SDBA eNews: September 21, 2017

In This Issue

IRA Update Seminar To Be Held Oct. 12


The SDBA will hold the IRA Update Seminar on Oct. 12 at the Ramkota Hotel in Sioux Falls.

The IRA Update Seminar builds on the attendees’ knowledge of IRA basics to address some of the more complex IRA issues their financial organizations may handle. This course will also include all changes that have occurred and discuss any pending legislation.

This is a specialty session; previous IRA knowledge is assumed. The instructor uses real-world exercises to help participants apply information to job-related situations.Learn more and register.


CFPB Proposes Changes to Publicly-Reported HMDA Data


The CFPB Wednesday issued policy guidance on the loan-level Home Mortgage Disclosure Act data it will make available to the public under the revised HMDA data collection rules, which take effect in 2018.

Noting concerns over consumer identity protection--which ABA raised several times to the bureau in previous comments--the CFPB is proposing to not publicly disclose a number of data points, including the universal loan identifier, the application date, the date of action taken by the bank on a covered loan or application, the address of the property securing the loan, and the credit score or scores relied on in making the credit decision.

The bureau also proposed changes that would reduce the precision of values reported for several data fields, such as the amount of the covered loan applied for, the age of an applicant or borrower, or a borrower’s debt-to-income ratio. Read more. For more information, contact ABA's Rod Alba.


Question of the Week

Can we allow borrowers to use the maximum deductible available to reduce the cost of flood insurance?

Answer: It’s permissible, but the bank should not allow it in every case. The bank should determine “the reasonableness of the deductible on a case-by-case basis, taking into account the risk that such a deductible would pose to the borrower and lender.” Note that the bank also should not allow the borrower to use a deductible equal to the insurable value of the property in order to avoid having to purchase flood insurance.

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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.

Emerging Bankers Don't Miss Opportunity

 
Are you an emerging leader at your bank? Would you like to become more engaged with the banking industry in South Dakota? Don't miss your opportunity to connect with other bank leaders of today and tomorrow.

The SDBA will hold the first of four Emerging Leaders Networking Meetings in Sturgis next Thursday, Sept. 28. The SDBA will follow up with meetings in Aberdeen on Oct. 2, Humboldt on Oct. 4, and Pierre/Fort Pierre on Oct. 11.

Attendees will hear about the SDBA, current issues of concern to the banking industry and how they can engage in public policy debate. The SDBA also wants to hear from attendees on ideas for further engagement with emerging banking leaders in South Dakota.

Anyone who works in banking in the state is invited to attend.  Learn more and register. Watch a short video about the meetings.


ABA, ICBA Caution Against Subjecting FDIC, Fed to Appropriations Process


ABA, together with the Independent Community Bankers of America, wrote to Senate Appropriations Committee leadership Tuesday urging lawmakers to reject provisions included in the House appropriations bill for FY2018 that would bring the FDIC and the non-monetary functions of the Federal Reserve under the appropriations process. The groups noted that such a change would disrupt the current fee structure that banks have already incorporated into their business plans, potentially requiring them to divert additional resources away from serving customers.

“We are concerned that this change in the funding of bank supervision would potentially disrupt the currently stable and predictable supervisory fees that banks expect to pay,” the groups wrote. “This radical change would also carry the very real possibility of new fees and fee increases while bankers are bearing a sharp increase in regulatory compliance costs. The cumulative impact of these expenses will strain bankers’ ability to support economic growth and job creation.” Read the letter.


ABA Urges Policymakers to 'Unleash America's Potential' in New Print Ad

 
ABA continued its call to Congress and policymakers to “unleash America’s potential” with a print ad in the Washington Post Tuesday. With a crowded legislative agenda planned for this fall, ABA is amplifying this message to help keep regulatory relief for banks top of mind for lawmakers and regulators with a targeted campaign that has also included ads in the popular Axios PM email newsletter and the Politico newspaper.

The campaign emphasizes that America’s full economic potential continues to be restrained by layers of duplicative and ill-fitting regulations and urges Congress to act this year on regulatory reform. “Banks of all sizes are fueling the U.S. economy, providing more loans to small businesses than any other source,” the ad reads. "Find out how Washington can help banks do even more at aba.com/RegReform." View the ad.


ABA Urges Support for Hurricane Irma Relief Effort

 
ABA President and CEO Rob Nichols last Friday announced that the Association will contribute $100,000 for Hurricane Irma relief, as it did a few weeks ago after Hurricane Harvey. “Hurricane Irma has devastated communities in Florida and beyond in much the same way Harvey affected Texas,” said Nichols. “Knowing the need for relief is just as great, and even more dispersed, ABA has pledged to donate $100,000 to assist those harmed by Irma.”

The Association will also match all ABA employee contributions to Irma relief efforts. ABA consulted with the Florida Bankers Association in directing its donation to the Florida Disaster Fund. However, ABA is matching employee contributions to hurricane relief in any area affected by Irma, including Georgia, Puerto Rico and the U.S. Virgin Islands.

In the wake of Harvey, ABA employees contributed $21,000 for relief, which ABA will match--bringing the total contribution from ABA and its employees to more than $142,000. Learn more about and donate to the Florida Disaster Fund.


CFPB Harmonizes Regs B and C


The Consumer Financial Protection Bureau on Wednesday modified the Equal Credit Opportunity Act (Regulation B) to provide flexibility for lenders around the collection of applicants’ demographic data under the Home Mortgage Disclosure Act (Regulation C). Reg B previously prohibited creditors from collecting information on consumers’ race or ethnicity, except to the extent required to monitor compliance with ECOA or comply with HMDA. The permissible inquiries under Reg B included only aggregate racial and ethnic categories. However, under the new HMDA rules, banks must permit applicants and borrowers to self-identify using disaggregated ethnic and racial categories.

The changes permit creditors to self-identify using disaggregated categories beginning on Jan. 1, 2017, enabling institutions to use Fannie Mae and Freddie Mac’s new Uniform Residential Loan Application prior to January 2018. The rule includes other optional model forms to assure compliance with Regulation B requirements. It also allows institutions not subject to HMDA reporting requirements to choose on an “application-by-application basis” between two approaches to collecting personal demographic data: either the more limited, aggregate race and ethnicity category required by Reg B, or the disaggregated and more expansive categories required for HMDA reporting institutions under Reg C effective in 2018.

The rule does not add the 2016 URLA to the Regulation B appendix; according to the bureau, that form is subject to a separate Federal Register notice that will be issued by the CFPB. in 2018. Read more. For more information, contact ABA's Rob Rowe.


FTC Confirms Investigation into Equifax Breach


The Federal Trade Commission last week confirmed that it has opened an investigation into the Equifax data breach. “The FTC typically does not comment on ongoing investigations,” FTC spokesman Peter Kaplan told Politico. “However, in light of the intense public interest and the potential impact of this matter, I can confirm that FTC staff is investigating the Equifax data breach.”

Credit reporting bureaus like Equifax are subject to the consumer data privacy rules under the Gramm-Leach-Bliley Act, and the FTC enforces these rules for nonbank companies. The breach, which affected an estimated 143 million Americans as well as additional foreign nationals, is the subject of intense scrutiny on Capitol Hill. Equifax’s CEO has been summoned to testify before the House Energy and Commerce Committee on Oct. 3. Additional hearings are expected.

ABA resources on the Equifax breach include a customer FAQ, a message for banks to use on their website and talking points to help respond to media inquiries. In addition, ABA’s Crisis Communications Toolkit provides general data breach talking points, consumer tips, an FAQ for frontline staff, social media posts and more.