SDBA eNews

September 15, 2022

Upcoming SDBA Events!  

The SDBA has several educational opportunities available this fall: 

  • IRA School: Sept. 27-Sept. 29, 2022, Sioux Falls
  • NEXT STEP: Emerging Leader Summit: Oct. 19-20, 2022, Rapid City
  • Breaking into Banking 101: Fundamentals of Commercial Banking: Oct. 26, 2022, Virtual
  • Compliance Management Systems & Enterprise Risk Management: Oct. 26-27, 2022, Lansing, MI & Virtual
  • Annual Security Seminar: Oct. 27, 2022, Sioux Falls
  • SDBA Board of Directors & Legislative Committee Meetings: December 8, 2022, Pierre

With so many upcoming events happening this fall, here is a refresher on how to register for the latest offerings from the SDBA! 

Step 1: Request a SDBA Profile - Sign Up Now (sdba.com)

Step 2: Click on our Events Calendar

Step 3: Register! 


Reminder: Sept. 19 Deadline for Banks to Object to FOIA Request for Diversity Data

On August 18, 2022, the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) issued a notice (Notice) announcing that it has received a Freedom of Information Act (FOIA)request for the disclosure of certain employee diversity data. Specifically, Will Evans, a Senior Editor and Producer with the left-leaning Center for Investigative Reporting's (CIR) "Reveal" program, seeks federal contractors' EEO-1 Reports submitted between 2016 and 2020. Federal contractors with 50 or more employees and all employers with 100 or more employees are required to submit EEO-1 Reports each year.

The request is potentially applicable to banks because the Labor Department’s Office of Federal Contract Compliance Programs asserts in an FAQ on its website that banks are federal contractors by virtue of their accepting deposit insurance. However, that conclusion is disputed by many.

While this notice likely does NOT apply to many of our members, it is important that banks “that consider themselves to be federal contractors” consider submitting an objection to the disclosure of this diversity data by OFCCP’s September 19 deadline. Please review this information which will be helpful to you should you consider your bank to be a federal contractor, and wish to file an objection.  DEADLINE for objection is September 19, 2022!


Reminder: Bank Directory Update Forms Due Sept. 23! 

The SDBA has again retained BLR – Business & Legal Resources to publish the 2023 South Dakota Bank Directory. BLR of Brentwood, Tenn., has an excellent reputation in directory publishing throughout the United States.

BLR has sent out update forms for the 2023 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.

If your bank did not receive its update form or you have any questions, contact Haley Juhnke at [email protected].


SBA South Dakota District Seeks Nominations for Small Business Week 2023

The U.S. Small Business Administration (SBA) announces the SBA South Dakota District Office is accepting nominations for the 2023 National and South Dakota Small Business Week Awards, including the annual Small Business Person of the Year award.  Nominations are accepted through December 8, 2022, 3 p.m. CST. The awardees will be honored during national and statewide award ceremonies during National Small Business Week, the first week of May 2023.

Visit the SBA’s dedicated website at www.sba.gov/nsbw to download forms, criteria, and guidelines for submitting a nomination. The South Dakota District Nomination Guidelines and district awards categories can be found on the district’s website at www.sba.gov/district/south-dakota .

The SBA awards given in celebration of Small Business Week include the following categories:

NATIONAL:

  • Small Business Person of the Year: A business/owner from each of the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and Guam will be selected for the State Winner award. The state award winners will compete for the title of National Small Business Person of the Year, SBA’s signature award.
  • Small Business Exporter of the Year
  • Phoenix Awards for Disaster Recovery:
    • Phoenix Award for Small Business Disaster Recovery
    • Phoenix Award for Small Business Disaster Recovery - Mitigation
    • Phoenix Award for Outstanding Contributions to Disaster Recovery, Public Official
    • Phoenix Award for Outstanding Contributions to Disaster Recovery, Volunteer
  • Federal Procurement Awards:
    • Small Business Prime Contractor of the Year
    • Small Business Subcontractor of the Year
    • Dwight D. Eisenhower Awards for Excellence (for large prime contractors who use small businesses as suppliers and contractors)
    • 8(a) Graduate of the Year
  • Awards to SBA Resource Partners:
    • Small Business Development Center (SBDC) Excellence and Innovation Center Award
    • Women’s Business Center of Excellence Award
    • Veterans Business Outreach Center of the Year
  • Small Business Investment Company of the Year

SOUTH DAKOTA:

  • Small Business Person of the Year (National and District – one nomination required for both)
  • Small Business Exporter (National and District – one nomination required for both)
  • Family-Owned Small Business: Nominees must serve as a majority owner & operator, or hold principal responsibility for operating a small business with at least a 15-year positive revenue history that has been passed down through one or more generations.
  • Minority-Owned Small Business: Any individual who qualifies as a minority, is at least 51% owner, and operates a small business with a three-year positive revenue history and a commitment to strengthen minority-owned businesses in the community.
  • Veteran-Owned Small Business: A business that is at least 51% veteran-owned with a positive revenue history and a commitment to strengthen veteran-owned businesses within the community.
  • Woman-Owned Small Business: A business that is at least 51% women-owned with a positive revenue history and a commitment to strengthen woman-owned businesses within the community.
  • Young Entrepreneur -Owned Small Business:  Any individual who serves as majority owner and operates or holds principal responsibility for operating a small business with a three-year positive revenue history, and who will not reach the age of 30 by June 1, 2023.
  • Small Business Champion: An organization/individual selected by the District Director who goes above and beyond as an economic advocate for small business in the State of South Dakota.

“Business owners and economic advocates work diligently throughout the year to ensure we have the goods and services we rely on,” said Jaime Wood, SBA SD District Director. “We have a long line of exceptional business awardees from previous years, and we are eager to continue acknowledging excellence in the business space.  These awards are for business owners and advocates who go the extra mile to make resounding economic and personal impact in their local communities and nationally.”

To obtain additional information on the award nomination process, please contact Michele Arends, SBA SD, at [email protected]. For current SBA SD information, please register for the district e-newsletter at www.sba.gov/updates.


BHG Bank Network Members Earn Combined $1 Billion in Interest Income

BHG Financial is the leader in unsecured business and personal loans and the creator of one of the country's largest community bank loan and product networks – the BHG Bank Network. Growing to over 1,450 members who purchase these top-performing loans, BHG Financial now reports a record milestone, with its network banks reaching a combined $1 billion in interest income since 2001.

According to a survey from the financial technology firm Jack Henry, 67% of community bank executives listed growing loans as their top strategic priority. As a reliable source of interest income, BHG continuously raises the bar on several industry standards, as noted below:  

  • Year over year through Q2, average daily sales volume on the BHG Loan Hub rose 24%
  • Bank members joining the BHG Bank Network increased 41% in the fiscal year 2021 vs. the year prior
  • Since the start of COVID in March 2020, 21% of U.S. banks have added a BHG loan to their balance sheet1
  • For the 5th consecutive year, at least one bank from every bank class year since the company's inception (2001 to 2022) bought from BHG again

"We're proud to stand with our BHG Bank Network members today and for over the past 20 years. As trusted partners during multiple credit cycles, this milestone is a testament to the relationships we've built and continue to build over time," said Al Crawford, Co-Founder, Chairman, and CEO of BHG Financial.

Allowing the banks to supplement in-house originations, BHG Bank Network members have exclusive access to purchase BHG's loans via a secure, online, state-of-the-art loan delivery platform called the BHG Loan Hub. Here, community banks can quickly grow assets and diversify their loan portfolios with top-credit-quality loans through some of the highest-quality borrowers in the nation.

Offering a seamless experience that allows members to locate, review, and purchase loans with complete credit files, banks can choose from millions of dollars' worth of loans that are available for purchase daily. With credit quality remaining consistently stable and asset volume increasing by 70% annually, there's no wonder why the BHG Bank Network continues to expand year after year.

"We are always using our members' feedback to improve their experience on the BHG Loan Hub," said Meghan Crawford, President of Bank Division at BHG Financial. "Strengthening a bank's portfolio and bottom line is our top priority; it's also why BHG Bank Network members keep coming back."

As the BHG Bank Network has evolved, so have the offerings to its members. It encompasses multiple fee income opportunities, digital lending and risk management services, point-of-sale financing, and collections—with more on the horizon. BHG introduces these new products and services at their quarterly seminars, bringing together banks for a chance to learn more about their latest innovations.

If you are interested in learning how to become a BHG Bank Network member, please visit BHGLoanHub.com.


ABA Foundation Releases New Videos to Raise Awareness on Senior Scams

The American Bankers Association Foundation today released seven new videos designed to raise awareness of the top scams targeting older Americans as a part of its Safe Banking for Seniors campaign. The campaign, led by volunteers at banks nationwide, helps older customers, their families and caregivers understand and mitigate the risks of elder fraud and financial exploitation and support those serving as financial caregivers.

The short, animated videos are available to participating banks at no cost to help them educate customers on the most prevalent scams and the red flags they should look out for to protect their financial assets and identities.

“Criminals know that older Americans hold approximately 65% of bank deposits in the U.S. and unfortunately, that concentration of wealth often makes them prime targets for financial exploitation,” said Lindsay Torrico, ABA Foundation executive director. “These videos will bolster bank efforts to safeguard their senior customers and help bank employees, caregivers and family members spot scams before they can do any damage.”

The short films cover the following topics:

  • Overview of scams
  • Family impostor scams
  • Government impostor scams
  • Tech support scams
  • Money mule scams
  • Sweetheart scams
  • Lottery scams

To view the scam awareness videos, click here.

The videos complement an existing suite of Safe Banking for Seniors resources designed to help banks inform their customers and communities about avoiding scams, preventing identity theft, understanding powers of attorney, choosing executors and financial caregiving. Curricula for Safe Banking for Seniors are available in both English and Spanish. Bankers registered for ABA Foundation programs receive turnkey resources, real-time customer support, and ready-to-use promotional and communication materials. Again, there is no cost for banks that register to participate in any of the Foundation programs.

The ABA Foundation also offers a free web connection tool, FinEdLink, that can match community groups, senior centers, faith-based ministries, schools and other organizations interested in a financial education lesson with local bank volunteers. Groups may request a free banker-led presentation at aba.com/FinEdLink.

This year, the ABA Foundation’s Safe Banking for Seniors program is generously sponsored by Bank of America, Citi, JPMorgan Chase, and Truist.

Interested banks should register at aba.com/FinEd or call 1-800-BANKERS for more information.


Washington Update from Rob Nichols: Breaking Down the Debate over Digital Assets

As I traveled the country this summer speaking at various state bankers association conventions, I’d always ask this question of my audience: How many of you have clients and customers that are asking you about cryptocurrencies and digital assets? And nearly everywhere I went, nearly every hand would go up.

The interest in cryptocurrencies and digital assets is undeniable—even in the face of recent volatility in digital asset markets. Americans want them: from the casual dabbler to the serious investor, from Gen Z’ers to boomers, everyone it seems wants a bite at the crypto apple. Many banks want to engage, too—as digital assets become more popular, and those banks are exploring ways to meet the needs of customers who want their bank to be the custodian of these assets.

I’ve written previously about the merits of banks being able to take on custodial roles for digital assets—there are many—and the need for a regulatory architecture that will support them taking on these roles if they choose. That’s an area where ABA continues advocate for banks’ ability to enter the digital asset space in a safe and sound manner. But it’s just one of the debates that are currently brewing over crypto. There are several others that bankers should be aware of:

Who should regulate? One key quandary facing policymakers right now is: what’s the right way to regulate crypto, and to which agency should that authority be delegated?

Currently, the Securities and Exchange Commission and the Commodity Futures Trading Commission are both vying for the role of crypto cop. Two separate bills have been introduced this summer—one by Sens. Cynthia Lummis (R-Wy.) and Kirsten Gillibrand (D-N.Y.) and another by Sens. Debbie Stabenow (D-Mich.) and John Boozman (R-Ark.)—that would delegate most of this authority to the CFTC. Simultaneously, there are some in the crypto community who are calling for the creation of a whole new regulatory agency dedicated to digital asset supervision, though this seems far less likely. 

Regardless of which entity ultimately ends up with regulatory authority, it is imperative that it develops clear definitions of digital asset products that are based on the risk that each category of digital asset carries. Working with the banking agencies, any prospective crypto regulator must also ensure a level playing field between bank and non-bank entities in the digital asset markets and establish clear guidelines for risk management and consumer protection.

Payments system access? Another key question is the extent to which nonbank crypto firms should have access to the payment system. The Federal Reserve took a significant step toward answering this question in mid-August when it finalized a framework for assessing which entities may be granted payments system access. This framework creates a tiered system for evaluating incoming requests, and under it, institutions that engage in novel activities would undergo a more extensive review.

Access to the payments system is a significant privilege and comes with many responsibilities. As the Fed begins evaluating new requests for access, we’ll be watching carefully to ensure that these new guidelines are appropriately accounting for the inherent risks that come with some of these new financial players.

Is there a use case for a CBDC? Finally, there’s the question of a central bank digital currency and whether there’s a use case for it in the U.S. As ABA told policymakers in several comment letters and testimonies over the last year, our view is that no such case exists—for every problem that proponents say a CBDC could solve, the fact is that there are already solutions available that don’t involve a government-created currency. Financial inclusion is just one example: Banks are already making great strides to bring more unbanked households into the financial system by offering Bank On-certified accounts.

Not only would a CBDC be duplicative of private-sector solutions that already exist, but it also has the potential to have an incredibly damaging effect on bank balance sheets and the flow of credit to households and businesses if the Federal Reserve were to become a competitor for bank deposits.

All of these ongoing debates underscore an urgent need for a fair, well-calibrated regulatory framework for digital assets—one that promotes responsible innovation while minimizing systemic risk and protecting consumers. And that’s a framework we’ll continue to fight for.


CISA News: Cybersecurity Awareness Month

CISA leads this annual, collaborative effort between government and industry with our partner the National Cybersecurity Alliance (NCA). This year, the Cybersecurity Awareness Month overarching theme for October 2022 is “See Yourself in Cyber.” Throughout October, CISA and NCA will highlight key action steps that everyone should take:

  • Enable Multi-Factor Authentication
  • Use Strong Passwords
  • Recognize and Report Phishing
  • Update Your Software


  Compliance Alliance logo

QUESTION OF THE WEEK

Q. When an institution changes their privacy notice to cease sharing nonpublic personal information with nonaffiliates, does this trigger a mailing to all customers?  

A.  No, this will not trigger a revised privacy notice. A revised notice is required when you want to disclose any nonpublic personal information about a consumer to a nonaffiliated third party in a way that was not described in the initial privacy notice. If you make a decision to change your sharing in a way that limits what you share then a revised notice is not necessary. There is a belief in the industry that every change to your privacy policies will trigger a revised notice but a notice is only prompted by a sharing of nonpublic personal information that is outside the boundaries of what was previously disclosed.  https://www.consumerfinance.gov/rules-policy/regulations/1016/8/#a  

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.

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


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Questions/Comments
Contact Haley Juhnke, SDBA, at 605.224.1653 or via email.