SDBA eNews

January 11, 2018

2018 South Dakota Legislature Opens this Week

Legislation PhotoThe 2018 South Dakota Legislature opened this Tuesday, Jan. 9, with Gov. Daugaard giving his State of the State address.

Bankers can stay current on legislative issues of importance to the banking industry by reading the SDBA Legislative Update and  Bill Watch. The Legislative Update is a recap of weekly key legislative action. The Legislative Bill Watch tracks the status of bills the SDBA is monitoring. Both publications are posted online on Fridays during session. To sign up for email notifications when the publications are posted, contact Alisa DeMers.

Don't forget to make plans to attend the SDBA State Legislative Day on Wednesday, Feb. 7, 2018, in Pierre. This year's event will include two special events specifically for emerging bank leaders. Learn more and register to attend

Write U.S. Senators Now to Build Momentum for Reg Reform Vote

The best chance of meaningful regulatory reform for banks of all sizes--S. 2155, the bipartisan Economic Growth, Regulatory Relief and Consumer Protection Act--may come to the U.S Senate floor in the coming weeks. To help build momentum behind this legislation, ABA is urging all bankers to ask their senators to vote for S. 2155. 

With 24 bipartisan co-sponsors--12 Republicans, 11 Democrats and one independent--the bill has a strong chance of clearing the full U.S. Senate. Sending additional messages to senators will build momentum behind passing S. 2155 on the Senate floor. All bankers and bank directors are encouraged to send messages now. Contact your senators

With a busy year expected on Capitol Hill and at the regulatory agencies, ABA President and CEO Rob Nichols will provide an overview of what to expect during an ABA members-only webinar on Wednesday, Jan. 17, at 1 p.m. CST. Register now.

Fox News' Bret Baier to Keynote ABA Summit; Scholarships Available for Emerging Leaders Forum

Bret Baier, chief political anchor for the Fox News Channel, has been announced as a keynote speaker for ABA’s Government Relations Summit, April 23-25 in Washington, D.C. Baier is the host of “Special Report with Bret Baier,” the top-rated cable news program in its timeslot, and he was previously Fox News’ chief White House correspondent. He co-anchored the first GOP presidential primary debate in the 2016 election cycle.

The Summit is the largest annual gathering of banking leaders in the nation’s capital. With bank regulatory reform expected to move through Congress in the coming months, and with new regulators taking office, bankers have a unique opportunity to advocate for meaningful changes that grow the economy and give bank customers more choices.

Registration is free for bankers, bank directors and trustees and ABA service members. The SDBA offers a $500 stipend to help with travel expenses of one individual from each SDBA member bank to attend. Register to attend the Summit.

Attendees may also register for ABA’s Mutual Community Bank Forum, Emerging Leaders Forum and Women’s Leadership Forum, all of which are held in conjunction with the Summit. The ABA is offering $750 scholarships to two South Dakota bankers to attend the Emerging Leaders Forum. Emerging bank leaders who are interested in attending should contact the SDBA's Halley Lee.

FASB to Issue Proposal on ABA-Initiated Tax Reform Accounting Issue

The Financial Accounting Standards Board has announced that it will issue a proposal in the coming days to adjust regulatory capital balances that were unexpectedly affected by the new tax reform law. Citing year-end reporting concerns, FASB plans to issue the exposure draft next week with a two-week comment period, in an effort to have a draft finalized in time for companies to apply the new standard to their 2017 results. 

Under current tax accounting, the reduction of deferred tax assets and liabilities are recorded entirely within net income, including those applying to items in accumulated other comprehensive income such as unrealized gains and losses on available for sale securities. As a result, not only are net income and regulatory capital distorted, but this treatment also creates onerous operational burdens to track the related amounts in the future. 

While the FASB proposal will not change the impact to net income, the proposed adjustment between AOCI and retained earnings will allow ending regulatory capital to be appropriately stated and also avoid onerous operational requirements to keep track of the amounts that would have been “stranded” within AOCI. ABA first expressed its concerns to FASB in December, and trade groups representing both the property/casualty insurance and life insurance industries have since supported the ABA letter. Read ABA's comments. For more information, contact ABA's Mike GulletteJosh Stein or John Kinsella

Meta Financial Group to Acquire Crestmark Bancorp

Meta Financial Group, Inc.® (Nasdaq: CASH) (“Meta”), the holding company for the federally-chartered savings bank MetaBank®, announced Tuesday that it has reached an agreement to acquire Crestmark Bancorp, Inc. (“Crestmark”), the holding company for the Michigan state-chartered bank, Crestmark Bank, in an all-stock transaction.

Meta, which is headquarters in Sioux Falls, operates in several segments within the banking and payments industries. Crestmark is a commercial lender specializing in providing diverse financial solutions to businesses. This acquisition provides Meta with a national commercial and industrial lending platform and is intended to add an immediate pipeline of insurance premium financing business and provide opportunities for innovation and synergistic cross-selling among business lines.

“With this acquisition, we continue to deliver on our goal of growth and innovation through diversification,” said J. Tyler Haahr, chairman and CEO of Meta. “This transformational transaction will allow us to significantly add on-balance sheet loans at attractive yields with the addition of Crestmark’s national lending platform. It also creates complementary cross-sell opportunities for our insurance premium finance business. Crestmark has built an enviable lending platform, and we believe the business is poised for rapid growth. We look forward to welcoming their tenured management team and talented workforce to Meta.”

It is anticipated that the transaction will close in the second calendar quarter of 2018. The transaction is subject to closing conditions, including the approval of bank regulatory authorities, receipt of third party consents and the receipt of approval by shareholders of both Meta and Crestmark. Upon the closing of the transaction, Crestmark will operate as a division of MetaBank. Read more.

SDBA Offers Bank Holiday Signs

The SDBA is offering holiday signs that banks can print and display to notify customers when the bank will be closed.

The signs are set up to be printed on 8.5" x 11" paper and are provided as a high-resolution pdf file. Banks can print the signs and use them how they see fit.

View and print the 2018 holiday signs. If you need the signs in a different format or have any questions, contact Alisa DeMers.

Equifax to Host Webinar on Post-Breach Response, New Credit Lock Product

ABA members are invited to join a free webinar on Thursday, Jan. 18, at 1 p.m. CST during which senior Equifax leaders will discuss the company's remediation efforts after 2017's significant data breach and its plans moving forward, including its remediation timeline with completed activities and planned dates. The webinar will also provide an opportunity to preview Equifax's new "Lock and Alert" credit lock service for consumers.

The webinar is intended for banks' third-party risk managers, business line managers who use Equifax products, Equifax relationship managers, information security professionals, risk auditors and compliance officers. Participants may submit advance questions for Equifax when registering. Register now. For more information, or to submit questions separately, contact ABA's Krista Shonk

Meade County Can Answer Floodplain Questions

If you want to know if a property is in the Special Flood Hazard Area, Meade County can help provide answers on its website

You’ll find a wealth of information about Meade County's flood insurance rate map, including a digital copy of the Special Flood Hazard Area (SFHA) on its free mapping site, flood zones, base flood elevations (where available), floodway data, flood insurance, special rules for building in the flood plain, as well as ideas for protecting property from flood damage. Meade County also has additional flood hazard data not shown on the FIRM maps, where available.

Or you can call the Meade County Equalization & Planning Office with all of your floodplain questions at 605.347.3818. The office has copies of FEMA Elevation Certificates on buildings constructed or substantially improved in the floodplain since January 2014.

Compliance AllianceQuestion of the Week

Question: What additional requirements do we have after issuing an LE if the applicant never responds?

Answer: There are not additional requirements for Regulation Z after you issue the LE if the applicant never indicates an intention to proceed with the loan. However, Regulation B (ECOA) requirements are not met simply by issuing an LE. Regulation B requires the lender to respond to the applicant within 30 days of receiving the application or taking adverse action on an incomplete application. If the application is incomplete, the lender must either notify the applicant that the application is incomplete within 30 days of receiving the application or provide an adverse action notice within 30 days of taking the adverse action on the incomplete application. If the application is complete, the lender must communicate to the applicant within 30 days that the loan was approved (this can be express or implied), was denied (adverse action notice), or make a counteroffer. If a counteroffer is made, the lender must notify the applicant of action taken within 90 days of making the counteroffer if the applicant does not expressly accept or use the counteroffer.

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.

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