SDBA eNews

April 11, 2019

SDBA Ag Credit Conference Postponed

The SDBA's Agricultural Credit Conference scheduled for this week in Pierre has been postponed due to the weather. The SDBA is currently working on a new conference date for late summer/early fall.

Once a new date is determined, registrations for the original conference date will carry forward to the new date. If the new date does not work for any registrants, they may cancel with no penalty. We ask that registrants wait to see if the new date will work for their schedules before canceling. Be watching for an announcement next week on the new date for the SDBA Agricultural Credit Conference

SDBA Seeking Bankers to Serve on Standing Committees

The SDBA will appoint standing committee members for the upcoming year in May. SDBA committees are: Agricultural Credit Committee, Credit Card Committee, Legislative Committee and Trust Committee. Terms are one year beginning May 1, 2019, and ending April 30, 2020, except for the Legislative Committee which is a three-year term. Legislative committee members can serve two, consecutive three-year terms.

As a volunteer for your Association, you will be contributing to a stronger banking industry. We respect the time commitment that each committee member has made and work hard to ensure the meetings are well run and productive. Committees meet once or twice a year to initiate activities and recommend policy.

If you or someone at your bank is interested in serving on an SDBA committee, please complete and return the committee request form by April 30, 2019, to [email protected] or fax to 605.224.7835. Questions, contact Alisa Bousa at 605.224.1653.

ABA Presses for an Optional Community Bank Leverage Ratio of 8 Percent

ABA on Tuesday filed a comment letter on the federal banking agencies’ proposal to set a community bank leverage ratio at 9 percent. Under the proposal, banks that meet or exceed the CBLR would be deemed in compliance with Basel III capital requirements and would be exempt from risk-based capital rules that have long been a poor fit for community banks.

The agencies proposed to set the CBLR at the midpoint of the 8 percent to 10 percent range authorized last year in the S. 2155 bipartisan regulatory reform bill, which required the creation of the CBLR. In its response, ABA emphasized that setting the CBLR at 8 percent would be more appropriate. “By ABA’s calculations, every single qualifying community bank that has an 8 percent CBLR is already meeting the well capitalized risk-based capital ratios,” the Association said.

ABA also urged the agencies to “reinforce the optionality” envisioned in the proposal to ensure that banks are never harmed or trapped by the CBLR’s prompt corrective action regime. Read ABA's letter. For more information, contact ABA's Hugh Carney.

Bipartisan ABA-Backed Bill Aims to Address Marijuana Conundrum 

Sens. Cory Gardner (R-Colo.) and Elizabeth Warren (D-Mass.) and Reps. Earl Blumenauer (D-Ore.) and David Joyce (R-Ohio) last Thursday introduced the States Act, a bipartisan bill that aims to resolve the conflict between state and federal laws on marijuana. The bill would amend the Controlled Substances Act so that it no longer applies to persons acting in compliance with state or tribal laws on cannabis, and the proceeds of any compliant transaction would not be deemed unlawful under anti-money laundering statutes or other federal laws.

ABA expressed its support for the bill. “The conflict between state and federal cannabis laws has become a challenge for many of our nation’s communities and the banks that serve them,” wrote ABA President and CEO Rob Nichols. “Like other measures that aim to provide clarity, the bipartisan States Act is an important step toward enabling financial services for cannabis-related businesses. . . . [It] is not a cure-all for the cannabis banking challenge, but it is a measure that helps banks serve the needs of their local communities.”

For the States Act to apply, state and tribal laws must continue to include basic protections. The bill keeps in place Controlled Substances Act bans on: endangering human life while manufacturing a controlled substance; employing minors in marijuana operations; distributing cannabis at transportation safety facilities like rest areas and truck stops; and distributing or selling marijuana to people under 21 except for medicinal purposes. Read the bill. Read ABA's letter.

SDSU to Open Ness School of Management and Economics

The South Dakota Board of Regents has given South Dakota State University in Brooking approval to create a school of management and economics. The school will be known as the Ness School of Management and Economics and be located in historic Harding Hall.

The school is named after alums Larry (1969) and Diane (1971) Ness. Larry Ness is CEO of First Dakota National Bank in Yankton. The couple were named the SDSU Foundation’s 2015 Philanthropic Family of the Year and received SDSU Presidential Medallions in 2016.

“Academically organizing as the Ness School of Management and Economics provides academic programs at SDSU new opportunities for innovative course instruction and a level of visibility needed to attract students interested in pursuing careers in business, management and finance,” said Dennis Hedge, provost and vice president of academic affairs. “The school will provide a higher-level and efficient structure to support the academic work of both students and faculty, while providing a pathway into the university for industry leaders to work with faculty in the school and engage with students as we prepare them to enter their careers ready to meet the opportunities and challenges of a global economy.”

The school will include the following degrees: agricultural business (B.S.), agricultural and resource economics (B.S.), business economics (B.A. and B.S.), economics (B.A. and B.S.), entrepreneurial studies (B.A. and B.S.) and economics (M.S.) In addition, minors will be offered in: accounting, agricultural business, agricultural marketing; banking and financial services; economics; entrepreneurial studies; human resource management; land valuation and rural real estate; management; and marketing. Read more

Podcast: A Small-Town Bank that Serves Small-Town Banks

Kristie Holoch’s bank is not just in the business of serving farmers, families and small businesses in the 33 Nebraska towns where it has branches—it also serves its fellow Nebraska community banks. With $1.7 billion in assets, Cornerstone Bank offers a correspondent banking division, a data center to handle core processing for two dozen smaller banks, loan participations that enhance the balance sheet of small community banks—and even an armored car service.

On the latest episode of the ABA Banking Journal Podcast, Holoch discusses how Cornerstone Bank also partners with community banks through its acquisition strategy, providing investors and management at small-town Nebraska banks with an exit opportunity that keeps the bank in the hands of a Nebraska bank focused on small towns. She also discusses Cornerstone’s commitment to keep every employee after an acquisition and how the family-owned bank plans to adapt its acquisition strategy as it continues to grow.

Holoch also talks about the Nebraska Bankers Association’s response to the disastrous flooding, as well as the bank’s diversified business model, which complements traditional bank offerings with insurance, trust services and farm management. Listen to the episode

SDSU Extension to Offer Farm Stress Workshops

SDSU Extension is bringing two different types of farm stress workshops to the state.

Communicating with Farmers Under Stress: Join a multi-disciplinary team of SDSU Extension experts to explore the subject of farm stress, a subject that’s affecting the lives of many South Dakota farmers and their families. The primary audience for this workshop includes professionals who work with or support farmers and farm families, such as inspectors, financial advisers and those associated with farm service type agencies.  This workshop will be held on April 15 in Aberdeen, Sioux Falls, Pierre and Rapid City and on May 23 in Lemmon, Winner, Watertown and Mitchell from 10 a.m. to 2 p.m. CDT.  The cost to attend is $30, and lunch will be provided. Register for an April 15 location. Register for a May 23 location

Weathering the Storm in Agriculture: How to Cultivate a Productive Mindset: This workshop is specific to farmers, ranchers and their families to help all members of the farm family understand the signs and symptoms of chronic stress and how to handle stress for a more productive mindset on the farm. This workshop will be offered on April 15 in Aberdeen, Sioux Falls, Pierre and Rapid City and on May 23 in Lemmon, Winner, Watertown and Mitchell from 6:30 to 8 p.m. CDT.  This workshop is free, and an evening meal along with youth programming will be provided. Register for an April 15 location. Register for a May 23 location

If a business is interested in having SDSU Extension come to present the Communicating with Farmers Under Stress Workshop to professionals and/or board members that work directly with farmers and farm families, contact Krista Ehlert to discuss specific needs, dates and the fee structure for providing the workshop.

SBS CyberSecurity to Offer Understanding SOC 2 Reviews Webinar

SBS CyberSecurity is offering a special request Hacker Hour: Understanding SOC 2 Reviews Webinar-Part 2 on Wednesday, April 17. SBS's second session on SOC 2 reporting will take a deeper dive into the challenges of completing an SOC 2 review. There is no cost for the hour-long webinar, which will begin at 2 p.m. CDT. Register for the webinar

Compliance Alliance

Question of the Week

Question:  We are selling one of our branches next month. The branch only has one HMDA loan to date. Do we need to report that loan on the HMDA LAR? The bank that is purchasing the branch is not a HMDA-reporting bank.

Answer: Assuming that purchasing this branch will not cause the acquiring back to become a HMDA-reporting bank, then yes, in this instance you'd report any HMDA reportable loans that originated prior to the sale in April.  Any reporting after the sale by the acquiring bank is optional for the remainder of the year.

CFPB HMDA Guide, p. 121

When an institution that is not subject to Regulation C acquires a Branch Office of an institution that is subject to Regulation C but that acquisition does not result in the acquiring institution becoming subject to Regulation C, data collection is required for transactions of the acquired Branch Office that take place prior to the acquisition. Data collection by the acquired Branch Office is optional for transactions taking place in the remainder of the calendar year of the acquisition.

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.