S. 2155 Rule Changes to Be Done by Year-End, Regulators Say

The heads of the banking agencies told lawmakers that they expect to have regulatory changes from the S. 2155 regulatory reform law implemented by year-end. Testifying before the House Financial Services Committee last week, Federal Reserve Vice Chairman for Supervision Randal Quarles said that the agencies are “on track to complete the implementing actions for S. 2155,” adding that they would “have the bulk of the implementing actions completed by the third quarter of this year and all of them completed by the end of this year.”

Items still outstanding include a final rule on the treatment of high-volatility commercial real estate, a framework for applying enhanced prudential standards to banks with more than $100 billion in assets, an appraisal exemption for certain rural real-estate transactions and the finalization of the community bank leverage ratio.

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Bill Introduced to 'Stop and Study' CECL

Sen. Thom Tillis (R-N.C.) on Tuesday introduced a long-awaited bill—S. 1564—calling for a delay in the implementation of the Financial Accounting Standards Board’s current expected credit loss standard until a quantitative impact study can be completed to understand its likely effects it will have on the economy.

The bill comes after bipartisan groups of lawmakers from both the House and Senate earlier this month wrote to the heads of several regulatory agencies raising concerns about CECL. ABA—which has long highlighted the procyclical effects of the standard to both lawmakers and regulators—welcomed the bill’s introduction.

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ABA Banker Committee Shares Concerns with Four Core Providers

The ABA Core Platforms Committee—a group of 20 bank leaders representing community and midsize banks—on Tuesday met with top executives from four of the nation’s largest core processing firms. During the meeting, the bankers shared their concerns on three key issues—data access, API deployment and contract fairness—with FIS, Fiserv, Jack Henry and Finastra. The representatives of each participating core agreed to provide written responses by July 15 to explain how they will address those issues and were invited to meet with the committee again in August.

“The tone of today’s meeting was positive and cooperative, even as we acknowledged that there is still work to do to address these challenges,” ABA President and CEO Rob Nichols said in an email to ABA member bank CEOs on Wednesday. “We look forward to seeing that spirit of cooperation in the form of meaningful commitments when the companies respond in writing and when we meet again later this summer.” Nichols convened the Core Platforms Committee earlier this year to evaluate how community and midsize banks’ current relationships with their core processors may be inhibiting innovation and provide recommendations that can help banks and cores move forward together.

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Don't Miss Out on SDBA's Largest Event of the Year

Evolving digital technologies, shifting consumer preferences and increasing competition are creating new challenges for banks. As the banking industry is being transformed, there is uncertainty around what the future of the industry will look like over the next decade. Are you ready to re-imagine the future of banking?

The SDBA invites you to FOCUS FORWARD at the 2019 SDBA/NDBA Annual Convention on June 2-4 at the Sioux Falls Convention Center in Sioux Falls. Explore new pathways, seek innovative partners and motivate to embrace the future of banking. You will return to work with a refreshed perspective and renewed vision after attending this year's event.

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Podcast: A Small Bank Tackles Rural Housing Affordability

Christie Obenauer’s family-owned bank had a problem. Based in a rural county in western North Dakota, her community had been dealing with the prospect of population decline, but then the North Dakota energy boom brought an influx of newcomers. “It’s a wonderful problem to have.”

While Obenauer’s bank—Union State Bank in Hazen, N.D.—isn’t in the oil patch directly, it serves as a bedroom community for many who commute into the oil areas. It’s also home to large coal-mining operations. In the face of the housing crunch, her bank got involved in financing homes across the western part of the state. And with a need for housing that could be deployed quickly—“We had people thinking they could live in a camper in January, which . . . no. You can’t do it,” she chuckles—she also worked with the Bank of North Dakota and a state agency to develop a secondary market for manufactured homes.

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CFPB Proposes to Raise HMDA Reporting Thresholds

The Consumer Financial Protection Bureau last Thursday issued a proposal to provide relief for smaller institutions from the Home Mortgage Disclosure Act data collection and reporting requirements. The proposal would increase the coverage threshold for closed-end mortgage loans from 25 loans to either 50 or 100. For open-end lines of credit, the CFPB is proposing to extend for another two years the current temporary coverage threshold of 500 open-end lines of credit. After that, the threshold would be permanently set at 200.

ABA SVP Virginia O’Neill welcomed the proposal and said the association would “analyze these amendments to ensure they appropriately exempt smaller institutions that account for only a minor portion of the mortgage market, while preserving HMDA’s intent.” Comments are due 30 days after publication in the Federal Register.

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SDBA Encourages Banks to Join Safe Banking for Seniors Campaign

The SDBA is encouraging banks to join the ABA’s Safe Banking for Seniors campaign to help educate older Americans, their caregivers and other family members about how to identify and prevent elder financial exploitation.

“We’ve found that bankers are often the first line of defense against elder financial fraud and abuse. As many older customers visit bank branches, bankers are educating and advising their customers on ways to protect their assets and identity,” said SDBA President Curt Everson.

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Pete Mehlhaff, David D. Nelson and Kristina Schaefer Elected to SDBA Board of Directors

The South Dakota Bankers Association (SDBA), the professional and trade association for South Dakota’s financial services industry, recently held elections for three of the nine seats on its Board of Directors. Elected to serve on the SDBA Board of Directors were:

  • Pete Mehlhaff, President/CEO, Great Plains Bank, Aberdeen
  • David D. Nelson, Senior Vice President/Branch Manager, First Fidelity Bank, Platte
  • Kristina Schaefer, General Counsel/Director of Risk Management, Fishback Financial Corporation, Sioux Falls

This is Mehlhaff’s first term on the SDBA Board of Directors and Nelson and Schaefer’s second terms. They started their three-year terms on May 1, 2019.

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Learn What Separates Exceptional Leaders from Average Leaders at Annual Convention

Technology has sent the world into warp speed and changed many things. Yet, true leadership is based on “ancient” principles. Professional speaker and author V.J. Smith will share the time-tested and core ideas of what separates exceptional leaders from average leaders at the 2019 SDBA/NDBA Annual Convention.

The theme of this year's conference, which will be held June 2-4 at the Sioux Falls Convention Center & Sheraton Sioux Falls, is "FOCUS FORWARD." Smith will present his session "Dancing to the Oldies" on Monday, June 3.

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ABA Report: Ag Lending Growth Tops 5 Percent in 2018

The nation’s farm banks increased agricultural lending by 5.3 percent, or $5.5 billion, to $108 billion in 2018, according to the ABA’s annual Farm Bank Performance Report released Tuesday. With non-performing loans remaining at a pre-recession level of .52 percent of total loans, asset quality was also healthy among the nation’s 1,772 farm banks.

“Even in the face of a slowing ag economy and harsh weather, farm banks continue to perform strongly while meeting the credit needs of farmers, ranchers and their communities,” said ABA Chief Economist James Chessen. “They play a critical role in the success of farms large and small, and their civic engagement and the jobs they provide make them the lifeblood of many rural communities across the country.”

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Deadline Nearing to Request Appointment to SDBA Standing Committees

The SDBA will appoint standing committee members for the upcoming year in May. SDBA committees are: Agricultural Credit Committee, Credit Card Committee, Legislative Committee and Trust Committee. Terms are one year beginning May 1, 2019, and ending April 30, 2020, except for the Legislative Committee which is a three-year term. Legislative committee members can serve two, consecutive three-year terms.

As a volunteer for your Association, you will be contributing to a stronger banking industry. We respect the time commitment that each committee member has made and work hard to ensure the meetings are well run and productive. Committees meet once or twice a year to initiate activities and recommend policy.

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SDBA Ag Credit Conference Rescheduled to August 14-16

The SDBA's Agricultural Credit Conference originally set for April 10-12 but canceled due to weather has been rescheduled to Aug. 14-16 at the Ramkota Hotel & Conference Center in Pierre. Conference content will be the same as the April agenda with slight changes to the order of some sessions. 

Registrations for the original conference date will carry forward to the new date. If the new date does not work for any registrants, they may cancel with no penalty. If you were not able to attend the original conference dates but can now attend, there is still room to attend. See the revised Agricultural Credit Conference agenda.

Learn What's Coming, What Matters and What To Do Next at Annual Convention

Chatbots? Machine learning? Open banking? Faster payments? Should you replace your staff with chatbots or showcase your staff within digital channels? How will the arrival of real-time payments change existing bank products and services? Are bigtechs or digital challenger banks a bigger threat than megabanks? And how will you strategically differentiate your bank from the competition?

Join Lee Wetherington for a bottom-line review of what’s new and what matters for community banks during his session "Focusing Forward: What's Coming, What Matters & What To Do Next" at the SDBA/NDBA Annual Convention. The theme of this year's conference, set for June 2-4 at the Sioux Falls Convention Center & Sheraton Sioux Falls, is "FOCUS FORWARD."

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SDBA Seeking Bankers to Serve on Standing Committees

The SDBA will appoint standing committee members for the upcoming year in May. SDBA committees are: Agricultural Credit Committee, Credit Card Committee, Legislative Committee and Trust Committee. Terms are one year beginning May 1, 2019, and ending April 30, 2020, except for the Legislative Committee which is a three-year term. Legislative committee members can serve two, consecutive three-year terms.

As a volunteer for your Association, you will be contributing to a stronger banking industry. We respect the time commitment that each committee member has made and work hard to ensure the meetings are well run and productive. Committees meet once or twice a year to initiate activities and recommend policy.

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SDSU Extension to Offer Farm Stress Workshops

SDSU Extension is bringing two different types of farm stress workshops to the state.

Communicating with Farmers Under Stress: Join a multi-disciplinary team of SDSU Extension experts to explore the subject of farm stress, a subject that’s affecting the lives of many South Dakota farmers and their families. The primary audience for this workshop includes professionals who work with or support farmers and farm families, such as inspectors, financial advisers and those associated with farm service type agencies.  This workshop will be held on April 15 in Aberdeen, Sioux Falls, Pierre and Rapid City and on May 23 in Lemmon, Winner, Watertown and Mitchell from 10 a.m. to 2 p.m. CDT.  The cost to attend is $30, and lunch will be provided. Register for an April 15 locationRegister for a May 23 location

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SDBA Ag Credit Conference Postponed

The SDBA's Agricultural Credit Conference scheduled for this week in Pierre has been postponed due to the weather. The SDBA is currently working on a new conference date for late summer/early fall.

Once a new date is determined, registrations for the original conference date will carry forward to the new date. If the new date does not work for any registrants, they may cancel with no penalty. We ask that registrants wait to see if the new date will work for their schedules before canceling. Be watching for an announcement next week on the new date for the SDBA Agricultural Credit Conference

ABA Welcomes More Than 1,300 Bankers to Washington

ABA’s annual Washington Summit and several related programs began Monday, with more than 1,300 attendees, including bankers from South Dakota. The formal Summit program opened Tuesday morning with keynote presentations by House Financial Services Committee Chairwoman Maxine Waters (D-Calif.), Chairman of the White House Council of Economic Advisers Kevin Hassett and  Senate Banking Committee Chairman Mike Crapo (R-Idaho). 

Tuesday's agenda also included a session with senior personnel from the FDIC, OCC and Federal Reserve, as well as an advocacy update from a panel of ABA leaders. Tuesday afternoon, Summit attendees visited their representatives on the Hill to advocate for meaningful changes that grow the economy and give bank customers more choices.

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Position for Success at SDBA Ag Credit Conference Next Week

Ag bankers can learn about positioning for success in the economic reset at the SDBA's Agricultural Credit Conference next week in Pierre.

The conference will open Wednesday, April 10, with pre-conference workshop "Implementing Farmer Mac as Part of Your Ag Lending Strategy in South Dakota." Learn about Farmer Mac’s tools available, including its new AgXpress scorecard program, a simplified loan application process with minimal documentation and attractive pricing. Farmer Mac will also review popular products, the current interest rate environment, and dive into some recent South Dakota loan sale transactions. The workshop will be followed by a reception with exhibitors. 

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Agencies Encourage Banks to Help Customers Affected by Midwest Flooding

Recognizing the serious effects of flooding in the Midwest and Great Plains, federal and state financial regulatory agencies on Monday issued a joint statement reminding banks of supervisory expectations related to disaster recovery. Regulators encouraged banks to work constructively to meet the financial needs of their communities.

The statement addresses supervisory expectations related to lending activities, operating temporary bank facilities, publishing requirements, regulatory reporting requirements, activities that are eligible for Community Reinvestment Act credit and investments. The agencies also provided links to previously issued examiner guidance for institutions affected by major disasters. Read the agencies’ statement.

Bill Would Level Playing Field for Banks on Farm Real Estate Loans

Rep. Steve Watkins (R-Kan.) on Tuesday introduced the Enhancing Credit Opportunities for Rural America Act (H.R. 1872), which would end taxation of interest earned from agricultural real estate loans. This ABA-advocated bill would provide rural bankers with the same tax status as Farm Credit System lenders when making loans secured by ag real estate, thus leveling the playing field between banks and the tax-advantaged FCS.

“Small town lenders are crucial to the viability of rural America. Community banks and their ag customers have unfortunately had to adjust to years of weak commodity prices while family farm debts have become increasingly highly-leveraged. In fact, farm delinquencies are sadly at their highest rate in nine years. This timely legislation would give greater certainty to small town folks by enhancing and expanding rural access to credit,” said Congressman Watkins.