SDBA eNews

February 14, 2019

South Dakota Banks Make a Difference in Our Communities

South Dakota Banks Make a Difference in our CommunitiesThe SDBA unveiled the latest results of its Banks Make a Difference Survey during its State Legislative Day yesterday in Pierre. Copies of the promotional handout were provided to all attendees and to all state legislators. Copies will also be mailed to all member banks and branches.

Each January, the SDBA surveys its member banks and collects data on the importance of banks to their local communities and to the state as a whole. The annual project is just a glimpse of how banks work every day to help South Dakotans grow and prosper. 

The document is a great tool that banks can use to promote all of the things they do for their communities. Banks are encouraged to use the document in their promotional efforts, make copies as needed and link the document on their websites. Download a high resolution copy for printing.

If you have questions about the survey or if you need the handout in a different format, contact Alisa Bousa at 605.224.1653.

Black Hills FCU, CMFG Life Insurance Agree to Settlement in Lawsuit 

Black Hills Federal Credit Union and a Wisconsin-based insurance company, CMFG Life Insurance Company, have agreed to pay $3 million to settle allegations that they improperly raised insurance premiums on thousands of loans, according to The Associated Press on Monday.
The proposed settlement to be considered by a judge later this month would resolve an eight-year-old class action lawsuit initially filed by a Rapid City couple.
Edward and Kathy Thurman got a $30,000 home equity loan from the credit union in 1995 and bought a disability insurance plan offered by CUNA Mutual Insurance Society (now CMFG Life Insurance Company). The couple sued after the credit union and the insurance company failed to improperly inform them their disability insurance premium was increasing.
They gained class action status after taking the matter to the South Dakota Supreme Court. So, the settlement involves 4,461 loans. Kathy Thurman died in 2016.

Iowa Bankers Op-Ed Calls for NCUA to Focus on its Job

With the Senate holding a confirmation hearing today for two nominees--Rodney Hood and Todd Harper--to the three-member National Credit Union Administration board, Iowa Bankers Association President and CEO John Sorensen yesterday said it was a fitting moment to recognize that the agency is "out of touch and needs a new direction." In an op-ed in the Credit Union Journal, Sorensen flagged numerous problems at the agency that he said "acts like a trade group protecting the industry that it is charged with overseeing."

NCUA has a record "of doing virtually everything the [credit union] industry asks," he wrote--including loosening field of membership requirements, permitting a massive expansion of business lending authority, authorizing an excessive appraisal threshold increase and promoting CU purchases of banks.

"NCUA is putting its thumb on the scale in the marketplace through its actions, when it is supposed to be focused on ensuring that credit unions operate in a safe and sound manner," he wrote. "Members of the NCUA board should stop drinking the industry Kool-Aid and focus on the job they’re there to do." Read the op-ed

Sens. Crapo, Brown Seek Feedback on Data Privacy

Sens. Mike Crapo (R-Idaho) and Sherrod Brown (D-Ohio)--the chairman and ranking member of the Senate Banking Committee, respectively--yesterday asked for stakeholder feedback on how financial regulators and companies collect, use and protect sensitive consumer data. They asked stakeholders to provide feedback by March 15.

Specifically, Crapo and Brown asked for feedback on what could be done to give consumers more control over their data and ensure that customers are notified promptly of breaches; how to ensure that consumers receive adequate disclosure of what data is collected about them and how it is used or shared; and how credit reporting bureaus can best protect consumer data and ensure it is accurate, among other topics. Read more and provide feedback

FDIC Extends Comment Period on De Novo Application RFI

The FDIC on Tuesday extended the public comment period on its request for information about the deposit insurance application process. The agency issued the RFI in December as part of its ongoing initiative to foster de novo bank formation. Comments are now due by March 31.

ABA submitted comments last week and suggested several steps the agency could take to encourage new applications. ABA is also urging bankers and state bankers associations to take advantage of the extended opportunity to provide feedback. Read more. Read ABA's comment letter. For more information, contact ABA's Shaun Kern

ABA Urges Congress to Resolve Conflict Over Cannabis

With the House Financial Services Committee set to hold a hearing tomorrow on the challenge of banking marijuana-related businesses, ABA on Tuesday submitted a statement for the record urging Congress to resolve the legal conflict that inhibits banks from serving MRBs operating legally at the state level.

ABA noted that it does not take a position on cannabis legalization. “However, our member banks find themselves in a difficult situation due to the conflict between state and federal law, with local communities encouraging them to bank cannabis businesses and federal law banning it,” ABA said, adding that “the majority of financial institutions will not take the legal, regulatory or reputational risk associated with banking cannabis-related businesses without congressional action.”

Rep. Ed Perlmutter (D-Colo.) on Monday circulated a draft of a bipartisan bill, the SAFE Banking Act, that would aim to address many concerns banks have about banking MRBs. It would specify that proceeds from legitimate cannabis businesses would not be considered unlawful under anti-money laundering statutes, and it would direct the Financial Crimes Enforcement Network and the banking agencies to issue appropriate guidance and exam procedures.

ABA described the draft legislation as “an important first step toward enabling financial services for cannabis-related businesses,” and ABA staff are working closely with lawmakers to share bankers’ perspectives on the issue. Read ABA's statement

Registration Open for Dakota School of Banking

Applications are now available for one of the NDBA’s flagship programs, the Dakota School of Banking, which will be held June 9-14 on the campus of University of Jamestown in Jamestown, N.D.  

By completing two, one-week, summer sessions and intersession projects, bankers will develop a range of skills to enhance their careers and quality for advancement. Graduates will be better positioned to make valuable contributions to their banks’ business strategies.

The Dakota School of Banking provides bankers with a comprehensive understanding of the connections between banking functions; increased knowledge and technical skills immediately applicable to daily responsibilities; ideas to increase personal productivity and improve bank performance and profits; compete in a simulated banking economy with BankExec simulation; and a network of peers to call on throughout one’s career.

Learn more and apply

GSBC Scholarship Deadline is March 1

The Graduate School of Banking at Colorado (GSBC) partners with the SDBA each year to offer the GSBC Future Leaders Scholarship. Awarded to one banker per state per year, recipients receive $1,390 per year for three years to attend GSBC’s annual school session. Scholarship recipients must enter as a first-year student.

Hosted each July at the University of Colorado Boulder, this 25-month graduate school of banking delivers a relevant and challenging curriculum that deepens students’ understanding of community banking. The 2019 session will be held July 14-26. Students take courses that are designed and regularly updated to tackle relevant topics in the community banking industry. Students attend three consecutive annual two-week sessions at CU Boulder, and have numerous opportunities to network with bankers from their states and across the country.

The deadline to apply for the Future Leaders Scholarship is March 1. For questions, contact the GSBC Office at 800.272.5138 or the SDBA’s Halley Lee at 605.224.1653. More information and apply for the school.

Compliance Alliance

Question of the Week

Question: Do loans made to executive officers have to be preapproved by the board?

Answer: No, unless the general requirement to get preapproval applies (which generally includes extensions over $500,000), the loan must be reported to the board but does not require preapproval. This is because the general prohibitions on insiders (§215.4), including the preapproval provision, and the more specific executive officer provisions (§ 215.5) are related, yet distinct.

What this means is that the executive officer may very well need to gain preapproval from the board, but not automatically just because she or he is an executive officer. This being said, the executive officer will need to report the extension to the board in all cases.

(b) Prior approval. (1) No member bank may extend credit (which term includes granting a line of credit) to any insider of the bank or insider of its affiliates in an amount that, when aggregated with the amount of all other extensions of credit to that person and to all related interests of that person, exceeds the higher of $25,000 or 5 percent of the member bank's unimpaired capital and unimpaired surplus, unless: (i) The extension of credit has been approved in advance by a majority of the entire board of directors of that bank; and (ii) The interested party has abstained from participating directly or indirectly in the voting.

12 CFR § 215.4(b)(1):

(d) Any extension of credit by a member bank to any of its executive officers shall be:

(1) Promptly reported to the member bank's board of directors;

12 CFR § 215.5(d)(1):

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.