Seats Remain for 2018 Experienced Ag Bankers School

A few spots still remain for the National School for Experienced Ag Bankers June 25-29 in Spearfish. 

Sponsored by the SDBA, the school targets ag bankers with a strong knowledge of financial analysis in ag banking who desire further training analyzing and troubleshooting more complex and problem credits. Three to five years of banking experience is recommended. The school is also beneficial for ag loan officers, credit analysts, credit reviewers, regulators and FSA loan officers. 

School instructors will provide course material primarily by case study and supported by lectures and intensive analysis. Students 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 learn about commodity grain marketing fundamentals through participation in a simulation game. Lender liability issues, grassroots efforts and the bank regulator's roll will round out the training. Attendees will achieve higher skills that will help with early identification of problem loans and determining solution options. 

The remaining seats for this year's school will fill quickly, so apply now. Learn more and register. 

Ryan Confirms House Will Vote on S. 2155

The House will vote on S. 2155, the bipartisan financial regulatory reform bill advanced by the Senate in March, while the Senate will take up a set of additional reform bills passed by the House Financial Services Committee, according to an agreement announced by House Speaker Paul Ryan (R-Wis.) on Tuesday. Both Ryan and House Majority Leader Kevin McCarthy have previously signaled that the House could pass the bill in May, but Ryan offered no further comments on the timing of a vote.

“We’ve got an agreement to be moving different pieces of legislation,” Ryan said. “So we will be moving [S. 2155]. We’re also going to be moving in the Senate a package of bills that we think will actually add to this that the Financial Services Committee has acted on as well.” The House Financial Services Committee has passed numerous standalone measures by substantial bipartisan majorities.

ABA is urging bankers to write their House members and ask them to pass the bill. A huge wave of grassroots action made a difference in urging the Senate to pass the bill, and now the same effort is needed in the House. “We need your help to get this regulatory reform legislation across the finish line,” ABA said in an action alert to members. Take action now. 

House Votes to Overturn CFPB Indirect Auto Lending Guidance

The House on Tuesday reversed the Consumer Financial Protection Bureau’s 2013 guidance on indirect auto lending. In a 234-175 vote, the House passed a Congressional Review Act resolution that would invalidate the guidance, which sought to impose limits on how and what indirect lenders pay car dealers who provide financing and how much discretion dealers have to set loan terms and rates. The Senate previously passed a similar measure to repeal the guidance.

In a letter on Monday urging lawmakers to vote for the resolution, ABA noted that the “the regulatory and enforcement uncertainty caused by this guidance has caused many banks to exit or curtail their indirect auto lending, which limits consumer choice and increases the cost of credit.”

Normally the CRA can only be used to invalidate regulatory actions issued within the previous 60 legislative days, but late last year, the Government Accountability Office formally ruled that the guidance constituted a rule, which--even though it was issued without notice and comment--was a general statement of policy with general applicability. That ruling restarted the CRA clock.

“ABA strongly believes that every automobile customer deserves to be treated fairly, and that there is no room for illegal discrimination of any kind in automobile financing,” the association added. “However, the [guidance] was issued without the opportunity for public comment on its legal underpinnings, critical review of its assumption and bases, and its impact on consumer access to convenient and affordable credit.” Read the letter. 

House Passes SBA 7(a) Reform Bill

By a voice vote, the House on Tuesday passed H.R. 4743, a bipartisan bill introduced by Reps. Steve Chabot (R-Ohio) and Nydia Velazquez (D-N.Y.) that would strengthen the Small Business Administration’s oversight of its loan programs and increase its maximum lending authority. ABA applauded the vote, noting that the bill would help ensure the strength of the program into the future.

“The SBA programs are an important part of business lending for many banks,” ABA said in a letter to lawmakers on Monday urging them to pass the bill. “They help fill a critical gap, particularly for early-stage businesses that need access to longer-term loans. The guarantee helps reduce the risk and capital required for banks and facilitates loans that might never have been made without this important level of support. ABA has long supported this successful public-private partnership and is pleased that Congress recognizes the importance of this program.” Read the letter. 

DOL Announces Relief for Fiduciaries

The Department of Labor on Monday announced a temporary enforcement policy on prohibited transaction rules applicable to investment advice fiduciaries. This much-needed relief will help bank fiduciaries ensure that their compliance efforts do not run afoul of the prohibited transaction requirements of the Employee Retirement Income Security Act and comes as a result of the Fifth Circuit’s decision earlier this year to vacate the fiduciary rule in its entirety.

Under the policy, banks and other financial institutions that were relying on their good-faith compliance with the fiduciary rule (including the impartial conduct standards of the best interest contract exemption) may continue to rely on this good-faith compliance without DOL enforcement action and pending further guidance from DOL. Read more. For more information, contact ABA's Tim Keehan. 

ABA Issues Policy Recommendations on Fintech

As the Treasury prepares to issue its report on nonbank fintech issues, ABA on Monay released a white paper featuring 11 fintech policy recommendations that would facilitate innovation both inside and outside of the regulated banking system and promote partnerships between banks and nonbanks.

Specifically, ABA recommended that regulators: clarify rules to ensure customers can securely share their personal data; think about third-party risk management in innovative ways; provide fintech companies with a path to become banks while ensuring a level playing field; provide a viable process for testing new technologies; modernize how the Community Reinvestment Act is applied; reevaluate the overbroad definition of a brokered deposit; and revisit Regulation D. ABA also urged Congress to codify the “valid-when-made” doctrine and to allow banks to use digital driver’s license images to open accounts, both of which would be accomplished by pending legislation. Finally, ABA recommended that the Federal Communications Commission revisit its interpretation of automated calling rules to promote efficient communication

“Regulation must be flexible enough to allow innovations to be driven from within traditional banks,” ABA said. “We must also ensure that customers receive the protection they deserve wherever they get their financial services through consistent regulation and oversight.” The white paper also outlines ABA’s broad framework on fintech: that regulators continue working to understand the effects of innovation on banking, that regulators allow banks to move quickly in this area and that security remain a top priority. Read the report. For more information, contact ABA's Rob Morgan. 

Agencies to Host Teleconference on CECL Implementation

The Federal Reserve, FDIC and OCC will hold a free banker teleconference on Tuesday, May 15, at 12 noon CDT to address proposed changes to their capital rules as banks prepare to implement the new Current Expected Credit Loss model for loan loss accounting. These proposed changes include: the definition of a new term, "allowance for credit losses"; a revised definition of carry value for available-for-sale debt securities and purchased credit deteriorated assets; mechanics of the proposed CECL transition provision; and new disclosure and regulatory reporting requirements. Read more and register now. 

Free BSA/AML Webinar Available for Download

A recording of a recent ABA webinar focusing on the Bank Secrecy Act and anti-money laundering issues is now available for download. Featuring insights from ABA staff experts, the webinar provides an update on customer due diligence, the latest on regulatory relief and more. The webinar also highlights ABA’s training and free resources available to help bank compliance staff keep up with the latest banking rules and regulations. Download the webinar. 

Question of the Week

Question: If we have four key factors already listed on an adverse action notice, but also took into account the number of inquiries, can we add that as a fifth factor? And, with this factor, do we have to list the number of inquiries?  

Answer: Yes, you may add the number of inquiries as a fifth factor. Generally, you would only list four key factors for FCRA purposes, but there is an exception that expressly gives the bank the permission to tack this factor on. As to the actual number of inquiries, there is no requirement to list the actual number—just the factor, itself, is required.

For reference, see: 15 USC § 1681g(f)(9): “Use of enquiries as a key factor. If a key factor that adversely affects the credit score of a consumer consists of the number of enquiries made with respect to a consumer report, that factor shall be included in the disclosure pursuant to paragraph (1)(C) without regard to the numerical limitation in such paragraph.” https://www.consumer.ftc.gov/articles/pdf-0111-fair-credit-reporting-act.pdf “

• Tuesday, May 15, 2018, 10-11 a.m. CDT
• Thursday, May 17, 2018, 1-2 p.m. CDT

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.