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ABA Banking Journal: Trump administration rescinds memo freezing federal grants
January 29, 2025
The Trump administration today rescinded its memo directing federal agencies to pause distribution of grants and loans, with the reversal coming after a federal judge temporarily blocked implementation of the freeze.
The Office of Management and Budget on Monday issued a memo directing federal agencies to suspend funding until each completed “a comprehensive analysis of all of their federal financial assistance programs to identify programs, projects and activities that may be implicated by any of the president’s executive orders.” The order caused widespread confusion about which funding sources were paused, and a federal judge in Washington, D.C., this week issued an administrative stay against the freeze after several groups challenged its constitutionally.
The OMB today issued a new memo rescinding the earlier memo. However, in a post on X, White House Press Secretary Karoline Leavitt said the administration rescinded the memo to avoid confusion about the court order, but suggested the freeze was not rescinded. “The president’s [executive orders] on federal funding remain in full force and effect, and will be rigorously implemented,” she said.
The American Bankers Association is closely tracking these developments and will launch a resource page analyzing the executive orders that affect banks in the coming days to provide immediate and updated feedback to members. The following FAQ documents on other executive orders are currently available to ABA members:
Additional Resources
The law firm Sullivan & Cromwell has created a tracker on the business effects of the administration’s executive orders.
Full Article
ABA Banking Journal: ABA Chair Asbury discusses credit unions, bank regulation in interview
January 28, 2025
Credit unions that compete with banks — and especially those that buy banks — should pay taxes, American Bankers Association Chair John Asbury told American Banker in an interview published today. Asbury, who is CEO of Atlantic Union Bankshares in Richmond, Virginia, also discussed his policy priorities as ABA chair and what bank regulation might look like under President Trump.
“I think it will be a consequential year,” Asbury told the publication. “We believe in the free market. This is a capitalist society. No one should apologize for that… We believe in a level playing field above all.”
Credit unions have acquired dozens of banks in recent years. When that happens, they remove tax-paying businesses from local markets, Asbury said. “I think there’s a fleecing of taxpayers. That goes way beyond the intent of why we have credit unions.”
As for other priorities, Asbury wants to do away with arbitrary thresholds for determining the level of bank regulation and instead move to a system that’s more tailored to an institution’s level of complexity.
CISA News: SecureSD: Cybersecurity for Municipalities and Counties
 In South Dakota and across the country cyberattacks targeting local governments have grown exponentially in the last few years. Local governments are among the highest value targets for hackers due to the critical infrastructure and public services they must provide without interruption, along with the highly sensitive citizen data stored on their information technology (IT) networks.
SecureSD is an initiative funded through SB187, in partnership with the Attorney General’s Office and the Cybersecurity & Infrastructure Security Agency (CISA). The initiative is aimed at strengthening the cybersecurity posture of municipalities, counties, and local governments across South Dakota.
WHO WE ARE
We are a team of cybersecurity professionals from Dakota State University MadLabs® dedicated to assisting local governments to improve the cybersecurity of their technology infrastructure. The DSU MadLabs® is part of the Madison Cyber Labs within the Research and Economic Development department on the DSU Madison campus.
WHAT WE DO
SecureSD will enhance the cybersecurity of municipalities, counties and local governments across South Dakota by providing various services. This program will be a partnership as we will need an investment with a demonstrated buy in of time and resources from the local governments. The partnership will be especially important as this will be a continuous effort going forward for everyone involved.
Specifically, the program will provide:
- Secure email solution
- Migrate to a secure email solution
- Email Configuration Review (If necessary)
- Security Enhancement Mitigation
- Mitigate (fix) security vulnerabilities/issues found from security assessments
- Specialized solutions per entity.
- Firewall Configuration Review
- Purchase specialized security equipment (If necessary)
- Migration to .gov domain specifically reserved for government entities in the United States
- Weekly External Network Vulnerability Scan (CISA-Dept. Homeland Security)
- Training
- Customized Cybersecurity Training
- Incident Response Planning
- Workshop to assist cities/counties with building their Incident Response Plans
- Tabletop exercises to practice Incident Response Plans
- Note: CISA/DSU training is already available and ready for scheduling
- Fill out the form below on this SecureSD website
- Requirements of the program:
- Security assessments
- Technical Assessment
- Project Boundary Fence (DSU) [Or equivalent]
- Strategic Assessment:
- Vulnerability assessment (CISA-Dept. Homeland Security) [Or equivalent]
- Risk assessment (CISA-Dept. Homeland Security) [Or equivalent]
ABA Banking Journal: ABA Fraudcast: The power of AI and trusting that voice on the phone
January 29, 2025
In a world where artificial intelligence is rapidly advancing from a distant dream technology to an accessible tool of working and consumer life, criminals have certainly noticed. On this episode of the ABA Fraudcast, test your discerning skills at identifying who is real and who is AI. Impersonating the voices of people familiar to us is rapidly becoming a new type of threat. And it will be difficult to stop.
The ABA Fraudcast will be published every two weeks, on this site, in ABA Daily Newsbytes and wherever you listen to and subscribe to your favorite podcasts.
- Click here to listen to this week’s episode.
ABA Banking Journal: Banking forward: What is top of mind for 2025?
ABA experts weigh in on how banks can harness the tools to drive value, build trust and stay ahead in a hyper-competitive landscape.
January 21, 2025
This year isn’t just another year for banking — it’s quite possibly the gateway to a transformative era. With a new administration settling in and a change in leadership at regulatory bodies, the landscape is shifting in ways that make crystal-ball predictions a risky game. Yet several things are clear: Artificial intelligence is taking center stage; open banking is gaining traction; and banking technologies are stretching the boundaries of innovation.
But let’s be clear: Change in 2025 is not just about the technology. It’s about how banks harness these tools to drive value, build trust and stay ahead in a hyper-competitive landscape.
To make sense of it all, a panel of ABA’s experts has shared their thoughts on the trends and technologies defining the year ahead. Their perspectives cut through the noise, offering clarity on the opportunities and challenges that matter most.
So, let’s dive into banking innovation with a lens that’s as forward-looking as it is grounded.
 Innovation: Driving the future
Brooke Ybarra, SVP, Innovation and Strategy
As banks think about innovation in 2025, there is tremendous opportunity. But, importantly, there is no one-size-fits-all approach. Individual banks must consider their own strategies, product strengths, customer needs and local markets. So, while themes including agentic AI, generative AI, quantum computing, personalization and super apps may be top-of-mind innovation buzzwords, these technologies may not be on the roadmap for all banks. The fundamentals remain crucial, and banks should prioritize building robust data strategies and modernizing tech infrastructure to ensure secure, nimble and enduring platforms.
The future of banking is bright and full of possibilities. By staying customer-centric and strategically investing in innovation, banks can create a more dynamic, responsive and inclusive financial ecosystem. The journey ahead is inspiring, with endless opportunities to meet customers’ changing expectations and operate efficiently.
Innovating with ownership and purpose
Samah Chowdhury, Senior Director, Innovation Strategy
In 2025, product design isn’t just a strategy. It’s the edge.
A trend that is decisive and evolving in a clear direction is the shift toward modular products — individual pieces of technology or functionality — that can be integrated, swapped or upgraded independently. Too often, banks rely on digital and core providers to shape foundational products like deposits and lending — leaving little room for differentiation in a crowded market.
The future lies in reclaiming ownership — using fintech firms as enablers and combining in-house expertise with modular technologies and consumer-conscious design.
Why now? Generative AI is unlocking hyper-personalized solutions. While much of gen AI’s impact remains behind the scenes, it’s creating new ways to deliver tailored experiences at scale.
 Payments 2025: Faster, faster, faster, prepare, prepare, prepare
Stephen Kenneally, SVP, Payments
More payments will be made faster in 2025 than ever before through FedNow and the TCH Real Time Payment network, but the old rails aren’t giving up the chase.
Late last year, the Federal Reserve Board of Governors proposed a change to Fedwire and the National Settlement System (NSS) to allow operations seven days a week including weekends and holidays as soon as 2027. Banks could voluntarily participate to send and receive wires on weekends. Plus, with NSS open on the weekends, that would enable ACH operations 24 hours a day, seven days a week, 365 days a year.
Banks need to track new payments innovations, but they can’t ignore legacy systems reinventing themselves and the downstream effect those changes can have on their institution.
 The AI fraud storm
Paul Benda, EVP, Risk, Fraud and Cybersecurity
This is likely the year that AI-enabled fraud goes mainstream. The risk is three-fold. Use of AI tools to break into banking systems, ever improving AI deepfakes to scam customers, and the potential to destabilize the financial system by impersonating bank CEOs and manufacturing fake crises.
The common thread is how to tell what and who is real. For years, banks have practiced out-of-band confirmation on transactions, but now it needs to become integral to every transaction. Verifying a customer not just with their voice or knowledge but also by the device they’re using or by giving grandma a password the grandkids will use to verify it’s really them on the phone.
By leveraging best practices and new technologies, banks and their customers will be able to weather the coming “AI fraud storm.”
 The quantum computing conundrum
John Carlson, SVP, Cybersecurity Regulation and Resilience
Quantum computers could break widely used encryption within the next five to 10 years, posing a significant challenge for banks and other organizations that rely on encryption to secure sensitive data. Cyber threat adversaries are harvesting encrypted data now with the hopes of decrypting it later. Swapping out encryption algorithms embedded in software and hardware takes a long time. In September 2024, the U.S. Treasury and Group of 7 released a statement warning of the risks and the need to take action. In July 2024, the National Institute of Standards and Technology (NIST) released new quantum-resistant encryption standards.
Banks and technology service providers can take several steps now to mitigate risks. These include using the NIST-approved encryption algorithms; monitoring CISA efforts to develop risk mitigation plans; using FS-ISAC’s tips on “crypto agility”; engaging information security, vendor management and business continuity professionals to ensure that these risks are being addressed and coordinated internally; and being prepared to answer questions from financial regulators about plans for mitigating the risk.
 Emerging regulatory horizon
Ryan T. Miller, VP and Senior Counsel, Innovation Policy
While the political environment is ever fluid, on a large enough scale we can observe the yonder horizon.
We can expect digital assets to play a major role in the early days of 2025. This could have implications for banks, such as whether to onboard crypto firms as customers and permissibility to use blockchain technology. Banks should conduct risk assessments on these questions.
Another issue that will be in focus are fintech firms. It is likely the new administration will create a more favorable environment for many fintech companies. For banks, that means more competition as well as more opportunities to partner. There doubtless will be many twists and turns. Above all, banks must follow their own guiding star even if they must sometimes adjust their route due to the regulatory landscape.
 More direct models, less middleware
Krista Shonk, SVP & Senior Counsel, Regulatory Compliance and Policy
How will regulators’ third-party risk management expectations evolve under the Trump Administration in 2025? Here’s one prediction: Regulatory scrutiny of third-party risk management practices is unlikely to change with the political winds that accompany a new administration, at least in the short term. As a result, more banks may pursue a partnership model where the bank — not the fintech — has the principal relationship with the end user.
In this type of arrangement, the fintech’s application serves as the end user’s point of entry into the bank and is similar to a virtual branch or a marketing engine that supports the bank’s customer acquisition. Increasingly, banks that use this model take on the compliance-related functions associated with fintech relationships instead of outsourcing them to the fintech or a middleware provider. Banks cite multiple reasons for this approach, including improving customer service and reducing the risk that the bank will be charged with a regulatory violation due to noncompliance by the fintech.
In sum, fewer layers and clearer accountability will trend in bank-fintech partnerships in 2025.
 Core decisions, big impacts
Deborah Whiteside, SVP, Vendor Evaluation
All innovation roads ultimately lead to a bank’s core platform. And core platform management is more complex than ever before.
Managing your core platform, and ensuring that it supports your business, operational and innovation goals, is key to a bank’s success. To support their strategies, and their growth, banks are engaging with and managing more technology partners than ever before to augment and extend their cores’ capabilities.
In addition, many major core providers are mounting sweeping core “modernization” efforts over the next few years, which will lead to multiple waves of foundational change rippling through the industry.
To remain competitive, bank leaders should evaluate if and how their core supports their vision for the future and ensure that they understand the full capabilities of their core provider and their provider’s plans for the future.
 The AI tipping point
Ryan Jackson. VP, Innovation Strategy
What’s top of mind for 2025?
Ask me this two months ago, and I would’ve done everything possible to avoid this topic, but alas, I have to go with artificial intelligence as it is set to significantly impact the banking sector in 2025. With the recent administration change and appointments of leaders with backgrounds in technology and venture capital, AI’s role in banking will grow substantially in 2025.
Two key trends to watch are: Banks that have been hesitant to adopt AI due to regulatory concerns are likely to start experimenting with AI-integrated technologies; and banks that have already implemented AI will push further into “production usage” with particular focus on measuring and reporting the return on investment from these technologies. These developments will drive innovation and efficiency in the banking industry, making 2025 a pivotal year for AI in finance.
Closing thoughts
The perspectives shared here are not just ideas — they’re a challenge. A challenge to think bigger, move smarter and lead with intent. The path forward might be intricate, but it’s rich with opportunity for those ready to act.
Full Article
Opt in to Receive Training Information From GSB
 The Graduate School of Banking at the University of Wisconsin in Madison, Wisconsin is a valuable training partner for the SDBA and our member bankers. GSB has been educating professionals and creating leaders in the banking industry since 1945. They offer a wide variety of schools and programs such as the Graduate Banking School, HR Management School, Digital Banking School and a long list of online learning opportunities. To learn more and to opt in to receive their marketing materials, click here.
SDBA Peer Groups Can be a Game-Changer for Bankers
In the fast-paced world of banking, staying ahead of industry trends, regulatory changes, and emerging technologies can be daunting. That’s where the power of peer groups comes in—offering an invaluable opportunity to connect, learn, and grow alongside your colleagues. The South Dakota Bankers Association (SDBA) provides peer groups in a variety of areas that are the perfect platform for bankers to share ideas, exchange thoughts, ask questions and network. There is no cost to participate in these groups. All peer groups are currently email-based, allowing members to communicate on an as-needed basis.
There are currently peer groups for:
- Compliance
- CRA
- Education
- ERM
- Fraud
- HR
- Mortgage
- Security
- Technology
If you are interested in joining one of these groups, click here. Please be sure to specify which group(s) you are interested in joining. We will reach out to all peer groups with further information after we update them the end of February.
Don’t miss out on this opportunity to connect with your colleagues! If you have any questions, please reach out to us at [email protected] or call 605.224.1653.
SDBA State Legislative Day
February 12, 2025 | Pierre
 SDBA’s Legislative Day is your opportunity to stay informed on both state and federal legislation which could impact the banking industry. This is your opportunity to actively participate in shaping the future of banking in our state. This gathering promises insightful conversations, networking, and direct engagement with key policymakers.
Information & Registration
ABA Washington Summit
April 7-9, 2025 | Washington DC
Join the biggest annual gathering of bank leaders in Washington to push for a bank policy framework that lets your bank stay focused on serving your customers, clients and communities. Hear directly from the key players in the 119th Congress and the new administration on what the future holds for banks of all sizes.
The SDBA is currently planning to attend the Summit and would like to invite you and your staff to participate as well. Registration is free and you can learn more and sign up here. Join us as we hear from top-notch speakers, connect with our congressional delegations' offices and dine with our friends at the NDBA. You won’t want to miss this opportunity to engage on multiple levels.
If you or one of your staff would like to attend, the SDBA will provide a $500 stipend (1 per member bank) to help defray the costs of any banker attending from a member bank not currently represented on the SDBA Board. There will also be an Emerging Leaders’ Forum and a Women’s Leadership Forum held in conjunction with the Summit.
Information and Registration
Online Education
 Participating in learning opportunities outside the bank can be challenging. Take advantage of the SDBA's extensive selection of webinars and on-demand training to enhance your banking expertise directly from your computer.
GSB Online Seminars
OnCourse Learning
SBS Institute
ABA Training
Question of the Week
Q: We would like to start utilizing a “soft pull” of credit reports as part of the prequalification process. What do we need to be aware of with this practice?
A: Ultimately, the FCRA does not differentiate between a "soft" pull and a regular credit pull, - and so, in either event, the bank is ultimately required to have permissible purpose to pull credit - regardless of whether it is a “soft pull” or a “hard pull.” Considering this, the same general requirements for a hard pull would seem to apply to a soft pull, including the recommendation to obtain written authorization for the purposes of demonstrating permissible purpose.
While it could be argued that an application to open an account may demonstrate permissible purpose, it should be noted that the regulators have been spotlighting permissible purpose issues as of late – and this could be doubly tenuous for those “prequalification’s” or inquiries that may not objectively rise to the level of an application; for those reasons, it is generally recommended to obtain an express authorization to pull credit in writing. Compliance Alliance’s Consumer Report Authorization Form may be as a starting point for this purpose.
As always, regardless of if the bank elects to go with a soft pull or a hard pull, the bank will want to be sure to apply this procedure in a consistent manner to avoid implicating any potential UDAAP/UDAP and/or fair lending considerations. Compliance Alliance’s FCRA Toolkit offers several other tools addressing the FCRA’s general requirements.
Learn how to put compliance management solutions from Compliance Alliance to work for your bank, by contacting (888) 353-3933 or [email protected] and ask for our Membership Team. For timely compliance updates, subscribe to Bankers Alliance’s email newsletters.
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Contact the SDBA at 605.224.1653 or via email
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