SDBA eNews

February 10, 2022

SDBA Unveils Banks Make a Difference Survey Results

South Dakota Banks Make a Difference in Our CommunitiesSouth Dakota banks and their employees are cornerstones of their communities, providing philanthropy and volunteer leadership that helps transform lives. South Dakota banks make a difference in our communities.

The SDBA unveiled the results of its Banks Make a Difference Survey during its State Legislative Day yesterday in Pierre. Copies of the promotional handout were provided to all attendees, state legislators, and mailed to all banks and branches.

Each January, the SDBA surveys the state’s banks on the ways they support their local communities. The annual project is just a glimpse of how these banks found creative ways to meet the needs of their communities during 2021.

The document is a great tool that banks can use to promote all of the things they do for their communities. Banks are encouraged to use the document in their promotional efforts, make copies as needed and link the document on their websites. Learn more

SDBA Holds State Legislative Day in Pierre

Photo of State Legislative DayMore than 80 bankers from across the state gathered in Pierre yesterday for the SDBA's State Legislative Day. The annual event is an opportunity to stay up-to-date on both state and federal legislation which could affect the banking industry and to make sure our industry is heard. 

Presenter Keith Prather spoke to attendees about issues affecting the economy and if 2021 is really in the rear view mirror, and Gov. Kristi Noem spoke about issues of importance being discussed at the State Capitol and took questions from bankers. The day also included special sessions for emerging bank leaders, an SDBA Legislative Committee meeting and an association update from SDBA President Karl Adam. The day culminated with a reception with state legislators and constitutional officers.

Thank you to all the bankers who traveled to Pierre to advocate for the industry. Also, thank you to this year's event sponsors: IntraFi Network, Federal Home Loan Bank of Des Moines and BHG Bank Group. 

ABA Tells Congress Action Needed to Address Gaps in Stablecoin Regulation

In a statement for the record shared ahead of a House Financial Services subcommittee hearing on stablecoins on Tuesday, ABA agreed with a recent report from the President’s Working Group on Financial Markets that action is “urgently needed” to address gaps in regulation of the stablecoin market. The Association told the subcommittee that Congress should follow the recommendation from the report to enact legislation to ensure that stablecoin arrangements are subject to a “consistent and comprehensive federal prudential regulatory framework.”

The lack of regulation for nonbanks is particularly concerning, ABA said, adding that many nonbank stablecoins are designed to circumvent established regulatory architecture and “pose a number of unmitigated risks including harm to consumers,” the potential for stablecoin runs, and payment system risks which could spill over into the broader financial system.

ABA said it is encouraging regulatory agencies to use their existing authorities to identify and address the risks of nonbank stablecoin arrangements. The Association added that it believes that customers who choose to access digital asset markets, including stablecoins, will be best served when they can do so through fully-regulated banks where they are afforded robust consumer protection. Read more.

FDIC's Gruenberg Flags Shift in Agency's 2022 To-Do List

Following the departure of Jelena McWilliams from the FDIC, Acting Chairman Martin Gruenberg on Monday outlined his agency’s shift in priorities for the year ahead. Gruenberg identified five primary focus areas for the FDIC in 2022: “strengthening and enhancing” the Community Reinvestment Act through an interagency process; addressing the financial risks posed by climate change; reviewing the bank merger process, which according to Gruenberg hasn’t been addressed in 25 years; evaluating crypto-asset risk to determine the extent to which banking organizations can safely engage in crypto-asset-related activities; and implementing the capital framework commonly known as “Basel IV,” which was delayed due to the pandemic.

“While there are many pressing issues the FDIC will have to address this year,” he said, these priorities “will require close collaboration among the federal banking agencies.”

With respect to climate change, Gruenberg said the agency will seek “public comment on guidance designed to help banks prudently manage these risks, [establish] an FDIC interdivisional, interdisciplinary working group on climate-related financial risks, and [join] the international Network of Central Banks and Supervisors for Greening the Financial System.” Read more.

ABA Proposes Changes to FinCEN Beneficial Ownership Registry Rules

In response to the Financial Crimes Enforcement Network’s proposed rule for a beneficial ownership registry, ABA said Monday in a comment letter to FinCEN that it is difficult to determine how the reporting requirements will fit with bank responsibilities because it is only the first of three regulations to implement the registry.

ABA supports the creation of the registry and made several recommendations including that FinCEN take steps to validate information submitted to the registry. The Association also recommended that FinCEN clarify the definition of a reporting company, clarify the information a reporting company must submit, develop a plan to educate reporting companies of the requirements and address situations involving trusts as beneficial owners.

ABA also emphasized that FinCEN should adopt a uniform filing deadline of 30 days and convene a roundtable of interested parties to explore the pros and cons of the FinCEN identifier that the Corporate Transparency Act directs it to create. Read the letter.

PPP Borrowers May Request Review of Partially Forgiven Loans

The Small Business Administration announced that it will allow Paycheck Protection Program borrowers to request a loan review by SBA when the lender determines that the borrower is entitled to only partial forgiveness of the PPP loan. Under a procedural notice issued by SBA, when a lender receives a forgiveness remittance from SBA on a loan where only a portion of the PPP loan was forgiven, the lender must inform the borrower that it has 30 calendar days to seek, through the lender, an SBA loan review of the lender’s partial approval decision. SBA retains discretion to accept or deny the borrower’s request to review the loan. If SBA selects the loan for review, the loan is not deferred and the borrower must continue to make payments on the remaining balance of the loan.

SBA also advised that by Feb. 26, lenders must notify all of their borrowers of loans that previously received a partial forgiveness decision that the borrower has 30 calendar days to seek, through the lender, an SBA loan review of the lender’s partial forgiveness decision.

SBA advised that it will be providing lenders with additional guidance through the platform, including step-by-step instructions. Read SBA’s procedural notice. For more information, contact [email protected].

ABA Foundation Launches 2022 Financial Education Campaigns, Unveils Free Resources for Banks

The ABA on Tuesday launched its 2022 financial education campaigns, calling on America’s banks and their more than two million employees across the nation to participate in these important and effective industry-wide efforts to promote consumer financial readiness. 

This year, the ABA Foundation will offer four specific initiatives that encourage banker volunteers to share important financial knowledge in their local communities. All of the Foundation programs are completely free to ABA member and non-member banks: 

“The hardships we’ve faced as a nation the last two years have underscored the importance of financial knowledge and preparing for the unexpected,” said Rob Nichols, ABA president and CEO. “These innovative educational programs allow financial institutions across the nation to make a meaningful difference in their local communities, and we strongly encourage bankers to participate.”

Curricula for Teach Children to Save, Get Smart About Credit and Safe Banking for Seniors are available in both English and Spanish. Bankers registered for ABA Foundation programs will receive turnkey resources, real-time customer support, ready-to-use promotional and communication materials. Again, there is no cost for banks that register to participate in any of the Foundation programs. Interested banks should register at or call 1-800-BANKERS for more information.

ABA, FS-ISAC to Host Free Webinar on Computer Security Incident Notification Rule

The ABA and the Financial Services Information Sharing and Analysis Center (FS-ISAC) will host a free webinar on Feb. 24 at 2 p.m. CST about how banks can prepare for the upcoming final computer-security incident notification rule. The webinar is the first in a series reviewing implementation from two perspectives: a bank and a critical service provider. The series is designed to help banks understand their obligations under the rule and what to expect from their third-party partners. Register now.

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Question of the Week

Question: Do we have to disclose the loan officer’s NMLS ID on the promissory note for a HELOC?

Answer: While Regulation Z does have a specific requirement to include the NMLS ID on the promissory note, it excludes open-end credit which would include a HELOC: 

Paragraphs (c)(1) and (2) of this section apply to closed-end consumer credit transactions secured by a consumer's principal dwelling. Paragraph (c)(3) of this section applies to a consumer credit transaction secured by a dwelling. Paragraphs (d) through (i) of this section apply to closed-end consumer credit transactions secured by a dwelling. This section does not apply to a home equity line of credit subject to § 1026.40, except that paragraphs (h) and (i) of this section apply to such credit when secured by the consumer's principal dwelling and paragraph (c)(3) applies to such credit when secured by a dwelling. Paragraphs (d) through (i) of this section do not apply to a loan that is secured by a consumer's interest in a timeshare plan described in 11 U.S.C. 101(53D)." 


"(2) The loan documents that must include the names and NMLSR IDs pursuant to paragraph (g)(1) of this section are:
(i) The credit application;
(ii) The disclosures required by § 
1026.19 (e) and (f);
(iii) The note or loan contract; and
(iv) The security instrument."

Note, however, that HELOCs could still be subject to the SAFE Act, but it just requires disclosure of the NMLS ID in the following instances, which would likely not include the promissory note:

"§1007.105 Use of unique identifier.
(a) The covered financial institution shall make the unique identifier(s) of its registered mortgage loan originator(s) available to consumers in a manner and method practicable to the institution.
(b) A registered mortgage loan originator shall provide his or her unique identifier to a consumer:
(1) Upon request;
(2) Before acting as a mortgage loan originator; and
(3) Through the originator's initial written communication with a consumer, if any, whether on paper or electronically."

As always, it’s important to also check internal policy and/or investor policy requirements as these can require additional disclosures beyond those in the regulations.

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.