SDBA eNews

June 7, 2018

SDBA Opens Registration for 2018 IRA School

IRAs continue to be an essential part of a person’s retirement planning. IRA rules are always changing, and more changes are expected in the near future. It is important to be informed and prepared.

The SDBA is offering its 2018 IRA School Sept. 5-7 at the Clubhouse Hotel & Suites in Sioux Falls. You can attend as many one-day IRA seminars as you want, but it will not equal what is covered in a three-day IRA school. This is the most comprehensive IRA course offered.

Attendees will learn new rule changes and reinforce existing rules, learn what it means to be in or out of compliance, and explore all topics in-depth. Attendees will have the opportunity to ask questions, share with peers and hear real case problems. Learn more and register.

CFPB to Retool Advisory Councils; Dismisses Current Members

The Consumer Financial Protection Bureau announced yesterday that it will relaunch its processes for collecting public feedback. The changes come after receiving requested feedback from ABA and others on its external affairs process. “The comments we received informed our shift to expand external engagements and modify our Advisory Board and Councils to be one focused tool in the evaluative process,” the bureau said in a blog post.

As part of this process, the CFPB yesterday dismissed all members of the bureau's advisory boards and councils, including its community bank and credit union councils and the Consumer Advisory Board, which is mandated by the Dodd-Frank Act to meet twice a year. The bureau will select new members through the current application cycle, for which applications were due in April. All three bodies will be smaller, the CFPB said.

The bureau also said it “will increase its strategic outreach to encourage in-depth conversations, sharing information, and developing partnerships focused on consumers in underserved communities and geographies,” including “regional town halls, roundtable discussions at the bureau’s headquarters with consumer finance experts and representatives, regional roundtables and regular national calls.”

In a comment letter last month, ABA and 51 state bankers associations urged the bureau to engage stakeholders early in the rulemaking process and to communicate with external stakeholders in a way that seeks meaningful feedback rather than simply reporting on CFPB activities. The associations also urged the bureau to improve its outreach to community financial institutions since it does not supervise them but does issue rules that apply to them. Read moreRead ABA's comment letter

ABA Files Appeal in Credit Union Field of Membership Case

ABA on Tuesday filed a cross-appeal in its legal challenge to the National Credit Union Administration’s field of membership rule, which further expanded the already loose fields of membership from which federal credit unions can draw their customers. The cross-appeal specifically challenged a portion of the recent decision by a D.C. circuit court judge upholding provisions of the rule that permit credit unions to serve core-based statistical areas without serving the urban core that defines the area. 

While Judge Dabney Fredrich upheld that provision in her ruling in March, she noted that “the approach to Core-Based Statistical Areas pushes against the outer limits of reasonableness.” She also declared invalid and vacated portions of the NCUA rule also challenged by ABA in the lawsuit: the inclusion of combined statistical areas with fewer than 2.5 million people, and the dramatic expansion of a “rural area” to include areas with up to 1 million people--which in some cases could encompass entire states. 

Senate Passes ABA-Backed SBA 7(a) Reform Bill

By a voice vote, the U.S. Senate on Tuesday passed S. 2283, a bipartisan bill introduced by Sens. Jim Risch (R-Idaho) and Jeanne Shaheen (D-N.H.) that would strengthen the Small Business Administration’s oversight of its loan programs and increase its maximum lending authority. H.R. 4743, an identical measure introduced by Reps. Steve Chabot (R-Ohio) and Nydia Velazquez (D-N.Y.), passed the House last month, so the bill now heads to the White House for the president's signature.

The bill would strengthen the SBA’s office of credit risk management; enhance the SBA’s lender oversight review process; require SBA to detail its oversight budget and perform a full annual risk analysis of the program; and clarify factors that must be considered under the “credit elsewhere” test that lenders perform before applying for 7(a) financing. 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 House members last month. “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.” 

Agencies No Longer Enforcing Volcker Rule for Banks Exempt Under S. 2155

As the FDIC board and the OCC last Thursday formally proposed the interagency revisions to the Volcker Rule that were unveiled by the Federal Reserve, the banking agencies are no longer enforcing Volcker for banks and holding companies subject to the exemption under the recently enacted S. 2155 regulatory reform bill.

S. 2155 generally exempted banks with less than $10 billion in assets from Volcker Rule requirements, and the agencies noted in the proposed rule that they “plan to address these statutory amendments through a separate rulemaking process. . . . The amendments took effect upon enactment, however, and in the interim between enactment and the adoption of implementing regulations, the Agencies will not enforce the 2013 final rule in a manner inconsistent with [S. 2155].”

In a 3-2 vote on Tuesday, the Securities and Exchange Commission became the fifth and final agency to approve the interagency overhaul of the Volcker Rule. The proposal is designed to simplify the rule’s compliance burdens and better target it toward intended financial activities. With the SEC’s action, the proposal will soon be published in the Federal Register. Comments are due 60 days after that point. Read the proposed rule. For more information, or to participate in ABA’s working group on the comment letter, contact ABA's Tim Keehan

GSB Extends Enrollment Deadline

The Graduate School of Banking (GSB) at the University of Wisconsin-Madison has extended the enrollment deadline for its 2018 school session through June 15, subject to limited availability. Applications will be processed in the order they are received, so immediate enrollment it strongly encouraged. This year's school session will be held July 29 to Aug. 10.

Over the course of 25 months--through a mix of lectures, bank simulations, case study discussions and hands-on projects--bank leaders learn to retain the best customers, increase market share, analyze market conditions to effectively manage risk, achieve a sustainable competitive advantage, utilize technology effectively to improve performance, improve bottom-line results, and manage change through agile leadership. GSB's curriculum challenges bankers to push beyond theory and put key concepts to work in the real world--to challenge assumptions, develop critical thinking skills and gain necessary leadership acumen. Learn more and apply

IRS To Offer Two Web Conferences on Virtual Currency, Dark Web

The IRS' Criminal Investigation Division is offering two free web conferences on Thursday, June 14, on understanding the basics of virtual currency and understanding the basics of the dark web.

"Understanding the Basics of Virtual Currency" will provide an overview of virtual currency, how virtual currency transactions work and blockchain. This web conference will be held at 10 a.m. CDT.

"Understanding the Basics of the Dark Web" will provide an overview of the dark web, how it works and the dark net market. This web conference will be held at 1 p.m. CDT.

Both webinars are scheduled for two hours and will include a live question-and-answer session. All participants who qualify will receive a certificate of completion, and tax professionals can earn a 2 CE credit per session. Both web conferences will be recorded and available on the IRS Video Portal by the end of June.

ABA to Host Free Members-Only Webinar on Digital Mortgage Strategies

As technology changes the way banks do business, developing a digital mortgage strategy is becoming critical. ABA will host a free webinar on Wednesday, June 13, at 1 p.m. CDT that will review how to create a strategy, explore the role of fintech in key phases of the mortgage lifecycle and discuss the risks banks should keep in mind. Register for the webinar

Compliance AllianceQuestion of the Week

Question: I have a loan for $200,000 to purchase a principal dwelling. It is unsecured. Do I need a TIL, or since it's out of the threshold, is it exempt from the regulations?

Answer: Because the loan is not secured by real property and is over the current Regulation Z threshold of $55,800, it is exempt from Regulation Z, meaning no TRID or TIL forms would be required. Additionally, the loan would be exempt from RESPA and HMDA because it is unsecured. Keep in mind, however, that you will still need to abide by safety and soundness concerns, the bank’s underwriting policy, and any other statutory or regulatory concerns that might apply (ECOA/fair lending, FCRA, e-SIGN, state law, etc.).

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.