IRA Basics Seminar Rescheduled for Jan. 13
The SDBA's IRA Basics Seminar scheduled to be held Dec. 16 was canceled due to the weather and will now be held Jan. 13 at the Ramkota Inn in Sioux Falls.
Attendees will leave this session able to work with IRA holders and process basic IRA transactions with confidence. The course is for people who are in a backup position or an IRA support person wanting to stay current, but it is also a great review course for those that have been away from IRAs for a couple of years.
This course goes in a logical order from opening an IRA, to talking about contribution rules, then on to distribution rules and regulations, which includes RMDs and death distributions, plus the course will address moving money as a transfer or rollover. Learn more and register.
Registration Limited for SDBA National School for Experienced Ag Lenders
The SDBA is encouraging ag bankers to register early for its 2016 National School for Experienced Ag Lenders as the school will be limited to only 60 students.
The school will be held June 20-23, 2016, at Black Hills State University in Spearfish, S.D.The school, which is only offered every two years, targets ag lenders with a good knowledge of financial analysis in ag lending who desire further training in analyzing and troubleshooting more complex and problem credits.
It is rare that a school has this caliber of instructors, including ag guru Dr. Dave Kohl and three national award winners for their contributions to the ag industry. Learn more and register.
Question of the Week
If a borrower applies for a loan secured by property in a flood zone in December 2015, but doesn’t close the loan until 2016, do the new flood escrow rules apply? If so, do we have to send the escrow notice?
Answer: Yes, you are required to escrow for any loan that is "made, increased, extended, or renewed on or after Jan. 1, 2016." You look at the consummation date, not the application date.
The notice requirement is a bit more nuanced. The regulation changes as of Jan. 1 to provide:
(b) Notice. For any loan for which an FDIC-supervised institution is required to escrow under paragraph (a) or paragraph (c)(2) of this section or may be required to escrow under paragraph (a)(3) of this section during the term of the loan, the FDIC-supervised institution, or a servicer acting on its behalf, shall mail or deliver a written notice with the notice provided under §339.9 informing the borrower that the FDIC-supervised institution is required to escrow all premiums and fees for required flood insurance, using language that is substantially similar to model clauses on the escrow requirement in appendix A. 12 CFR 339.5 (effective Jan. 1, 2016).
Note that the statute does not have a timing requirement. Also note that this isn’t effective or required until January. For applications received in December, a good practice would be to wait until January to send the notice. For example, if you receive an application on Dec 20, but the loan doesn’t close by Dec. 31, send the new notice required by Appendix A of 12 CFR 339 before you consummate in January.
Upcoming Events
- IRA Basics Seminar: Jan. 13, 2016, Sioux Falls
- SDBA State Legislative Day: Feb. 10, 2016, Pierre
- NDBA/SDBA Bank Management Conference: Feb. 12-13, 2016, Scottsdale, Ariz.
- IRA Update Seminar: Feb. 18, 2016, Sioux Falls
- ABA Government Relations Summit: March 14-16, 2016, Washington, D.C.
View all SDBA events
Sponsorship Opportunity
Learn more about sponsoring the SDBA eNews.
Questions/Comments
Contact Alisa DeMers, SDBA, at 800. 726.7322 or via email.
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Registration Open for SDBA 2016 State Legislative Day
The SDBA’s 2016 State Legislative Day on Feb. 10 in Pierre 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 and banking legislation review, discussion on the 2016 race for the White House, chance to visit with legislators at the State Capitol, and an evening reception and dinner with legislators and constitutional officers. The Governor has also been invited to speak.
This year's featured speaker is Dr. Steffen W. Schmidt, university professor of political science at Iowa State University in Ames, Iowa. The 2016 race for the White House is proving to be one of the most interesting and intense in the past 50 years. Dr. Schmidt will slice and dice this exceptional political season in his presentation "Fear and Loathing in the Campaign Trail 2016."
Events will be held at the Ramkota RiverCentre in Pierre. To receive the special SDBA rate, reserve your hotel room at the Ramkota by Jan. 20. Learn more and register for the event.
Nichols to CEOs: Spending Bill a 'Missed Opportunity' for Ref Relief
In an email to bank CEOs yesterday, ABA’s Rob Nichols expressed his disappointment over the omission of meaningful regulatory relief provisions from the compromise omnibus spending bill that was presented to the House and Senate late Tuesday night. The bill contains only one measure -- proposed by ABA in 2013 -- requiring regulators to study the effects of Basel III’s capital requirements on mortgage servicing assets.
Despite the defeat, Nichols said that the aggressive pursuit of reg relief will continue. “Reg relief is a necessity, so we will continue to seek solutions, both legislative and regulatory,” he said. “And while 2016 is unlikely to be a robust legislative year on Capitol Hill, it’s a year bankers can, and must, use to reset expectations.”
Nichols emphasized the need for the industry to build its “political muscularity” by increasing grassroots engagement by bankers at all levels -- from CEOs to tellers. He added that the industry must also be “more deliberate” in who it chooses to support with funding, manpower and other resources. Read the CEO update.
Spending Bill Advances ABA-Advocated Cyber, Basel III Legislation
The spending bill includes a measure long advocated by ABA that will facilitate increased sharing of critical cyber threat intelligence between the private and public sectors without compromising customer privacy. As urged by ABA, the spending bill left out a controversial section in the Senate’s cyber bill that would have amounted to giving the Department of Homeland Security the authority to regulate large financial firms.
The bill also includes a provision advocated by ABA and the state bankers associations requiring the banking regulators to conduct a study of Basel III’s effects on bank holdings of mortgage servicing assets. ABA’s legislative staff will continue to review the more-than-2,000-page bill for its implications for bankers.
Fed Raises Rates for First Time Since 2006
The Federal Open Market Committee decided yesterday to raise the target range for the federal funds rate from near zero to 0.25 to 0.5 percent, due to continued “moderate” economic expansion and steady job gains, according to a statement from the committee. The decision marks the first rate hike since 2006.
The committee said it would take a gradual approach to raising rates. “In determining the timing and size of future adjustments to the target range for the federal funds rate, the committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation.”
The action “shows the Fed is confident that the economy is strong enough to handle a very gradual rise in rates,” said Rob Nichols, adding that “after years at historically low levels, it’s important to head back in the direction of more normal interest rates. Abnormally low rates can have adverse consequences -- especially for savers that may seek out investments that could be too risky in pursuit of a higher return.” Read the FOMC statement.
CFPB Tool Helps Creditors Locate Properties in Rural Areas
The CFPB yesterday released a new online tool to help creditors determine if properties are located in rural or underserved areas.Creditors may rely on this tool to provide a safe harbor determination as allowed by Regulation Z.
Users select a year and enter a property address to determine whether the property location is considered to be in a rural or underserved area. The tool also provides a template that can be used for a larger file upload, allowing users to search for multiple properties at a time. Access the tool.
FCA Faced Tough Questions at House Ag Committee Hearing
On Dec. 2, the House Agriculture Committee held a three-hour hearing “to review the Farm Credit System.” The sole witness was Kenneth Spearman, chairman and CEO of the Farm Credit Administration (FCA), the FCS regulator.
Although Spearman has been a full-time member of the FCA board of directors for the last six years and CEO since March of this year, in responding to questions from committee members, he needed substantial assistance from two FCA executives, Charles Rawles, the FCA’s general counsel, and Robert Coleman, the FCA’s chief examiner, according to Bert Ely in his December 2015 Farm Credit Watch
Most of the committee’s 45 members attended the hearing; nearly all of them asked questions. While many committee members expressed support for FCS, with several acknowledging that as farmers they were or had been FCS borrowers, they still asked a lot of tough questions and offered many sharp criticisms of the FCS, and by extension, the FCA, Ely said.
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