South Dakota Launches Medical Cannabis Website

The South Dakota Department of Health, South Dakota Department of Education and Gov. Kristi Noem last Thursday launched medcannabis.sd.gov, a website to answer questions and provide information about the upcoming medical cannabis program set to take effect on July 1, 2021.

“One of my jobs as governor is to make sure that the will of the people and all constitutional laws are enforced,” said Gov. Noem. “I want South Dakota to have the best, most patient-focused medical cannabis program in the country. I’ve heard from people who are hurting and are hopeful for relief. My team is 100% committed to starting this program as quickly and as responsibly as possible for South Dakota.”

Medical cannabis will be legal on July 1, 2021, in South Dakota after voters passed Initiated Measure 26 in November 2020. The medical cannabis program is on schedule, according to a press release. The Departments of Health and Education are creating and will operate the new regulatory program to ensure the safety of patients, students and the public in this new industry.

“We are working hard to streamline the process to get medical cards out to people,” continued Gov. Noem. “Other states have made mistakes that we do not want to repeat, so we have been careful in our approach.“

In conjunction with the website, Gov. Noem also launched a public service announcement (PSA) to tell the people of South Dakota where they can find more information about the medical cannabis program. View the PSA.

SD Department of Health to Hold Medical Cannabis Town Halls

The South Dakota Department of Health will hold two telephone town hall events on Monday, June 28, to receive public input on the implementation and rule-making process for medical cannabis in South Dakota.

The public will have the opportunity to ask questions, provide their feedback and listen to the latest updates on the implementation of IM-26. The town halls will be held at 5 p.m. CDT and 6:30 p.m. CDT on Monday.

Those interested in participating must register by 2 p.m. CDT that day. Those who register will receive a call at the start of the selected meeting. For more information, visit MedCannabis.sd.gov.

CFPB Issues Statement on Juneteenth Mortgage Closing Delays, Signals Further Guidance

After advocacy by the ABA, the Consumer Financial Protection Bureau issued a statement late Friday night on mortgage closing delays that might have been caused by the abrupt enactment of the new Juneteenth federal holiday.

“The CFPB recognizes that some lenders did not have sufficient time after the Federal holiday declaration to consider whether and how to adjust closing timelines. The CFPB understands that some lenders may delay closings to accommodate the reissuance of disclosures adjusted for the new Federal holiday,” said CFPB Acting Director Dave Uejio. “The CFPB notes that the TILA and TRID requirements generally protect creditors from liability for bona fide errors and permit redisclosure after closing to correct errors.”

The statement did not address litigation risks and rescission rights, two particular concerns of bankers as they seek to comply with the treatment of federal holidays in the mortgage rules’ prescriptive timelines. The ABA has also urged the Bureau to issue a public statement explaining to consumers why some mortgage transactions have been delayed or re-calculated.

Uejio appeared to signal that additional guidance may be forthcoming, noting in his statement that “any guidance ultimately issued by the CFPB would take into account the limited implementation period before the holiday and would be issued after consultation with the other FIRREA regulators and the Conference of State Bank Supervisors to ensure consistency of interpretation for all regulated entities.” ABA will continue to monitor the CFPB for any possible updates. For more information, contact ABA’s Rod Alba or Sharon Whitaker.

ABA Report: Ag Lending Remains Strong Despite Small Decrease in 2020

Agricultural lending by the nation’s farm banks dipped 1.8% to $98.6 billion in 2020 as demand for agricultural production loans declined slightly, according to ABA’s annual Farm Bank Performance Report released on Monday. Agricultural production loan demand declined 6.7% due to rising costs, supply and production bottlenecks, price volatility and an increase in federal cash payments, the report found. Government payments also enabled producers to pay down existing loan balances.

“American farm banks have remained healthy this past year and continued to play a critical role in supporting farmers and the broader U.S. economy through the turbulence of 2020,” said ABA Chief Economist Sayee Srinivasan. “While the agricultural sector will continue to face challenges as the economy reopens and recovers from the coronavirus pandemic, the strong asset quality and capital levels of America’s farm banks will help ensure that they continue to provide support to rural communities.”

Farm banks—defined by ABA as banks with ratios of domestic farm loans to total domestic loans greater than or equal to the industry average—also continued to build high-quality capital throughout 2020. Equity capital increased 9% to $52.6 billion, while Tier 1 capital increased by $3.6 billion to $48.3 billion.

The report also found that farm banks supported rural communities through the Paycheck Protection Program by holding 172,818 PPP loans worth $12.7 billion on their balance sheets at the end of 2020. Farm banks distributed these loans via more than 7,700 branches across rural America. Read the report

Fed Extends Comment Period for ABA-Opposed Durbin Proposal

The Federal Reserve announced on Tuesday that it would extend until Aug. 11 the comment deadline for a proposal to amend Regulation II, which implements the Durbin Amendment, to apply the requirement that debit card transactions be able to be processed on at least two unaffiliated payment card networks—for example, a PIN debit and a signature debit network—to card-not-present transactions.

ABA previously panned the proposal, warning in a statement with other financial trades that revisiting the “flawed from the beginning” Durbin Amendment would make it harder for banks to deliver low transaction prices to acquirers and consumers. For more information, contact ABA's Kirsten Sutton.

Supreme Court: FHFA Director May be Removed by President at Will

The Supreme Court ruled yesterday that the structure of the Federal Housing Finance Agency (FHFA) is unconstitutional, given that it has a sole director who may only be removed by the president for cause, not at will. The court’s opinion in the case of Collins v. Yellen mirrored its decision in Seila Law v. CFPB, which challenged the Consumer Financial Protection Bureau’s structure on similar grounds. The court in that case held that the Bureau may continue to operate but that its single powerful director must be able to be removed at will by the president.

Immediately after the decision, President Biden removed FHFA Director Mark Calabria, who had been appointed by former President Trump to a five-year term starting in 2019. Biden designated Sandra Thompson as FHFA acting director. Thompson, a 23-year veteran of the FDIC, has served since 2013 as deputy director of FHFA's Division of Housing Mission and Goals.

The Collins case arose when Fannie Mae and Freddie Mac shareholders challenged FHFA’s amendments to the senior preferred stock purchase agreements, which among other things included the replacement of the fixed dividend with a variable quarterly dividend. The shareholders argued that FHFA exceeded its authority both on statutory grounds as a conservator under the Recovery Act by agreeing to the new variable dividend formula, and on constitutional grounds, claiming that the agency’s structure violates the separation of powers.

While the court sided with the shareholders on the constitutional question, it held that the shareholders’ statutory claim is barred by the Housing and Economic Recovery Act, which prohibits course from taking “any action to restrain or affect the exercise of [the] powers or functions of the Agency as a conservator.” Read the court’s opinion

ABA to Host Free Webinar on Expanding Black Homeownership

The ABA will host a free webinar on Tuesday, June 29, at 2:30 p.m. CDT about banks’ role in expanding Black homeownership. Participants will learn strategies to serve this segment of the market and explore relevant lending data. Speakers include leading experts from the National Association of Real Estate Brokers, the Urban Institute, ComplianceTech, the National Fair Housing Alliance and the Department of Housing and Urban Development. Register now

ABA to Host Webinar on National Flood Insurance Program Changes

The ABA, Mortgage Bankers Association and the National Flood Association will host a webinar on Thursday, July 1, at 11:30 a.m. CDT about the National Flood Insurance Program’s Risk Rating 2.0. Attendees will hear from a senior official from NFIP and the Federal Emergency Management Agency about the change to NFIP’s policy rating methodology and how the federal insurance program is being modernized by bringing more data and technology into rate-setting, moving away from reliance upon flood zones. Register now.

Question of the Week

Question: We are in the process of changing our TISA disclosures and are going to be sending out the updated disclosures soon. We are going to make sure to send out the notices at least 30 days before the effective date of any changes, but are we required to send disclosures to all account holders? If there are multiple account holders on one account, can we just send the updated disclosures to one account holder, or do we have to send it to all account holders on that account?

Answer: Regulation DD indicates that if you have more than one account holder on an account that you are only required to send the disclosures to any account holder. There is no indication in the regulation as to which account holder you must send it to, so it would be up to the bank to pick which account holder is going to be the recipient of revised disclosures.

"(d) Multiple consumers. If an account is held by more than one consumer, disclosures may be made to any one of the consumers." 12 CFR 1030.3(d), https://www.consumerfinance.gov/rules-policy/regulations/1030/3/#d

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