Large Numbers to Attend SDBA's First Women in Banking Conference

More than 200 people are registered to attend the SDBA's Lead Strong: Women in Banking Conference on Oct. 2 in Sioux Falls at the Hilton Garden Inn South.

The SDBA's first one-day conference for women in banking is designed to encourage, support and inspire women to succeed in the workplace. The event will benefit all levels of staff interested in the enhancement and career growth of women in South Dakota banking.

Due to space restrictions at the venue, the SDBA will have to cap registrations at 230 attendees. While seats still remain, the SDBA encourages those still interested in attending who haven't yet registered to register as soon as possible. Learn more and register. Questions, contact the SDBA at 605.224.1653.

CFPB Responds to ABA Concerns Over Records Disclosure Proposal in Final Rule

The Consumer Financial Protection Bureau yesterday published its final rule on the disclosure of records and information. The final rule makes clarifying changes to the CFPB’s practices related to Freedom of Information Act requests, requests for information in connection with legal proceedings and the Privacy Act of 1974. It takes effect Oct. 12, 2018.

Importantly, as a result of advocacy by ABA, the bureau omitted from the final rule previously proposed changes that would have threatened the confidentiality of supervisory information banks provide to CFPB examiners by allowing the bureau to disclose confidential supervisory information to any agency it deems “relevant to the exercise of the Agency’s statutory or regulatory authority”--including state attorneys general, foreign regulators and state bar associations.

ABA noted in a comment letter that this change would have expanded the bureau’s authority to share confidential information far beyond its statutory authority and raised significant safety and soundness, litigation and reputational concerns for banks under CFPB supervision. Read the final rule. Read ABA's comment letter.

Fed Approves ABA-Supported Changes to Reg CC

As part of its ongoing effort to update Regulation CC to reflect a payments system that is largely electronic, the Federal Reserve yesterday approved changes to Reg CC’s liability provisions to address situations involving a dispute about whether portions of an electronic check have been altered or whether the item is a forgery. The changes--which ABA supported--take effect Jan. 1, 2019.

The Fed acknowledged that in today’s check collection environment, original checks may not be available for inspection when disputes between banks arise. In cases where the original paper check is not available, the amendments stipulate that for purposes of determining the burden of proof, it will be assumed that the item has been altered rather than forged. The presumption applies only in disputes between banks when one bank has transferred an electronic or substitute check to the other bank.

In a joint comment letter with five financial trade groups, ABA noted previously that the groups “believe that alteration of a legitimate check is the more common type of check fraud today in which disputes arise between banks, and therefore a presumption of alteration in those disputes where the evidence is lacking is appropriate.”

Read the final rule.
Read ABA's comment letter.
For more information, contact ABA's Nessa Feddis.

Agencies Affirm: No Enforcement Actions Based on Guidance

In an important joint statement issued Tuesday, the financial regulatory agencies clarified the role of supervisory guidance in bank supervision, noting that it “does not have the force and effect of law.” Regulators from the Federal Reserve, FDIC, OCC, Consumer Financial Protection Bureau and the National Credit Union Administration affirmed that supervisory guidance is intended to outline expectations and general views regarding appropriate practices for a given subject area, and that they would not pursue enforcement actions based on it.

The agencies highlighted additional ongoing efforts to clarify policies and practices related to supervisory guidance. Specifically, they said they would: limit the use of numerical thresholds or bright-lines when outlining expectations in supervisory guidance; not criticize institutions for “violations” of supervisory guidance; strive to reduce the issuance of multiple guidance documents; and continue working to clarify the role of supervisory guidance in communications with exam teams and supervised institutions. They also noted that seeking public comment on guidance does not signal that the guidance is intended to have the force and effect of a regulation or law.

ABA welcomed the announcement. “We appreciate this effort by regulators to ensure that both banks and examiners have a clear understanding of the appropriate role of guidance in bank supervision,” said ABA EVP Wayne Abernathy. “Bankers over the years have raised numerous concerns about the application of guidance in the examination process, and we view this as a positive step towards providing greater clarity.” Read the statement.

OCC, N.C. Regulator Permit Banks to Close for Hurricane Florence

With Hurricane Florence expected to make landfall on the southeastern Atlantic coast later this week, the OCC and the North Carolina Commissioner of Banks on Tuesday preemptively authorized banks affected by the severe weather to close. The OCC also reiterated guidance intended to help banks facilitate recovery in the wake of natural disasters.

Working in consultation with state bankers associations, ABA stands ready to assist bankers with disaster preparedness and recovery efforts. ABA resources include communications guidance, tips for consumers and links to checklists from FEMA and the Financial Services Information Sharing and Analysis Center.

FinCEN Grants Relief from CDD Rule for CDs, Auto-Renewals

The Financial Crimes Enforcement Network last Friday announced that it would grant relief from beneficial ownership requirements for certificate of deposit rollovers and loans that renew automatically; loans where the renewal, modification or extension does not require underwriting; and safe deposit box renewals. The exception applies to rollovers, renewals, modification or extensions occurring on or after May 11, 2018.

FinCEN earlier this year granted temporary exceptive relief to CD rollover and automatically renewing loans in response to concerns raised by ABA and others in the banking industry. The association has worked closely with FinCEN to advocate for making the changes permanent, noting that providing this relief would help banks--particularly community banks--better serve their customers without undermining anti-money laundering efforts. Read more. For more information, contact ABA’s Rob Rowe.

MetaBank Employee Named to CFPB's All-New Community Bank Advisory Council

The Consumer Financial Protection Bureau last Friday announced the appointment of all-new panels on its advisory boards, including the Community Bank Advisory Council (CBAC).

Jeanni Stahl, senior vice president and chief risk officer at MetaBank in Sioux Falls, was one of seven appointments to the CBAC board. Stahl has more than 25 years of financial services industry experience in roles in both business development and risk management. At MetaBank, she has responsibilities for overseeing a large network of innovative payment and lending products offered through nationwide delivery channels. She worked as a senior bank examiner at the FDIC for eight years examining banks throughout South Dakota, Minnesota and Iowa. She then served in leadership roles at two Midwest financial institutions before joining MetaBank in 2009. Stahl regularly speaks at industry payments conferences on third-party risk management and compliance.

CBAC members serve a one-year term and provide advice on how the CFPB’s policies and rulemakings affect community banks. Read more.

Learn About SBA 504 at Noontime Knowledge Sessions

Dakota BUSINESS Finance is holding a series of noontime knowledge sessions to learn more about the SBA 504 Program, GAP financing and the Small Business Development Center.

The sessions will be from 11 a.m. to 1 p.m., with lunch provided. The locations are:

September 13: MTI Campus Center, Mitchell
September 20: NFAA Easton Yankton Archery Center, Yankton
September 24: The Flame, Aberdeen
October 9: The Plains, Huron
October 11: Pierre Economic Development Corporation, Pierre

To RSVP for one of the sessions, email Teresa Jones with Dakota BUSINESS Finance.

Question of the Week

Question: It is in our loan policy not to use the credit score to base our credit decision on, but we do pull the real estate credit report for the disclosures. We don’t need to report the credit score on the HMDA LAR since we do not rely on the score to make a decision, correct?

Answer: Yes, that's correct. If the credit score wasn't relied on in making the credit decision, you're not required to report it for HMDA purposes, even if the credit report was pulled.

TRANSACTIONS FOR WHICH NO CREDIT SCORE WAS RELIED ON.

If a financial institution makes a credit decision without relying on a credit score for the applicant or borrower, the financial institution complies with § 1003.4(a)(15) by reporting that the requirement is not applicable.

Comment 5 to 1003.4(a)(15): https://www.consumerfinance.gov/eregulations/1003-Subpart-Interp/2017-18284_20180101#1003-4-a-15-Interp-5

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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Questions/Comments
Contact Alisa DeMers, SDBA, at 800.726.7322 or via email.