Learn Succession Planning How-To's on Jan. 7

Prairie Family Business Association will hold a Succession Planning How-To's Webinar on Friday, Jan. 7, at 10 a.m. CST. Learn from three families in various stages of their succession plans: David and Jan Johnson of Reliabank, Jarod Stec of Stec's Advertising, and Darcy Christenson of Quality and Triview Communications. You'll come away with strategies that work as well as pitfalls for you to avoid. Learn more and register.

Nichols Recaps ABA's 2021 Accomplishments

In a year-end message to ABA member banks last week, ABA President and CEO Rob Nichols provided a recap of several major accomplishments made on behalf of the banking industry in 2021, including those related to the COVID-19 response, economy recovery, banking policy and financial inclusion.

Nichols highlighted bank efforts to support their customers throughout the pandemic and recovery, particularly through the Small Business Administration’s Paycheck Protection Program. He also highlighted efforts by ABA and bankers to defeat a controversial proposal to create a new bank account-based IRS reporting regime; educate senators from both parties on the policy views of former OCC nominee Saule Omarova; advocate for the withdrawal of several controversial rules, including the 2020 Community Reinvestment Act rule; and draw attention to the unlevel playing field between banks and credit unions, through the relaunch of the Reform Credit Unions campaign.

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Happy Holidays from the SDBA

Wishing You a Happy Holiday Season from the SDBAWhatever is beautiful. Whatever is meaningful. Whatever brings you happiness. May it be yours this holiday season and throughout the coming year.

During the holiday season, the SDBA likes to thank our membership by making donations to worthy causes. This year, we made donations to Make-A-Wish South Dakota and Capital Area United Way.

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Court Reinstates Vaccine Mandate; OSHA Sets New Compliance Dates

Late last Friday, a three-judge panel of the Sixth Circuit Court of Appeals, in a two-to-one decision, lifted a judicial stay of the COVID-19 vaccine mandate issued by the Occupational Safety and Health Administration. OSHA immediately announced set new dates by which employers must come into compliance with the vaccine mandate.

The agency said it will not issue citations for non-compliance with any aspect of the vaccine mandate before Jan. 10 and that it will not issue any citations for non-compliance with the mandate’s testing requirements before Feb. 9 “so long as the employer is exercising reasonable, good faith efforts to come into compliance with the standard.” The mandate requires employers with 100 or more employees to in turn require their employees be vaccinated or tested weekly for COVID-19. Unvaccinated employees also would be required to wear a mask when indoors except when alone in a private office.

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Scholarships Available for Graduate Banking and HR Management Schools

Scholarships are available to South Dakota bankers planning to attend their first year of  the Graduate School of Banking in Wisconsin and the Graduate School of Banking in Colorado. 

The Prochnow Educational Foundation in conjunction with the SDBA offers a scholarship at the Graduate School of Banking in Wisconsin. The scholarships pay $1,500 (approximately one-third) of the annual tuition for each of three GSB resident sessions, for a total value of $4,500. Applicants must be entering their freshman year at GSB. The 2022 school will be held July 31 to Aug. 12 at the University of Wisconsin in Madison, and the deadline to apply for the scholarship is May 2. Learn more

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Make Sure Our Industry Is Heard at 2022 SDBA State Legislative Day

Photo of State CapitolThe SDBA State Legislative Day on Feb. 9, 2022, at the Ramkota Hotel & Conference Center in Pierre is your opportunity to stay up-to-date on both state and federal legislation which could affect the banking industry, visit with state legislators and constitutional officers, and make sure our industry is heard.

The day will include an SDBA Legislative Committee meeting, lunch, SDBA update, featured speaker Dr. Chris Kuehl, Gov. Kristi Noem (invited), the chance to visit with state legislators at the State Capitol, and an evening reception with state legislators and constitutional officers. The day will also include special sessions specifically designed for emerging bank leaders.

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Registration Open for 2022 Dakota School of Lending Principles

Photo of lending. The Dakota School of Lending Principles, hosted by the South Dakota Bankers Association and co-sponsored by the North Dakota Bankers Association on March 29 - April 1, 2022, in Aberdeen is a learning event with one foot grounded in the classroom and one foot in the bank. This school allows students to learn the theory and process of basic lending and then put this knowledge to work in actual nuts and bolts sessions.

In the four modules on loan types (consumer lending, real estate lending, analyzing small business loans and agricultural lending), learn the lending process by studying elements applicable to each loan type: terminology, the application process, interviewing, investigation, credit analysis, loan structure, decision communication and selling. Case studies and exercises provide hands-on learning experience.

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OCC's Hsu Pushes Envelope with Call for 'No-Cost Overdrafts'

The OCC has identified principles for banks to implement what it calls “responsible overdraft programs that benefit financially vulnerable consumers,” while continuing to encourage banks to offer other options for short-term, small-dollar credit, Acting Comptroller of the Currency Michael Hsu said in a speech yesterday. With policymakers increasingly scrutinizing bank overdraft programs—and with several banks recently announcing changes to their overdraft offerings—Hsu noted that his agency has conducted its own review of bank overdraft programs and identified “several features . . . that could be modified or recalibrated to support financial health.”

Among these features are: requiring consumers to opt-in to overdraft programs; providing a grace period before charging an overdraft fee; allowing negative balances without triggering an overdraft fee; offering consumers balance-related alerts; providing consumers with access to real-time balance information; linking a consumer’s checking account to another account for overdraft protection; collecting overdraft or non-sufficient funds fees from a consumer’s next deposit only after other items have been posted or cleared; not charging separate and multiple overdraft fees for multiple items in a single day; and not charging additional fees when an item is re-presented.

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Learn About Supporting Native American Small Business CDFIs in South Dakota

The Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) will host a webinar highlighting Native American Community Development Financial Institutions (CDFIs) on Wednesday, Dec. 15, at 10-11 a.m. CST. 

This webinar will provide information and education on the strengths and challenges of Native American CDFIs that support small businesses and entrepreneurs in South Dakota and discuss how financial institutions can strengthen their Community Reinvestment Act (CRA) programs through partnerships. 

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2022 National School for Beginning Ag Bankers Registration Open

Ag School Lending Photo

The National School for Beginning Ag Bankers is an intensive school designed to train in all facets of agricultural lending with emphasis on credit analysis, credit scoring, risk rating, problem loans and group case study. Sponsored by the SDBA, the school will be held June 20-23, 2022, on the campus of Black Hills State University in Spearfish, S.D.

The purpose of the National School for Beginning Ag Bankers is to prepare ag bankers to make better loan decisions. Ag bankers with zero to three years of experience should attend this school. Attendees will receive personalized instruction and continual peer interaction fostered through a limited class size, case study and group exercises.

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ABA Survey: Ag Borrower Profitability Increased in 2021

Photo of Nate Franzen speaking at ABA's Agricultural Bankers ConferenceA majority of ag lenders—69.7%—reported that overall farm profitability increased in the prior year, due in large part to government support, which is estimated to account for 38% of ag borrowers’ net income, according to the 2021 Agricultural Lenders Survey conducted by ABA and Farmer Mac. This marks the first time since the survey began in 2016 that a majority of ag lenders reported an increase in overall farm profitability. Lenders also said they expect that 80% of their borrowers will be profitable in 2021.

Competition with other lenders was the greatest overall concern facing ag lenders in 2021, with just more than half ranking it among their top two concerns, up 13 points from last year. The majority—82.3%—said the Farm Credit System was their number one competitor. Other top concerns included weak loan demand, interest rate volatility and credit quality and ag loan deterioration.

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ABA, Banking Groups Express Opposition to Proposed SBA Direct Lending Program

ABA and a coalition of financial trade groups yesterday expressed opposition to a proposed Small Business Administration direct lending program that has been included in the Biden administration’s “Build Back Better” legislation. In a letter to congressional leaders yesterday, the groups raised concerns that the proposed program will undermine existing public-private partnership SBA loan programs and potentially limit access to capital to small businesses “due to increased complexity.”

The proposed Build Back Better legislation provides only 90 days to stand up a $2 billion direct lending program, the groups wrote, adding that the complexity of setting up a lending program so quickly will lead to issues that could drive applicants away from any SBA lending program, including the popular 7(a) lending program in which many banks and credit unions participate. “The regulatory safeguards that exist for financial institutions have proven to be a much better shield to fraud and defaults as compared to SBA-run programs,” the trade groups said.

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Banking, Consumer Groups Call for Oversight Hearing on NCUA

In a joint letter with the Independent Community Bankers of America and the National Community Reinvestment Coalition yesterday, ABA urged lawmakers to schedule an oversight hearing for the National Credit Union Administration (NCUA) in light of several recent NCUA rulemakings that the groups said “would undermine important statutory guardrails designed to protect low-income consumers.” The groups noted that an NCUA-specific congressional hearing has not been held since 2015.

The letter came one day before NCUA is set to finalize a new rule that would expand the definition of “service facility” for common bond credit unions, enabling them to add groups to their fields of membership on effectively a national basis—disregarding the statutory requirement that credit unions be in “reasonable proximity” to the customers they seek to serve. The NCUA board appears likely to approve the rule even amid opposition from the current Democratic NCUA Chairman Todd Harper and former chairman Mark McWatters, a Republican. Previously, NCUA finalized another controversial rule—which Harper also opposed—expanding the range of permissible lending activities for credit union service organizations, or CUSOs.

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OCC's Hsu: Bank Board Guidance on Climate Risk Coming Soon

In remarks Monday at the OCC, Acting Comptroller Michael Hsu indicated that the agency plans to address climate change risk regulation with high-level framework guidance and five “range of practices” questions for large-bank boards by the end of 2021.

The questions are intended to spur conversations at the board level with management and to inform more detailed guidance that would likely be developed in 2022. Examinations based upon the guidance will follow after the more detailed guidance in 2022, and a focus on climate risk and midsize and smaller banks will follow after that, he said.

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Federal Court Issues Administrative Stay of Vaccine Mandate

A federal appellate court on Saturday issued an administrative stay of enforcement of the emergency temporary standard that will require all employers with 100 or more employees to be fully vaccinated or test weekly for COVID-19. The stay—which appears to apply nationwide—was issued in response to a legal challenge to the ETS filed by several governors and private entities.

Under the standard—which was developed by the Occupational Safety and Health Administration at the direction of President Biden—employees of covered firms would have until Jan. 4 to receive the vaccine or be required to produce a negative test on “at least a weekly basis.”

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ABA: 'Whole-of-Government' Approach Needed to Address Chip Shortage

With millions of microchips needed annually to equip smart chip payment cards, ABA yesterday told the Commerce Department that a “whole-of-government approach” is needed to weather the expected shortages in the global chip supply.

Large numbers of chip cards need to be replaced each year as they expire, ABA said, adding that without a sufficient supply of chips, some consumers and businesses may not receive a timely replacement of an expired, lost or stolen payment card.

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State Announces Funding for Health Services for Farmers and Ranchers

The South Dakota Department of Agriculture and Natural Resources (DANR) has allocated $500,000 to support mental and behavioral health programs for rural areas and specifically farmers and ranchers across the state. DANR is partnering with the Department of Social Services (DSS), Avera Health and South Dakota State University (SDSU) Extension to fund new and existing programs.

DSS will receive $120,000 to support its Behavioral Health Voucher Program through 605 Strong, and DANR will receive $35,000 to promote the expansion of the program. Farmers and ranchers will now be eligible to receive mental health or substance use disorder counseling at no cost by calling 211 or visiting https://www.605strong.com/#voucher-program.

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Survey: Banks Continue to Offer More Products Favorable for Older Customers

As older Americans—those born before 1965—hold 65% of deposit balances in the U.S., banks have continued to offer more products with terms that are favorable to them, according to the ABA Foundation’s 2021 Older Americans Benchmarking Report released yesterday.

The survey found that 60% of responding banks offer favorable products for older customers, an increase from 53% in 2019. Banks with less than $1 billion in assets are most likely to offer those products at 67%. The products offered to older customers include no-fee checking accounts, no-minimum balances and senior savings accounts with no fees. Many banks also waive fees for providing paper statements on senior accounts, as some older customers may be less likely than younger ones to use online banking, the survey found.

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Dusty Pinske Appointed to SDBA Board of Directors

Photo of Dusty PinskeDusty Pinske, First Interstate Bank, Rapid City, has been appointed to the Board of Directors for the South Dakota Bankers Association (SDBA), the professional and trade association for South Dakota’s financial services industry. SDBA Chair Kristina Schaefer, First Bank & Trust, Sioux Falls, appointed Pinske to fill a vacant seat on the SDBA Board of Directors through April 30, 2022.

Pinske has been with First Interstate Bank for 24 years (12 with First Western Bank and 12 with First Interstate Bank). She has worked at numerous First Interstate Bank locations in South Dakota and has held many positions including mortgage lending, small business lending and branch management. Pinske’s current role is VP, Retail Manager III for the bank’s Rapid City market. She enjoys building strong teams that work well together to achieve common goals.

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Twenty-One House Democrats Call for IRS Reporting Proposal to be Cut from Spending Bill

A group of 21 Democratic representatives wrote to House leadership yesterday calling for the removal of the Biden administration’s controversial proposal for financial institutions to report information on gross inflows and outflows on all accounts above a certain de minimis threshold. “We respectfully request that this proposal be withdrawn from further consideration in favor of a more targeted approach,” the lawmakers wrote to House Speaker Nancy Pelosi (D-Calif.) and House Ways and Means Committee Chairman Richard Neal (D-Mass.).

The Democrats said that they share the proposal’s goal of reducing the so-called tax gap but that “the data that would be turned over to the IRS is overly broad and raises significant privacy concerns. We have little information about how the IRS plans to protect or use this massive trove of data. Americans expect their bank or credit union to safeguard their financial information. This proposal would erode trust in financial services providers.”

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