SDBA's 2023 Women of Impact Nominations Open

Promote National Financial Literacy Month with Free Social Media Resources!

The American Bankers Association is calling on banks of all sizes to join us in this month-long effort to shine a light on the power of financial literacy and inspire action to build thriving, resilient and equitable communities. 

Throughout the month, get energized with weekly themes and content your bank can use to increase awareness, exchange ideas, amplify success stories and take action. 

Find it all here!

1. Use the Social Toolkit

SDBA to Recognize Bankers for Years of Service at Annual Convention

40 and 50-Year Banker Awards

The SDBA will honor and recognize those bankers with 40 or 50 years of service in banking during its Annual Business Meeting at the 2023 Annual Convention in Sioux Falls, SD. Years of service awards can also be awarded at the bank. Service awards that will be awarded at the bank can be ordered at any time. To request an award for someone who has been in banking for 40 or 50 years, please complete the form. The deadline to submit an award to be presented at the 2023 Annual Convention is May 12, 2023. 

Convention Memorial Service

Bankers who have passed away since the last Annual Convention (June 2022) will be remembered during the SDBA's Annual Business Meeting at the Annual Convention in Sioux Falls, SD. The deadline to submit a name for the memorial service is also May 12, 2023.

Questions, contact the SDBA Office at 800.726.7322 or 605.224.1653.

ABA Report: Bank Economists Expect Slowing Economic Growth to Tighten Credit Conditions

Bank economists expect credit conditions to weaken over the next six months as economic growth slows and interest rates trend higher, according to the American Bankers Association’s latest Credit Conditions Index released today.

The latest summary of ABA’s Credit Conditions Index examines a suite of indices derived from the quarterly outlook for credit markets produced by ABA’s Economic Advisory Committee (EAC). The EAC includes chief economists from North America’s largest banks. Readings above 50 indicate that, on net, the bank economists expect business and household credit conditions to improve, while readings below 50 indicate an expected deterioration.

EAC members expect banks to tighten credit standards this year in reaction to still-elevated inflation and higher interest rates leading to weaker growth in consumer spending and business investment. As a result, the Q2 2023 report foresees that the quality and availability of credit will decline over the next six months for both consumers and businesses. The survey was conducted after recent stress in the banking sector.

“ABA’s latest Credit Conditions Index recognizes that recent strong credit quality will be challenged by heightened uncertainty and broader economic headwinds this year,” said ABA Chief Economist Sayee Srinivasan. “Lenders are responding with cautious and prudent underwriting.”

In the second quarter:

• The Headline Credit Index fell in Q2 to 5.8, decreasing 6.7 points to its lowest point since the onset of the pandemic. The reading indicates broad-based expectations for weaker credit market conditions over the next six months among bank economists, and banks are likely to grow more cautious about extending credit. 
• The Consumer Credit Index fell 7.9 points to 5.8 in Q2. EAC members expect credit availability to deteriorate more than credit quality, though almost all expect both to decline. The sub-50 reading indicates that consumer credit conditions are likely to weaken over the next six months.
• The Business Credit Index fell 5.6 points to 5.8 in Q2. All EAC members expect business credit availability will deteriorate in the next six months, and most expect business credit quality to deteriorate. The sub-50 reading indicates that EAC members expect that overall credit conditions for businesses will continue to weaken over the next two quarters.

Read the full report with detailed charts and a discussion of the broader economic context.

About the Credit Conditions Index 

The ABA Credit Conditions Index is a suite of proprietary diffusion indices derived by the American Bankers Association from surveys of bank chief economists from major North American banking institutions. Since 2002, the bank economists have forecasted credit quality and availability for both businesses and consumers, indicating whether they expect conditions to improve, hold steady, or deteriorate over the ensuing six months. Readings above (below) 50 indicate that, on net, these expert business analysts expect credit market conditions to improve (deteriorate). Input from the bank economists is equally weighted in the indices. This data will remain anonymous, but historical index values are available upon request.

Answers to Frequently Asked Questions about the ABA Credit Conditions Index can be found in an Appendix attached to the outlook. This report and all previous reports can be found at https://www.aba.com/news-research/research-analysis/aba-credit-conditions-index.

North and South Dakota Bankers Roundtable: Supporting Native American Homeownership to be Held on May 4

North and South Dakota Bankers Roundtable: Supporting Native American Homeownership will be held on May 4, 2023, from 10:00 a.m. to 11:30 a.m. CT. This event, co-hosted by the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), will highlight how financial institutions in North and South Dakota can leverage federally administered loan guarantees and programs through the government sponsored enterprises (GSE's) to increase Native American homeownership. 

Experts from the U.S. Department of Housing and Urban Development (HUD), the United States Department of Agriculture (USDA) and Fannie Mae will discuss their programs and how financial institutions can become lenders or provide referrals.  

ABA Provides Resource Page with Sharable Information on Bank Closures

While the closure of any bank is unfortunate, it is a reality of our freemarket system and not a reflection of broader industry health. Bank customers can be confident that America’s banking industry remains strong and resilient, and that there is no safer place for their money than in a bank. 

This page contains resources from ABA, federal regulatory agencies and others designed to help bankers manage risk, navigate uncertain conditions and reassure their customers, clients and communities of the industry's strength even during times of stress.

CISA News: Emergency Communications Month

QUESTION OF THE WEEK

Q: Is the Right to Receive Appraisal form under Regulation B still required to be provided on a loan that is denied/withdrawn within 3 days of the application date? 

A: The appraisal notice requirements and the denial process are independent from one another, and their requirements operate separately. Sec. 1002.14(a)(2) of Regulation B requires the Right to Receive a Copy of the Appraisal Disclosure not later than the third business day after the creditor receives an application for credit that is to be secured by a first lien on a dwelling. Accordingly, if the loan is to be secured by a first lien on a dwelling, this notice is required. Further, see here for relatively recent guidance from the CFPB indicating that it would be required:  

“ARE DENIED OR WITHDRAWN APPLICATIONS FOR CREDIT COVERED UNDER THE RULE?  

Yes. There are no exceptions for withdrawn or denied applications. The requirements of the Rule apply regardless of whether an application is approved, withdrawn, denied, or incomplete. Thus, assuming an application is withdrawn or denied, and the requirements in Sections 2 and 3 below are met, the creditor is required to provide the disclosure and the appraisal or other written valuation to the applicant, if one was prepared in connection with the application. 12 CFR § 1002.14(a)(4). If no appraisal or other written valuation was developed in connection with the application, there is no valuation to provide to the applicant and the creditor is not required to develop one. Additionally, assuming the requirements in Sections 2 and 3 below are met, the creditor is also required to provide the applicant written notice of the right to receive a copy of all written appraisals developed in connection with the credit application within three business days of receipt, even when the application is denied or withdrawn. If a creditor denies, or an applicant withdraws, an application for credit subject to § 1002.14(a)(1) within three business days of receipt of the application, the creditor is still required to provide in writing a notice of the applicant’s right to receive a copy of all written appraisals prepared in connection with the application. The creditor may choose to modify the notice of right form to make clear to the applicant that the credit application has been denied.” https://files.consumerfinance.gov/f/documents/cfpb_ecoa-valuation_transaction-coverage-factsheet.pdf  

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