4-26-18

SDBA eNews

April 26, 2018

SDBA to Hold First Women in Banking Conference

Save the date for Lead Strong: Women in Banking set for Oct. 2, 2018, at the Hilton Garden Inn South in Sioux Falls. The event is the SDBA's first one-day conference for women in banking.

The day will include sessions on fierce female leadership, personal branding, and a panel discussion featuring four female bank leaders from across the state. Attendees will also hear from Laurie Stewart, 2017-2018 ABA Board of Directors vice chair and president and CEO of Sound Community Bank in Seattle, Wa.

Watch for more details and registration materials to come at www.sdba.com.

ABA Welcomes More Than 1,200 Bankers to Washington for GR Summit

SDBA President Curt Everson and Sen. Mike Rounds ABA’s annual Government Relations Summit and several related programs began on Monday with more than 1,200 bankers in attendance. ABA Monday night kicked off its Mutual Community Bank Forum, which continued Tuesday, along with ABA's Emerging Leaders Forum. On Wednesday, ABA held its annual Women's Leadership Forum.

The formal GR Summit program opened on Tuesday morning with keynote presentations by Consumer Financial Protection Bureau Acting Director Mick Mulvaney, Sen. Mark Warner (D-Va.) and Reps. Blaine Luetkemeyer (R-Mo.) and Patrick McHenry (R-N.C.). Tuesday's agenda also included a session with senior personnel from the FDIC, OCC and Federal Reserve, as well as an advocacy update from a panel of ABA leaders.

Tuesday afternoon, Summit attendees, including South Dakota bankers, visited their representatives on the Hill to build support for the passage by the House of S. 2155, a bipartisan regulatory reform bill. As bankers prepared to head to Capitol Hill, Sen. Mark Warner (D-Va.), one of the Democratic co-sponsors of S. 2155, charged them to urge the House to pass the regulatory reform measure immediately in its original form, warning that “this bill will not pass if it comes back to the Senate.”

On Wednesday, attendees heard from Comptroller of the Currency Joseph Otting and Fox News Chief Political Anchor Bret Baier.

(Photo L-R: SDBA President Curt Everson and Sen. Mike Rounds courtesy of Sen. Mike Rounds.)

ABA Launches New Campaign to Educate Consumers, Policymakers on Banks' Role in Growth

Tuesday morning at the Government Relations Summit in Washington, D.C., ABA unveiled its re-imagined America’s Banks campaign. The refreshed campaign uses new videos featuring bank customers and employees to visualize how banks help people and places grow.

The new site, available at aba.com/AmericasBanks, also features an interactive map that allows bankers and policymakers to view the banking industry’s impact in each state and nationwide, including the jobs banks provide, customers served, loans made and bank volunteer hours contributed. The map marks the first time the public has had access to this data on a state-by-state basis.

The website also features personal stories that illuminate how banks grow jobs and the economy, how they provide security and convenience and how they help communities through volunteering and outreach.

Bankers are encouraged to share the website, facts and figures, stories and videos with their lawmakers and customers and are invited, when sharing on social media, to use the hashtag #AmericasBanks. To help get word out on Capitol Hill, ABA is sharing figures from the site in a wrap on copies of the Washington Post being delivered to congressional offices. Learn more at aba.com/AmericasBanks.

Otting Previews OCC Actions on CRA, BSA, Small-Dollar Loans

The OCC’s top policy priorities are changing regulations on the Community Reinvestment Act, the Bank Secrecy Act and small-dollar lending, Comptroller of the Currency Joseph Otting said yesterday during the final day of the ABA Government Relations Summit. On CRA issues, he said that the agency would issue a long-awaited advance notice of proposed rulemaking in the next four weeks.

Otting said the agency is looking at better ways to measure CRA performance, simpler methods of verifying compliance and a broader definition of what qualifies for CRA credit, which he said has been generally limited to residential lending to low- and moderate-income borrowers. “I’m a big believer that we should stretch that to more small business, more community development,” Otting said.

He also pointed to the massive efforts by banks of all sizes to comply with BSA reporting requirements, which capture far too many non-suspicious transactions, he said. Despite the best intentions of the industry, “we’ve evolved to where this is almost impossible to comply with.” Otting also said he believes there is an opportunity for banks to make more small-dollar loans in the $500-$5,000 segment. “If we can get people back into the regulated market, that will be better for them and the economy,” he said.

While he is paying attention to underwriting trends, cybersecurity and leveraged lending, Otting said that overall “the outlook is very positive” for banking. “We do not see material deterioration in underwriting,” especially at this point in the cycle, he said. “For the most part, the aggressive lending has stayed outside the banking industry.”

Sen. Hatch Calls for Large Credit Unions to File Form 990 with IRS

The largest credit unions should be required to file Form 990--the standard return filed by most nonprofit entities--with the Internal Revenue Service, Senate Finance Committee Chairman Orrin Hatch (R-Utah) said in a letter to the IRS’ acting commissioner yon Tuesday. Requiring 990s for large and complex credit unions--which is within the discretion of the IRS--would enhance transparency as the credit union business model has significantly evolved, Hatch wrote.

With the exception of credit unions, houses of worship and the very smallest nonprofits, all tax-exempt entities are required to file 990s annually. The form documents balance sheets, expenses and officer and board compensation. Credit unions were exempted because of their supervision by the National Credit Union Administration, Hatch noted, but he added that “during that time there is no question that federal credit unions have grown in size and complexity, which should give us pause to reflect whether that exemption is still warranted.” Read the letter.

'Reform Farm Credit' Website Refreshed as Part of ABA-Led Campaign

As part of ABA’s effort to reach influential groups involved in agricultural policy, ReformFarmCredit.org has been refreshed. Originally created three years ago to increase awareness of the risks posed by the Farm Credit System, the new website continues to build on the success of the reform campaign by better showcasing the latest research and information about the uneven playing field between the FCS and agricultural banks.

The revamped site provides taxpayers concrete examples of how the FCS’ tax-exempt status affects them as individuals and mobilizes them to take action by sharing the website and its materials further on social media. The website also houses information on the problems associated with the FCS--including issues related to mission creep, lax standards for loans and appraisal conflicts--making it a top resource for policymakers, third-party alliances and members of the media interested in the issue.

The updated site also emphasizes the 2018 Farm Bill as a major opportunity to revisit the agricultural credit conversation and ensure that American farmers have access to the credit they need. Visit the website.

Free Compliance Article Examines Beneficial Ownership Rule

The cover story in the May/June issue of ABA Bank Compliance magazine addresses key compliance questions about the Financial Crimes Enforcement Network's customer due diligence rule, which takes effect next month. The article covers key questions about documenting beneficial owners of accounts.

The cover story is available for free and the full issue is available online for subscribers. Other stories in the issue cover identifying and mitigating conduct risk, Regulation E error resolution and updates to social media policies. Read the cover story. Subscribe to ABA Bank Compliance.

Conference on Economies of Historic Preservation To Be Held in Vermillion

Preservationists, historians, architects, realtors, bankers and the public are invited to attend the Missouri Valley Historic Preservation Conference May 16-18 in Vermillion to share interests and ideas and to hear Donovan Rypkema speak on the economics of historic preservation.

Rypkema is president and chief executive of PlaceEconomics, a Washington, D.C.-based, real estate and economic development-consulting firm. He is a native of Rapid City and a graduate of the University of South Dakota and Columbia University. Rypkema pioneered historic preservation in downtown Rapid City before establishing his consulting business in Washington. He is generally regarded as the leading American authority on the economics of historic preservation and consults across the United States.

The conference will emphasize the economics of historic preservation and provide opportunities for preservationists and others to compare experiences, exchange ideas and explore establishing relationships toward the advantages and economics of historic preservation. Learn more and register to attend.

Question of the Week

Question: Does the bank need to expand our assessment area for CRA purposes when loan production offices (LPOs) are opened in new counties or MSAs?

Answer: No, the bank does not need to automatically expand its CRA assessment area, because LPOs are not deposit taking facilities. However, when LPOs are outside of the bank's current assessment area, loan production can affect the bank's inside/outside ratio. If the ratio of loans outside of the bank's assessment area exceed the loans inside the assessment area, then the bank should consider whether it should open a branch and adjust the assessment area.

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