Banks to Receive Update Forms for 2022 South Dakota Bank Directory

The SDBA has again retained BLR – Business & Legal Resources, a division of Simplify Compliance LLC (“BLR”) to publish the 2022 South Dakota Bank Directory. BLR of Brentwood, Tenn., has an excellent reputation in directory publishing throughout the United States.

BLR is emailing the update forms for the 2022 South Dakota Bank Directory to all SDBA member banks. The purpose of this questionnaire is to obtain data about your bank—including correct address, telephone numbers, officers and directors. It is important that you respond promptly with the information requested by Sept. 23. If you assign this responsibility to someone else on your staff, please share the letter with them and forward the questionnaire to the appropriate person as soon as it arrives.

In January, all SDBA member banks, branches and associate members will receive a complimentary copy of the new bank directory and will have the opportunity to purchase additional bank directories for senior management, directors and key staff members. If you have any questions about the 2022 Directory, contact Alisa Bousa.

ABA, Trade Groups Support Bill to Create Bipartisan Commission Structure for CFPB

In a letter to Rep. Blaine Luetkemeyer (R-Mo.) yesterday, ABA and several financial trade groups expressed support for H.R. 4773, the Consumer Financial Protection Commission Act, a bill that would transition the governance structure of the Consumer Financial Protection Bureau from having a sole director to a five-person, bipartisan commission. The bill is similar to bipartisan legislation introduced in previous Congresses and has long been supported by the financial services industry.

“A Senate-confirmed, bipartisan commission will provide a balanced and deliberative approach to supervision, regulation and enforcement by encouraging input from all stakeholders. The current single director structure leads to uncertainty as administrations transition,” the groups said. “This uncertainty is not only borne by financial institutions providing significant lending services, but it negatively impacts America’s consumers, small businesses and our local economies. Dramatic shifts in the CFPB’s philosophy and approach with each change in presidential administration make it difficult for lenders and small businesses to plan for the future.”

The groups added that transitioning to a bipartisan commission structure has wide support, with a Morning Consult poll showing that by a margin of three to one, registered voters in eight states support a bipartisan commission over a sole director. The poll also shows that only 14% or respondents stated they prefer to keep the Bureau’s current leadership structure. Read the letter.

Minnwest Bank and Roundbank Announce Merger

Minnwest Bank, a family-owned bank based in Redwood Falls, Minn., will acquire Roundbank, based in Waseca, Minn.

Minnwest Bank has 32 branches throughout Minnesota and South Dakota and $2.27 billion in assets. The bank has South Dakota locations in Big Stone City, Florence, Sioux Falls, Summit and Wilmot. Roundbank has four branches in Minnesota and $385 million in assets.

The deal is expected to close by the end of 2021. Read more.

ABA's Benda Provides Update on Delta, Hospitalization Rates and Booster Shots

Paul Benda welcomes you to ABA’s 21st episode of the weekly Pandemic Update podcast. Once again, it’s all about the Delta variant, which now likely makes up 99% of U.S. cases.

This week, Benda discusses current and potential future trends, hospitalization rates—including children—and shares some exciting news about booster shots. He also parses some data on vaccine effectiveness from Israel and newly-released CDC studies and discusses updated OSHA recommendations. Listen to the episode.

Bankers can also subscribe to the ABA Pandemic Update through the following podcast apps: Apple Podcasts, Google Podcasts, Stitcher, or Amazon Audible

ABA, Trade Groups Raise Concerns about Cybersecurity Reporting Legislation

In a joint letter to Senate Intelligence Committee leaders on Monday, ABA and two financial trade groups said that several provisions in the Cyber Incident Notification Act of 2021 conflict with cybersecurity requirements already in place for financial institutions. ABA and the groups urged that any new requirements for reporting, oversight and enforcement be harmonized with existing regulatory requirements.

The timeline for reporting a cybersecurity incident should also be extended to 72 hours from 24 hours—as currently written in the bill—the groups said. The longer deadline would allow institutions to provide more accurate reports, given that firms have limited information on an event within the first 24-36 hours, they noted.

The groups also requested that the scope of reporting be reduced to events that cause actual harm. Reporting of “potential incidents” would create near-constant reporting to Cybersecurity and Infrastructure Security Agency by financial services firms based on the number of incidents those firms see on a daily basis, the groups wrote.

Additionally, they asked that a mechanism be developed to notify a critical infrastructure entity when an incident affects a federal system holding the entity’s sensitive data. “Should a federal agency experience a cyber-incident affecting the operations and security of systems holding sensitive private sector data, notifying the private entity would allow institutions to take proactive measures to mitigate potential attacks,” the groups said. Read the letter.

FDIC Selects Eight Teams in Tech Sprint to Reach Unbanked

The FDIC last week announced the selection of eight teams to participate in a “tech sprint” to explore new technologies for banks that will help meet the needs of unbanked individuals. The tech sprint asks participants to identify better tools to help banks get unbanked households into the banking system and keep them banked.

The agency will host a “demo day” next month where the selected teams will make short presentations to a panel of judges who will evaluate submissions based on creativity, effectiveness and market readiness.

According to the FDIC, approximately 7.1 million U.S. households remain completely unbanked. ABA has urged its member banks to actively promote financial inclusion, including through offering Bank On certified accounts. There are 92 financial institutions with more than 32,500 branches nationwide offering Bank On certified accounts, which offer features including low costs, online bill pay capabilities, no overdraft fees and certain transaction capabilities. Read more about the tech sprint. Learn more about Bank On.

Hacker Hour: Producing an Effective Business Impact Analysis

Conducting an impactful business impact analysis (BIA) allows business leaders to identify critical operations and evaluate the effect of various disruptions on the overall continuity of the business.

Join SBS as they walk through the process of conducting a business impact analysis and discuss the important components that can help your business be more prepared to react to disruptions during Hacker Hour: Producing an Effective Business Impact Analysis on Wednesday, Aug. 25. The free webinar will be held at 2 p.m. CDT.

By conducting a BIA, we should be able to: identify steps and resources needed to ensure delivery of essential services, evaluate impacts of downtime, and make decisions concerning business continuity plans and testing. Register for the webinar.

SDBA to Hold Bank Technology Conference in September

Technology and innovation have been transforming financial services since long before artificial intelligence and iPhones, and your role as an IT professional is ever-changing, especially in today’s environment.

The SDBA'S Bank Technology Conference on Sept. 8-9 in Sioux Falls is designed to provide support as you keep on top of technology trends, navigate the business of banking, and build and sustain your bank’s technology strategy—all to improve access and better serve your customers. This conference will provide you with an opportunity to learn from industry experts, network with IT colleagues, and visit with exhibitors to see and experience the latest in products and services.

The event will be held at the Hilton Garden Inn Sioux Falls South and will begin with an evening reception with exhibitors. See the full agenda and register to attend.

Question of the Week

Question: We would like to have a giveaway contest but are concerned with the requirements under the Bank Lottery Rule. What should we consider?

Answer: Under the Bank Lottery Rule, with the exception of a savings raffle, any advance of money or credit by three or more persons for the possibility to win more than the amounts contributed generally results in a prohibited lottery. Below are several practices that are commonly accepted to not run afoul of this requirement.

The contest should be open to everyone, with no account needed to participate, offer multiple ways to enter and mention that IRS reporting may apply. The Official Rules should have a free alternative written entry method to enter for non-customers is sometimes known as the "sweepstakes workaround," which is common for giveaways. By offering a written entry alternative, a case can be made that there truly is no "money or credit" being advanced to the bank since an entrant potentially can mail in their entry and still be given a fair/equal shot at winning. While admittedly not a best practice, from what C/A has seen, it generally appears to be considered by auditors and regulators as compliant with both UDAAP and the anti-lottery statutes.

In addition to the free alternative method of entry, the bank should include the following information in the official rules for that promotion, as applicable:

Geographic area and/or who is eligible to participate.
Opening date and scheduled termination date.
Complete name and address of the sponsor and promoter of the contest.
Number of prizes, the accurate description of each prize, the retail value of each prize and the odds of winning.
Whether all prizes offered will be awarded and how the prizes will be awarded.
Manner of selection of winners and when a determination of winners will be made.
Permission to use.
Where and when a list of winners can be obtained.
IRS reporting may apply.

12 U.S.C. 1829a(a), https://www.fdic.gov/regulations/laws/rules/1000-2200.html

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