USDA to Temporarily Reopen FSA Offices During Shutdown

With the government shutdown now approaching its fourth week, the Farm Service Agency will temporarily reopen several of its offices to provide assistance to farmers and ranchers, the Department of Agriculture announced yesterday. These offices will be open on Jan. 17, 22 and 28 during normal business hours. 

The USDA noted that at almost half of FSA locations, staff will be available to help farmers and ranchers with existing farm loans and tax documents. Staff will also be available at certain offices to provide specific services including processing payments made on or before Dec. 31, 2018; continuing expiring financing statements; and opening mail to identify priority items. 

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Drew Haack and Matt Schlechter Promoted at SD Division of Banking

Drew Haack and Matt Schlechter have promoted to supervisory roles at the South Dakota Division of Banking. Haack has been promoted to chief bank examiner, and Schlechter has been promoted to chief trust examiner.

Both will continue to participate on examinations but will be assisting more with administrative functions, said Deputy Director of Banking Mike Dummer. Haack joined the Division in 2006, and Schlechter joined the Division in 2011. Both work out of the Division of Banking's Sioux Falls office. 

Bank Midwest CEO Mary Kay Bates Named BankBeat's Banker of the Year

Photo of Mary Kay BatesMary Kay Bates, CEO of Bank Midwest in Spirit Lake, Iowa, has been named 2019 Banker of the Year by BankBeat. 

Bates grew up in the restaurant business, where she learned a work ethic that has served her well throughout her banking career. She’s been at Bank Midwest, which has nearly $1 billion in assets and operates 11 offices in three states including South Dakota, since the mid-1990s. She hasn’t just witnessed the bank’s many successes; she’s been integral to them. 

Bates is the second female banker to be recognized as a Banker of the Year since the program began in 1989. With her selection, Bank Midwest becomes the first bank to have two Banker of the Year honorees selected in different years. Bank Midwest Board Chair Steve Goodenow was the magazine’s 2011 Banker of the Year.

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2019 South Dakota Legislature Now In Session

Photo of State CapitolThe 2019 South Dakota Legislature opened Tuesday, Jan. 8, with Gov. Noem giving her State of the State Address.

Bankers can stay current on legislative issues of importance to the banking industry by reading the SDBA Legislative Update and  Bill Watch. The Legislative Update is a recap of weekly key legislative action. The Legislative Bill Watch tracks the status of bills the SDBA is monitoring. Both publications are posted online on Fridays during session. To sign up for email notifications when the publications are posted, contact Alisa Bousa.

Don't forget to make plans to attend the SDBA State Legislative Day on Wednesday, Feb. 13, 2019, in Pierre. This year's event will include events specifically for emerging bank leaders. Learn more and register to attend

Agencies Finalize Three-Year Phase-In for CECL's Regulatory Capital Effects

As expected, the financial regulatory agencies on Dec. 21 issued a final rule giving banks the option to phase in over a three-year period the day-one adverse effects of the Current Expected Credit Loss standard on regulatory capital.The CECL standard, which goes into effect in 2020 for SEC registrants, 2021 for non-SEC banks that are FASB-defined "public business entities," and 2022 for all other banks, requires an estimate of expected credit losses over the life of the portfolio to be effectively recorded upon origination. 

In related news, the Federal Reserve issued a statement noting that to reduce uncertainty, it will maintain its current framework for calculating loan loss allowances in supervisory stress tests until after the 2021 test cycle. With regard to company-run stress tests, the Fed said that it would “not issue supervisory findings on firms’ stressed estimation of the allowance under CECL in CCAR’s qualitative assessment any earlier than 2022.” View the final ruleRead the Fed's statement

CFPB Issues Policy Guidance on HMDA Data Release

The Consumer Financial Protection Bureau has released its policy guidance describing the Home Mortgage Disclosure Act loan-level data it plans to release publicly in 2019.

Significantly, in response to concerns raised by ABA about the need to protect consumer privacy, the Bureau announced that it would not release property addresses, applicants’ credit scores or automated underwriting results. As expected, the CFPB will release “certain information with reduced precision,” including borrower ages, loan amount and number of units in the dwelling. 

In addition, the Bureau also announced that it would begin the rulemaking process in 2019 to consider what HMDA data it will disclose in future years. ABA has long called for a formal rulemaking on the public disclosure of HMDA data and will continue to work closely with the agency to ensure its concerns about consumer privacy are addressed. Read more. For more information, contact ABA's Rod Alba

After ABA Advocacy, FEMA Reverses Decision on Flood Insurance During Shutdown

Effective immediately, the Federal Emergency Management Agency will allow operations of the National Flood Insurance Program to resume, even while the government remains partially shut down, the agency announced last Friday. The move was retroactive to Dec. 21, ultimately leaving no lapse in NFIP availability.

ABA, along with members of Congress and other trade groups, strongly objected to FEMA’s surprise decision earlier this week halting regular operations, despite Congress’ passage and the president's signature of a bill to reauthorize the NFIP before the shutdown began.

ABA applauded FEMA's action. The association has emphasized in its public statements that suspending the sale and renewal of NFIP policies could complicate and potentially delay loan closings for borrowers seeking mortgages where NFIP coverage is required. For more information, contact ABA's Joe Pigg or Diana Banks

FEMA Halts National Flood Insurance Program

“On December 26, the Federal Emergency Management Agency announced its intention to halt regular operations for the National Flood Insurance Program. This decision comes even as Congress passed and the President signed legislation last week that was specifically intended to keep the program operating during the government shutdown," said ABA President and CEO Rob Nichols in an ABA statement today.

“FEMA’s unexpected decision will complicate and delay loan closings for borrowers who are required to carry flood insurance and seek NFIP coverage for as long as the government shutdown continues. This result is in direct conflict with what Congress and the President intended when legislation was passed and signed into law last week to extend the NFIP’s authorization for six months. FEMA’s failure to inform Congress and the public earlier that such action would be taken despite the passage of the extension is distressing. We hope that FEMA will reconsider this unfortunate action immediately."

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Bank Regulators to Stay Open While Other Agencies Partially Close

With the federal government shut down since Saturday morning, several agencies are closing all but essential operations. Federal banking regulators--the Consumer Financial Protection Bureau, FDIC, Federal Reserve and OCC--will remain open as their funding does not come from congressional spending. However, federal lending programs, including the Small Business Administration, Federal Housing Administration and USDA programs, will be curtailed.

The Securities and Exchange Commission said that it will prioritize investor protection and market integrity functions starting on Dec. 27 should the shutdown persist; the Commodity Futures Trading Commission will likewise shut down all but essential market support functions. The Financial Crimes Enforcement Network will continue to process industry anti-money laundering filings. For more information, visit individual agency and department websites.

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House Members Call for CECL Study, Delay

As the Financial Stability Oversight Council met yesterday to discuss, among other topics, the Financial Accounting Standards Board’s Current Expected Credit Loss model for loan loss accounting, 28 Republican House members urged a delay in CECL’s implementation date and a comprehensive study of its effects on the banking industry and access to credit. Read the letter.

Led by House Financial Services Committee member David Kustoff (R-Tenn.), the signers called on Treasury Secretary Steven Mnuchin as chairman of FSOC to “closely evaluate the negative consequences this standard will place on the banking industry, small businesses and the consumer.” They added that uncertainty about CECL’s effects on bank capital “may cause many community banks to reduce the number of financial products offered to consumers.”

ABA and four other trade groups yesterday called for a quantitative impact study of CECL and a delay in implementing the standard until the study can be conducted. Meanwhile, the Financial Accounting Standards Board announced that it will hold a public roundtable on CECL implementation issues in January. Read more about the roundtable

Registration Open for SDBA State Legislative Day

Photo of State Capitol

Find your seat in the process. The SDBA will hold its 2019 State Legislative Day on Wednesday, Feb. 13, at the Ramkota Hotel & Conference Center in Pierre.

The State Legislative Day is your opportunity to stay up-to-date on both state and federal legislation which could affect the banking industry and to visit with state legislators. The day will include a luncheon, featured speaker, chance to visit with legislators at the State Capitol and an evening reception. The Governor has also been invited to address bankers. In addition, a special reception and sessions will be held for emerging leaders.

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SDBA 2019 Media Kit Available

The South Dakota Bankers Association is the premier avenue for businesses to target their marketing message to the top decision makers in South Dakota's financial services industry.

There is no better way to get your products or services in front of South Dakota bankers than to advertise in the SDBA's SDBANKER Magazine or sponsor the SDBA eNews. Learn more about advertising and marketing opportunities available for 2019 in the SDBA's 2019 Media Kit.

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Congress Passes ABA-Backed 2018 Farm Bill

With a vote of 369 to 47 yesterday, the House approved the 2018 Farm Bill. The bill must now be signed into law by President Trump. Ahead of the vote, ABA wrote to House Agriculture Committee leaders urging them to pass the bill, which contains several banker-advocated provisions. Among other things, the bill will increase Farm Service Agency guaranteed loan program funding to $1.75 million; make needed changes to rural development guaranteed loan programs; and provide risk management tools for farmers and ranchers through crop insurance and other farm programs. 

ABA President and CEO Rob Nichols thanked lawmakers for their work on the bill. “This important piece of legislation provides critical risk management tools and stability for our nation’s farmers and ranchers, as well as the 2,000 farm banks that serve them every day,” Nichols said. “We are particularly pleased that lawmakers recognized the vital role of crop insurance and USDA loan guarantees. These programs help farm banks make loans and manage risk in both good times and bad, which is critical to maintaining a stable and vibrant farm economy.” Read ABA's letter

ABA: CU Appraisal Proposal Would Create Inconsistent Regulatory Standard

A recent proposal by the National Credit Union Administration to raise the threshold at which credit unions must obtain appraisals for commercial real estate transactions from $250,000 to $1 million would create an unlevel playing field between banks and credit unions, ABA said in a comment letter to the NCUA on Tuesday. The letter was also shared with members of the Federal Financial Institutions Examination Council. ABA noted that the proposal would “[put] NCUA’s regulatory treatment of credit unions dramatically out-of-step with its sister agencies,” which earlier this year raised the CRE appraisal threshold for banks from $250,000 to $500,000. 

“Two different standards for commercial real estate lending appraisal thresholds or any other real estate lending thresholds, made by what are functionally equivalent lending institutions, would negatively impact prudent risk management practices and undermine local markets,” ABA said. It added that “FFIEC and all participating agencies should uniformly agree to abide by consistent standards, rulemaking and thresholds that are now in jeopardy as a result of this proposal.” Read the letter. For more information, contact ABA's Sharon Whitaker or For more information, contact ABA's Brittany Kleinpaste

Dante Bank Listed on National Register of Historic Places

Photo of Dante BankThe Security State Bank in Dante was added to the National Register of Historic Places on Nov. 1, according to the South Dakota State Historical Society.

The Security State Bank is a two-story, rectangular masonry brick commercial building. It was built in 1920 at 320 Main St., which is the southwest corner of Main Street and Haskell Avenue. The bank is the best remaining local example of early 20th century commercial history and architecture in Dante and is the only bank in Dante’s history.

The building is listed in the National Register for its significance to the history of banking and commerce in early Dante to serve the agriculture-dependent community and represents the economic difficulties that plagued South Dakota in the 1920s. Banking in South Dakota was critical in its early years for the prominent industries of real estate and agriculture, but the state also had a high bank failure rate after World War I due to the collapse of ag prices and risky banking investments.

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Webinar: Tax Security Awareness: Understanding the Dark Web

In support of the IRS' Tax Security Awareness Week next week, a free webinar is being offered on Monday, Dec. 3, to help taxpayers understand the Dark Web and how it is used as a repository for stolen identities, credit data, tax information, banking/financial information, etc. 

During this webinar, IRS criminal investigators will provide an overview of the Dark Web and answer questions that will help you recognize the risks and use of the Dark Web by cyber criminals. A Live Q&A will be included.

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Webinar: Fighting Consumer Fraud and Identity Theft in South Dakota

Join the Federal Trade Commission for a free, one-hour webinar on Thursday, Dec. 6, at 1 p.m. CT to learn about the top scams reported in South Dakota and get tips to help people in your community avoid scams, protect their identity and recover from identity theft. 

Speakers will include staff from the Federal Trade Commission; Office of the South Dakota Attorney General; U.S. Attorney’s Office for the District of South Dakota; Better Business Bureau Serving Nebraska, South Dakota, the Kansas Plains and Southwest Iowa; East River Legal Services; Centers for Medicare and Medicaid Services; and Senior Medicare Patrol of South Dakota.

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SDBA Office Closed for Thanksgiving

The SDBA Office will be closed November 22 - 23 in observance of the Thanksgiving holiday.

ABA Unveils New 'Basic Bank Training' for Servicemembers, Military Spouses

The ABA on Monday launched a new training initiative designed to help veterans, active-duty servicemembers and military spouses transition to careers in banking. The series--Basic Bank Training for Veterans--consists of eight self-paced online courses covering a range of topics including customer service, lending, payments and ethics. 

With an estimated 230,000 to 245,000 U.S. military members entering civilian life each year according to the U.S. Department of Defense, ABA developed this suite of courses to assist veterans with their transition and to help banks tap into a community of uniquely talented job candidates. The program is available free to banks and to qualified individuals--including active-duty military spouses--who request access on their own. Learn more about the training

A recent article on the ABA Banking Journal website highlights the many ways banks can support military servicemembers on their families by providing financial education and job and mentorship opportunities. Meanwhile, a new bonus episode of the ABA Banking Journal Podcast features an interview with Steve Lepper of the Association of Military Banks of America. Lepper discusses the unique financial needs of service members and veterans, the employment potential of veterans and military spouses and what banks are doing to serve these populations. Read the articleListen to the podcast

FDIC Seeks Information on Small-Dollar Loans

The FDIC is seeking public feedback on the steps it can take to encourage FDIC-supervised banks to offer small-dollar credit products to meet the needs of consumers, the agency announced yesterday. Comments will be due 60 days after publication in the Federal Register. 

Specifically, the FDIC is seeking information about consumer demand for small-dollar credit products, features and characteristics of these products, and the benefits and risks to banks offering them. The FDIC is also interested in the challenges that stand in the way of banks’ ability to offer small-dollar credit products, how technology can play a role in offering these products or assessing the creditworthiness of potential borrowers, and how alternative products or services could supplement or complement small-dollar credit offerings. 

ABA has long called on regulators to remove barriers that impede banks from making small-dollar loans, and earlier this year welcomed guidance from the OCC encouraging banks to make responsible short-term, small-dollar installment loans to help meet the credit needs of their customers. The association has previously called on the FDIC to rescind its 2013 guidance on direct deposit advance services, which imposes requirements on banks that are inconsistent with efficient underwriting standards, and will submit feedback to the bureau in response to the RFI. Read more. For more information, contact ABA's Jonathan Thessin