SDBA eNews

April 12, 2018

SDBA Seeking Bankers to Serve on Committees for 2018-2019

The SDBA will appoint standing committee members for the upcoming year in May. SDBA committees are: Agricultural Credit Committee, Credit Card Committee, Legislative Committee and Trust Committee. Committee terms are one year beginning May 1, 2018, and ending April 30, 2019, except for the Legislative Committee which is a three-year term. Legislative committee members can serve two, consecutive three-year terms.

As volunteers for the Association, those who serve on the SDBA's committees are contributing to a stronger banking industry. 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. 

If you are interested in serving on an SDBA committee, please complete and return the committee request form by April 30, 2018, to [email protected] or fax to 605.224.7835. Questions, contact Alisa DeMers at 605.224.1653 or via email.

Mulvaney: CFPB 'Opening Up' Rules in Search of 'Unnecessary Burden'

The Consumer Financial Protection Bureau is revisiting several rules as it considers whether they impose “unnecessary burden or restrict consumer choice,” Acting Director Mick Mulvaney told the House Financial Services Committee yesterday. Specifically, he said, the bureau is revisiting the Home Mortgage Disclosure Act data expansion and its small-dollar loan rule.

“Regarding HMDA, the bureau intends to open a rulemaking to reconsider various aspects of the 2015 HMDA rule, such as reporting thresholds and transactional coverage and reconsider data points not mandated by the Dodd-Frank Act,” Mulvaney said. He also explained that the federal banking agencies’ goal with supervising HMDA compliance is “to help companies identify any weaknesses” and that they “will credit good-faith efforts to comply.” Read Mulvaney's testimony

Trade Associations Support Bill to Create Bipartisan Commission Structure for CFPB

In a joint comment letter to several House members on Monday, the ABA and several financial trade groups expressed support for H.R. 5266, a bill that would transition the governance structure of the Consumer Financial Protection Bureau from having a sole director to a five-person, bipartisan commission. The bipartisan bill was introduced by Reps. Dennis Ross (R-Fla.), Kyrsten Sinema (D-Ariz.), David Scott (D-Ga.) and Ann Wagner (R-Mo.).

“The current single director structure leads to uncertainty as we have witnessed in CFPB leadership from the Obama administration to the Trump administration. This uncertainty is not only borne by financial institutions providing significant lending services, but it negatively impacts America’s consumers, small businesses and our local economies,” the groups said. “A Senate-confirmed, bipartisan commission will provide a balanced and deliberative approach to supervision, regulation and enforcement by encouraging input from all stakeholders.”

The associations added that transitioning to a bipartisan commission structure has wide support, both from Congress and the public; similar bills have been passed multiple times on bipartisan votes by the House Financial Services Committee and the full House, and a recent Morning Consult poll noted that only 14 percent of the public favors maintaining the bureau’s current leadership structure. Read the letter

Agencies Issue Statement on Role of Cyber Insurance in Risk Management

As banks continue to face threats from cyber incidents, the Federal Financial Institutions Examination Council on Tuesday issued a joint statement on how its member agencies view the role of cyber insurance in banks’ overall risk management strategies. The statement did not contain any new regulatory expectations. 

While banks are not required to have cyber insurance, FFIEC noted that it can be a helpful tool to mitigate risk, but emphasized that a sound control environment remains the primary defense against cyber threats. “Purchasing cyber insurance does not remove the need for a sound control environment,” the agencies said. “Rather, cyber insurance may be a component of a broader risk management strategy that includes identifying, measuring, mitigating and monitoring cyber risk exposure.” 

When assessing the costs and benefits of cyber insurance, the agencies recommended that banks involve multiple stakeholders across the organization; perform proper due diligence to understand cyber insurance coverage and identify any gaps; and evaluate cyber insurance as part of an annual review and budgeting process. 

ABA Insurance Services, ABA's endorsed insurance provider, offers cyber insurance policies that cover a wide range of cyber and privacy exposures, including data breach liability, cyber liability and cyber publishing and social networking liability. Read the FFIEC noticeLearn more about ABA Insurance Services’ cyber insurance policy

ABA, State Associations Urge House to Pass S. 2155 'As Soon as Possible'

ABA and state bankers associations across the country on Monay sent letters to congressional leaders urging the House to pass S. 2155--the Senate-passed regulatory reform bill--“as soon as possible.” The associations noted that the bill contains numerous provisions championed by members of the House Financial Services Committee in recent years.

Among the S. 2155 provisions that originated in the House are those that would provide Qualified Mortgage status for mortgage loans held in portfolio by banks with less than $10 billion in assets, raise the small bank holding company threshold and provide greater flexibility to federal thrifts. “The tireless work of the House Financial Services Committee over the last six years under the leadership of Chairman Jeb Hensarling cannot be overstated, nor can the influence the committee had on this critically important bipartisan agreement,” ABA said.

While welcoming House members’ efforts to pass additional regulatory reform bills, ABA added that “now is the time to get S. 2155 to the president’s desk for his signature” and urged the House to pass it promptly. “We believe S. 2155 will make a very real difference to community banks across the country,” ABA said. “It is on the verge of enactment due in no small part to the actions and the efforts of House lawmakers.” Read the ABA letterRead the state association letter

Speaker Ryan to Retire from Congress

House Speaker Paul Ryan (R-Wis.) announced yesterday that he will not run for re-election, thus retiring as both speaker and from his congressional seat at the end of the current Congress. A member of Congress since 1999, he was elected speaker in 2015. He previously served as chairman of the powerful House Budget Committee and Ways and Means Committee. Last year, Ryan secured passage of a tax reform bill that had been one of his long-standing policy goals.

ABA President and CEO Rob Nichols thanked Ryan for his service. “Congress will be losing a steadfast public servant, a champion of economic growth and opportunity for all Americans and a good man,” he said. “Speaker Ryan has always appreciated the critical role America’s banks play in the economy, and we thank him for consistently supporting policy that will allow banks to better serve their customers and communities.” 

ABA Offers New Resources to Help Banks Comply with FinCEN's Beneficial Ownership Rule

With the May 11, 2018, compliance date for the Financial Crimes Enforcement Network’s beneficial ownership rule fast approaching, ABA has created two new resources to help ABA member banks comply.

The first is a staff analysis of FinCEN’s latest set of FAQs on the rule, which were issued last week. In addition, ABA has created its own set of FAQs that supplement the guidance provide by FinCEN and respond to questions raised by bankers since the rule was published in 2016. The FAQs will be updated as additional guidance is issued by FinCEN and the banking agencies on the new requirements. 

Deadline to Apply for GSB Wisconsin Scholarships is April 25

The Graduate School of Banking (GSB) at the University of Wisconsin's 2018 school session will be held July 29 to Aug. 10 at the University of Wisconsin-Madison. Prochnow Educational Foundation/SDBA scholarships will be awarded to two South Dakota bankers attending the 2018 school.

The scholarship amount is $1,500 for each year of the student’s attendance (approximately one-third of the annual tuition fees), for a total value of $4,500. This scholarship is for people who will be entering their first year at GSB. The deadline to apply for the scholarship is April 25, 2018. View the scholarship application

GSB students acquire a broad knowledge and understanding of major bank functions and their interrelationships and develop the skills required to lead and manage effectively. The school’s curriculum reflects the contemporary trends impacting the financial services industry. Core courses address broad areas of finance, marketing, management and the environment in which banks operate while elective courses allow students to customize their learning experience. A separate application for the school must be completed, and the enrollment deadline for the school is June 1, 2018. Learn more and apply for the school

Compliance AllianceQuestion of the Week

Question: I am trying to research a few things for beneficial ownership. Our current new account process includes a pre-qualification piece for credit cards and lines of credit. This "soft hit" on credit is included in the customer verification process. Are we out of compliance for soft pulls on credit for beneficial owners who are not signers on an account?

Answer: Technically, beneficial owners are not owners/signers of the account. In order to pull credit, you'd need permission (written) from the beneficial owner. FCRA outlines permissible purposes to pull credit reports. FCRA 604(a)(3)(A) "...intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer..."

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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.