SDBA eNews

February 22, 2018

Hotel Registration Open for 2018 NDBA/SDBA Annual Convention

Bankers and business partners can now make their hotel room reservations for the 2018 NDBA/SDBA Annual Convention June 10-12 in Fargo.

This year’s convention will be held at Delta by Marriott at 1635 42nd St. SW in Fargo. Room prices are $92 and $105. The deadline to reserve a room from the annual convention block is May 10. To make a reservation, call Delta by Marriott at 701.277.9000.

This year’s event will look to innovate, inspire and ignite bankers. It is also an opportunity for bankers from South Dakota and North Dakota to get together to share ideas and for bankers to learn about new products and services from our business partners.

This year’s host is the North Dakota Bankers Association. Be watching for more details to come on exhibiting, sponsoring and advertising at the Annual Convention. Visit Or contact the North Dakota Bankers Association at 701.223.5303.

State Associations to Sen. Hatch: Time to Change 'Status Quo' for Credit Unions

Taxpayers should no longer subsidize the nation’s largest credit unions, which effectively operate the same as taxpaying banks, all 52 state bankers associations said in a letter to Senate Finance Committee Chairman Orrin Hatch (R-Utah) on Tuesday. The letter came after Hatch last month raised concerns to the National Credit Union Administration about whether credit union activities--and the NCUA’s supervisory agenda--align with the purposes of the federal income tax exemption they enjoy.

While the credit union tax exemption was originally created to help institutions meet the credit needs of customers in their local communities, the industry today has stretched the “common bond” requirements to allow credit unions to serve large, multistate regions, the associations said. They also pointed out that the number of credit unions with more than $1 billion in assets has more than doubled in the past decade, and that this group of almost 300 credit unions represents just 5 percent of the industry but enjoys 75 percent of the tax subsidy. Noting that Congress missed a critical opportunity to address the treatment of credit unions in the new tax reform law, they urged Hatch--the top tax policymaker in the Senate--to revisit the tax exemption this year.

“There is no reason why the largest credit unions, which act and look just like the taxpaying banks they compete with, should be completely free of income taxation,” the associations wrote. “This creates a market distortion where the tax code effectively subsidizes one financial services entity (the largest credit unions) over another (the smaller community bank).” Read the letter

Two More Senators Sign on to Bipartisan Regulatory Reform Bill

Senate Banking Committee members Ben Sasse (R-Neb.) and Doug Jones (D-Ala.) have signed on as co-sponsors of S. 2155, the bipartisan financial regulatory reform bill expected to receive a Senate vote in the coming weeks. Sasse and Jones bring the number of co-sponsors to 26--13 Republicans, 12 Democrats and one independent aligned with Democrats.

The result of a bipartisan compromise between Senate Banking Committee Chairman Mike Crapo (R-Idaho) and four Democrats on the committee--Jon Tester (D-Mont.), Heidi Heitkamp (D-N.D.), Mark Warner (D-Va.) and Joe Donnelly (D-Ind.)--S. 2155 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.

ABA has strongly supported the bill as it has moved through the Senate, including digital and print advertising in Capitol Hill publications and activating grassroots activity that resulted in tens of thousands of messages to Congress. Take action now

Bipartisan Federal Data Security Bill Draft Text Released

Reps. Blaine Luetkemeyer (R-Mo.) and Carolyn Maloney (D-N.Y.) last Friday released draft text of a bipartisan data security bill that would provide broad standards for data protection across industries and create new federal post-breach notification requirements. The draft legislation would set consistent, scalable standards for what businesses that handle sensitive personal data must do to protect that data. It also establishes steps that covered entities must take to notify regulators, law enforcement and victims after a breach exposing records of 5,000 or more consumers.

The bill designates the Federal Trade Commission as the regulatory and enforcement agency for non-depository institutions; the prudential regulators would continue to oversee how banks and their affiliates protect data under the Gramm-Leach-Bliley Act, and compliance with those agencies’ regulations would constitute compliance with the Luetkemeyer-Maloney bill. Under the current draft, FTC action in response to a breach would preempt state enforcement actions, and depository institutions would be exempt from actions brought by state attorneys general.

ABA has long advocated for consistent data security standards, and association staff are reviewing the draft and working closely with members of Congress to ensure the bill aligns with ABA’s position on the issue. ABA Government Relations Council Vice Chairman Jim Reuter--president and CEO of FirstBank, Lakewood, Colo.--is scheduled to testify on this topic at a House Financial Services Committee hearing on March 1. Read the draft. For more information, contact ABA's Bill Boger

Applications for Conservation Stewardship Program Due March 2

Are your ag customers being challenged to create a positive cash flow this year? Look into the Conservation Stewardship Program (CSP) at your local Natural Resource Conservation Service (NRCS) office. Since 2010, the CSP has been helping farmers and ranchers not only make ends meet but also implement soil health practices that pays for years and years. 

The CSP helps farmers and ranchers build on their existing conservation efforts while strengthening their operations. Whether a producer is looking to improve grazing conditions, increase crop yields or develop wildlife habitat, the NRCS can custom design a CSP plan to help meet those goals. The NRCS can help schedule timely planting of cover crops, develop a grazing plan that will improve forage base, implement no-till to reduce erosion or manage forested areas in a way that benefits wildlife habitat.

CSP applications are due Friday, March 2, 2018. More more details, information about applying, and a listing of CSP common enhancement activities on cropland and grazing land, visit NRCS South Dakota's website. Or call your local NRCS office.

CFPB Seeks Feedback on External Engagements

The Consumer Financial Protection Bureau yesterday issued a request for information seeking feedback on its external engagement process--the fifth in an ongoing series of RFIs designed to provide the CFPB with input on how it is fulfilling its statutory obligations and how to improve outcomes for both consumers and covered entities.

The public is invited to provide comments on how the bureau engages with external stakeholders through public and non-public hearings including field hearings, town halls, roundtables and meetings of its advisory boards and councils. The CFPB is seeking feedback specifically on how it can engage diverse external stakeholders, improve transparency around public and private events, solicit perspectives from outside Washington, D.C., and raise awareness for external engagements. Read the RFI. For more information, or to provide feedback on ABA's response to the RFI, contact Krista Shonk.

New ABA Staff Summary Highlights Mortgage Interest Deduction Issues

The ABA on Tuesday published a new staff summary addressing the changes to the treatment of mortgage interest deductibility as a result of the new tax reform law. The document includes an overview of the changes, as well as the answers to several frequently asked questions that have arisen since the law was passed. 

The tax law made two key changes regarding mortgage interest deductibility. First, it limited the amount of acquisition indebtedness that qualifies for the deductibility of interest to $750,000 for married taxpayers. It also removed the deduction for interest on home equity loans for tax years beginning in 2018. Both of these changes are scheduled to sunset in 2025. Read the summary. For more information, contact ABA's John Kinsella

National Interagency Community Reinvestment Conference To Be Held in Miami 

Building resilient and inclusive communities is more important than ever. Communities across the nation face a broad array of social and economic challenges, including widening cultural divisions, stagnation of incomes and devastation from natural disasters.

At the 2018 National Interagency Community Reinvestment Conference on March 18-21 in Miami, come together to learn how to align stakeholders, resources and strategies to face these challenges, strengthen communities and produce lasting impact. Don’t miss this opportunity to talk to the regulators, meet with peers and learn how CRA loans, investments and services can have a positive and lasting impact in the communities we serve.

The program offers: 10.5 CRCM credits; Community Reinvestment Act (CRA) examination training with regulators’ participation and insights; emerging ideas and best practices in community development shared by experts from around the country; and tours of Miami that explore resilience, recovery, and economic inclusion in a diverse and vibrant city.

The conference is sponsored by the Federal Reserve Banks of San Francisco, Atlanta and Chicago, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. Learn more.

Compliance AllianceQuestion of the Week

Question: For calculating my tolerances on the CD, what is an affiliate?

Answer: The definition of affiliate varies depending on the regulation and the part of the regulation to which the question applies.

For TRID, the definition is: Affiliate means any company that controls, is controlled by, or is under common control with another company, as set forth in the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.).

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.