SDBA eNews: August 3, 2017

In This Issue

GSBC to Hold Community Bank Investments & Asset Liability Management Workshop

The Graduate School of Banking at Colorado (GSBC) will hold its 12th annual Community Bank Investments & Asset Liability Management Workshop Sept. 6-8 in Las Vegas at Ceasars Palace

This workshop examines strategic opportunities in managing a community bank’s investment portfolio, balance sheet composition and funding activities. It examines the specific risk and return features of agency securities, mortgage-backed securities and municipals in the current economic and political environment. It emphasizes how to respond to factors affecting interest rate, liquidity, and credit risks and common issues raised in regulatory exams.

Learn more and register.

Onsite Certified Banking Security Manager Training

SBS Institute, along with the SDBA and ICBSD, will offer the Onsite Certified Banking Security Manager training Oct. 18-19 in Sioux Falls at the Sheraton Sioux Falls & Convention Center. The onsite certification provides an opportunity to work closely with a security expert and network with peers.

Attendees will learn about U.S. information security laws and regulations, information security program components, security awareness programs, IT audit, social engineering, preparing for IT examinations, and running effective IT and audit committees.

Learn more and register.


Question of the Week

Is it okay for our mortgage lenders to take welcome gifts, like a gift basket, to realtors to introduce themselves?

Answer: The basket itself would definitely be a thing of value so if it's being taken with the basic purpose of getting referrals or only to realtors who normally refer to the bank, that's definitely a section 8 violation. In general, I wouldn't consider it a good practice since it would be hard to document a purpose that wasn't tied to referrals.

(b) No referral fees. No person shall give and no person shall accept any fee, kickback or other thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a settlement service involving a federally related mortgage loan shall be referred to any person. Any referral of a settlement service is not a compensable service, except as set forth in §1024.14(g)(1). A company may not pay any other company or the employees of any other company for the referral of settlement service business.

(d) Thing of value. This term is broadly defined in section 3(2) of RESPA (12 U.S.C. 2602(2)). It includes, without limitation, monies, things, discounts, salaries, commissions, fees, duplicate payments of a charge, stock, dividends, distributions of partnership profits, franchise royalties, credits representing monies that may be paid at a future date, the opportunity to participate in a money-making program, retained or increased earnings, increased equity in a parent or subsidiary entity, special bank deposits or accounts, special or unusual banking terms, services of all types at special or free rates, sales or rentals at special prices or rates, lease or rental payments based in whole or in part on the amount of business referred, trips and payment of another person's expenses, or reduction in credit against an existing obligation. The term “payment” is used throughout §§1024.14 and 1024.15 as synonymous with the giving or receiving of any “thing of value” and does not require transfer of money.

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.

Upcoming Events

View all SDBA events

Advertising Opportunity

Learn more about sponsoring the SDBA eNews.


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

SD GOED Rolls Out New Bulldoze, Build, Beautify CDBG Program

The South Dakota Governor's Office of Economic Development (GOED) has set aside $1 million for a new Bulldoze, Build, and Beautify (BBB) activity under the Community Development Block Grant (CDBG) program.

“We’re excited to launch this program after a lot of hard work and planning,” said Commissioner Scott Stern, GOED. “For communities to determine eligibility, and to address blighted properties in and understand the application process and timeline, we invite you to please review the eligibility requirements carefully. Interested applicants can also talk to regional planning districts for support and answer to questions as you prepare your materials.”

Interested cities or counties should submit an “Intent to Apply” package to GOED through their regional planning district, including the basic information described in the Intent to Apply Questionnaire and any supporting documentation by Friday, Aug. 18. Any applicants who miss that deadline may apply again beginning on Monday, Aug. 28. Learn more.

ABA Seeks to Inform Regulator-Led Exam Modernization Effort

In a March 2017 report on regulatory burden reduction, the federal banking agencies committed to review parts of their safety and soundness exam process. ABA is working to ensure that this regulator-led review is informed by banker perspectives early in the process. To that end, ABA recently hosted two conference calls with bankers to discuss ways to improve the exam process, streamline exam reports, and make the Uniform Bank Performance Report more accessible and informative.

ABA invited regulators to listen in on both calls to hear these banker perspectives directly. The association will continue working to facilitate an open dialogue between banks and regulators as the exam modernization effort moves forward, as it did for a similar effort to modernize the Call Report.

Bankers are invited to submit their specific ideas on how to improve the safety and soundness exam process, exam report or UBPR. Read the report. To provide feedback, contact ABA's Rick Freer, Shaun Kern or Barry Mills.

ABA Recommends Changes to BSA/AML Regulations

In a comment letter to the Treasury department on Monday, ABA provided extensive feedback on several Bank Secrecy Act and anti-money laundering regulations that could be eliminated, modified or streamlined to reduce the compliance burden on banks in response to an executive order issued by President Trump earlier this year.

Emphasizing that the banking industry is committed to combatting terrorist financing and financial crime, ABA recommended a series of changes to improve and modernize the current regulatory regime, including creating an independent “BSA gatekeeper” to oversee and coordinate the BSA regime, taking a priority-focused approach to compliance, increasing the quality of feedback and transparency, streamlining reporting requirements, refraining from criminal sanctions that impose administrative compliance standards and redefining procedures for taking criminal actions against banks.

With respect to the BSA regime, ABA called for a return to basics, with banks identifying and reporting suspicious transactions to law enforcement for investigation rather than conducting investigations themselves. The Association also highlighted the importance of an ombudsman to resolve disputes and serve as a single reference point, and of uniform training for bankers and examiners.

ABA further urged Treasury to make it easier for banks to rely on trusted third parties and other financial institutions for customer information and to refocus the risk-based element in customer relationships to grant additional flexibility to banks. ABA also recommended that Treasury conduct a review of currency transaction reports to determine their utility and encourage better feedback from law enforcement to help banks better focus their resources. Read the comment letter.

White House, Lawmakers Issue Joint Statement on Tax Reform

The six lead negotiators on tax reform last week issued a joint statement on how they plan to move forward with changing the U.S. tax code. The Republican leaders--Senate Majority Leader Mitch McConnell, House Speaker Paul Ryan, Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch and House Ways and Means Committee Chairman Kevin Brady--have been meeting together for the past three months with a goal of developing a shared vision for tax reform.

The high-level statement reiterated many of the principles outlined in the House Republican blueprint for tax reform released last summer and the administration’s tax reform principles released in April. Policymakers said that their plans would include a simplified tax code for families and businesses, promote increased competitiveness with foreign businesses and greater capital spending, and address foreign taxation regimes. While the statement did not provide specifics on the proposed tax rates or the treatment of net business interest expense, it did note that the controversial border adjustment tax idea would not be pursued.

ABA President and CEO Rob Nichols welcomed the news. “ABA strongly supports tax reform that boosts economic growth and creates jobs by lowering tax rates for everyone and broadening the tax base in a manner that avoids picking winners and losers. We look forward to working with policymakers on a plan that abides by these and other core principles,” Nichols said. “Comprehensive tax reform has the power to contribute to the financial success of America’s families, businesses and communities, and the nation’s banks stand ready to support its enactment.”

Lawmakers in both houses of Congress said they plan to work together on legislation this fall with the support of the administration. ABA, which recently issued principles for tax reform generated through a banker-led process, will continue to work with lawmakers and administration officials to provide input as the process moves forward.

Hotel Room Block To Be Released for SDBA's IRA School

Friday is the final day to make a hotel room reservation for the SDBA's 2017 IRA School. This year's school will be held 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.

Learn what the new Congress could bring to IRAs at this year's school. The instructor is Mike Nelson with JM Consultants. Learn more and register to attend.

Memorial Fund Established for Banker's Family

Photo of Bruce NordleeBruce Alan Nordlee, 37, a banker with Pioneer Bank & Trust in Rapid City, died suddenly on Monday in Madison, Wis. He was attending his second year at the Graduate School of Banking in Wisconsin-Madison.

Funeral services will be held at 10 a.m. MDT on Tuesday, Aug. 8, 2017, at Kirk Funeral Home in Rapid City.

Nordlee grew up in Rapid City and graduated from Douglas High School in 1998. He then attended National American University and graduated with a bachelor of science degree in business administration, with emphasis in financial management. Before joining Pioneer Bank & Trust, he worked for First Interstate Bank.

Nordlee's family includes his long-time girlfriend Pamela Redleaf and son Christian Redleaf. In lieu of flowers, the family requests that donations be made for the college education of Christian. A fund has been set up at Black Hills Federal Credit Union, where Pamela works. See the full obituary.