SDBA eNews

July 7, 2022

605 Strong Hotline

We have experienced several rough and ugly summer storms, and we likely haven’t seen the last of those. As a reminder, if you or someone you know is experiencing mental anguish due to these tough and challenging times, there are resources available: log on to or call 211. These services are free and available 24/7. 

SDBA Digital Innovations in Today’s Banking Environment Conference

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 Digital Innovations in Today’s Banking Environment Conference (formerly Technology Conference) will be held on August 31 at the Hilton Garden Inn Sioux Falls South in Sioux Falls.

This conference 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. The Digital Innovations in Today’s Banking Environment Conference will provide you with an opportunity to learn from industry experts, network with colleagues, and visit with exhibitors to see and experience the latest in products and services.

There is an opportunity for business partners to exhibit at and sponsor the conference. See the full agenda and register to attend here.

CSBS Board of Directors Names James M. Cooper President and CEO

The Conference of State Bank Supervisors Board of Directors has announced the appointment of James M. Cooper as president and CEO. Cooper had served as acting president and CEO after the sudden death of CSBS leader John W. Ryan on May 16.

Cooper’s appointment follows a nine-year tenure at CSBS, during which he directed policy and supervision as senior vice president and more recently as executive vice president. Before joining CSBS, Cooper was deputy director at the Indiana Department of Financial Institutions from 1994 to 2013. 

“As a long-time leader at CSBS and architect of important legislative and regulatory initiatives, Jim is singularly qualified to serve as CEO,” said Tom Fite, CSBS Board chair and director of the Indiana Department of Financial Institutions. “Under Jim’s leadership, CSBS and its members will continue to advance state regulation and work towards the vision of a more networked system.”

“I am honored by this appointment and excited to lead the CSBS staff during a time when financial services regulation is at the center of great change and opportunity,” said Cooper. “We are committed to delivering on the vision set by our former CEO, John Ryan, to help unify and streamline the state system through our policy, technology and training platform.” 

No Deal: States Slam on Brakes for CU Acquisitions of Community Banks

It would have been the largest acquisition of a community bank by a credit union—but word came in mid-June that the deal was off between VyStar Credit Union and Heritage Southeast Bancorporation, after a failure to receive regulatory approvals. If completed, the deal would have made Jacksonville, Florida-based VyStar the 13th largest credit union in the nation.

The deal was just one of a growing list of mergers that have been announced between tax-exempt credit unions and taxpaying banks in recent months—but states are starting to sour on the idea.

Earlier this year, the Minnesota Department of Commerce blocked the acquisition of state-chartered Lake Area Bank by Royal Credit Union, officially clarifying that state law does not permit the acquisitions of state-chartered banks by credit unions. Similar actions have taken place in Colorado, Iowa, Tennessee and Nebraska.

Meanwhile, the Mississippi state legislature succeeded in passing a law stipulating that only FDIC-insured banks can acquire or merge with Mississippi-chartered state banks. The law, which goes into effect this July, puts a halt to any deals in progress that don’t comply with the new requirement.

These are encouraging developments.

The decision to merge is, of course, a business decision that must be made at the individual level. But states are increasingly acknowledging that allowing tax-exempt credit unions to gobble up taxpaying banks—taking them off the tax rolls for good—is poor public policy that imposes costs on consumers and taxpayers, and they’re taking sensible steps to prevent it from happening in the future.

The fact that states are beginning to take action is due in no small part to banker advocacy—and it’s a good reminder of the importance of speaking up whenever we see the credit union industry pushing the boundaries of the statutory limits imposed on it by Congress.

Unfortunately, those attempts are only becoming more brazen.

Recently, the industry lobbied to create a new loophole designed to enable credit unions to greatly expand their fields of membership and business lending capacity. The House bill, which we don’t expect to advance in the Senate, was included as part of a broader package of financial inclusion measures, despite the fact that the bill contained no language to ensure that these expanded powers would be used by credit unions to serve underserved communities.

If credit unions were serious about promoting financial inclusion, they should welcome the opportunity to demonstrate their commitment to serving low- to moderate-income communities by meeting the same Community Reinvestment Act requirements banks must meet. But it’s become clear that credit unions aren’t interested in that mission—in fact, recent data has shown a general pattern of credit unions opening more branches on net in upper- and middle-income census tracts and closing more branches on net in low- to moderate-income census tracts.

It’s wrong for credit unions to try and shoehorn self-serving pieces of legislation through Congress under the guise of promoting financial inclusion—just as it’s wrong for them to exploit their tax advantaged status to subsidize acquisitions of taxpaying banks, pay for stadium naming rights or private jets, or open multi-million dollar headquarters.

It’s encouraging that states are starting to scrutinize the credit union industry more closely. Now Congress must do the same. 

CISA News: Password Files

“I have so many passwords to keep track of…I’ll just keep a list of them in a file. Then I won’t ever forget them.”  … <heavy sigh> This is one of the most egregious findings from Dakota State Universities’ Project Boundary Fence Project. There are many effective methods and tools to track passwords, recording them in an Excel or Word file is NOT one of them (even if you put a password on the file).  

Does your organization have a policy banning the recording of passwords in a non-secure manner? Use your favorite Search Engine to easily find a list of the best tools available.

8 Steps to Recruiting (and Keeping) Rockstar Employees

Make a Plan.

Everything in life needs a plan. You need to know where to start to know where you are going. There are several factors to consider like will you hire within or open to outside candidates? Will you post to job sites such as LinkedIn, Glassdoor, or Indeed? Will you use a headhunter? These questions should all be answered before you post that job opening.

Create a timeframe.

Sometimes you have to work backwards. Think about when you need that employee to start.  Then determine how long for interviews. How many rounds of interviews will there be? This will help you to decide on how long to accept applications.

You expect your candidates to have a good resume; you need to too.

Top recruits will have many options. LinkedIn reports job seekers have become choosier, viewing nearly twice as many job posts before applying in 2021 than they did in previous years. You must show why your company outranks the competition and is the place for them. Therefore, the job posting itself will need to get the right candidates to apply.

It goes without saying organizations must research the average salary for the different positions and be competitive. But not just competitive in salary. Candidates also look at benefits such as medical plans, retirement plans, and work flexibility. Your company must keep up with the competition in these areas as well.

Outline the process to the candidates.

You don’t want to find the right candidate and then lose them because of the timing. Explain the process and timeline for them. Do not leave them wondering where they stand, or they will look elsewhere.

Work with your hiring manager.

Candidates will be scanning the job openings to see if they qualify for the job listing. A list of talents needs to be specific. If you are looking for a particular set of skills, it must be relayed from the start, or you are wasting everyone’s time. There is no such thing as overcommunicating with your hiring manager on the job skills, requirements, and qualities you are looking for in a new employee.

Don’t forget about past candidates. Did you recently hire for an opening and had a hard time deciding between two people? Would they be a good fit for your new opening?

Seal the deal.

You did it. You found your rockstar. Now don’t lose them. Be up front about the position, salary, and benefits. Give them time to think it over, but not too much time. Set a deadline for acceptance.

Onboarding is still part of the process.

The first few weeks are critical for the employer/employee relationship. And the whole team must contribute. You need a welcoming atmosphere, a smooth transition, and offer lots of training. You may have an experienced employee, but they are experiencing a new culture.

Set goals for 30 days, 60, days, 6 months, etc. so the employee knows what to strive for. And your team needs to know early on if the employee is a good fit or not.

Retain that talent.

You have now created a rockstar. So now they have even more skills and experience that are attractive to other organizations. Strong relationships must be maintained. A happy employee will work harder and stay loyal.

The Job Market is Only Going to Get More Competitive.

Recruiting is one of the most expensive things an organization does. According to Buddy Punch, it costs nearly $7,000 to hire a professional employee. You cannot take the recruiting process lightly. If you need help learning how to recruit rockstar talent, you can find more information here.

ABA Agricultural Bankers Conference

Registration for the ABA’s Agricultural Bankers Conference is now open.  Join the ABA as they celebrate the 70th anniversary of the conference and recognize how far ag banking has come - and how far it can go. Click here for details and to register. Dates are November 6-9, 2022 and the location for this year’s event is Omaha, Nebraska. 

Compliance in Crypto Free Webinar Series  

Kyle Pickner, Chief Trust Officer at Plains Commerce Bank with special guest David Chachanko, Head of Compliance Technology at BitGo are opening up a free webinar series that will discuss how compliance and risk have developed in the age of pseudonymity. Join them for Compliance in Crypto on July 21 at 10 a.m. CST. Register for the event here.


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Q:  We have two borrowers who are requesting to refinance a loan secured by one of the borrower’s principal residences, but the purpose of the cash out will be to pay off a lien on a different residence that is only in one of the borrowers’ names. For HMDA purposes, should I report this as a Refinance since both liens are in one of the borrower’s name even if it’s not the same property?

A:  Yes, that is correct since the HMDA definition of a refinancing does require that at least one of the borrowers be the same but does not necessarily require that that the dwelling securing the loans be the same: "Refinancing means a closed-end mortgage loan or an open-end line of credit in which a new, dwelling-secured debt obligation satisfies and replaces an existing, dwelling-secured debt obligation by the same borrower." 

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 [email protected] and ask for our Membership Team.

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Contact Haley Juhnke, SDBA, at 605.224.1653 or via email.