Schaefer Honored by American Bankers Association with Inaugural Emerging Leader Award

Kristina M. Schaefer, executive vice president, chief risk officer & chief administrative officer, general counsel, First Bank & Trust, Sioux Falls, S.D., was honored by the American Bankers Association as a recipient of its inaugural ABA Emerging Leader Award. This new award recognizes the next generation of bank leaders who are committed to the highest standards of achievement and service to both their industry and their local communities. Schaefer and 10 other winners will be recognized together during next week’s ABA Annual Convention.

“In the spring, the ABA was looking for nominations for emerging leaders who exemplified leadership, not just in the banking industry, but in their communities, civic and volunteer organizations, schools and beyond,” said SDBA president, Karl Adam. “It was our pleasure and sincere honor to nominate Kristina Schaefer for the inaugural ABA Emerging Leader Awards. Kristina’s accolades and accomplishments reach far beyond the banking industry, and her excellence has been recognized many times in recent years. This year alone, she was named 2022’s OnCon Icon Top 50 Corporate General Counsel Award Winner, EmBe’s 2022 Tribute to Women winner in the banking and finance sector, and was a selected speaker at the 2022 TEDxSiouxFalls event.

“The SDBA, the banking industry and the South Dakota community at-large is fortunate to have a natural emerging leader like Kristina,” Adam continued. “Her drive and willingness to answer the call of leadership knows no bounds and we look forward to following her lead as her professional career only begins to unfold. We hope everyone joins us in celebrating Kristina today. For all she does for everyone else, returning the applause with a standing ovation and tip of the hat is all we can do to share our gratitude.”

“I’ve been a community banker for 40 years, and I can truly say it is a great honor to watch the next generation of banking leaders emerge and blaze their own trails in the industry,” said SDBA Board Chair, David Bangasser, senior vice president chief banking officer, Dacotah Bank. “Having served on the SDBA Board of Directors with Kristina Schaefer for more than six years, I’ve witnessed first-hand her talents and passions grow. To echo Karl, Kristina’s leadership involvement reaches far beyond the banking industry. She’s a mentor, a coach and an advocate for people across South Dakota in all walks of life. Kristina’s representation and commitment to her family, friends and neighbors is above and beyond, and the ABA’s Emerging Leader Award couldn’t go to a more genuine and deserving person.”

The winners were selected by a diverse steering committee of industry professionals. The qualities and characteristics the committee evaluated as judging criteria included dedication to the profession, inventiveness, leadership skills, mentoring ability, personal integrity, tenure at the bank and broader commitment to a career in banking, sustained career progress, and academic training including advanced degrees and certificates/certifications.

“We congratulate these high performers who have already begun to have a significant impact on our industry,” said Rob Nichols, ABA president and CEO. “These ABA Emerging Leader Award recipients have demonstrated a range of banking skills, a commitment to conduct their work with integrity and a strong desire to help their customers and communities flourish. The future of our industry is bright because of leaders like these.”

“Banking is so much more than meets the eye, and it serves and impacts virtually every other industry,” Schaefer said. “No matter how you choose to serve within your bank, serving outside your bank broadens your bank’s purpose—and that’s true of emerging leaders in any industry. So, if you are an emerging leader, don’t be afraid to show up and volunteer to help. At times, you might not feel like you belong, but there is plenty of room at the table. Bankers, particularly South Dakota’s bankers, are some of the best people I know. I appreciate the opportunity to serve so many of them over the past several years during my involvement with the South Dakota Bankers Association, and I look forward to continuing telling the story of South Dakota banks. It is my privilege to serve the banking industry, and I’m humbled to be recognized by the ABA this way.”

Learn more about Kristina Schaefer and each member of ABA’s Class of 2022.

ABA Sues CFPB for Abuse of Statutory Authority

The American Bankers Association today joined the U.S. Chamber of Commerce, Longview Chamber of Commerce, Texas Bankers Association, Independent Bankers Association of Texas, Texas Association of Business and the Consumer Bankers Association in filing a lawsuit against the Consumer Financial Protection Bureau and Rohit Chopra in his official capacity as director of the CFPB. The litigation challenges the CFPB’s recent update to the Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) section of the CFPB’s exam manual because it exceeds its statutory authority and violates the Administrative Procedure Act (APA) in three ways: the Bureau is exceeding its statutory authority outlined in the Dodd-Frank Act, the updated manual is “arbitrary” and “capricious,” and it violates the APA’s procedural requirements because it constitutes a legislative rule that failed to go through notice and comment. The suit further challenges the CFPB by calling into question the Bureau's funding structure.

In their filing, ABA and its co-plaintiffs make clear that the groups and their respective members fully support the fair enforcement of the nation’s nondiscrimination laws, yet “they cannot stand by while a federal agency exceeds its statutory authority, creates regulatory uncertainty, and imposes costly burdens on the business community. Especially when the CFPB did not even give the public an opportunity to raise concerns through the APA’s notice-and-comment process. This Court’s intervention is needed to ensure that the CFPB is accountable to legal constraints, the rule of law, and the public as it pursues an aggressive agenda with far-reaching implications for the American economy, Plaintiffs, and their members.”

Today’s action follows a recent legal analysis ABA and other groups shared with the CFPB in June detailing how the Bureau’s actions exceed its legal authority. The analysis concluded that the new exam manual and related CFPB actions are "contrary to law and subject to legal challenge."

"The CFPB's decision to dramatically expand its regulatory reach without any input from the public was not authorized by statute and has significant implications for consumers, banks and the broader financial markets," said ABA President and CEO Rob Nichols. "This is a step we did not want to take, but it was a necessary step given the extraordinary actions of the CFPB."  

The lawsuit, filed in the United States District Court for the Eastern District of Texas, is available on the ABA website.

SDBA's Annual Security Seminar Room Block Closing September 30! 

The hotel room block for the SDBA's Annual Security Seminar will be released on Friday, September 30. 

This year's Annual Security Seminar will be held October 27 at the Hyatt Place Sioux Falls South. 

This seminar is relevant for security officers or directors, operations managers, auditors, HR directors, legal staff, loan officers, disaster recovery managers, collection staff and fraud investigators. 

To reserve a hotel room, contact the Hyatt Place Sioux Falls South at 605.271.2871. See the agenda and register to attend. 

#BanksNeverAskThat Campaign Set to Kickoff on October 3!

The ABA’s #BanksNeverAskThat anti-phishing campaign was a big success in 2020 and 2021. They’re bringing the campaign back this October to help even more consumers beat scammers at their own game. The ABA has added new content to their easy-to-use turnkey toolkit, including videos, social posts, digital signage, printables and more. 

Every day, thousands of people fall victim to fraudulent emails, texts and calls from scammers pretending to be their bank. The ABA wants to change that by raising awareness among banks and their customers of best practices for phishing defense. Whether you are a member or not, you can take part in this campaign. Utilize their tools and resources to run a stellar antiphishing campaign, and educate and protect your customers every step of the way.

Sign up to receive your easy-to-use toolkit before kickoff on October 3! 

Enrollment Now Open for 2023 GSB Programs

Applications are now being accepted for all 2023 GSB schools -- so make your plans now to benefit from a world-class education. Space is strictly limited and early enrollment is encouraged.

The Digital Banking School will be held online; all other schools are residential and will be held in person on the University of Wisconsin campus in Madison, Wisconsin. We can't wait to see you and members of your team at one of these programs:

Report Finds Banks Strong as Global Economy Weakens

Banks are on sound financial footing even as the world’s economy wobbles from a series of shocks, according to the 2023 Banking and Capital Markets Outlook by Deloitte released today. Still, while the annual report noted banks’ overall strength, “Russia’s invasion of Ukraine, ongoing supply chain and energy shocks, persistent inflation and tightening monetary policy will be felt unevenly across the industry.”

“Generally, banks are coming into 2023 in a position of relative strength,” the authors said. “Capital buffers are strong, and liquidity is adequate, as of the third quarter of 2022. And while there are signs of consumer and corporate balance sheets depleting, there doesn’t seem to be much cause for alarm yet. In fact, the stress test that the U.S. Federal Reserve conducted in June 2022 of large American and foreign banks domiciled in the United States found these banks to ‘have sufficient capital to absorb more than $600 billion in losses,’ which is higher than the cumulative loan losses during the 2008–2009 financial crisis.”

Retail banking should fare well in 2023, due to higher net interest income from rising rates, but investment banking performance will probably be mixed due to languishing underwriting and M&A advisory activities, according to the report. “In the United States, consumer loan growth has been relatively resilient, but mortgage business revenues are taking a hit as rates and inflation soar. At the start of 2022, mortgage originations declined by 32%, the largest year-over-year plunge in nearly a decade. In addition, subprime auto-loan defaults are expected to climb, further denting banks’ balance sheets. Most major banks are expecting only a modest rise in loan losses, although many are adding to reserves.” Falling fee income also could squeeze U.S. banks in part because of more regulatory scrutiny of fees for services such as overdraft protection, the authors said.

Bank, Credit Union Groups Unite Against Welch-Gooden Bill

CISA News: October is National Cybersecurity Month!

QUESTION OF THE WEEK

Q.  Can a lender order an appraisal prior to receiving intent to proceed? Is it a regulatory violation if a lender orders one without having received intent to proceed? When can we first charge for an appraisal? 

A.  Reg Z does not expressly prohibit the actual ordering of an appraisal prior to receiving intent to proceed. However, without intent to proceed, the Bank runs the risk of not being able to charge the customer for it. Reg Z does not permit the Bank to impose any fee in connection with the transaction before the consumer has provided the intent to proceed. Once the bank has received intent to proceed, it may assess the fee. Some Banks choose to not order any appraisal prior to receiving intent to proceed because if the intent to proceed is never provided, the Bank cannot charge for it. So, this is not necessarily a regulatory error unless you attempt to charge for it without receiving intent to proceed.

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.