Keynotes Announced for ABA GR Summit
This year brings big changes to Washington--and it’s a critical time for enacting pro-growth legislation. Join bankers from across the U.S. on March 20-22, 2017, at the ABA Government Relations Summit to show lawmakers that America’s banks are ready for policies that will create jobs, grow the economy and help bankers serve their communities.
The Summit agenda includes keynote speakers and journalists Chris Wallace of Fox News Sunday and Paul Mecurio of The Late Show with Stephen Colbert. Learn more and register.
Join SBS for Annual Cybersecurity Predictions
At the end of each year, Secure Banking Solutions (SBS) looks into its magic crystal ball and makes predictions of what the world will see in the cybersecurity industry throughout the next year.
Join SBS for Hacker Hour: SBS Annual Cybersecurity Predictions on Wednesday, Dec. 28, at 2 p.m. CST. During this free, one-hour session, SBS will review which 2016 predictions came true and announce its 2017 predictions.
Learn more and register.
Question of the Week
Can an LLC assign a POD on a business account?
Answer: Ultimately, this is a state law question, and so you should check the rules in the state where the deposit account is opened. However, it would be very unusual for this to happen. An LLC is an entity and doesn’t “die," and therefore the POD designation wouldn’t really do anything since there is never a “death” of the LLC. Even if the owner of the LLC dies, the LLC continues on in existence.
If the customer wants to leave the business to a specific person, then it would be best to amend the formation documents to consider succession. The bank should suggest that the customer speak with their attorney to help them with corporate succession management.
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
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Fed Raises Rates for Second Time Since 2006
The Federal Open Market Committee voted unanimously yesterday to raise the target range for the federal funds rate by 25 basis points to 0.5-0.75 percent--only the second rate hike since the financial crisis. Committee members attribute the increase to consistent economic growth, in particular strong job gains, throughout 2016.
Projections released yesterday by the committee include accelerated growth over the next few years, which suggest a series of additional rate hikes across 2017. The committee continued to stress, however, that future rate hikes will “depend on the economic outlook as informed by incoming data.” Read the FOMC statement.
Agencies Finalize Extended Exam Cycle for Small Banks
The federal banking agencies on Monday issued final rules extending the on-site exam cycle for banks with up to $1 billion in assets from 12 months to 18 months, effective immediately. The rules are identical to interim final rules issued earlier this year.
This regulatory change--long advocated as part of ABA’s Agenda for America’s Hometown Banks--was included in a spending bill at the end of 2015 as a result of strong advocacy efforts by ABA and the state associations.
The measure will qualify an estimated 611 institutions for the extended exam cycle. Previously, the 18-month exam cycle was only available to institutions with asset sizes less than $500 million. Read the final rules.
Nichols to Outline 2017 Policy Goals on Webinar
With a potentially very productive legislative and regulatory environment ahead in 2017, ABA leaders will present a free webinar for bankers on Jan. 10 on what the industry can expect from Washington in the next year.
ABA President and CEO Rob Nichols will be joined by ABA EVPs James Ballentine and Wayne Abernathy to outline opportunities on regulatory relief, tax reform and other policy priorities.
In addition to joining the webinar, bankers can take action by registering now to attend ABA’s Government Relations Summit on March 20-22 and raising their voice on Capitol Hill.
Bankers Urged to Submit Post-Exam Surveys
One of the top concerns among bank CEOs has long been inconsistent supervisory expectations or expectations changed without notice. In addition, some have expressed concerns with their treatment by examiners during the exam and with the failure of examiners to discuss problems during the exit interview, instead informing the bank of a matter requiring attention only in the exam report.
To help address these concerns, ABA and the state bankers associations developed the Regulatory Feedback Initiative. Since 2011, more than 3,400 bankers have submitted post-exam surveys covering safety and soundness, compliance and IT examinations. The surveys provide CEOs the ability to submit anonymous feedback, and participating bank CEOs can request reports. Another helpful feature is the CEO’s written comments related to what they liked, disliked and feel should be improved in the examination process going forward.
ABA and the SDBA encourage bank CEOs or their designees to take a 20-minute survey for any exams completed this year, provided they have not already submitted surveys. Take the post-exam survey. Contact ABA's Rick Freer with questions.
ABA, Farmer Mac Launch New Ag Lending Survey
ABA and Farmer Mac yesterday launched a new nationwide, biannual survey of agricultural lenders to collect data about the economic and lending conditions in their service areas. Through the questionnaire, lenders can share their opinions on local farm income, land sales, delinquency expectations and other important industry issues. The survey will remain active until Jan. 6. To participate in the survey, contact ABA’s Brittany Kleinpaste.
Lawmakers Call for Additional Marijuana Banking Guidance
With state or local law in 29 states and the District of Columbia now permitting marijuana use for various purposes, a bipartisan group of 10 senators yesterday asked the Financial Crimes Enforcement Network to issue additional guidance for financial institutions that provide indirect services to marijuana-related businesses.
Marijuana use remains illegal under federal law, leaving many banks and credit unions hesitant to serve marijuana-related businesses. FinCEN issued guidance on suspicious activity reporting for marijuana-related transactions and accounts in 2014, but did not distinguish between state-sanctioned cannabis operations and the businesses that serve them, the lawmakers said, leading many banks to deny service to a number of these indirect service providers. Without access to banking services, these companies are often left to operate in cash, which increases the potential for robberies, tax fraud and other financial crimes, they added.
“With tens of millions of Americans soon gaining legal access to marijuana under state laws, new guidance is necessary in order to allow banks to enhance the availability of financial services for indirect businesses that service the marijuana industry,” the lawmakers wrote. “This will not only bolster the safety of our communities, but it will also help spur economic growth.” Read more.
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