Sioux Falls.

Anyone interested in forming a compliance users group for the western part of the state which would meet in Rapid City should contact the SDBA's Alisa DeMers via email or call 605.224.1653. The Central SD Compliance Users Group is next scheduled to meet on Thursday, Aug. 18, 11 a.m. CDT at the SDBA Office in Pierre.

Cybersecurity Training Available to Banking Industry

The South Dakota Division of Banking will hold a cybersecurity training at Dakota State University (DSU) in Madison on Tuesday, Aug. 16. The training is co-hosted by the South Dakota Bankers Association, Independent Community Bankers of South Dakota, Conference of State Bank Supervisors and DSU.

Speakers will include law enforcement officials, state and federal regulators and DSU educators. Agenda topics include the threat of cybercrime, risk assessments and best practices, along with roundtable discussion and a hacking simulation table top exercise.

“Financial institutions are constantly combatting online threats which could compromise the safety and soundness of their operations,” said South Dakota Banking Director Bret Afdahl. “This training will better equip bank leaders with the questions to ask and the steps to take to better prepare their institution to survive and thrive in today’s challenging environment.”

Executive Leadership of Cybersecurity will be held from 9 a.m. to 4 p.m. on Aug. 16. Interested parties can register online for $150.

Tarullo: Smaller Banks Need 'Substantially Simpler' Capital Regime

In remarks at an industry event yesterday, Federal Reserve Governor Daniel Tarullo made one of his strongest statements yet about the need to minimize capital burdens on highly-capitalized community banks--as ABA has long advocated.

“Capital requirements for smaller institutions in the United States need to be simpler than they are,” Tarullo said. “When it comes to smaller institutions and certainly community banks--any institution under $10 billion--I think we can and should have a substantially simpler capital system, one that looks more like the original Basel I.”

ABA and the state bankers associations have strongly advocated--in letters and in person--for provisions exempting banks that are clearly highly capitalized from having to prove it via the complex and costly Basel III calculations.

CFPB Moves to Conform Privacy Notice Rule to Legislation

The Consumer Financial Protection Bureau last Friday issued a proposed amendment to the Gramm-Leach-Bliley Act to conform its regulations on privacy notice requirements to last winter’s legislation that provides banks meeting certain requirements an exemption from sending an annual privacy notice. To do so, the bureau is withdrawing its 2014 rulemaking providing an alternative delivery method for the notices.

Under GLBA, banks are generally required to send annual notices to customers detailing whether and how their nonpublic personal information is shared and provide a way for customers to opt-out of having their information shared with unaffiliated third parties. In December, Congress passed a law ending the requirement to mail an annual notice, provided that they have not changed their policies and practices on the disclosure of nonpublic information since the previous notice was sent and that they do not share non-public personal information with third parties, unless required by law.

In addition to implementing the change, the CFPB’s proposed amendment establishes deadlines for institutions resuming annual privacy notices if they cease to qualify for the exemption. View the proposed amendment. For more information, contact ABA's Rob Rowe.

FDIC Streamlines IT, Operations Risk Exam Procedures

Effective July 1, the FDIC implemented the Information Technology Risk Examination (InTREx) program for conducting IT and operations exams. The updated program reflects a more efficient, risk-focused approach, the agency said, and is designed to help ensure that IT and cybersecurity risks are promptly identified and addressed by bank management.

InTREx includes a streamlined IT profile that financial institutions will complete 90 days in advance of their exam, which replaces the IT Officer’s Questionnaire (ITOQ). The profile includes 65 percent fewer questions than the ITOQ and is intended to provide exam staff with more focused insight on a bank’s IT environment. Read more.

Court Rejects Agreed-Upon Settlement in Visa, MasterCard Case

An appellate court last week rejected the settlement in which Visa, MasterCard and credit card-issuing major banks agreed to pay $6.05 billion to settle a long-running lawsuit by retailers alleging the violation of antitrust laws in setting credit card interchange fees. The court ruled that the settlement, which was agreed to in 2012 and finalized in 2014, inadequately represented the interests of the class of merchants suing the card companies.

Under the settlement, the class of plaintiffs were divided into two groups based on when they had accepted or would accept Visa or MasterCard cards. The first class was eligible for monetary relief, while merchants in the second class sought injunctive relief in the form of future network rules.

In addition to the $6.05 billion for cash claims, the settlement also included a 10-basis-point reduction in credit card interchange rates for eight months--estimated to equal about $1.2 billion--that would be paid to retailers participating in the suit and deducted from the interchange revenue of all banks.

ABA has long urged an end to the more-than-decade-old litigation, noting that the lawsuit by retailers has nothing to do with consumer benefits and is rather a battle over who should pay to support an efficient payments system that merchants chose to fight in court rather than through market structures.