SDBA eNews: November 17, 2016

In This Issue

Hacker Hour: Leveraging the "Dark Web"


Cyber criminals are leveraging the "Dark Web" to monetize the data they are stealing from organizations.

In Hacker Hour: Leveraging the "Dark Web," Secure Banking Solutions will discuss how to access the "Dark Web" and how cyber criminals make their money or use it for ransomware attacks.

The free webinar will be held Friday, Nov. 18,  2 p.m. CST. Register for the webinar.


GSBC Now Taking Applications for 67th Annual School Session


Since 1950, banks have trusted Graduate School of Banking at Colorado (GSBC) to prepare the next generation of community bank leaders.

This legacy, combined with a cutting-edge curriculum, expert faculty and state-of-the art facilities makes GSBC's 25-month graduate banking school an ideal management training program for community banks nationwide.

GSBC is now accepting applications for first year and second year direct enrollments and offers scholarships through sponsoring state banker associations. The 67th school session will be held July 16-28, 2017, at the University of Colorado in Boulder. Learn more.


Question of the Week

The Protecting Tenants at Foreclosure Act of 2009 (PTFA) expired on Dec. 31, 2014. Has there been any more mention of this? Should we continue following it?

Answer: No--it's expired and hasn't been renewed so, you just want to check any foreclosure protection statutes on a state level. The PTFA contained protections intended to ensure that tenants facing eviction from a foreclosed property would have adequate time to find alternative housing. Notwithstanding the expiration of the PTFA, some state or local laws continue to provide protections for tenants facing eviction from foreclosed properties…”

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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Questions/Comments

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

CFPB Investigating Third-Party Access to Customer Data

 
The Consumer Financial Protection Bureau is today launching a formal inquiry into obstacles consumers face in accessing and sharing with third parties personal financial records held by banks and other institutions.

The action by the bureau comes amid banking industry concern over a commonly used process called “screen scraping” in which consumers provide their online banking credentials to a third-party app or tool. While banks fully support consumers’ ability to extract and control personal financial data--and are working on ways to facilitate it safely--services that require customers to provide account credentials can introduce significant risks, including potential loss of consumer protections.

“Consumers should be able to use their financial records and account information and securely share access in an electronic format,” said CFPB Director Richard Cordray. “Technology provides opportunities to use these records to create new consumer tools that help improve financial lives. To realize that potential, we are launching a public inquiry into how much control consumers have over their records and how easy and secure it is for them to share their records with third parties.”

The bureau will commence its inquiry at a field hearing in Salt Lake City this afternoon where ABA VP Rob Morgan will represent the banking industry. Morgan’s testimony will focus on the development of alternatives to screen scraping that ensure security, promote transparency and enhance customer control. He will also urge the CFPB to avoid new regulation--which could stifle innovation--in favor of continued work by banks of all sizes and their technology partners toward protocols and methods of securely sharing data.

The CFPB today issued a request for information on several aspects of consumer data access and sharing, including current practices and potential market developments. Responses to the request will be due 90 days after it is published in the Federal Register. Read the request for information. Watch the hearing.


Nichols to Regulators: Time to Revisit Asset Thresholds


In a letter to the heads of the federal banking agencies yesterday, ABA President and CEO Rob Nichols said it was time for regulators to revisit the numerous asset thresholds at which different regulatory frameworks begin to apply. Several years after these thresholds have been implemented, Nichols said regulators should consider whether the thresholds are meeting their supervisory purposes or “unintentionally limiting economic growth,” which is not an academic question given the persistently low-growth environment in developed economies.

Nichols noted that “rudimentary” asset-size thresholds were earlier adopted out of a spirit of tailored supervision--a spirit that should encourage more sophisticated tailoring.

“Reflection and experience tell us that asset size has a poor correlation with prudential risk,” he explained. “We believe an appropriate alternative approach would be to replace the thresholds with a more risk-sensitive, dynamic measure that would better align regulatory requirements with risk.” Read more.


House Panel Examines Appraiser Shortage

 
The House Financial Services Subcommittee on Housing and Insurance held a hearing yesterday on changes in the appraisal industry, focusing on how appraisal regulations do not reflect the present-day marketplace and how burdensome qualification requirements are causing a decline in the number of appraisers--especially in rural areas.

ABA briefed committee staffers last week in advance of the hearing and has been leading an effort to combat the rural appraiser shortage. Recently, the association urged the Appraiser Qualifications Board continue exploring solutions that would allow prospective appraisers to use relevant experience gained in other professions to help meet certification requirements. Read about the hearing.


SD Voters Approve Maximum Finance Charge for Money Lenders

 
South Dakota voters last week approved Initiated Measure 21 to set a maximum finance charge for all money lenders licensed under South Dakota Codified Laws chapter 54-4. These licensed lenders make commercial and personal loans, including installment, automobile, short-term consumer, pay day and title loans.

The initiated measure prohibits all state-licensed money lenders from making a loan that imposes total interest, fees and charges at an annual percentage rate greater than 36 percent. The measure also prohibits these money lenders from evading the rate limitation by indirect means.

The provisions of Initiated Measure 21 apply to all loans originated, rolled over, renewed or flipped after Nov. 15, 2016. A violation of this measure is a misdemeanor crime. A loan made in violation of this measure is void, and any principal, fee, interest or charge is uncollectable. The law took affect yesterday.

The measure does not apply to state and national banks, bank holding companies, other federally-insured financial institutions and state-chartered trust companies. The measure also does not apply to businesses that provide financing for goods and services they sell.

Contact the Department of Labor and Regulation, Division of Banking at 605.773.3421 for more information.


FDIC Approves Deposit Recordkeeping Final Rule

 
The FDIC Board on Tuesday approved a final rule 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. Under the rule, the FDIC will 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.

To comply with the rule, these banks will be required to collect and maintain more detailed depositor information and make upgrades to their IT systems to ensure that they are able to calculate many types of insured deposits within 24 hours of failure.

In response to feedback from ABA and other associations, the final rule includes alternative requirements for a number of accounts, including certain trusts, brokered deposits and lawyers’ trust accounts for which it would be difficult to compel accountholders to provide personal identification information about the ultimate owners of the funds.

The FDIC also extended the timeline for banks to comply with the rule, also in response to banker concerns. Affected institutions--currently 38 of the country’s largest banks--will now have three years to comply with the final rule instead of two. Read the final rule. For more information, contact ABA's Rob Strand or Hu Benton.


Elder Financial Abuse/SSA Benefit Fraud Presentation To Be Held in Watertown


The U.S. has a drastically aging population that due to medical advances will outlive their personal assets. Ultimately, Social Security and other government benefit programs will be the only revenue steam the elderly population can utilize for day-to-day existence. Current trends show an alarming increase in elder financial abuse and benefit fraud that not only impacts the individual victim but also the taxpayers which fund these programs.

The Social Security Administration Office of the Inspector General's Sioux Falls Field Office will offer an elder financial abuse and Social Security benefit fraud presentation on Dec. 6 in Watertown. The presentation will be held 10 a.m. to 12 noon CST at the Jenkins Townview Apartments Community Room, 220 S. Maple, Watertown.

The meeting will focus on Title II Retirement Survivors Insurance, Title XVI Supplemental Security Income and Title XIX Medicaid. The presentation is designed to put key players that deal with this exploitation on a daily basis in the same room to discuss how they can cooperate to mitigate or reduce the exploitation. Key players include nursing homes, group homes, hospitals, social workers, financial planners, banks, credit unions, legislators, prosecutors and law enforcement.

The Dec. 6 training will target the following counties: McPherson, Edmunds, Faulk, Hand, Beadle, Spink, Brown, Marshall, Day, Clark, Roberts, Grant, Duel, Hamlin and Codington. This training will be conducted on a quarterly basis in different zones across South Dakota. Learn more. Questions, contact Special Agent Jason Piercy, Social Security Administration, Office of the Inspector General.