SDBA eNews

July 18, 2019

Registration Open for LEAD STRONG: Women in Banking Conference

Image of WomenRegistration is now open for the SDBA's second annual LEAD STRONG: Women in Banking Conference. The event is set for Oct. 10, 2019, at the Sioux Falls Convention Center in Sioux Falls.  An optional networking reception will be held the night prior.

The conference is designed to encourage, support and inspire women to succeed in the workplace. This event will benefit all levels of staff interested in the enhancement and career growth of women in South Dakota banking.

Topics at this year's conference will include getting noticed as a potential leader, next-level conversational banking services, improving your emotional intelligence, diversity and inclusion in banking, body language detection skills, daring leadership and team building. The conference will conclude with Natalie Bartholomew--The Girl Banker-- with her session, "Calling All Girl Bankers."

This year's service project will be collecting personal care item for women in need. The Helpline Center will distribute the items to organizations that work with women, along with resource cards about 211. 

FASB to Delay CECL Implementation for Some Institutions

In a significant move, the Financial Accounting Standards Board (FASB) yesterday voted to propose a delay for the implementation of the current expected credit loss standard until January 2023 for certain companies. The delay would apply to small reporting companies (as defined by the SEC), non-SEC public companies and private companies.

'FASB’s vote to delay CECL for certain smaller banks offers further proof that the required efforts to implement this costly standard are far greater than the board has previously led bankers to believe,” said ABA President and CEO Rob Nichols after the vote. He noted with concern, however, that the delay would not apply to all banks; for larger public companies, the standard would still take effect in January 2020.

Nichols called on FASB to apply the delay to banks of all sizes and use the additional time to “conduct a rigorous quantitative impact study to properly assess the effect this new standard will have on their ability to serve their customers and the broader economy, particularly during an economic downturn.” He added that “a partial delay without a requirement for study or reconsideration simply kicks the can down the road—it does not reduce the ongoing data, modeling and auditing requirements facing smaller banks or address the increased procyclicality it will cause.”

He also reiterated ABA’s call for congressional leaders to act to delay CECL’s implementation. Bills have been introduced in both the House and Senate to “stop and study” the standard and its effect on the economy.

CFPB Issues Advisory on Reporting Elder Financial Abuse

The Consumer Financial Protection Bureau (CFPB) yesterday released an advisory to financial institutions for reporting suspected elder financial exploitation. The document updates the CFPB’s 2016 recommendations for preventing and responding to elder financial abuse and urges financial institutions to report suspected exploitation to the appropriate local, state and federal authorities. In particular, the Bureau recommends filing Suspicious Activity Reports in such cases.

The recommendations reflect a recent study of 180,000 elder financial exploitation SARs that showed an average loss of $41,800 among adults over 70, with 7% losing more than $100,000.

As banks continue the fight against elder abuse, the ABA Foundation has compiled a number of resources bankers can use to raise awareness about financial exploitation among older Americans. ABA’s Safe Banking for Seniors program provides free presentation lessons, activities and other materials to educate older Americans and their caregivers about how to bank more securely. FinEdLink connects registered banks with community organizations or agencies to provide banker-led presentations in the community.

New Treasury Guidance Offers Greater Flexibility for Higher-Deductible Health Plans

Following an executive order by President Trump, the Treasury Department and IRS yesterday issued guidance expanding the preventative care benefits that may be provided by high-deductible health plans linked to Health Savings Accounts for a range of chronic conditions.

“We applaud the administration’s efforts to make life-saving medicines more affordable to chronically ill Americans by allowing Health Savings Account-qualified plans to cover them pre-deductible,” said Kevin McKechnie, executive director of ABA’s HSA Council. “By expanding that coverage option, this guidance will help lower out-of-pocket costs for the millions of Americans managing a chronic illness.” Read more.

Core Providers Submit Responses to ABA Concerns

Fiserv, Jack Henry and Finastra all met a July 15 deadline set by ABA’s Core Platforms Committee to submit written responses to specific bank-core issues raised by the committee in May. FIS requested more time to submit its response.

The committee, composed of 20 bank leaders representing community and midsize banks, had identified three key issues: data access, API deployment and contract fairness and asked the cores to spell out how they will address those issues going forward.

“We appreciate that the core providers are taking the industry’s concerns seriously,” said committee Chairwoman Julieann Thurlow, president and CEO of Reading Cooperative Bank in Reading, Mass. “Since word has circulated about our committee, I have heard from banker after banker who has shared with me their frustrations as well as their hopes that this dialogue will bring about meaningful change.”

Thurlow said the committee will now review the responses and prepare follow-up questions for a second meeting with the cores planned for August. View committee members .

Podcast: Enterprise Risk Management in a Growing Midsize Bank

Midsize banks are at an inflection point: their ranks are growing as banking sector consolidation continues, and while these banks are ramping up their risk and compliance functions, they don't need the same kinds of programs as the largest banks. "The evolution is about right-sizing and making it our own," says Atul Malhotra, managing director of enterprise risk management at Fulton Financial in Lancaster, Pa., and chairman of ABA's ERM/ORM peer group for midsize banks.

On the latest episode of the ABA Banking Journal Podcast, Malhotra discusses:

  • Trends in risk management and governance at midsize and community banks.
  • How Fulton Financial embeds ERM in everyday tasks through training and communication.
  • Key risks midsize banks are dealing with, including reputation risks and cybersecurity.
  • The challenges of ERM in a bank holding company with multiple charters.
  • The importance of risk management talent development (including ABA's Risk Management School, Aug. 19-23 in Reston, Va.)

Listen to the episode. Register for ABA’s Risk Management School.

FinCEN Warns of Business Email Compromise Scams

Business email compromise schemes—though which fraudsters target businesses and their fund transfers—generated more than $300 million a month in illicit revenue during 2018, the Financial Crimes Enforcement Network reported on Tuesday. As it works to combat this type of fraud, the agency issued a trend analysis of BEC schemes, as well as an updated advisory for financial institutions.

The trend analysis showed that BEC schemes were most often targeted at the manufacturing and construction sectors, according to Suspicious Activity Report filings from 2017 and 2018. FinCEN noted that the nature of BEC schemes continues to evolve; for example, the agency noted that the number of schemes involving the impersonation of a CEO or other high-ranking official declined between 2017 and 2018, while the usage of fraudulent vendor or client invoices rose during that period.

The updated advisory includes operational definitions for email compromise fraud, provides information on the targeting of non-business entities and data by email compromise schemes, highlights general trends in BEC schemes, and alerts financial institutions to risks associated with the targeting of vulnerable business processes. Read more.

Make Plans to Attend SDBA 2019 IRA School

IRAs continue to be an essential part of a person’s retirement planning. IRA rules are always changing, and more changes are expected in the near future. It is important to be informed and prepared. The SDBA is offering its 2019 IRA School Sept. 4-6 at the Clubhouse Hotel & Suites in Sioux Falls.

The school is the most comprehensive IRA course offered and will benefit both new and experienced staff. Learn new rule changes and reinforce existing rules. Learn what it means to be in or out of compliance. Topics will be explored in-depth, and attendees can ask questions, share with peers and hear real case problems.

Compliance Alliance

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.