SDBA eNews

October 11, 2018

ABA: Federal Data Privacy Law Must Recognize Banks' Existing High Standards

Ahead of a Senate Commerce Committee hearing on consumer data privacy yesterday, ABA in a statement submitted for the record called on lawmakers to consider the existing set of privacy laws banks adhere to when drafting new federal privacy legislation.

Noting that banks are already subject to extensive data privacy and protection laws--including the Gramm-Leach-Bliley Act, the Fair Credit Reporting Act and others--the association emphasized that “Congress must take into account the GLBA and other existing federal privacy laws and preempt the patchwork of state laws that provide different and often inconsistent consumer protections across the country. Otherwise, a consumer’s privacy protections, including their ability to understand their own rights, will depend entirely on the state in which the individual lives.”

ABA added that the GLBA--which requires banks to disclose their privacy practices in a clear, accessible and transparent manner--should be considered a good model for transparency for purposes of federal data privacy legislation. Read the statement

U.S. Bank to Receive Community Commitment Award

The ABA Foundation has recognized six banks for their outstanding commitment to their communities, including U.S. Bank for affordable housing.

The ABA Community Commitment Awards--to be presented on Oct. 23 during ABA’s Annual Convention in New York--are given in six categories to honor innovative, high-impact bank programs and projects that produce lasting results in the communities they serve. Categories are: affordable housing, community and economic development, economic inclusion, financial education, protecting older Americans and volunteerism. 

U.S. Bank, headquartered in Minneapolis, is being recognized for its American Dream Home Loans program. The program offers solid and ethically priced loans for low-to-moderate income borrowers to help them become homeowners. In 2017, nearly 700 households utilized this program to realize their dream of homeownership, resulting in nearly $48 million in mortgages helping to revitalize communities across the U.S. Bank footprint.

First National Bank of Omaha received honorable mention for affordable housing, and Wells Fargo Bank received honorable mention for economic inclusion. 

Read the Community Commitment Award press release.

ABA Offers Resources to Help Banks Recover from Hurricane Michael

As banks in Florida and other southeastern states brace for the effects of Hurricane Michael, ABA’s dedicated hurricane preparedness and response webpage offers bankers useful tools and resources to assist with the recovery process. The page provides links to announcements and alerts from public and private agencies, situational reports and analyses, state evacuation, re-entry and road status updates, links to state associations’ hurricane resources and other industry recovery resources for banks and consumers. 

“Our thoughts and prayers are with all of those in the path of Hurricane Michael, which has now made landfall in Florida,” said ABA President and CEO Rob Nichols yesterday. “On the heels of Hurricane Florence, we are particularly concerned about those communities facing a second devastating blow in less than a month. We will continue to monitor the path of this storm closely, and we look forward to joining with our members in supporting recovery efforts.” ABA is closely coordinating with state bankers associations in the affected areas to determine the full effect of the storm on banks and their employees, Nichols added.

In related news, federal and state financial regulatory agencies yesterday issued a joint statement reminding banks of supervisory expectations related to disaster recovery. Regulators encouraged banks to work constructively to meet the financial needs of their communities. 

The statement addresses supervisory expectations related to lending activities, operating temporary bank facilities, publishing requirements, regulatory reporting requirements, activities that are eligible for Community Reinvestment Act credit and investments. The agencies also provided links to previously issued examiner guidance for institutions affected by major disasters. View ABA's resources pageRead the agencies' statement

New Report to Help Banks Prepare for Upcoming Exams

The Coalition of Bankers Associations has released the first Bank Exam Monitor, Insights on Recent Examinations report created by its Regulatory Feedback Initiative strategic partners at FinPro.

"Regulatory examinations continue to be tilted toward liquidity risk with stress testing, interest rate risk with a flattening yield curve, asset quality concerns in a highly competitive environment, and corporate governance," said Scott Polakoff, executive vice president, FinPro. "The examiners persist in their apprehension with the length of this economic expansion and the possibility of a downturn over the next 12 to 24 months.  Strategic planning remains the roadmap to planned performance, and the examiners expect to see quarterly assessments of actual to budget results documented in Board of Director minutes."

The report highlights trends seen from data collected anonymously via post exam surveys from banks across America.  The analysis, which will be updated quarterly, is intended to help banks prepare for upcoming exams. Read the report

Fed's Quarles: Rural Markets Retain Community Bank Presence, But Not Headquarters

Community bank locations have remained present in rural markets at roughly the same rate over the past two decades, even as consolidation means that bank headquarters have closed in many of these markets, Federal Reserve Vice Chairman for Supervision Randal Quarles said yesterday at an industry event in St. Louis.

Rural markets have averaged around four community banks (those with under $10 billion in assets) consistently since 1997; in these markets, the average number of larger banks grew from one to 1.4 during this period. Urban markets have seen more consolidation and a shift to larger banks; the average urban area had 18 community banks and 8 large banks in 2017, compared with 21 community banks and 6 large banks in 1997.

However, Quarles noted that consolidation has cut the number of bank headquarters in rural markets by 45 percent and in cities by half. “Consolidation has led to a doubling in the number of banking markets--almost all of which are rural--in which no banks are headquartered,” he said. “We hear anecdotally that banks are more attuned to the needs of the communities in which they are headquartered, so the significance of this loss could have an effect on the local markets.” Read the speech.

CSBC to Launch New Index of Community Bank Optimism

The Conference of State Bank Supervisors announced last week that it will create a new index of community banker sentiment. To be released annually at first, the index will be based on the annual survey conducted by CSBS and the Federal Reserve and will ask 11 questions about competition, new products and markets, technology investments, M&A activities, perspectives on the economy and banking risk factors.

The index value will be calculated by adding the number of positive responses, subtracting the number of negative responses, and then adding 100 for ease of understanding, with 100 representing a roughly neutral level of sentiment. Based on the most recent national survey, released last week, only three percent of banks scored less than 95. Eighty-six percent of community banks rated their sentiment at 100 or higher, with 13 percent in the category of greatest optimism (scores of 110 or more). Read more

IRS to Offer Tax Reform Webinars

The IRS is offering three webinars on tax reform. The intended audience is individual taxpayers, small business owners and/or tax professionals.

Each 60-minute webinar will begin at 1 p.m. CT and will include Q&A.  

Siouxland Ag Lenders Seminar Set for Nov. 1

Agricultural lenders will receive current useful, research-based information during the Siouxland Ag Lenders Seminar on Nov. 1  at the Triple Box near Orange City, Iowa. The second annual seminar presents current information that assists lenders and farm financial advisors in their portfolio management. This will be especially true in this era of continued low prices and the unknowns of the new farm bill.

Lenders who serve agricultural clients--especially those who work with dairymen--in Iowa, Minnesota, Nebraska and South Dakota are encouraged to attend as the seminar will focus on agricultural market outlooks, the farm bill, financial recordkeeping and accounting, and insurance and farm safety procedures.

“Ag lenders know that price risk management continues to be a major variable for profitability in many ag enterprises, “said Fred Hall, Northwest Iowa Extension dairy field specialist with Iowa State University (ISU) Extension and Outreach. “For that reason, understanding the current market trends and risks is a necessary part of farm management assistance. Lenders working with dairymen have the additional necessity of understanding a complex system of milk marketing, labor inputs and federal policy implications.”

The seminar is hosted through a partnership between the ISU Extension and Outreach Dairy Team, Iowa Farm Bureau and the Iowa, Minnesota, Nebraska and South Dakota Bankers Associations. Learn more.

Compliance Alliance

Question of the Week

Question: For the Reg. DD - "indoor signs" exception in Section 1030.8(e)(2), I see that indoor signs are exempt from: permissible rates, when additional disclosures are required, bonuses, and certain media exemptions. My question is whether "when additional disclosures are required" includes, for example, an advertisement of "free checking" when listing products available on an indoor billboard/peg board if that board does not list features which are listed elsewhere in other advertisements for a given type of checking account and its associated fees?

Answer: The rule regarding when the bank can advertise an account as "free" does apply to indoor signs. Indoor signs are excluded from the requirements listed in subsections (b), (c), (d) and (e)(1) but the rule on "free" accounts is in subsection (a) and not excluded:

(i) Signs inside the premises of a depository institution (or the premises of a deposit broker) are not subject to paragraphs (b), (c), (d) or (e)(1) of this section.

Not a 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.

 SDBA eNews Archive

View past issues of the SDBA enews

Advertising Opportunity
Learn more about sponsoring the SDBA eNews.

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