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ABA Banking Journal: FDIC issues regulatory relief guidance for South DakotaAugust 21, 2024
The FDIC today released guidance with steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of South Dakota affected by severe storms, straight-line winds and flooding. The agency encouraged banks in affected areas to work constructively with borrowers experiencing difficulties due to severe weather, including extending repayment terms, restructuring existing loans or easing terms for new loans. The agency said banks may receive favorable Community Reinvestment Act consideration for community development loans, investments and services in support of disaster recovery. The FDIC also will consider regulatory relief from certain filing and publishing requirements. ABA Banking Journal: ABA, associations: Brokered deposits proposal moving forward without enough time, data for review
August 21, 2024
An FDIC proposal to expand the definition of “deposit broker” would significantly alter the agency’s brokered deposit regulatory framework and reverse existing interpretations of law, all without sufficient data or a robust rationale to support the changes, the American Bankers Association and 10 financial sector associations said today in a joint letter to the agency. The FDIC board in July voted 3-2 to expand the definition to capture many deposit placement arrangements that currently do not meet the criteria for enhanced scrutiny under current regulation, such as sweep deposits and those related to financial technology and cryptocurrency. The proposal would amend a 2020 rule that FDIC Chairman Martin Gruenberg and the other board members believe is too narrow in scope. In their letter, the associations said the decision to move forward with the proposal was particularly concerning given the 2020 rulemaking was preceded by years of public comment and industry outreach—none of which took place with the new proposal. “In the absence of data and sufficient rationale for revising the brokered deposits framework at this time, we believe the proposal should be withdrawn until the FDIC conducts additional analysis and makes it available to the public for comment,” the associations said. They added that if it isn’t withdrawn, then the FDIC should publish the data driving the proposal and extend the comment period by 60 days after publication to give all interested parties time to study that data and provide informed feedback. Such an extension would align the public comment period with the comment period provided when the FDIC last proposed changes to its brokered deposits regulations, they said. ABA Newsbytes: ABA, bankers associations offer recommendations for AI policy, risk management
Any new federal laws of artificial intelligence in the financial services sector should preempt state requirements and clearly exclude banks from duplicative obligations, the American Bankers Association and 21 state bankers associations said today in a joint letter to the U.S. Treasury Department. They also called for updated model risk management guidance from the banking regulators to clarify expectations in the wake of changes, “but only after an appropriate notice and comment period.” In June, the Treasury Department issued a request for information on the use of AI in financial services. In their letter, the associations said that banks have employed AI in a responsible manner for decades and are leveraging that mature risk management framework as they begin implementing generative AI technologies. They also offered recommendations for policymakers. One was to encourage international and multijurisdictional cooperation to pass laws pertaining to AI that are risk-based and industry-focused. “Lately, state legislatures have been scrambling to pass laws pertaining to the development and use of AI and GAI,” they said. “However, Congress must assert its leadership over this issue and pass AI-specific laws that clearly preempt burgeoning state requirements while recognizing banks’ unique status as the only industry examined for compliance with model risk management expectations.” Another recommendation was for model risk management guidance to be more reflective of bank operations, and to make applicability to AI usage more obvious. “Existing model risk guidance from the prudential agencies establishes standards for the use of third-party models used by banks, but banks may not have the ability to fully oversee all AI that third parties use to provide services,” the associations said. “Updated guidance should clearly delineate the responsibilities when banks use third-party AI and GAI. “Crucially, however, such updates must be developed through a notice and comment period to ensure that the proposed clarifications reflect the current state of technology, industry practice, consumer interests, etc.,” they added. The associations urged other actions, including the development of a standards-setting organization with certifications that would aid with due diligence of third-party developers of AI. In addition, the letter provided an overview of existing laws, regulations, and guidance applying to AI activity; a survey of use cases and opportunities; and a detailed examination of risks associated with AI applications. ABA Banking Journal: NIST unveils encryption standards to protect against quantum computer cyberattacksAugust 13, 2024
The National Institute of Standards and Technology today announced that it has finalized a principal set of encryption algorithms designed to withstand cyberattacks from a quantum computer. The standards are the result of an eight-year effort by NIST to strengthen computer encryption capabilities amid advances in technology. Quantum computers theoretically would be far more powerful than today’s computers, and many experts believe a quantum computer capable of breaking current encryption methods is just a decade away, according to NIST. The three standards unveiled by the agency contain the encryption algorithms’ computer code, instructions for how to implement them and their intended uses. NIST also said it will continue to evaluate two other sets of algorithms that could one day serve as backup standards. “These finalized standards include instructions for incorporating them into products and encryption systems,” said NIST mathematician Dustin Moody, who heads the post-quantum cryptography standardization project. “We encourage system administrators to start integrating them into their systems immediately, because full integration will take time.” Moody added that there is no need to wait for future standards. “Go ahead and start using these three,” he said. “We need to be prepared in case of an attack that defeats the algorithms in these three standards, and we will continue working on backup plans to keep our data safe. But for most applications, these new standards are the main event.”
Order Your 2025 Scenes of South Dakota Calendars!
These calendars are a great opportunity to thank your customers for their business and promote your bank or business. Your bank, branch or business' logo and name can be printed on each calendar to display in homes and businesses all year long. The SDBA logo is also included to emphasize the strength and security of South Dakota’s banking industry. The Scenes of South Dakota Calendar is exclusive to SDBA member banks and associate members. Place your order here for the 2025 Scenes of South Dakota Calendar! Orders placed by September 1, 2024, will receive the early-bird rate. After September 1, 2024, prices will increase. If you have any questions, email Laura Norton or call the SDBA Office at 605.224.1653. 2024 SDBA Annual Security Seminar
October 10, 2024 | Holiday Inn & Suites | 2040 Russell Street | Sioux Falls, SD
Registration is now open for the 2024 SDBA Annual Security Seminar, Thursday, October 10 at the Holiday Inn & Suites located at 2040 Russell Street in Sioux Falls, SD. This well-rounded seminar focuses on a range of issues of concern to security officers, facility personnel, and management. Using current trends and examples, a variety of topics will be covered, such as The Robbery Experience; Active Shooter Vs. Armed Robbery; Increasing Customer Service and Security; and Security Assessments. Security officers or directors, operations managers, auditors, HR directors, legal staff, loan officers, disaster recovery managers, collection staff and fraud investigators are encouraged to attend. #BanksNeverAskThat – Everything You Need to KnowAugust 27, 2024 Webinar | 3-4 PM EDT
Learn about what’s in store for 2024, including a new website, social media posts and videos to help your bank tackle the growing threat of check fraud and show customers how to safely use checks. The website and all materials will be available in English and Spanish. We’ll also be back with new #BanksNeverAskThat anti-phishing resources, including videos and social media posts, to help you protect your customers from phishing scams. Attendees will also get an overview of phishing and check scams, so you start out feeling reinvigorated to fight fraud. Banking Matters Podcast
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The SDBA has opened up orders for the 2025 Scenes of South Dakota Calendar! This calendar features photos of South Dakota submitted by South Dakota bankers, their family members and customers.
The #BanksNeverAskThat award-winning anti-phishing campaign returns this October with an exciting new companion check fraud campaign! Make your participation a success and get ready for the Oct. 1 launch by attending this 
