11-16-17 eNews

SDBA eNews

November 16, 2017

2018 High School Scholarship Program Application Now Available

The South Dakota Bankers Foundation has allocated $90,000 for the High School Scholarship Program for 2018. Matched by recipient banks, the program will result in a total of $180,000 in high school scholarships awarded to high school seniors throughout South Dakota in 2018.

Scholarship are available in $500 increments to the first 180 banks/branches who agree to match an equal amount. Banks who participated in the High School Scholarship Capital Campaign are eligible to apply for funding.

Students who receive the scholarships must be high school seniors who plan to attend an accredited South Dakota college, university, vocational technical school or community college on a full-time basis. Winners must agree to have their names released to the media. Other scholarship eligibility requirements may apply as determined by the sponsoring bank. The deadline for SDBA banks to apply for high school scholarship funding is Dec. 22, 2017. Learn more and apply.

Enrollment Open for 2018 National School for Experienced Ag Bankers

The 2018 National School for Experienced Ag Bankers, sponsored by the South Dakota Bankers Association, will be held on the campus of Black Hills State University in Spearfish on June 25-29, 2018. The school targets ag bankers with a strong knowledge of financial analysis in ag banking who desire further training in analyzing and troubleshooting more complex and problem credits.

Now that ag bankers have some experience in credit servicing, credit analysis and risk rating, school instructors will provide course material primarily by case study and supported by lectures and intensive analysis. Attendees will be taken through a “live” case study and other rapid fire case studies. Instructors will provide valuable information and additional analytical tools that will inspire action as attendees learn to apply the techniques in more complex loans.

Students will continue their education by learning about commodity grain marketing fundamentals through participation in a simulation game. Lender liability issues, grassroots efforts and the bank regulator’s role will also help “round out” attendees' education. Students will achieve higher skills that will help with early identification of problem loans and determining solution options.

Cordray to Step Down from CFPB By End of Month

In a long-anticipated move, Richard Cordray will resign as director of the Consumer Financial Protection Bureau by the end of the month, he said in an email to CFPB staff yesterday. Cordray’s five-year term as director was set to expire in July 2018. His email did not mention future plans, but many analysts have expected him to run for governor of Ohio, where he previously served as attorney general.

“While we haven’t always agreed with Director Corday on issues, we have always shared his goal of wanting to help consumers and appreciated his willingness to engage with us,” said ABA President and CEO Rob Nichols. “Consumers are our customers, and nothing is more important to America’s banks than maintaining their trust and confidence. We will continue to work with the CFPB under its new leadership to ensure consumers have access to the increasing variety of credit and financial tools they demand, with the full protections they deserve.”

As he did when Comptroller of the Currency Thomas Curry’s term ended this spring, President Trump will name an acting director to serve until a new CFPB director is confirmed. “The administration will announce an acting director and the president’s choice to replace Mr. Cordray at the appropriate time,” said a White House spokesman.

Nichols reiterated ABA’s longstanding support for having the bureau led by a five-member bipartisan commission, which he said would “increase accountability . . . provide continuity across administrations and broaden the CFPB’s perspective on regulation that must carefully balance consumer protection against access to credit.”

House Committee Passes ABA-Advocated Bills

During a markup yesterday and Tuesday, the House Financial Services Committee approved several regulatory relief bills advocated by ABA as part of its Blueprint for Growth. Almost all were approved with bipartisan majorities. H.R. 3299--a bill codifying the “valid-when-made” doctrine, which ensures validly made loans remain valid when they are sold or assigned but which has come under question in the courts--cleared on a 42-17 vote. The committee also passed a bill (H.R. 4296) with a 42-18 vote that would prohibit the establishment of operational risk capital requirements based on a number of factors.

The committee approved a number of mortgage-related bills, including H.R. 1153, which would clarify the Qualified Mortgage points and fees test (46-13 vote); H.R. 3978, which would allow the accurate disclosure of title insurance premiums and potential discounts under the TILA-RESPA integrated disclosures (53-5 vote); and H.R. 3221, which would eliminate appraisal requirements for certain portfolio loans (32-26 vote).

The committee also passed bills addressing large bank stress tests and the “living will” process. H.R. 4293 passed on a 38-21 vote; the bill would make the Dodd-Frank stress tests more transparent and subject the scenarios and methodologies regulators require to notice and comment. Meanwhile, a bill to extend the submission cycle for large bank resolution plans to once every two years and require timely regulator feedback (H.R. 4292) sailed through unanimously. Read ABA's memo on the bills.

ABA Continues Engagement on Tax Reform Issues

As the Senate Finance Committee debates Chairman Orrin Hatch’s draft tax reform bill and the full House prepares to take up the bill cleared by the Ways and Means Committee, ABA continues to review legislative language and engage with members of Congress and their staff.

ABA is currently analyzing new legislative text released by Hatch in advance of a committee vote scheduled for the end of the week, as well as the more than 300 amendments that have been introduced. Senate leaders hope to hold a vote by the full Senate the week after Thanksgiving. Working with state bankers associations, ABA continues to engage members of the Senate and House on ending the tax exemption for large, bank-like credit unions--which would save up to $35 billion to fund tax reform.

ABA staff are also working closely with the Independent Community Bankers of America and the Subchapter S Bank Association in advocating for changes in both the Senate and House bills to help Subchapter S banks benefit from lower rates for pass-through entities. ABA has received clarifications from Senate staff on how calculations in that bill work and remain in close contact with House staff. For more information, contact ABA’s John Kinsella or Curtis Dubay.

House Passes Five-Year Flood Insurance Reauthorization

In a bipartisan 237-189 vote Tuesday night, the House passed H.R. 2874, which would reauthorize the National Flood Insurance Program for up to five years. In addition to extending the NFIP before it expires next month--and thus providing greater certainty to lenders and borrowers--the legislation also includes updates to interagency guidance and mandatory staffing that will facilitate compliance.

ABA President and CEO Rob Nichols applauded the vote. “We strongly support a long-term reauthorization of the NFIP, and believe this bill makes appropriate and necessary reforms to address the program’s sustainability, affordability and availability,” he said. “The five-year reauthorization included in the legislation will ensure that the program is reliably available for borrowers seeking to purchase homes in special flood hazard areas where purchase of flood insurance is mandatory.” For more information, contact ABA’s Joe Pigg.

SDBA to Hold IRA Basics Seminar in December

The SDBA's IRA Basics Seminar, to be held Dec. 7 in Sioux Falls, will provide attendees a solid foundation of IRA knowledge. Real case problems and examples are included throughout the day to help participants apply information to job-related situations. 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, and this 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 to attend.

FDIC to Hold Teleconference on Small Business Lending Rescources

FDIC will hold a free teleconference on Dec. 12 at 1 p.m. CST to provide information for community banks on small business lending. Presenters will discuss FDIC resources and research relevant to small business, including Money Smart for Small Businesses, the FDIC's small business lending survey and Community Reinvestment Act consideration for small business lending and investments. A Q&A period will follow the presentation. Register now.

Question of the Week

Question: We are doing a land loan that will have a house built in the next year on it. The loan we originate will just be secured by land. The proceeds to build the home in the future will be from another loan. Should we pull a flood determination?

Answer: If the bank is just originating a loan that will only be secured by land, then it is not required to pull a flood determination. The bank would need to pull a flood determination when it’s time to do the other loan that will be secured by the home. At that time, you would treat it like a construction loan in regards to flood.

Not a Compliance Alliance member? Learn more about membership with Compliance Alliance by attending one of our live demos:

Tuesday, Nov. 21, 2017, 10-11 a.m. CT

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