SDBA eNews

December 13, 2018

Congress Passes ABA-Backed 2018 Farm Bill

With a vote of 369 to 47 yesterday, the House approved the 2018 Farm Bill. The bill must now be signed into law by President Trump. Ahead of the vote, ABA wrote to House Agriculture Committee leaders urging them to pass the bill, which contains several banker-advocated provisions. Among other things, the bill will increase Farm Service Agency guaranteed loan program funding to $1.75 million; make needed changes to rural development guaranteed loan programs; and provide risk management tools for farmers and ranchers through crop insurance and other farm programs.

ABA President and CEO Rob Nichols thanked lawmakers for their work on the bill. “This important piece of legislation provides critical risk management tools and stability for our nation’s farmers and ranchers, as well as the 2,000 farm banks that serve them every day,” Nichols said. “We are particularly pleased that lawmakers recognized the vital role of crop insurance and USDA loan guarantees. These programs help farm banks make loans and manage risk in both good times and bad, which is critical to maintaining a stable and vibrant farm economy.” Read ABA's letter

Agencies to Host Conference Call on Community Bank Leverage Ratio

The financial regulatory agencies will host a conference call for bankers on Tuesday, Dec. 18, at 1 p.m. CST, to discuss the proposed community bank leverage ratio framework. Under this optional framework, community banks with a leverage capital ratio of at least 9 percent may be automatically considered in compliance with Basel III capital requirements and exempt from the complex Basel calculations. Pre-registration is not required, but participants are asked to join the webinar 20 minutes before the scheduled start time. Learn more about the conference call. For more information on the proposal, visit ABA's dedicated webpage

FDIC Launches Initiative to Encourage De Novo Formation

The FDIC formally launched its highly-anticipated initiative to foster de novo bank formation. In a request for information issued last Thursday, the FDIC is seeking feedback on how it could modify the application process for traditional community banks; whether and how it should support the evolution of emerging technologies and fintech firms as part of the application process; and any factors that discourage potential applicants. Read the request for information. For more information, or to provide feedback for ABA's response contact Shaun Kern.

The FDIC also issued a financial institution letter outlining a new process by which new applicants for deposit insurance may submit a draft application and receive feedback from FDIC staff prior to filing the formal application. In the FIL, the FDIC said it expects to provide updates to organizers within 30 days of receiving a draft proposal and communicate all feedback within 60 days. Read the FIL.

Additionally, the FDIC issued an update to its de novo handbook, as well as a final version of its deposit insurance applications procedures manual. While the handbook and manual do not establish new policy or guidance, or modify existing policy or guidance, they are intended to provide greater transparency and clarity about the deposit insurance application and review process. View the de novo handbookView the deposit insurance application manual.

Finally, the FDIC reissued its processing timeframe guidelines for applications, notices and others filings submitted on behalf of institutions and other parties, as part of its ongoing effort to foster greater transparency within the agency. Learn more

FCC Adopts Reassigned Number Database with Safe Harbor

The Federal Communications Commission yesterday voted unanimously to create a database of phone numbers that have been relinquished by one individual and reassigned to another individual, something that ABA has long called for. Under existing case law and the FCC’s Telephone Consumer Protection Act regulations--prior to being struck down by a federal appellate court last March--a bank or other company is liable for a call made in good faith to a party who has consented to receive the call but whose telephone number has been reassigned to another consumer, unbeknownst to the caller. 

At ABA’s urging, the FCC also provided a safe harbor from liability for any calls to reassigned numbers caused by database error. In prior comments, ABA explained that a safe harbor was necessary to ensure that banks are not discouraged from placing important calls to their customers and do not face liability for inadvertently calling a reassigned number despite consulting the database. 

The FCC also voted to continue to permit voice service providers to apply filtering measures to block messages that are likely spam. FCC Chairman Ajit Pai explained that as a result of existing filtering practices, the spam rate for SMS texts is estimated at less than 3 percent. Read more. For more information, contact ABA's Jonathan Thessin

Data Security, Privacy to Be Early Focus of CFPB's Kraninger

Newly sworn-in Consumer Financial Protection Bureau Director Kathy Kraninger will focus on data security and privacy in her early days in office, she said at a press briefing on her first day at the bureauTuesday. The bureau collects a significant amount of consumer data in the form of surveys, consumer complaints and expanded Home Mortgage Disclosure Act data reporting.

“Data security and data privacy [are] going to be a big focal point in terms of what the bureau collects, how it’s used, how long it’s stored,” Kraninger said. “We absolutely will put consumers first in the decisions I make.”

She added that she will use the agency’s strong enforcement powers as needed but that a previous CFPB practice sometimes called “regulation by enforcement” is “certainly pushing the envelope. I think there is a responsibility here to make sure the law is clearly articulated in the regulations. People want to comply . . . the bureau should be providing them the information they need to comply.”

Asked about predecessor Mick Mulvaney’s initiative to rebrand the agency as the Bureau of Consumer Financial Protection, or BCFP, in line with its authorizing statute, Kraninger noted that the name change remains only “partially done” and that she has not made a final decision on completing it.

Hacker Hour: FSSCC Releases New Cybersecurity Framework

The FSSCC has released a new cybersecurity framework called the “Cybersecurity Profile.” The profile is a standards-based tool to help guide financial services institutions in developing and maintaining a cybersecurity risk management program. The new framework option has people asking a lot of questions:

  • How is it different than the Cybersecurity Assessment Tool?
  • Will it be used by U.S. regulators?
  • Is it more efficient than the other frameworks on the market today?

Join SBS Cybersecurity for a free Hacker Hour Webinar: FSSCC Releases New Cybersecurity at 2 p.m. CST on Friday, Dec. 14. SBS will review the framework and provide answers to these and other common questions. Register for the webinar.

SDBA Offers 2019 Bank Holiday Signs

The SDBA is offering holiday signs that banks can print and display to notify customers when the bank will be closed. 

The signs are set up to be printed on 8.5" x 11" paper and are provided as a high-resolution pdf file. Banks can print the signs and use them how they see fit. 2019 Holiday Signs

If you need the signs in a different format or have any questions, contact Alisa Bousa.

SDBA 2019 Media Kit Available

The South Dakota Bankers Association is the premier avenue for businesses to target their marketing message to the top decision makers in South Dakota's financial services industry.

There is no better way to get your products or services in front of South Dakota bankers than to advertise in the SDBA's SDBANKER Magazine or sponsor the SDBA eNews. Learn more about advertising and marketing opportunities available for 2019 in the SDBA's 2019 Media Kit.

The kits contains information on advertising in SDBANKER Magazine, sponsoring the SDBA eNews, and other advertising and marketing opportunities available with the SDBA throughout the year. Learn more.

Compliance Alliance

Question of the Week

Question: Would the bank be violating Reg. O if it offered a higher money market rate for just shareholders?

Answer: There is not a direct prohibition in Reg. O, since it primarily governs credit and not deposit accounts, like money market accounts. However, many banks have it in their internal policy to not give preferential interest rates to shareholders on deposit accounts either, to follow the spirit and intent of Reg O.  Also, remember preferential treatment will oftentimes bring extra scrutiny.

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 Bousa, SDBA, at 800.726.7322 or via email.