SDBA Seeking Candidates for Board Elections

Elections for the SDBA’s Board of Directors are scheduled for April. Two directors have terms that expire on April 30, 2019, in addition to a vacancy. Elections will take place in Groups 1, 3 and 4.

Terms for Kristina Schaefer, First Bank & Trust, Sioux Falls, (Group I) and Dave Nelson, First Fidelity Bank, Platte, (Group III) will expire on April 30. Both have served one, three-year term and are eligible to run for a second, three-year term. The Group IV seat is currently vacant as this seat was previously held by SDBA Vice Chairman Steve Bumann, BankWest, Pierre.

If you are interested in running for one of the Board seats, please contact one of the nominating committee members by Thursday, March 28, 2019. Please also submit a short bio and headshot photo for the voting ballot to Alisa Bousa. Newly-elected Board members will take office on May 1, 2019, and serve a three-year term expiring April 30, 2022.

See the list of nominating committee members.

Craig Hansen Joins SDBA Board of Directors

Photo of Craig Hansen Craig Hansen with Citibank, N.A., Sioux Falls, has been appointed to the SDBA Board of Directors as the director representing banks in the Credit Card Bank Category. He fills a seat previously held by Rick Nath.

As the interim site president of Citi in Sioux Falls, Hansen is responsible for driving and executing site governance, people strategy, site culture and community involvement. In addition to his duties as site president, he is also a managing director responsible for the global digital software architecture in the consumer bank. In addition to U.S. sites, Hansen also has teams in Mexico City and Singapore responsible for the regional design and governance of Citi’s strategic digital programs.

Hansen earned a B.S. degree in information systems and a B.A. in business administration from Dakota State University in Madison. He serves on several local community church, school and sport organizations and is active in the Sioux Empire community. Hansen and his wife, Marnie, live in Dell Rapids and have six children and three grandchildren.

As an SDBA director, Hansen wants to continue to support the South Dakota banking industry by driving a strong partnership with peer banks and maintaining a strong legislative relationship which will enable growth and promote a positive business environment.

IRA Update Seminar Rescheduled to March 26

The SDBA’s IRA Update Seminar originally scheduled for Feb. 21 was rescheduled to March 26 due to the weather. The seminar will be held 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.

Course highlights will include a legislative update, IRA contributions, IRA transfers/IRA rollovers/QRP direct rollovers, conversions, excess contributions, recharacterizations, inherited IRAs and reporting 5498.

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.

There is still space to register for this seminar if you were previously unable to attend. Learn more and register.

ABA Calls for Updates to USDA's Farm Loan Programs

In a statement for the record before Wednesday's House Agriculture Committee hearing on the rural economy, ABA called on lawmakers to ensure farmers’ ongoing access to adequate credit by updating the U.S. Department of Agriculture’s guaranteed farm loan programs.

While emphasizing the success of the 2018 Farm Bill, ABA noted some of the looming risks to the U.S. farm sector. These include a decline in commodity prices, rapid appreciation of farmland values in some areas and a scarcity of off-farm employment opportunities in rural areas.

To mitigate these risks, the association called for farm program upgrades, such as modernized technology and increased staffing at FSA, a national-level approval process for the FSA guaranteed loan program and the return of FSA’s interest assistance program. In addition, the association voiced its support for a preferred lender program for rural development loan programs. Read the statement.

Fed to Watch CECL Implementation 'Very Carefully' Chairman Says

As banks prepare to implement the Financial Accounting Standards Board’s current expected credit loss standard, Federal Reserve Board Chairman Jerome Powell said that the agency will be “watching carefully” to see how the standard will affect banks and the economy.

“We’re doing everything we can to avoid a big change that’s disruptive to lending,” Powell said during his annual testimony before the House Financial Services Committee yesterday. “We’ve tried to work with banks so that they’ll be able to implement this FASB decision in ways that are not too disruptive and too expensive and too complicated.” He added that the Fed is allowing banks to phase-in the new standard over a three-year period.

ABA has previously raised concerns that the Fed’s three-year phase-in does not go far enough to ensure CECL will function as intended, and that there could still be significant adverse effects on regulatory capital as the standard is implemented, particularly in the event of an economic downturn. The association has advocated for a quantitative impact study that would examine the effect of CECL throughout a credit cycle, including the standard’s effect on credit availability and procyclicality, among other things.

Powell stopped short of weighing in on whether conducting a quantitative impact study on the standard would be useful. He did suggest, however, that the Fed does not expect the standard to have a procyclical effect.

CFPB Analysis of SARs Finds Elder Financial Abuse Widespread, Costly

The number of Suspicious Activity Reports filed on suspected elder financial abuse quadrupled from 2013 to 2017, rising to 63,500 that year, according to new figures published by the Consumer Financial Protection Bureau. In 2017, financial institutions reported $1.7 billion worth of actual elder fraud losses and attempts to steal seniors’ money.

Of SARs during the study period, nearly 80 percent involved a loss to a senior victim or to the institution filing the SAR. When a SAR involved a loss to a senior, the average amount was $34,200; when a filer lost money, the amount averaged $16,700. Losses were greater when victims knew the suspect; $50,000 on average versus $17,000 for stranger frauds. Losses involving a victim’s checking and savings accounts saw higher median losses than those involving money transfers or credit cards.

SARs filed by depository institutions rose by 80 percent during this period. While money services businesses tended to file SARs on scams involving money transfers, the frauds uncovered by banks were more diverse. They included scams, caregiver theft, account takeover attempts and identity theft.

The CFPB found that a little over half of depository institutions reported the suspicious activity to law enforcement or adult protective services separately from filing a SAR, whereas only one percent of the SARs filed by MSBs were also reported to law enforcement. Banks can participate in the ABA Foundation’s Safe Banking for Seniors program, which provides resources for banks on preventing elder fraud and partnering with law enforcement, as well as education materials for customers and community seniors. Read the report. Learn more about Safe Banking for Seniors.

CFPB Unveils Electronic Platform for Prepaid Account Agreement Submissions

Ahead of the effective date of its prepaid rule, the Consumer Financial Protection Bureau today unveiled a new electronic submission system--Collect--that prepaid account issuers may use to submit their account agreements to the bureau. The CFPB also released several related compliance materials including a user guide, quick reference guide, FAQs and a recorded webinar.

All prepaid account agreements that are offered as of April 1, 2019, must be submitted to the CFPB by May 1, 2019; after that date, issuers must notify the bureau when a new agreement is offered, a previously submitted agreement is amended or a previously submitted agreement is no longer offered. View the resources. Access Collect. For more information, contact ABA’s Nessa Feddis.

Deadlines Approaching for Two GBS Wisconsin Schools

Deadlines are approaching for two Graduate School of Banking at the University of Wisconsin-Madison schools. The enrollment deadline for GSB's Bank Technology Management School is today, and the enrollment deadline for GSB's Human Resource Management School is March 7.

The Bank Technology Management School on March 31-April 5 is an innovative one-week school designed by, and especially for, IT professionals and information security officers in the financial industry. This state-of-the-art program will broaden your understanding of the business of banking including key drivers of bank profitability, along with an in depth and interactive study of information technology management. Learn more and apply.

The Human Resource Management School on April 7-12 is a one-week school that provides the foundation for new or veteran human resource professionals to tie together important issues in human resource management with an understanding of the business of banking. Learn more and apply.

Both schools will be held at the University of Wisconsin in Madison.

Question of the Week

Question: For HMDA purposes, would a construction-to-permanent loan be considered a refinance under the loan purpose?

Answer: It would actually be considered a home purchase loan under HMDA regardless of whether it is a combined construction to permanent loan or the permanent financing that replaces the temporary construction financing. If it is a construction-only loan to be replaced by permanent financing later, it will be excluded as temporary financing under 1003.3(c)(3).

3. Construction and permanent financing. A home purchase loan includes both a combined construction/permanent loan or line of credit, and the separate permanent financing that replaces a construction-only loan or line of credit for the same borrower at a later time. A home purchase loan does not include a construction-only loan or line of credit that is designed to be replaced by separate permanent financing extended by any financial institution to the same borrower at a later time or that is extended to a person exclusively to construct a dwelling for sale, which are excluded from Regulation C as temporary financing under § 1003.3(c)(3) Comment 3, 1003.2(j), https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/Interp-2/#2-j-Interp-3

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