As negotiations continue on Capitol Hill over a bipartisan, $908 billion coronavirus relief package, draft language released by the congressional negotiators indicates that several ABA-advocated provisions are likely to be included. These key provisions include a $300 billion Paycheck Protection Program reauthorization along with several enhancements: a simplified forgiveness application; language holding PPP lenders harmless; and clarification on agent fees, the deductibility of Economic Injury Disaster Loan advances from PPP loan forgiveness and the tax-deductibility of business expenses paid for with PPP loan proceeds.

Amid the fluid negotiations, ABA continues to advocate for extensions on CARES Act provisions like the treatment of troubled debt restructuring accounting to ensure banks can continue to provide a wide range of forbearance options to borrowers affected by the pandemic. For more information, contact ABA’s James Ballentine.

The application period for the South Dakota Bankers Foundation’s new post-secondary scholarships has been extended to Dec. 31, 2020. SDBA member banks can apply for one of 40, $2,000 scholarships.

The scholarships must be awarded to South Dakota college juniors/seniors with an expressed interest in banking/financial services or second-year South Dakota technical school students with an expressed interest in banking/financial services. There is no match required by member banks, however banks may choose to supplement the $2,000 scholarship to increase its attractiveness. Recipient banks must award the $2,000 as one scholarship.

The University of South Dakota Beacom School of Business' Career Success Center is planning a Spring 2021 – Virtual Networking Event on Thursday, Jan. 21, at 3-5 p.m. CST. The event is an opportunity for employers to network, virtually, with students.

Businesses will be able to virtually chat with students individually or as a group. During businesses' time with students, they are welcome to share information about their company and any full-time, part-time or internship opportunities they may have available immediately or in the near future (e.g. spring 2021 or summer 2021). During the event, businesses may collect contact information when they visit with students to keep in touch with them moving forward.

Bankers Healthcare Group (BHG), a new SDBA associate member, is hosting a free webinar “Regulatory Risk Trends in Small Business Lending Today and Under the New Presidential Administration" on Thursday, Dec. 17, at 1 p.m. CST. The session will tackle some of the most relevant regulatory and compliance challenges banks are facing today, including fair lending, UDAAP and data collection rules that impact small business lending, among others.

Join BHG's panel of speakers including former senior examiners of the OCC, FDIC and CFPB and industry leading compliance experts for this informative session. The presentation will be followed by a live Q&A session with audience participation. Register for the webinar.

ABA and 51 state bankers associations yesterday called on lawmakers to extend the troubled debt restructuring provisions in the CARES Act that allow banks to suspend generally accepted accounting principles for COVID-19 related loan modifications.

Once a loan is classified as a TDR, the groups said, it often requires twice the regulatory capital of other loans, and is ineligible for consideration as collateral at the Federal Reserve, often requiring the bank to take remedial steps against a loan, including foreclosure. The associations wrote that "[i]t is critically important that the TDR relief in the CARES Act (Section 4013) be extended before the end of 2020 so that America’s banks can continue to fulfil their role as financial first responders in the communities they serve."

Gov. Kristi Noem announced that Lorraine Polak will be appointed executive director of the South Dakota Housing Development Authority (SDHDA), effective Jan. 8, 2021. Polak will replace Mark Lauseng, who is retiring.

“Lorraine has a great understanding of SDHDA’s programs and all the opportunities that they present,” said Gov. Noem. “She will be a dedicated leader and an invaluable partner as it relates to carrying out SDHDA’s mission for the people of South Dakota.”

The Small Business Administration last Wednesday outlined procedures for lenders in handling the loan necessity questionnaires that SBA is requesting for PPP loans totaling $2 million or more. The procedures were detailed in a user guide and introductory letter sent using SBA’s PPP forgiveness platform.

According to the documents, lenders will receive notice of requests from SBA for questionnaires via the SBA forgiveness platform at forgiveness.sba.gov. The questionnaires—SBA Form 3509 for for-profit borrowers and Form 3510 for nonprofit borrowers—are available there, and the platform now accepts online submission of the completed questionnaires. Lenders must notify the borrower of the request within five business days and should advise the borrower to complete the form within 10 business days, SBA said. Lenders must upload the completed questionnaire, manually enter borrower responses and upload supporting documentation within five business days of receiving it.

The Small Business Administration on Tuesday released names, addresses, loan amounts and names of lenders for all Paycheck Protection Program borrowers. The release came after a court order in a lawsuit brought by media organizations seeking the data.

After the data release, ABA heard that some third-party businesses were using the publicly released data to solicit business from PPP borrowers, specifically referencing the name of the lending institution—in some cases not disclosing that they are unaffiliated with the PPP lender, and others are implying a business relationship where none exists. ABA has updated its bankers-only talking points document with information to help bankers respond and provided a free sample email that bankers can adapt to communicate with their clients.

• Access the SBA data.
• Read the talking points.
• Download the sample email.

Amid ongoing stresses in the ag sector and economic dislocation from the COVID-19 pandemic, lenders reported that just under 51% of their agricultural borrowers were profitable in 2020, a decline of six percentage points from the prior year, according to the latest agricultural lenders survey conducted by ABA and Farmer Mac. About half of the lenders, 49%, said do not expect borrower profitability to improve in 2021 and respondents expressed the most concern about the grain, dairy and cattle sectors.‌

Credit quality and the deterioration of agricultural loans were ranked as the top concerns facing lenders in 2020 for institutions of all sizes and across all regions. Competition from other lenders and weak loan demand were also ranked as leading concerns. Nearly 60% of lenders said they expect delinquencies to increase for agricultural production loans over the next year. Nearly three in five lenders reported that demand for agricultural production loans was flat over the last six months.

The ABA on Tuesday urged lawmakers to consider extending several banking-related CARES Act provisions that are set to expire at year-end. These include temporary relief from troubled debt restructurings, optional temporary relief from CECL implementation, a temporary lending limit waiver and temporary regulatory capital relief for community banks.

“Banks of all sizes will continue to support their communities as the recovery continues, and we hope your committees can assist by providing additional tools,” the ABA wrote. “Although several other committees are also considering issues important to the customers and communities served by America’s banks, extension of these key, temporary changes is critical to empower banks to continue to assist those in need.” Read the letter.

The ABA on Tuesday joined a broad coalition of groups from various industries in a letter to the Small Business Administration and Treasury Department raising concerns about the loan necessity questionnaires that SBA is using to evaluate borrowers’ good-faith certification of their economic need for Paycheck Protection Program loans.

SBA rolled out the questionnaires—which included separate versions for nonprofit and for-profit entities—last month to borrowers with loans totaling $2 million or more. However, the groups noted that the forms ask for information—such as quarterly revenue and employee earnings—that is unrelated to what borrowers were asked to consider when they applied for their PPP loan.

Regulators are exploring additional ways to provide temporary relief to banks that may be approaching regulatory asset thresholds that could trigger additional compliance requirements as a result of participation in COVID-19 relief programs like the Paycheck Protection Program.

In testimony before the Senate Banking Committee on Tuesday, Acting Comptroller of the Currency Brian Brooks said that regulators are working on an interagency basis “on a set of rules that would relieve for a period of time certain asset thresholds being tripped that would trigger heightened scrutiny and heightened compliance requirements at different levels.” Brooks signaled that this relief would “cap out at $10 billion, most likely, based on current conversations.”

With some Americans experiencing difficulties paying their mortgage due to COVID-19, the ABA on Tuesday joined a broad coalition of mortgage industry stakeholders and consumer groups to launch a new national campaign to help raise awareness about consumers' forbearance options. This effort is intended to augment the successful outreach efforts already underway by mortgage servicers and housing counseling groups nationwide and is supported by the Consumer Financial Protection Bureau.

As part of the "COVID Help For Home" campaign, ABA is making creative materials available to member banks to help them reach borrowers who may have missed one or more mortgage payments due to the pandemic and who may be eligible for assistance under the CARES Act or other mortgage payment relief. The national ad campaign also targets borrowers whose forbearance plans are ending and may need to request an extension or additional assistance. Banks participating in the campaign can access a downloadable toolkit that includes customizable communications materials and templates that can be adapted for social media and other advertising platforms.

With major media outlets calling the 2020 presidential election for former Vice President Joe Biden and Sen. Kamala Harris over the weekend, ABA President and CEO Rob Nichols congratulated Biden and Harris. “We look forward to working with the new administration and the new Congress to address the nation’s challenges,” he said. “ABA and our member banks stand ready to work with the Biden administration and lawmakers from both parties to bolster the economy, increase opportunity and create a brighter future for all Americans.”

The ABA on Monday issued a 2020 election analysis prepared by its government relations and political engagement teams. The analysis covers what to expect from the Biden administration, as well as expectations for Congress, where control of the Senate will be determined by Jan. 5 runoff elections in Georgia. The ABA members-only analysis also covers results of ABA’s political engagement efforts during the campaign.

Dr. Barry Flinchbaugh, a popular presenter at the SDBA's Agricultural Credit Conference and National Schools for Ag Bankers, passed away on Monday at Stormont Vail Hospital in Topeka, Kan., at the age of 78. Flinchbaugh was a professor emeritus in Kansas State University's Department of Agricultural Economics.

Please join the SDBA in saying thank you to President Curt Everson for  his service to the banking industry. The SDBA will hold a virtual retirement reception for Everson on Tuesday, Nov. 10, at 4-5 p.m. CST. After more than 18 years leading the SDBA on behalf of South Dakota's banking industry, Everson is retiring at the end of this year.

Everson's virtual retirement reception will be held via Zoom. Registration is required to receive the meeting link. Upon clicking the "Register Now" link, you'll be redirected to the SDBA's Zoom registration page. Register now.

With the passage of Amendment A and Initiated Measure 26 legalizing medical and recreational use of marijuana in South Dakota, the SDBA remains committed to supporting its member banks during this transition.

There are several resources available. The SDBA’s webinar partner, On Course Learning, has a variety of on-demand webinars addressing the topic of marijuana. Visit www.bankwebinars.com, click on the search option and enter “marijuana”.  Similarly, the ABA provides a wealth of information at https://www.aba.com/advocacy/our-issues/cannabis.

During the 2020 South Dakota Legislature, HB 1127 was passed allowing South Dakota credentialed appraisers to do evaluations. While the bill became law on July 1, the rules defining the statute that allow South Dakota appraisers to offer evaluations do not go into effect until after the rules hearing the first part of November.

The South Dakota Appraiser Certification Program is offering a four-hour virtual seminar "Evaluations: Understanding the Brand New Product/Service that SD Appraisers Can Offer their Clients" on Monday, Nov. 16. The seminar will cover the new rules defining when and how South Dakota appraisers can provide evaluations to their clients. The seminar is designed for all real estate appraisers that work in the state. 

The ABA and other industry groups met with the U.S. Department of Agriculture and the Farm Service Agency yesterday to discuss ways to support the credit needs of new farmers and ranchers. Representing ABA at the meeting were Heather Malcolm, VP, Bank of the Rockies, Livingston, Mont.; Dinese Watson, VP, Merchants Bank of Indiana, Lynn, Ind.; and Caleb Hopkins, chief lending officer, Westside State Bank, Halbur, Iowa. The bankers participated in a panel discussion on the challenges of serving beginning farmers and ranchers and shared some of the best practices they have learned.

During the event, the groups agreed to establish a process for agricultural lenders and FSA to communicate when challenges arise in financing beginning farmers; to engage agricultural lenders and FSA staff in loan-making training sessions and farm loan conferences; and to develop working groups of lenders and FSA staff to share best practices and overcome challenges.

American Banker Magazine yesterday published its eighth annual list of the best banks to work for, and two SDBA member banks and one associate member were part of the 85 honorees. Dacotah Bank in Aberdeen was named number 28, First PREMIER Bank in Sioux Falls was named number 58, and SDBA associate member Bell Bank in Fargo was named number two. 

The SDBA and ABA salutes these and other banks for establishing a culture and amenities that help attract and retain top talent, from generous health insurance and retirement benefits to employee prize programs, jovial atmospheres and employee financial health programs. View the list.