SDBA eNews

April 1, 2021

Quad States Convention Registration and Hotel Block Now Open

Quad States Convention GraphicThe pandemic has forced organizations to transform and move faster than any of us thought possible to support our employees, customers and communities. In order for our progress to be sustainable, organizations must reinvent with the future in mind. Now is the time to pivot and make it happen.

The South Dakota Bankers Association invites you to celebrate all that we have accomplished this past year as we REIMAGINE, REINVENT and REVOLUTIONIZE in A NEW DIRECTION at the 2021 Quad States Convention on June 14-15 at The Monument (former Rushmore Plaza Civic Center) in Rapid City, S.D. This year’s event will include bankers and business partners from South Dakota, North Dakota, Montana and Wyoming.

The 2021 Quad States Convention is currently being planned in a hybrid manner. We are hosting a live event in Rapid City and will also livestream speakers for those who are unable to or prefer not to attend in person.

To see the full agenda, register to attend and view the hotel block details, visit the Quad States Convention website. Questions, contact the SDBA as 605.224.1653 or [email protected].

SDBA to Hold Virtual Hill Visit Next Week

The SDBA will hold a Virtual Hill Visit with Sen. Mike Rounds, Sen. John Thune and Congressman Dusty Johnson on Wednesday, April 7, at 11 a.m. CDT. The SDBA encourages bankers to join this hour-long conversation and learn what South Dakota's congressional delegation has to say about current events and other banking-related topics.

This free event will be hosted on the Senate’s Webex platform. Be sure to check your compatibility with this software. There is a cap on the number of attendees the platform can support, so be sure to register early. The link will be sent next week to those who are registered. Register for the event.

CFPB Rescinds Several Temporary Pandemic Flexibilities

The Consumer Financial Protection Bureau yesterday rescinded seven policy statements that provided temporary flexibilities for financial institutions when serving customers during the COVID-19 pandemic. The rescissions take effect today.

The rescinded policy statements include:

  • A March 26, 2020, statement affirming that the CFPB would take into account staffing and related resource challenges facing banks when conducing supervision and enforcement activities.
  • A March 26, 2020, statement postponing quarterly Home Mortgage Disclosure Act reporting requirements.
  • A March 26, 2020, statement postponing data submission requirements related to credit card and prepaid accounts required by TILA, Regulation Z and Regulation E.
  • An April 1, 2020, statement on financial institutions’ reporting obligations under the Fair Credit Reporting Act and Regulation V during the pandemic.
  • An April 27, 2020, statement affirming that the Bureau would not take supervisory or enforcement action against land developers subject to the Interstate Land Sales Full Disclosure Act and Regulation J until further notice.
  • A May 13, 2020, statement providing flexibility for creditors to resolve billing errors during the pandemic.
  • A June 3, 2020, statement providing flexibility for credit card issuers when providing electronic versions of disclosures that are required to obtain electronic consent from a consume in accordance with the E-Sign Act and Reg Z.

In addition to these statements, the Bureau also issued a revised bulletin on supervisory communications, replacing a 2018 bulletin which sought to distinguish Matters Requiring Attention and Supervisory Recommendations. The revised bulletin notes that “examiners will continue to rely on Matters Requiring Attention to convey supervisory expectations” and will no longer issue Supervisory Recommendations. It further states that “Bureau examiners may issue MRAs with or without a related supervisory finding that a supervised entity has violated a federal consumer financial law.” Read more.

President Biden Unveils Infrastructure Plan, Proposed Tax Changes 

President Biden yesterday released his $2 trillion plan for overhauling the nation’s infrastructure, including new investments in transportation systems, broadband access and alternative energy. To pay for it, Biden proposed significant changes to the tax code. Among other things, the plan calls for an increase of the corporate tax rate from 21% to 28% and a 15% minimum tax on book income that would apply to the largest corporations.

The plan also makes several changes to international tax provisions that were included in the 2017 tax reform law. Specifically, it calls for doubling the global intangible low-taxed income rate and eliminating a provision that allowed domestic corporations to deduct foreign-derived intangible income. It also supports a global minimum tax.

In addition to these proposals, the administration also called for increased enforcement around corporate tax evasion and increased audits of corporations by the Internal Revenue Service. The White House said it would put forward “additional ideas in the coming weeks” for further changes to the tax code. Read the plan. ABA has an active tax policy committee and will be engaging on revenue raising proposals that affect banks. For more information, contact ABA’s John Kinsella.

SBA Outlines Process for PPP Lenders to Clear Hold Codes, Error Messages

With many banks continuing to receive hold codes and compliance check error messages when submitting first- and second-draw Paycheck Protection Program loan applications, the Small Business Administration on Tuesday issued a second procedural notice with new instructions for lenders to clear these codes and move applications forward.

Under the newly-issued procedural notice, SBA clarified that the borrower must certify the information used to resolve the hold code or error message. Specifically, lenders may resolve certain hold codes and error messages “by obtaining a written borrower certification along with supporting documentation of the type identified for each Hold Code or Compliance Check Error Message in the First Revised Hold Code Notice.” Once obtained, “the lender may execute the updated certification within the platform,” SBA said. “The lender must retain the borrower’s written certification and supporting documentation in its file and must provide them to SBA as indicated in the Lender Certification.” Once the process is complete, the PPP platform will “automatically move the loan guaranty application to the next stage of loan processing.”

With the window for PPP applications extended by Congress through May 31, SBA said it “has obtained a validated machine learning scoring model” that allows it to process automatically first-draw PPP loans with “minimal risk of noncompliance with eligibility requirements, fraud, or abuse.” Once deployed, SBA said the number of first-draw PPP hold codes would be “significantly reduced.” SBA added that lenders will know the model is deployed when the loan subject to a hold receives an SBA loan number.

Meanwhile, SBA said it would remove error messages indicating a disqualifying criminal history or delinquent or defaulted federal student loan, based on changes announced by the Biden administration to expand PPP loan access. ABA and the state bankers associations have been advocating for SBA to address the hold codes and error messages to ensure loans are processed before PPP funding lapses. Read the notice. For more information, or to provide feedback, contact [email protected].

President Biden Signs PPP Extension Bill; Extends Program Through May 31

President Bide on Tuesday signed into law H.R. 1799, a bill extending the Small Business Administration’s Paycheck Protection Program. The PPP Extension Act allows loan applications to the program—which had been set to expire March 31—for two more months and gives the SBA 30 additional days to process loan applications made by the new May 31 deadline. View ABA's PPP resources.

Dylan Clarkson Appointed to CSBS Bankers Advisory Board

Photo of Dylan ClarksonSDBA Board of Director Dylan Clarkson, president and CEO of Pioneer Bank & Trust, Belle Fourche, has been appointed to a two-year term on the Conference of State Bank Supervisors (CSBS) Bankers Advisory Board.

Clarkson was recommended for appointment by Bret Afdahl, director of banking for the South Dakota Division of Banking. “I’m very happy to welcome Dylan to the Bankers Advisory Board,” said Afdahl. “I think he will be a great asset and will provide valuable input as state regulators consider financial policies impacting community banks.”

“CSBS values the perspectives community bankers bring to policy discussions that impact state-chartered financial institutions,” CSBS President and CEO John W. Ryan said. “For this reason, we have had a longstanding history of seeking input from Bankers Advisory Board members on pressing public policy matters."

“I appreciate that Director Afdahl and the CSBS have given me the opportunity to serve on the Bankers Advisory Board," said Clarkson. "Having a direct impact on regulatory policy affects not only community banks, but more importantly, the communities they serve."

The CSBS is the nationwide organization of banking and financial regulators from all 50 states and U.S. territories.

SDSU Extension 2021 Ag Land Value Survey Now Open

Ag lenders, appraisers, assessors, Realtors and Extension field specialists are invited to participate in SDSU Extension's 2021 South Dakota Farm Real Estate Market Survey. 

The principal purpose of the survey is to obtain market value and cash rental rate information, by type of agricultural land, in different regions of South Dakota. Farmers, landowners, investors, lenders, real estate professionals and public officials are the majority users of the data provided by the survey. 2021 marks the 31st South Dakota Farm Real Estate Market Survey.

The deadline to complete the survey is April 26. Participate in the 2021 Land Value Survey. View the 2020 completed land value results. Questions, contact Jack Davis, SDSU Extension, at 605.995.7378 or via email


Question of the Week

Question: Bank XYZ has a phase II exemption customer that is no longer eligible for the CTR exemption since they haven't had five or more transactions over the CTR threshold in 2020. What do they need to do?

Answer: Bank XYZ would need to start filing CTRs as appropriate and cease treating them as exempt. There is no need to backfile CTRs.

“Customers no longer eligible for exemption
Question: What should a bank do if, during its annual review of a listed business or Phase II customer, it discovers that the customer no longer meets all the criteria for exemption?
Answer: During the annual review of a Phase II exempt customer, a bank may conclude that a customer is no longer eligible for exemption (for example, if an exempt non-listed business customer conducted only four reportable currency transactions during the year under review). At the time the customer's ineligibility is discovered, the bank should document its determination of ineligibility and cease to treat the customer as exempt. The bank is not required to back file CTRs with respect to a designated Phase II customer that had met the eligibility requirements in a preceding year but was subsequently found to be ineligible during the bank's timely completion of its annual review.”

Guidance on Determining Eligibility for Exemption from Currency Transaction Reporting Requirements:

Not a member? Learn more about membership with Compliance Alliance by attending one of our live demos:

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 and ask for our Membership Team.

For timely compliance updates, subscribe to Bankers Alliance’s email newsletters.

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Contact Alisa Bousa, SDBA, at 605.224.1653 or via email.