SDBA eNews

July 5, 2018

Senate Passes Farm Bill with Flood Insurance Extension

By a bipartisan 86-11, the Senate last Thursday passed its version the 2018 Farm Bill. The vote sets up a conference between the Senate version and the recently passed House version where lawmakers will address differences in the two bills on nutritional assistance, farm subsidy caps and conservation initiatives.

ABA President and CEO Rob Nichols welcomed the bill's passage. "The reauthorization of this bill will provide critical risk management tools and stability for our nation’s farmers and ranchers and the 2,000 farm banks that serve them every day," he said. "We are particularly pleased that banks and their customers will continue to have access to crop insurance and USDA guaranteed loan programs. Ag bankers use these programs to make loans and manage risk, so they can serve the needs of their customers even in down times."

The bill also included a six-month extension of the National Flood Insurance Program, which is set to expire on July 31. "While work remains to achieve long-term reauthorization and reform of the NFIP, it is essential for borrowers across the nation that the program not lapse," Nichols said. 

ABA Wins One-Year Extension on Regional Bank Living Will Deadline

As they implement S. 2155, the Federal Reserve and the FDIC said on Monday that they are beginning the process of determining which financial firms with assets of less than $250 billion will be subject to the requirement to submit resolution plans, also known as living wills. Under S. 2155, the Federal Reserve is no longer required to impose the living will process on bank holding companies with less than $100 billion during the first 18 months following the bill’s passage. After the 18-month period, or sooner at the discretion of the Fed, the requirement ends for bank holding companies with assets below $250 billion.

As recommended by ABA in a February comment letter, the agencies also extended the deadline for 14 U.S. regional banking companies to submit their resolution plans. Originally due by the end of 2018, living wills will be due by Dec. 31, 2019, in order to allow more time for the agencies to provide feedback on their last round of resolution plans. ABA has urged--and Fed Vice Chairman for Supervision Randal Quarles has signaled that he wants to pursue--a biennial rather than annual living will process.

The 14 companies receiving the extension are Ally Financial, American Express, BB&T Corporation, Capital One Financial, Citizens Financial, Fifth Third Bancorp, Huntington Bancshares, KeyCorp, M&T Bank, Northern Trust, Regions Financial, SunTrust Banks, PNC Financial Services Group, and U.S. Bancorp. Last week, the Fed and FDIC also sought public comment on living will guidance for the largest U.S. financial institutions. Read more. Read ABA's comment letter. For more information, contact ABA's Hu Benton

ABA Seeks Collaborative Approach to Promote Faster Payments Adoption 

As the faster payments process develops in the United States, ABA recently laid out its views on the governance of that process in a comment letter to the Federal Reserve System. The comment letter addressed a proposal from the Governance Framework Formation Team, a group of private-sector representatives working in collaboration with the Fed.

ABA welcomed the proposal’s focus on “private-sector approaches to solving problems and removing barriers to achieving ubiquity.” The formation team’s proposal envisions a Faster Payments Council, a private-sector body that would be independent of the Fed. Ideally, ABA said, this council would foster greater interaction among faster payments solutions, a high-quality customer experience and more efficient cross-border transactions.

However, ABA expressed some concerns about the Faster Payments Council as proposed. Specifically, ABA was concerned about granting authorities to the FPC that would turn it into a “semi-regulatory body” with powers to set future standards--which could hamper future innovations and reduce competition, ABA said. ABA recommended a narrower scope of work, which would in turn cut the high costs associated with the proposal.

“It is vital that the interests of consumers be kept at the forefront as the primary consideration,” ABA wrote. “Any group that assembles should be disciplined by and attuned to consumers’ needs through a presumption of free market principles and an exclusion of regulatory or other tactics that would select winners and losers.” Read the letter. For more information, contact ABA's Steve Kenneally

New Article Spotlights Robots, Drones in Financial Services

A feature in the latest issue of the ABA Banking Journal spotlights ways that financial services businesses are deploying robots and drones to enhance the customer experience and improve efficiency. The article looks at three examples from the retail, insurance and risk management areas.

HSBC last week became the first U.S. bank to deploy a robot in a branch environment, introducing Pepper the robot in its flagship Manhattan location. The four-foot-tall robot greets customers, answers basic questions and provides introductory information about products and services.

The article also explores how insurance and banking company USAA is using drones to inspect damages after a disaster and automate a labor-intensive part of the insurance claims process, and it explores Citizens Financial Group's test of security robots at its new headquarters campus in Rhode Island. Read the article.

California Enacts Controversial Data Privacy Law

California Gov. Jerry Brown last week signed a bill creating new data privacy requirements for businesses that handle consumer data in the state. The bill was passed as a compromise measure to avert a more intrusive ballot initiative this fall; while business groups find the legislation only marginally better than the initiative, the process of amending the new law would be easier.

Effective on Jan. 1, 2020, the new law grants consumers a right to request that businesses disclose what personal information it has about individual consumers, what it uses the data for and how it is shared. It also requires businesses to delete that data upon request, among other provisions. Unlike the proposed ballot initiative, which would have granted a private right of action with statutory damages, the law limits enforcement authority to the state’s attorney general. Consumers have a right to sue in response to a data breach, however.

For financial companies subject to the privacy provisions of the Gramm-Leach-Bliley Act, the law provides a narrow exception for consumer data collected, processed, sold or disclosed pursuant to GLBA, if the requirements of the state law are in conflict with GLBA. The California Bankers Association and other business groups will continue urging California lawmakers to amend the law as the compliance date draws closer. ABA is closely following the process. Read the bill text. For more information, contact ABA's Sabrina Bergen

Bonus Podcast: Bankers and the Founding of the United States

To mark Independence Day this week, this bonus episode of the ABA Banking Journal explores the role of banking and finance in the American Revolution and the founding era. This week's guest, John Steele Gordon, is an acclaimed economic historian whose books include "Hamilton's Blessing," "The Great Game" and "An Empire of Wealth"; he is also the ABA Banking Journal's "From the Vault" columnist. In this episode, Gordon discusses:

  • How not having any chartered banks prior to 1782 put the United States at a disadvantage during the Revolution.
  • Conversely, how the Bank of England was a "secret weapon" for Britain during the war.
  • The role of patriotic financiers like Robert Morris in achieving U.S. victory.
  • The debates over a central bank in the post-revolutionary period and how they contributed to the development of the Constitution.

Listen to this episode. Do you use podcast apps to listen? You can find the ABA Banking Journal Podcast on Apple Podcasts, Google Play, Pocket Casts, Stitcher and Spotify, as well as in the Daily Newsbytes email every Friday. 

Graduate School of Banking Colorado to Hold Community Bankers Summit

Graduate School of Banking Colorado (GSBC) alumni and supporters are encouraged to attend the Community Bankers Summit: What You Need to Know to Be Competitive in 2018 on July 23-25 in Boulder, Colo.

This three-day seminar is designed to brief senior managers on hot-button community banking issues. Topics in 2018 include staying relevant among demographic shifts, responding to changes in the payments system and technology, opportunities and risks with social media and balance sheet management. Learn More

ABA to Host Free Webinar on Branch Redesign in Digital Era

For bankers who were unable to experience one of the popular sessions from ABA's 2018 Conference for Community Bankers, the ABA will host a free webinar on July 11 at 1 p.m. CDT recapping a session on five key steps to meet customers' evolving demands--both digitally and in the branch.

Anthony Burnett, VP at design-build firm Level5, will lay out principles for branch redesign in a digital era, and Shaun Burke, president and CEO of Guaranty Bank in Springfield, Mo., will discuss his bank's approach to renovating its headquarters in light of today's banking environment. Register for the free webinar. Register for the 2019 conference

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Contact Alisa DeMers, SDBA, at 800.726.7322 or via email.