SDBA eNews

February 21, 2019

Registration Open for SDBA Ag Credit Conference

Photo of ag producers.The SDBA will hold the 2019 Agricultural Credit Conference on April 10-12 at the Ramkota Hotel & Conference Center in Pierre.

This conference focuses on the unique needs of ag bankers and the need for quality information and training to better serve their customers. The SDBA has lined up speakers on a variety of timely topics to help ag bankers navigate through challenging times. 

Dr. David Kohl will kick off this year's event with his session "Positioning for Success in the Economic Reset." This energizing session will take a walk around economic trends followed by their implications to your organization, business and personal endeavors. Regardless of the cycle, if managed well and pro-actively, then you will be on the positive end of the profit spectrum.

Experienced and new ag lenders, as well as CEOs, will all benefit from this conference. See the full agenda and register. There is also an opportunity for business partners to exhibit or sponsor at the conference. Learn more

Annual Convention Sponsorship Deadline Nearing

Focus Forward: 2019 SDBA/NDBA Annual ConventionThe SDBA invites its business partners to FOCUS FORWARD at the 2019 SDBA/NDBA Annual Convention on June 2-4 at the Sioux Falls Convention Center & Sheraton Sioux Falls.

Business partners can participate in the 2019 Annual Convention by sponsoring, exhibiting or advertising. A business partner packet including information on signing up is available online. The deadline to sign up as a sponsor and be listed in convention registration materials is Friday, March 1. Learn more about sponsoring or contact the SDBA's Alisa Bousa

Be watching for the full convention agenda and registration in March. Questions, call the SDBA at 605.224.1653.

FDIC Outlines Plans for Deposit Insurance Calculations Under Community Bank Leverage Ratio

As the banking agencies prepare to finalize the framework for the community bank leverage ratio, the FDIC has issued a proposal for how it will assess banks for deposit insurance that elect to use the CBLR framework. Comments on the proposal are due in 60 days.

Under the proposal, CBLR banks would be assessed as small banks. They would have the option of using either CBLR tangible equity or tier 1 capital for their assessment base calculation, and using either the CBLR or the tier 1 leverage ratio that the FDIC uses to calculate an established small bank’s assessment rate. The FDIC said that it will provide an assessment estimation tool on its website to help banks determine their deposit assessment amounts under the proposal.

Additionally, the proposal clarifies that a CBLR bank that meets the definition of a custodial bank would have no change to its custodial bank deduction or reporting items required to calculate the deduction. It also clarifies that the assessment regulations would continue to reference the prompt corrective action regulations for the definitions of capital categories used in the deposit insurance assessment system, with technical amendments to align with the community bank leverage ratio proposal. Read the proposal

Farm Credit Administration Seeks Feedback on YBS Farmer Data Collection, Reporting

The Farm Credit Administration is seeking feedback on its processes for collecting and reporting data on how the Farm Credit System is serving young, beginning and small farmers--one of its statutory requirements.

Commenters are invited to provide input on how the accuracy, transparency and processes surrounding YBS farmer data collection could be improved; how definitions of key terms could be clarified; whether the definitions of YBS farmers and other terms are still relevant and reflect the evolving agricultural economy; and whether current YBS programs are achieving their mission of serving YBS farmers. Comments are due in 90 days.

ABA has long raised concerns that as the Farm Credit System has continued to grow, it has neglected its statutory responsibility to serve YBS farmers and ranchers, citing a marked decline in loans to YBS farmers in recent years. Read more.  

Wendy's Reaches Data Breach Settlement with Banks

U.S. fast food chain Wendy’s last week announced a $50 million settlement with financial institutions that suffered losses during a data breach that ran from October 2015 through June 2016. The settlement agreement, which is subject to court approval, follows last year’s $3.4 million settlement with customers.

Affecting an estimated 1,000 restaurants, 7,500 financial institutions, and 18 million payment cards, the breach involved malware designed to steal payment card information--including names, card numbers, expiration dates and security codes--from point-of-sale systems. If the settlement is approved by the court, payments are expected to be made in late 2019. Read more

Podcast: Challenges and Solutions for Ag Lenders with Heather Malcolm

Heather Malcolm is a central Montana agricultural lender, but when she's not at the bank, she works on her family's cattle ranch, which allows her to stay closely in touch with the challenges faced by her loan customers. On the latest episode of the ABA Banking Journal Podcast, Malcolm talks current pressures, such as commodity pricing, facing ag lenders and producers, and she outlines her recommendations for banks seeking to recruit the next generation of ag lenders.

Malcolm is joined by ABA SVP Ed Elfmann to talk about recent policy changes affecting rural and agricultural lenders, including what's in the recently enacted Farm Bill, and new resources ABA is offering. Listen to this episode

Hacker Hour: Business Email Compromise Investigations

Business email compromise (BEC) is a scam where an attacker sends an email that appears to be from an executive in an attempt to trick recipients into clicking a malicious link, sharing sensitive information, or even sending money directly to the attacker.

The FBI recently warned that this type of attack has cost U.S. businesses more than $1.6 billion in losses over the past six years. In 2018, we saw BEC become one of the leading attack types, mainly because of how difficult it is to detect.

Join SBS CyberSecurity for Hacker Hour: Business Email Compromise Investigations on Tuesday, Feb. 26, to discuss common BEC attacks, tips to tell your customers and simple steps in an initial BEC investigation. This free one-hour webinar will begin at 2 p.m. CST. Register for the webinar.

Scholarships Available for ABA Emerging Leaders Forum

Join the ABA on April 1-3 in Washington, D.C., for the 2019 ABA Washington Summit to keep policy moving in the right direction. Hear from regulators and lawmakers in the new Congress and visit Capitol Hill to share your experiences. In conjunction with the Summit, ABA also hosts:

The ABA is offering $750 scholarships for the Emerging Leaders Forum to two SDBA emerging leaders to help cover travel expenses. If you are an emerging leader interested in applying for a scholarship, contact the SDBA's Halley Lee or call 605.224.1653. 

While there is no registration fee to attend the Washington Summit or Forums, those planning to attend need to register. The SDBA offers a $500 stipend to help with the travel expenses of one person from each SDBA member bank to attend the Summit. The SDBA will issues stipends following the event. Learn more and register

Compliance Alliance

Question of the Week

Question: I have a HMDA question about construction loans. Our construction loans are 360 months plus nine months interest. They are construction to perm. The first nine months are interest only and then the 10th month includes principal and interest. Would we report this on HMDA as an interest-only loan?

Answer: If the loan is a single transaction--a construction-to-perm loan (one closing)--our interpretation is that you would report it as having an interest-only feature. If this was two transactions, a construction-to-perm loan with two closings, then you would only report on the perm portion of the loan.


The requirements of this part do not apply to: Temporary Financing... 12 CFR § 1003.3(c)(3) 

A loan or line of credit is considered temporary financing and excluded under § 1003.3(c)(3) if the loan or line of credit is designed to be replaced by separate permanent financing extended by any financial institution to the same borrower at a later time. Commentary to 12 CFR § 1003.3(c)(3)-1 

Whether the contractual terms include or would have included any of the following: (ii) Interest-only payments as defined in Regulation Z, 12 CFR 1026.18(s)(7)(iv); 12 CFR § 1003.4(a)(27) 

The term ‘interest-only’ means that, under the terms of the legal obligation, one or more of the periodic payments may be applied solely to accrued interest and not to loan principal; an ‘interest-only loan’ is a loan that permits interest-only payments. 12 CFR § 1026.18(s)(7)(iv) 

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.

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