SDBA eNews: July 13, 2017

In This Issue

GSB Offers Sizzling Summer Sale on Online Seminars

The Graduate School of Banking at the University of Wisconsin-Madison's Online Seminar Series offers a convenient, cost-effective way to access quality educational opportunities.

GSB seminars are designed to meet the dynamic learning needs of today's busy financial professional and are delivered by some of today's top industry experts. And now through Sept. 1, save up to 30 percent when you choose your own bundle of educational programs:

  • Purchase three programs at one time and receive a 20 percent discount with coupon code GSBPick3.
  • Purchase five programs at one time and receive a 30 percent discount with coupon code GSBPick5.
Learn more and sign up.

Strategic Responses to the Rising Rates Environment

JPMorgan Chase estimates that 60 percent, or $1.5 trillion, of excess deposits will trickle out of banks in the next four-to-five years if the Fed begins reversing quantitative easing (QE) in December 2017. In order to react rapidly and effectively to market changes like this, financial institutions will need a good view into their performance.

But, when data is coming at you from multiple systems and branches, it can be hard to gain an accurate, forward-looking view of your business. Join Deluxe for the webinar "Strategic Responses to the Rising Rates Environment" on Wednesday, July 26, at 1 p.m. CDT to learn how to better position your institution for the next rate cycle by:

  • Examining the industry drivers that are influencing market change, including rate direction and yield curve shape.
  • Performing the necessary diagnostics to evaluate how your organization is positioned.
  • Determining what tactical strategies are required to attain success in this new environment.
  • Using analytics to drive accountability and better decision-making throughout your organization.

Learn more and register.


Question of the Week

When setting up a customer for electronic delivery of disclosures, can we provide the E-Sign consent along with all the relevant disclosures?

Answer: No, the E-sign consent must happen before you provide any subsequent disclosures. For example, suppose you want to send the loan estimate electronically to an applicant. The first thing you need to do is provide all of the E-sign disclosures, obtain demonstrable electronic consent, and only after then can you send the loan estimate electronically. E-sign disclosures and consent need to be first and separate from all other disclosures. 

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.

ABA Urges Bankers: Write to Senators to Keep Momentum on Reg Reform

With momentum building in Congress for regulatory reform--but dwindling time left on the 2017 legislative calendar--ABA, as well as the SDBA, is appealing to all bankers to contact their senators and urge action on meaningful regulatory relief.

The House passed the sweeping Financial Choice Act in June, and the onus is now on the Senate to take action. Grassroots engagement by bankers is essential to keeping up momentum on Capitol Hill. ABA's Grassroots Action Center makes it easy for all bankers to send messages to their senators. Write your senators now.

ABA also encourages bankers to plan now to host a lawmaker during the August congressional recess. Hosting a senator or representative in a branch or bank office as part of Take Your Lawmaker to Work Week provides a firsthand look at how banks operate, allows legislators to meet the customers the bank serves and helps them experience the value banks bring to their communities. Host a bank visit.

ABA, State Associations Call for Extension on HMDA Implementation

Together with state bankers associations from all 50 states and Puerto Rico, the ABA yesterday called on the Consumer Financial Protection Bureau to delay the implementation of the new Home Mortgage Disclosure Act (HMDA) requirements to provide bankers and third-party service providers more time to comply with the complex rule and to ensure that consumer data is protected. The rule is set to take effect on Jan. 1, 2018. The groups asked the bureau to announce its intention for a delay within the next month.

The associations noted that the recent proposed changes to the rule--many of which were substantive--have added to its complexity, and will require third-party software providers to make additional changes to help banks comply, which would make the Jan. 1 compliance deadline unfeasible. They also pointed out that the CFPB has not conducted appropriate reviews or engaged bankers in discussing solutions.

The recent Treasury report on financial regulation raised similar concerns banks’ ability to comply with the rule and whether borrower data would be adequately protected. The associations echoed the department’s call for implementation to be postponed “until borrower privacy is adequately addressed and the industry is better positioned to implement the new requirements.” Read the letter. For more information, contact ABA's Rod Alba.

Yellen Highlights Opportunities for Reg Relief

Testifying before the House Financial Services Committee yesterday, Federal Reserve Chairman Janet Yellen highlighted opportunities for Congress and financial regulators to streamline and reduce regulatory burdens. For example, she urged Congress to exempt community banks from the Volcker Rule and suggested that the Fed is interested in a “simplified capital regime” for community institutions and in revisiting the high-volatility commercial real estate guidance issued by federal agencies.

She also praised the Treasury Department’s recent report on financial regulation, noting that it includes “many useful and productive suggestions that mirror things we have been doing with respect to tailoring regulations” and adding that while she does not agree with every recommendation, there is “a lot in it that’s very useful.”

Yellen’s testimony principally addressed monetary policy and economic conditions, and she noted that due to the historically low “neutral rate,” the federal funds rate “would not have to rise all that much further to get to a neutral policy stance.” However, she expects the neutral rate to rise over time, meaning that “gradual rate hikes are likely to be appropriate over the next few years.”

She added that the Fed expects to begin its balance sheet unwinding this year, should the economy continue on its present course. “Once we start to reduce our reinvestments, our securities holdings will gradually decline, as will the supply of reserve balances in the banking system,” she said. “The [Federal Open Market] Committee currently anticipates reducing the quantity of reserve balances to a level that is appreciably below recent levels but larger than before the financial crisis.” Read the testimony.

Ag Appropriations Bill Includes Support for Guaranteed Ownership, Operating Loans

The House Appropriations Committee yesterday passed an agricultural appropriations bill that includes funding for its guaranteed farm ownership and operating loan programs.

While cuts to ag loan programs were made across the board, lawmakers set funding for the guaranteed farm ownership loan program at $2.5 billion for fiscal year 2018, consistent with previous appropriations bills. Through an ABA-supported amendment, the bill also included an increase in funding for the guaranteed farm operating loan program from $1.4 billion to $1.6 billion.

As it has in previous years, the bill includes a provision allowing the secretary of agriculture to request an additional funding increase of up to 25 percent for agricultural lending programs, if needed. For more information, contact ABA's Ed Elfmann.

Congressional GOP Pursing Vote to Overturn Arbitration Rule

Republicans in the House and Senate are taking steps to overturn the Consumer Financial Protection Bureau’s final rule prohibiting mandatory arbitration clauses. The action would happen under the Congressional Review Act (CRA), which gives Congress the ability to vote to reject new federal regulations within 60 legislative session days of publication in the Federal Register.

While several members indicated their desire to use CRA to overturn the rule, Senate Banking Committee Chairman Mike Crapo (R-Idaho) indicated he would lead the effort. Senate Majority Leader Mitch McConnell (R-Ky.) also signaled his willingness to move forward with the process, and ABA intends to launch a grassroots campaign in support of it.

As Congress weighs broader reforms of the CFPB, Rob Nichols on Monday urged lawmakers to “overturn this rulemaking,” which ABA believes hurts rather than helps consumers. The final rule, which the CFPB finalized on Monday, prohibits customers from waiving their ability to participate in class action suits and limits drastically the use of mandatory arbitration agreements for financial products and services. Banks of all sizes often include these clauses in their credit card and deposit account agreements in order to manage the unpredictable costs of class action lawsuits and ensure prompt resolution of disputes.

SDBA to Hold 2017 IRA School in September

Learn what the new Congress could bring to IRAs at the SDBA 2017 IRA School Sept. 6-8 at the Clubhouse Hotel & Suites in Sioux Falls.

IRAs continue to be an essential part of a person’s retirement planning. IRA rules are always changing, and more changes are expected in the near future. It is important to be informed and prepared. Highlights of this year’s school include:

  • New: 60 Rollover Exception Self-Certification
  • Update on Fiduciary Responsibility Regulations
  • Beneficiary/Death Distribution/Reporting
  • Transfers Versus Direct Rollovers
  • Direct Rollover of Qualified Plan Money
  • Review of 2015 IRA Rollover Rule
  • 1099-R and 5498 Updates/Changes
  • Health Savings Accounts
  • SEPS and SIMPLEs

Instructor Mike Nelson, JM Consultants, has conducted insurance, real estate and securities training seminars and developed financial training services for financial institutions. JM Consultants offers all IRA products and services. Learn more and register to attend.