SDBA eNews

December 7, 2017

Senate Banking Committee Passes Bipartisan Reg Reform Bill

The ABA on Tuesday applauded the Senate Banking Committee's passage of S. 2155, the bipartisan regulatory reform bill championed by Sen. Mike Crapo (R-Idaho) and Sens. Jon Tester (D-Mont.), Heidi Heitkamp (D-N.D.), Mark Warner (D-Va.) and Joe Donnelly (D-Ind.). The bill includes several provisions that are part of ABA’s Blueprint for Growth, including a Qualified Mortgage designation for mortgages held in portfolio, a substantial increase in the SIFI designation threshold, and relief from stress tests and exam requirements for certain institutions.

“Today’s bipartisan 16-7 vote in the Senate Banking Committee for financial regulatory reform legislation shows what can happen when lawmakers on both sides of the aisle work together for the good of the American people,” said ABA President and CEO Rob Nichols. “This bill includes commonsense changes to the nation’s financial rules that will allow banks to better serve their customers and communities.”

In a print ad running in Politico ton Wednesday, ABA thanked the 10 Republicans, 11 Democrats and one independent who co-sponsored the bill--a key step toward unleashing the full potential of the American economy--and urged the full Senate to pass the bill. Read ABA’s statement.  View the ad.

ABA Urges Bankers to Contact Senators in Support of Reg Reform Bill

As momentum continues to build in Congress for common-sense regulatory reform, ABA is calling on all bankers to contact their senators and urge them to support S. 2155, a solid step towards right-sizing regulations for the nation’s banks. ABA has created two letters--one thanking the bill’s co-sponsors for their efforts and one urging general support for the bill--for bankers to use when contacting their lawmakers. Contact your senators now.

ABA Encourages Bankers to Prepare for Financial Reporting, Capital Impacts of Tax Reform

While the current tax reform bills are expected to have positive long-term effects on the economy and bank performance, the Financial Accounting Standards Board’s standards require banks to include the impact of the new tax rates in the year that the law is enacted. If tax reform is enacted this year, this could adversely impact regulatory capital positions for many banks in 2017, as deferred tax assets and liabilities, among other things, are revalued.

ABA has compiled a preliminary list of accounting and capital challenges that bankers will need to address as they head into the year-end reporting season. It is recommended that bankers review this with their board members, auditors and examiners prior to starting their end-of-year reporting processes. View the list. For more information, contact ABA's John Kinsella or Josh Stein.

FinCEN Launches New Public-Private Information-Sharing Forum

The Financial Crimes Enforcement Network will formalize FinCEN Exchange, a new forum to facilitate public- and private-sector information sharing on financial crimes data, Sigal Mandelker told the ABA/ABA Financial Crimes Enforcement Conference on Monday. Mandelker is Treasury under secretary for terrorism and financial intelligence.

Through the program, FinCEN will coordinate with law enforcement to convene regular briefings for financial institutions to exchange information on illicit finance threats--including specific information and broader “financial typologies,” a term that refers to money laundering methods.

This effort “significantly contributes to our ability to combat the increasingly sophisticated money laundering efforts we face,” Mandelker said, noting that FinCEN Exchange builds on a series of a dozen pilot briefings held for 40 institutions since 2015. “It is time to institutionalize this program within our AML framework,” she added.

Mandelker emphasized that FinCEN Exchange is “not intended to add a regulatory burden to your financial institutions. We’re not imposing any new requirements.” Instead, she explained, it is designed to help banks “channel resources toward high-priority targets.” Read more.

FinCEN Considering Further Guidance on Beneficial Ownership Rule

As the banking industry prepares to implement the Financial Crimes Enforcement Network’s final beneficial ownership rule, FinCEN Acting Director Jamal El-Hindi on Monday said that the agency is considering additional guidance to help address lingering questions from financial institutions ahead of the May 2018 compliance deadline. The rule requires banks to collect information on beneficial owners--individuals who own more than 25 percent of the equity interests in a company, or a single individual who exercises control--when an account is opened.

Addressing the rule’s 25 percent reporting threshold at the ABA/ABA Financial Crimes Enforcement Conference, El-Hindi noted that regulators included language in the rule that gives banks flexibility to collect additional information on customers below the 25 percent equity interest threshold in order to “support industry’s own efforts” when they feel they need to collect information at a lower threshold. Andrea Sharrin, director of FinCEN’s policy division, added that the agency is finalizing a new set of frequently asked questions, and regulators noted that they are working to update the FFIEC manual to incorporate new information on beneficial ownership.

When it comes to enforcing the beneficial ownership rule, the OCC’s Donna Murphy noted that regulators “have been planning to begin looking at compliance through the risk-based examination process once the date comes into effect. If there are deficiencies, we will be addressing them.” She added, however, that “that doesn’t mean one should expect to see a plethora of enforcement actions.”

Discussing enforcement more broadly, regulators noted that the anti-money laundering violations today are much more nuanced than in previous years. “Nowadays, we’re seeing a much, much higher level of compliance,” said Sarah Green, senior director for enforcement and AML policy at FINRA. “Violations are generally more focused on specialized instances.”

Morning Consult: Majority of Voters Support Taxing Credit Unions

American voters overwhelmingly are unaware that credit unions pay no federal income taxes, and when told about it, more than half would support a tax reform plan that eliminates the credit union tax exemption to limit deficit increases, according to a survey conducted by Morning Consult for ABA. The federal tax subsidy to credit unions with more than $1 billion in assets amounts to $27 billion over 10 years.

According to the national survey, 85 percent of American voters did not know whether credit unions pay taxes or mistakenly believed they do. Fifty-one percent of voters said they would support eliminating the credit union tax exemption if it helped minimize the impact of tax reform on the deficit. Fifty-six percent of voters agreed that it is inappropriate for credit unions to use their tax exemption to buy multimillion-dollar sports sponsorships, such as the Golden 1 Credit Union Center, where the NBA’s Sacramento Kings play, and the San Diego County Credit Union Holiday Bowl.

The survey results were released in a Morning Consult infographic sent to a broad audience in the public policy community as the Senate debates the latest tax reform plan. To help lawmakers and voters understand the full impact of credit unions’ tax exemption, the infographic links to a website with more information, including state-by-state details. Bankers can use and share the information on social media using the hashtag #fairshare. View the infographicView the website.

Federal Reserve Bank of St. Louis EVP to Speak in Brookings

Julie Stackhouse with the Federal Reserve Bank of St. Louis will present “From Financial Crisis to Recovery–The Important Role of the U.S. Central Bank" on Feb. 5, 2018, at South Dakota State University in Brookings. Stackhouse is executive vice president and managing officer of Supervision, Credit, Community Development and Learning Innovation.

Prior to joining the St. Louis Fed in September 2002, Stackhouse served as vice president and managing officer of the risk management department of the Federal Reserve Bank of Minneapolis. Before moving to Minnesota in 1995, she was an officer with the Federal Reserve Bank of Kansas City, where she served in many capacities, starting as an examiner in 1980. Stackhouse holds a bachelor's degree in business administration from Drake University and is a graduate of the Wisconsin Graduate School of Banking. In 2010, Stackhouse was named a St. Louis Business Journal “Most Influential Business Women” recipient.

The presentation at SDSU is free to attend and will be held at 7 p.m. at the SDSU Performing Arts Center at 1601 11th St. The event is sponsored by the Dykhouse Scholar Program in Money, Banking and Regulation. Questions, contact Dr. Joseph M. Santos.

Registration Now Open for NDBA/SDBA Bank Management Conference

Now is the perfect time to make plans to attend the NDBA/SDBA Bank Management Conference in Scottsdale, Ariz.The conference will be held Feb. 16-17, 2018, at The Westin Kierland Resort & Spa, a AAA Four Diamond resort located adjacent to Kierland Commons, an outdoor shopping center with 70 stores and restaurants.

The conference program will include six keynote speakers who will provide timely insight on banking trends, the economic landscape, FinTech opportunities and workplace culture. In addition, Lt. Col. Robert J. Darling will share how he experienced first-hand the crisis leadership decisions in the White House on 9/11.

Friday afternoon will feature an optional conference golf tournament. This is always a popular event, and advance registration is required.

Programs for spouses and guests include a breakfast and “Cheese 101” workshop on Friday and “September 11, 2001–The White House: A Crisis Leadership Presentation” on Saturday.

Learn more and register.

Compliance AllianceQuestion of the Week

Question: As a RDFI (receiving depository financial institution) for ACH purposes, how long do we have to return an ACH to the ODFI (originating depository financial institution) after the transaction?

Answer: Generally, NACHA rules permit returns on consumer transactions for 60 calendar days and returns on business transactions for two business days. The RDFI must have a written statement of unauthorized debit complying with NACHA guidelines to use the extended return period for consumer transactions. Some variations based on SEC type may apply. See NACHA Rules Sections 3.8 and 3.13.

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

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.

 The Advantage Network

SDBA eNews Archive
View past issues of the SDBA enews

Advertising Opportunity
Learn more about sponsoring the SDBA eNews.

Contact Alisa DeMers, SDBA, at 800.726.7322 or via email.