SDBA eNews: June 15, 2017

In This Issue

ABA Seeks Participants in Latest Ag Survey

ABA and Farmer Mac are seeking responses in the latest round of their nationwide, biannual survey of agricultural lenders. 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 June 30. Take the survey.

FDIC Consumer Publication Focuses on Scam Prevention

The newest issue of the FDIC's Consumer News publication includes a list of the top 10 scams targeting bank customers and ways for customers to protect themselves. These scams include government imposter frauds, debt collection scams, fraudulent job offers and phishing. Other articles cover mortgage negotiation tips and answers to consumer questions about deposit insurance. FDIC Consumer News is free for financial institutions to reprint and share with customers. Read Consumer News.


Question of the Week

When the information that is required to be on the closing disclosure will not fit in the allotted area, where do we put it?

Answer: When you are attempting to disclose required information and it will not fit in the designated area, you should disclose the information on a separate page attached to the closing disclosure. Each section will determine what your responsibility is regarding using additional pages. This information can be found in each section of § 1026.38. There are additional provisions for customary recitals and for information when using a local real estate settlement company and those examples are found in the commentary of § 1026.38(t)(5)(i).

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

ABA Urges Ag Appropriators to Fund Farm Loan Guarantees

In a statement submitted for a Senate subcommittee hearing on agricultural and rural development appropriations on Tuesday, ABA urged appropriators to provide adequate funding for the U.S. Department of Agriculture’s rural and ag loan guarantee programs. Specifically, ABA urged Congress to raise the cap on Farm Service Agency guaranteed loans, improve USDA technology to support loan guarantee growth, protect Rural Development loan programs and protect crop insurance.

In related news, ABA and other farm groups wrote to House and Senate appropriators Tuesday urging continued funding for FSA farm loan programs.

ABA Applauds Proposed Structural Changes to USDA

ABA yesterday welcomed a proposal by the U.S. Department of Agriculture to restructure its operations to improve efficiency, effectiveness and accountability, in response to an executive order by President Trump. The association expressed optimism that the proposed changes would help strengthen the delivery of USDA’s loan programs, including Farm Service Agency and Rural Development loans, which provide more than $7 billion in credit to the nation’s farmers and ranchers.

With respect to FSA loans, ABA urged the department to increase the loan limit size for FSA guaranteed loans, take steps to modernize the program and add additional staff, and bring back FSA’s interest assistance program. ABA also called for the expansion of USDA’s Rural Development programs, and for a review of certain environmental regulations that hold back agricultural lending. Read the letter.

Fed Hikes Rates; One More Increase Expected in 2017

As expected by many analysts, the Federal Open Market Committee decided yesterday to raise the target federal funds rate to 1 to 1.25 percent--the second of 2017 and the fourth since the committee resumed rate hikes in December 2015. According to the FOMC statement, all but one committee member--Minneapolis Fed President Neel Kashkari--voted for the increase.

FOMC members noted that economic growth remained moderate and that the labor market had strengthened despite some moderation in the rate of job growth. They also expected inflation, which has been running somewhat below the committee's 2 percent benchmark, to stabilize around 2 percent in the "medium term."

Economic projections released yesterday showed that most FOMC members expect the target rate at the end of the year to be between 1.25 and 1.5 percent, signifying one more expected rate increase in 2017. Read the FOMC statement.

Treasury Department Issues Sweeping Regulatory Reform Recommendations

The Treasury Department on Monday issued a 150-page report making dozens of recommendations for how Congress and regulatory agencies can streamline bank regulation in a way that promotes economic growth. The report came in response to President Trump’s executive order outlining core principles of financial regulation and calling for a comprehensive review of the regulatory structure.

As ABA has long urged, the report called for significant tailoring of regulatory requirements. “[N]early seven years after [Dodd-Frank], regulation has proven to be insufficiently tailored to depository institutions based on the size and complexity of their business models,” the report said. The report noted that economic growth and loan growth have been historically depressed during the current recovery, which Treasury attributed in part to the volume and structure of current regulations.

“Today’s Treasury report is an important step to refine financial regulations to ensure that they are supporting --not inhibiting--economic expansion,” said ABA President and CEO Rob Nichols. “We applaud Secretary Steven Mnuchin for recognizing that we need regulatory reform to boost economic growth, and we expect this report will serve as a catalyst in that effort.” ABA was an active participant in the Treasury’s process. It submitted 10 white papers to Treasury offering detailed feedback, and delegations of bankers representing all bank sizes took part in in-person meetings. The recommendations of the report are consistent to a large degree with recommendations made by ABA.

The Treasury report included recommendations on capital, liquidity, community banks, mortgage lending and structural regulatory reform. While some of Treasury’s recommendations require congressional action, Mnuchin estimated that “70 to 80 percent” can be put into motion by regulators immediately through their independent rulemaking authority. The report also highlighted numerous mortgage rules that the CFPB could address on its own.

Nichols will discuss the Treasury report, along with legislative efforts on regulatory reform and other topics during a free member webinar today at 1 p.m. CDT. ABA staff will continue to review the report and issue additional analysis for members in the days to come.

House Passes Financial Choice Act

The House last Thursday passed the Financial Choice Act by a mostly party-line vote of 233 to 186. The legislation is Financial Services Committee Jeb Hensarling’s sweeping, 600-page bill aimed at reforming parts of the Dodd-Frank Act’s extensive supervisory regime and providing regulatory relief for banks.

The bill includes a number of regulatory relief provisions long sought by ABA as part of its Blueprint for Growth, including a Qualified Mortgage safe harbor for mortgage loans held in portfolio, more tailored supervision based on an institution’s risk profile and business model, greater flexibility for savings associations, relief from various reporting requirements, and repeal of the Volcker Rule.

Included in the bill is a “regulatory off-ramp” for larger institutions subject to DFA’s heightened prudential standards and Basel III’s capital and liquidity standards, provided those institutions elect to maintain a 10 percent non-risk weighted leverage ratio. The Choice Act also focuses on ending “too big to fail” by replacing DFA’s Orderly Liquidation Authority with a new Bankruptcy Code designed to accommodate the failure of a large, complex financial institution.

Also targeted for reform by the bill is the Consumer Financial Protection Bureau, which would be renamed the Consumer Law Enforcement Agency and stripped of its examination powers and “UDAAP” enforcement authority. The agency would be led by a single director removable at will by the president, and subject to the congressional appropriations process.

The bill’s passage reflects an important step toward providing meaningful regulatory reform that will help America’s banks better serve their customers and communities, ABA President and CEO Rob Nichols said, though he noted that the bill “would have been much stronger had a provision to repeal the Durbin Amendment been retained.” With the bill’s passage, the fight for regulatory reform now shifts to the Senate. Read ABA's statement.

SDBA Taking Orders for 2018 Scenes of SD Calendar and Photo Submissions

Scenes of South DakotaThe SDBA is offering the 2018 Scenes of South Dakota Calendar featuring photos of South Dakota submitted by South Dakota bankers, their family members and customers.

These calendars are a great opportunity to thank your customers for their business and promote your bank or business. Your bank, branch or business' logo and name can be printed on each calendar to display in homes and businesses all year long.

The Scenes of South Dakota Calendar is exclusive to SDBA member banks and associate members. Calendar orders are due by Sept. 1, 2017, to get the low price of $1.19 per calendar. All orders will be shipped Nov. 1, 2017. Place your order today.

If you are an amateur photographer, send the SDBA your photos of farms, barns, agricultural activities, historical South Dakota locations, county fairs, carnivals, parades or festivals, fall colors, winter snowfalls, spring flowers or summer fun. Any photo that shows the history or beauty of South Dakota qualifies. The deadline to submit a photo is July 28, 2017, and all photos will be judged with the top photos featured in the 2018 Scenes of South Dakota Calendar. View the photo submission form.