SDBA eNews

May 24, 2018

Annual Convention Early Registration Deadline Extended

2018 NDBA/SDBA Annual Convention

Have you been trying to decide whether to attend the NDBA/SDBA Annual Convention in Fargo on June 10-12. Of course you should! Where else would you enjoy a great program, lots of activities and the chance to connect with more than 350 bankers and business partners?

And here's another incentive to send your registration in today--you will save money. The early registration had been extended until Friday, May 25.

Join the SDBA and NDBA in Fargo for exceptional learning, fun activities and networking opportunities. See the full agenda and register to attend.

Congress Enacts Bipartisan, ABA-Advocated Regulatory Reform Bill

In a landmark moment for post-crisis banking policy, the House by a bipartisan 258 to 159 vote on Tuesday passed S. 2155, the Senate’s regulatory reform bill. The bill’s passage marks an important step toward bringing much-needed regulatory relief to help banks better serve their customers and communities, and President Trump is expected to sign it into law in the coming days.

"Today’s successful bipartisan House vote marks a turning point in the banking policy debate in this country. For the first time in nearly a decade, lawmakers from both parties have chosen to right-size financial rules that were not working as intended and holding the economy back," said ABA President and CEO Rob Nichols. "We look forward to President Trump signing this bill into law and seeing the benefits it will provide to customers and communities that banks serve across the country."

The result of a bipartisan compromise among Senate Banking Committee Chairman 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 numerous measures that had their origin in the House Financial Services Committee under the leadership of Chairman Jeb Hensarling (R-Texas). Among the bill’s key provisions are several longstanding priorities in ABA's Blueprint for Growth. The bill will:

  • Provide Qualified Mortgage designation for most mortgages held in portfolio by banks with less than $10 billion in assets
  • Raise the threshold for designation as a systemically important financial institution from $50 billion in assets
  • Apply principles of tailored supervision to larger banks
  • End mandated stress tests for banks with under $100 billion in assets
  • Simplify capital calculations for community banks
  • Provide relief from appraisal requirements for smaller mortgages
  • Institute longer exam cycles for community banks
  • Provide charter flexibility for federal thrifts with less than $20 billion in assets
  • Provide relief from the Volcker Rule for most community banks

The bill is a result of a persistent, eight-year advocacy effort as bankers worked to bring ideas to Capitol Hill to help address some of the unintended consequences of Dodd-Frank, and ABA emphasized that the bill is a good first step toward reforming the U.S. regulatory architecture. "There is certainly more to do to recalibrate regulations and tailor them based on a bank’s risk profile and business model, but the common-sense changes included in S. 2155 will help America’s banks, particularly community banks, get back to the basics of lending to creditworthy borrowers and businesses," Nichols said.

A brand-new, just-released bonus episode of the ABA Banking Journal Podcast features Nichols and ABA Chairman Ken Burgess discussing the banker-led advocacy effort that made the bill possible--plus two of ABA’s top regulatory experts laying out what comes next in terms of implementing the changes in the bill. ABA has also prepared resources highlighting key provisions of the bill and will host a free webinar on Tuesday, May 29, at 2:30 p.m. CDT to provide bankers with an overview of changes ahead.

Nichols: S. 2155 an Important First Step for Reg Reform

Ahead of the House vote on Tuesday that determined the fate of S. 2155, ABA President and CEO Rob Nichols said that the bill “is a huge, important step forward--we hope the first of additional steps--to modernize and appropriately tailor the supervisory framework.”

In an interview with Bloomberg TV, Nichols highlighted the positive effects the bill will have on consumers and the American economy. “It’s going to be easier for banks to serve their customers, clients and communities--that’s what’s most important,” Nichols said. “Banks do well when their customers do well, when the economy does well, when you have enhanced jobs and prosperity. This is really not about the banking sector--it’s about the customers and clients we serve.”

While the bill includes many reg relief provisions for community banks in particular, more could be done to improve the current regulatory framework while maintaining safety and soundness, Nichols added. “We prefer to see banks supervised based on business model and risk profile, [and] we’d like to see the regulation tailored appropriately.”

With respect to “next steps,” he pointed to ongoing efforts led by the Federal Reserve to make meaningful changes to the Volcker Rule, in addition to signals from House Financial Services Committee Chairman Jeb Hensarling that the House will introduce additional reg relief legislation before the end of the year. Watch the interview

OCC Announces Policy Shift on Small-Dollar Lending

Signaling a significant shift in the OCC’s approach to small-dollar lending, the agency yesterday issued a bulletin encouraging banks to make “responsible short-term, small-dollar installment loans, typically two to 12 months in duration with equal amortizing payments” to help meet the credit needs of their customers.

The bulletin does not define how banks should underwrite small-dollar loans, but notes that small-dollar lending programs should be consistent with safe and sound banking practices, include an effective risk management framework and be underwritten based on reasonable policies and practices, which may include analysis of internal and external data sources such as the borrower’s deposit activity with the bank. It also calls for banks to report repayment activity of small-dollar loan customers to the credit bureaus to help borrowers improve their credit scores.

ABA has long called on regulators to remove barriers that impede banks from making small-dollar loans, highlighting in a white paper to the Treasury Department last year that there is a genuine consumer need for small-dollar credit. “Today’s bulletin is a step in the right direction to help banks offer customers a variety of short-term credit products,” said ABA SVP Virginia O’Neill. “We appreciate that the principles outlined in the bulletin are not prescriptive and encourage banks to design their own underwriting and product features that promote access and treat customers fairly.”

ABA also welcomed the OCC’s willingness to work with the Consumer Financial Protection Bureau as it undertakes a review of its final payday lending rule, which establishes “ability-to-repay” requirements for single-payment loans and loans with a term of 45 days or less. “We look forward to working with these agencies to remove regulatory impediments that stand in the way of banks’ ability to meet consumers’ short-term credit needs,” O’Neill added. “Allowing banks to innovate will lead to more diverse products and greater consumer choice.” Read the bulletin. For more information, contact ABA's Virginia O’Neill

Fed Minutes Signal Possible June Rate Hike

June could bring an additional hike for the target federal funds rate if the economy continues to perform as expected, according to the minutes from the May 1-2 Federal Open Market Committee meeting. Given the anticipated frequency of forthcoming rate hikes, a few members commented that the federal funds rate could be on pace to reach its longer-run neutral level in the near future. They added that it might soon be appropriate to reassess the committee’s expectation that the rate is likely to remain for some time below levels that are expected to prevail in the long run, as well as the Fed’s stance on accommodative monetary policy.

Committee members continued to debate the inflation path as it moves closer to the “symmetric” 2 percent target. “Several participants suggested that the underlying trend in inflation had changed little, noting that some of the recent increase in inflation may have represented transitory price changes in some categories of health care and financial services,” the minutes said.

The committee members also expressed great uncertainty around U.S. trade policies, noting that they “viewed the range of outcomes for economic activity and inflation to be particularly wide, depending on what actions were taken by the United States and how U.S. trading partners responded.” Read the minutes

VAFA Offers Low-Interest Rates for Livestock Development Projects

Producers and bankers can benefit by utilizing tax-exempt bond programs for livestock development projects through the Value Added Finance Authority (VAFA).

Tax-exempt bond programs through the VAFA can be utilized to obtain lower interest rates on bank financing for solid waste disposal projects. Any expenses for the collection, storage, treatment and utilization of manure are eligible for the Livestock Nutrient Management Bond.

“This program has been widely used in the dairy industry and can be used in the swine industry as well to help producers get lower interest rates on bank financing,” said Terri LaBrie, VAFA executive director. “These bond programs enable the bank to save money on taxes while passing on some of those savings to the borrowers in the form of lower interest rates.”

Application forms are located on the South Dakota Department of Agriculture’s website,, and are due at least a week prior to the VAFA board meeting. The board meets the last Thursday of each month to consider applications. For more information on the Livestock Nutrient Management Bond or any of the other financial programs the VAFA offers, contact LaBrie at 605.280.4745 or [email protected], or visit

Hacker Hour: Brushing Up on Corporate Account Takeover

It has been seven years since the term "Corporate Account Takeover" or CATO took the industry by surprise and challenged financial institutions to do more to help secure their small business customers. Is CATO still happening today? You bet it is. 

Join SBS CyberSecurity for Hacker Hour: Brushing Up on Corporate Account Takeover as SBS reviews guidance centered on CATO and walk through recent types of CATO that are challenging financial institutions.The free webinar will be held Wednesday, May 30, 2 p.m. CDT. Learn more and register

GSB Enrollment Deadline June 1

The Graduate School of Banking (GSB) at the University of Wisconsin-Madison is excitedly preparing for its 2018 school session. June 1 is the deadline to apply for this year's session, which will be held July 29 to Aug. 10.

Since 1945, GSB has helped develop banking leaders through a program of advanced management education. Today, GSB is widely recognized as the nation's leading and most progressive banking school, offering a comprehensive course of study that focuses on meeting the changing needs of today's bank manager. GSB relies on its alumni, Banker Advisory Board and Academic Committee to create a unparalleled learning and networking experience. GSB is sponsored and governed by the Central States Conference of Bankers Associations in partnership with the University of Wisconsin-Madison, and has been the school of choice for more than 20,000 bankers, with good reason.

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. Learn more and apply

Compliance AllianceQuestion of the Week

Question: Our bank's website has been “spoofed” by a foreign website. The foreign website has a different but very similar URL and content almost identical to our site. Do you have any tips on what steps we should take?

Answer: In addition to following your regular BSA/AML policies and procedures, we recommend contacting your federal regulator, and your state's cybercrimes unit or Attorney General as soon as possible. We also recommend adding a “pop-up” or greeting page on your own website that explains the issue to your online visitors and keeping it up until the fake site is removed. Furthermore, consider sending out a warning email to at least all your online banking customers--if not all your customers--notifying them of the issue

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.