SDBA eNews: April 28, 2016

In This Issue

Resources to Educate Older Americans About Scams and Financial Abuse


To celebrate May as Older Americans Month, the ABA Foundation wants to help bankers reach their older customers and their financial caregivers.

Four new tip sheets are perfect to share on social media, as printouts in the lobby or during events.

If you plan to tweet or post in celebration of Older Americans Month, please be sure to use the hashtags #OAM16 and #SafeBankingForSeniors.

New web graphics, customizable outreach letters and customizable communications tools are now available for banks participating in Safe Banking for Seniors. Register your participation today!


12th Annual Bankers and Bikes Rally Set for June


CSPI is holding its 12th annual Bankers and Bikes Rally June 4-10, 2016.

This year's destination is the Madeline Resort and Spa in Telluride, Colo. Price per couple this year will be $1,600. Individuals can usually be paired with another single rider if need be.

The tour will begin in Jefferson City, Mo., with two stops along the way in Wichita, Kan., and La Junta, Colo.

CSPI, along with several of its business partners, have been participating and sponsoring this event for several years. Anyone who is interested in a relaxed event with other bankers and business partners is invited to take part. Learn more and register.


Question of the Week

If a borrower doesn’t qualify for a loan under the ATR rule, can we rely on a guarantor’s income?

Answer: No, you may not use a guarantor’s income to qualify a loan under the ATR rule. Under the ATR rule, you have to consider the “borrower’s” ability to repay a loan(12 CFR 1026.43), and the guarantor is not considered a borrower under the ATR rules. The creditor can only rely on the borrower’s and any co-borrower’s income and assets to document ATR.

Compliance rules and regulations change quickly. For timely compliance updates, subscribe to Compliance Alliance’s email newsletters.

Compliance Alliance offers a comprehensive suite of compliance management solutions. To learn how to put them to work for your bank, call 888.353.3933 or email.


Upcoming Events

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Questions/Comments

Contact Alisa DeMers, SDBA, at 800. 726.7322 or via email.

Deadline Nearing to Request Appointment to SDBA Committee

 
The deadline to request appointment to an SDBA standing committee for 2016-2017 is May 1.

SDBA committees are: Agricultural Credit Committee, Credit Card Committee, Legislative Committee and Trust Committee. Committee terms are one year beginning May 1, 2016, and ending April 30, 2017, with the exception of Legislative Committee members who serve three-year terms.

Those who are currently serving on a committee will not be automatically reappointed and need to complete the committee appointment request form.

As a volunteer for the Association, bankers will be contributing to a stronger banking industry, and the SDBA is confident that they will enjoy a personal sense of accomplishment as well. The SDBA respects the time commitment that each committee member has made and works hard to ensure the meetings are well run and productive. Committees meet once or twice a year to initiate activities and recommend policy.

Learn more and request to serve on a committee.


FDIC Issues Final Rule on Small Bank Deposit Insurance

 
The FDIC on Tuesday approved a final rule for assessing deposit insurance premiums on banks with under $10 billion in assets. Under the rule, assessment rates will be calculated using financial measures and supervisory ratings derived from a statistical model estimating the probability of failure over three years.

The final rule eliminates the risk categories currently used for banks that do not have a rating of CAMELS I or II and instead bases assessment rates for all banks on a standardized formula. As a result, deterioration of a bank’s capital or supervisory rating will not lead to a jump in its assessment rate, only to a somewhat higher rate, ABA pointed out in a staff analysis. In addition, the rule adopts fairer standards for assessing growth; assets would have to grow more than 10 percent over a one-year period to trigger higher assessments, meaning that fewer banks will be penalized for healthy, well-managed growth.

The rule does not alter the loan portfolio factor--something ABA criticized previously--but does cap assessment rates based on CAMELS ratings. This cap could limit the impact of the loan portfolio factor and the weighting for the tier 1 core capital ratio (which is given a much higher rating in the revised formula).

The FDIC estimates that 93 percent of small banks will see somewhat lower assessments as a result of the final rule, while the remaining 7 percent will see increases. The final rule will take effect beginning the quarter after the FDIC’s insurance fund reaches 1.15 percent, which is expected to occur in the third quarter.


ABA Commends CFPB Action on QM Coverage for Rural, Underserved Areas


In a comment letter to the Consumer Financial Protection Bureau on Tuesday, ABA expressed its support for the CFPB’s recent interim final rule that broadened the availability of certain special provisions for small creditors operating in rural or underserved areas. Under the interim rule, small creditors--or banks that made no more than 2,000 first-lien covered transactions and have less than $2 billion in assets--will be eligible for special qualified mortgage provisions if they originate at least one covered mortgage loan on a property located in a rural or underserved area in the prior calendar year.

ABA recommended that the bureau consider increasing the asset threshold limit to be considered a “small creditor” from $2 billion to $10 billion to allow more small institutions to take advantage of the regulatory relief the rule provides.

The association also urged the CFPB to revise the language of the rule to allow creditors to begin taking advantage of special QM provisions immediately after beginning to lend in a rural or underserved area in 2016. Without this clarification, ABA pointed out, banks that only recently began lending in rural or underserved markets would have to wait until the end of the calendar year to take advantage of the QM provisions. Read the letter. For more information, contact ABA's Rod Alba.

The Consumer Financial Protection Bureau on Tuesday updated its website with new online resources to help bankers keep pace with regulatory changes. The new resources include a factsheet for small creditors operating in rural or underserved areas and a chart to help creditors determine whether they are eligible to make qualified mortgages. View the factsheet. View the QM chart.


Mediation Services Available for SD Farmers and Ranchers


The South Dakota Department of Agriculture’s Agricultural Mediation Program is available for farmers and ranchers in financial distress.

 “The Agricultural Mediation Program has been around since the 1980s, although it has evolved over the years and added additional areas to mediate,” says Terri LaBrie, finance and mediation administrator for the department. “Mediation is a great way to resolve disputes outside of the court system by providing a neutral third-party mediator to facilitate a resolution. It’s confidential and mediation fees are minimal compared to litigation.”

Agricultural Mediation Program areas include debtor/creditor, federal lands, oil and gas and water drainage mediation. 

Mediation is mandatory for any agricultural credit more than $50,000. Mediation is voluntary for any credit less than $50,000. Mediation for the program areas of water drainage, federal lands and oil/gas are all voluntary.

“We have seen an increase in mediation requests over this last year. It’s important our farmers and ranchers know this program exists with the continuation of low commodity prices,” said LaBrie. “Financial counseling services are also available for clients in mediation. This service is free and is an important tool when looking at options.”

More information on the department’s Agricultural Mediation Program and any of the financial programs the department has to offer can be found online or by calling the Division of Ag Development at 605.773.5436.


ABA Encourages Nominations for Powerful Women in Banking List

 
ABA is encouraging members to nominate women of outstanding achievement to the annual 25 Most Powerful Women in Banking and 25 Women to Watch lists. The rankings, selected by the editors of American Banker, will highlight the professional achievements and business acumen of the industry’s leading women. They also will spotlight institutions that do the best job of promoting gender diversity in their leadership ranks.

Banks, both large and small, can nominate one or more women with senior status within their organizations. Individuals also may submit testimonials supporting a nomination. The deadline for nominations is Friday, May 27. Rankings will be published in October. Access the nomination forms. For more information, contact ABA's Susan Bonney.


New Video Explains How Bankers Can Increase Industry's Clout

 
ABA on Monday released a new YouTube video encouraging bankers to support the new “Power Up” initiative, which is designed to increase bankers’ clout and voice with policymakers. To “power up” banker advocacy, ABA is calling on all bank CEOs to build strong relationships with policymakers, join BankPac or a state association’s federal PAC and donate to the Fund for Economic Growth.

“All of these steps are aimed at dramatically expanding bankers’ participation in the political process and thereby increasing our political strength,” ABA President and CEO Rob Nichols said recently, emphasizing the need to engage the nation’s 2 million bank employees in advocacy efforts and deploy our funds and other resources much more aggressively in support of candidates who appreciate banks’ role in the economy. Watch the video. Learn more at aba.com/PowerUp.