SDBA eNews

September 5, 2019

Three SDBA Member Banks, One Associate Member Named Best Banks to Work For

Photos of Best BanksSDBA member banks First Bank & Trust, Dacotah Bank, First PREMIER Bank and SDBA associate member Bell Bank were named “Best Banks to Work For” by American Banker. Bell Bank was named number two; First Bank & Trust was named number 22; Dacotah Bank was named number 30; and First PREMIER Bank was named number 58. These banks’ leaders work purposefully every day to ensure that employees are engaged, having fun and enjoy what they are doing.

American Banker Magazine on Aug. 29 published its seventh annual list of the 85 best banks to work for. The banks had to answer survey questions about their leadership philosophy, going above and beyond for employees, efforts to recruit a diverse workforce, their most effective ways to communicate and more.

A few themes emerged from their answers. These managers go out of their way to create a collaborative workplace and listen to feedback from others. They connect with employees through frequent communication over different mediums—emails, town hall meetings, branch visits and even text messaging. See the full list

Advertising Available in 2020 South Dakota Bank Directory

Advertising is now available for purchase in the 2020 South Dakota Bank Directory. 

The South Dakota Bank Directory is an indispensable reference tool for financial services institutions and those conducting business with financial decision makers in South Dakota. Produced by the SDBA, the directory provides contact information for all South Dakota banks. The directory also includes information about the SDBA, the SDBA’s endorsed vendors and associate members, state and federal regulatory agencies, and South Dakota officials.

Participating in the 2020 South Dakota Bank Directory is a cost-effective advertising strategy that will reach financial industry leaders who utilize this valuable tool on a daily basis throughout the year. The directory reaches all South Dakota banks and branches, associate members and other financial industry leaders. The advertising placement deadline is Oct. 4, 2019. Learn more and reserve your advertising. Questions, contact Alisa Bousa at 605.224.1653.

Save the Date for Advanced Study in Banking & Regulation at SDSU

This fall, the Dykhouse Program in Money, Banking and Regulation in the Ness School of Management and Economics at South Dakota State University in Brookings will host two free events on the subject of community banking.

On Monday, Oct. 7, at 4 p.m. in SDSU’s Harding Hall, Professor James (Jim) Barth, Lowder eminent scholar in finance at Auburn University, will present “Banks and Natural Disasters.”

This applied research on the conduct and performance of banks serving regions struck by natural disasters demonstrates that banks with branches in affected areas raise both deposit and loan rates such that net interest margin and, in turn, return on assets increase, though not enough to indicate profiteering. Meanwhile, these banks increase their uses of brokered deposits in order to fund increased loan demand by individuals and firms in affected communities. Barth’s research demonstrates that banks located in disaster-prone areas help the communities in these areas recover from natural disasters. An opportunity to visit with Barth over hors d’oeuvres and light refreshments will follow this event. If planning to attend, RSVP to Joseph Santos by Sept. 20.

On Tuesday, Oct. 8 at 7 p.m. in SDSU’s Founders Recital Hall at the Performing Arts Center, Christine Gaffney, senior vice president for supervision, regulation and credit at the Federal Reserve Bank of Minneapolis, and Bret Afdahl, director of the South Dakota Division of Banking, will participate in an evening speaking event titled “The Regulators: Perspectives on Ensuring a Safe and Sound Financial System.” 

The event will open with Gaffney, who will discuss banking conditions in the Ninth Federal Reserve District and share her observations on banking under Federal Reserve System supervision. Then, Afdahl will join Gaffney on stage to discuss state versus federal agency supervision and regulation and to take questions from the audience.  No RSVP is needed for this event.

ABA, Trade Groups Warn Congress Against Potential SBA 7(a) Program Shutdown

As part of the Small Business Access to Capital Coalition, ABA called on congressional leaders to address a potential funding gap that could bring operations of the Small Business Administration’s 7(a) business lending program to a halt next month. The groups warned that if the Office of Management and Budget fails to correct a “questionable federal credit subsidy rate estimate” contained in the presidential FY 2020 budget, the program will shut down on Oct. 1.

The OMB is responsible for making annual estimates of the net present value of expected future government outlays and receipts for general credit programs, including the SBA’s 7(a) program. However, the groups raised concerns that “OMB and SBA have failed to carry out their roles in the subsidy estimation process,” for the 7(a) lending program, as evidenced by significant downward re-estimates over the past nine years and questionable modeling practices, among other things. These flawed calculations “have unnecessarily driven up the cost of 7(a) loans, forcing borrowers to pay higher fees and lenders to raise interest rates to cover lender fees,” the groups noted.

Absent action from OMB, the groups urged Congress to consider “a modest appropriation” to support the program, in order to “avoid shifting the burden of an erroneous subsidy rate estimate onto the backs of small borrowers.” Read the letter.

ABA, BPI: Rakuten ILC Application 'Inconsistent' with FDIC Standards

The application by Rakuten—a major Japanese e-commerce company—for deposit insurance for its prospective U.S. bank subsidiary does not meet requirements imposed by the Federal Deposit Insurance Act, ABA and the Bank Policy Institute (BPI) told the FDIC in a letter last Friday. ABA and BPI raised concerns about several aspects of Rakuten’s application for deposit insurance as a Utah-based industrial loan company, among them an “excessively narrow” business plan and the “unprecedented” sharing of bank customer information with non-financial affiliates.

“Given the unprecedented nature and scope of prime elements of the proposal, the FDIC should provide a fair opportunity for public comment, and thorough analysis of the results of such comment, before acting on the application or any similar applications involving such proposed non-financial affiliations with ILCs,” ABA and BPI wrote.

ABA is a strong advocate for charter choice, de novo banks and the ILC charter option. However, the proposed Rakuten bank would be so unlike others the FDIC has approved that it would “undermine two long-standing pillars of U.S. bank regulation—the separation of banking and non-financial businesses, and the value of consolidated supervision of banking organizations,” ABA and BPI said. “The precedential nature of this application cannot be overestimated.” Read the ABA-BPI letter.

Podcast: Avoiding the 'Rhetoric of Sameness' in Bank Marketing

"We just never felt like we wanted to join that rhetoric of sameness," Tim Marshall says of his marketing approach at Bank of Ann Arbor. On the season three premiere of the ABA Banking Journal Podcast—sponsored by Rivio, the future of financial information interchange—Marshall discusses Bank of Ann Arbor's vision for the community bank customer experience and the bank's unique approach to communicating with present and future customers. 

He also talks about Bank of Ann Arbor's free summer concert series Sonic Lunch and how the bank positions itself as an employer of choice in its Michigan market.

Listen to the episode. To receive the podcast delivered straight to your own device, subscribe using Apple Podcasts, Google Play, iHeart Radio,, Pocket Casts, TuneIn, Spotify or Stitcher.

Still Time to Register for Next Week's SDBA Bank Technology Conference

The SDBA will hold its Bank Technology Conference next Wednesday, Sept. 11, in Sioux Falls, and there is still time to registered to attend. This day-long conference will provide you with an opportunity to learn from industry experts, network with other IT colleagues, and visit with exhibitors to see and experience the latest in products and services.

Topics will include how hackers hack humans, how to get great results on your next IT audit, why cybersecurity matters and how FS-ISAC can help, weathering the storm of cloud security, cybercrime and the dark web, building a right-sized cyber governance program, skimming/card cloning and a roundtable discussion. 

A networking reception will also be held the evening before the conference, which will be held at the Hilton Garden Inn Sioux Falls South in Sioux Falls. See the full agenda and register to attend

Registration Open for ABA Ag Bankers Conference

Registration is now open for the ABA Agricultural Bankers Conference on Nov. 10-13 in Dallas, Texas. Experience the power of partnership and join fellow ag bankers at this year’s three-day conference packed full of reliable insights and to-the point content.

Hear from top experts across the nation covering the latest around tariffs and trade policy, plus regulatory updates: "Building Resilience in U.S. Farm Profits" and "Global Markets in Transition: 2020 Outlook." Plus, expand your perspective on achieving growth for the bank and your customers in challenging times with these sessions: "Juggling Tough Conversations with a Goal for Positive Loan Growth," "Developing a Quality Credit Package" and Bank on Marketing."

This year's conference will include a new ag banker track, a women in ag banking networking breakfast and a pre-conference workshop with Dr. David Kohl. Register by Sept. 13 and save money on your registration fee. Learn more and register to attend

Compliance Alliance

Question of the Week

Question: We are in the process of underwriting a commercial 10-year term loan to a church for the purpose of purchasing a single-family residence (zoned as single family) that will be used as a place of worship. Is this a HMDA covered transaction or is there an exemption that exists that excludes this loan?



Answer: If the loan will be replaced by permanent financing later, then it's possible that it might fall into the temporary exception:

1. Temporary financing. Section 1003.3(c)(3) provides that closed-end mortgage loans or open-end lines of credit obtained for temporary financing are excluded transactions. 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. For example:... 

Otherwise, if not, the bank may be able to document that this is not in fact used as a residence, and thus, does not fall into the definition of a "dwelling":

3. Exclusions. Recreational vehicles, including boats, campers, travel trailers, and park model recreational vehicles, are not considered dwellings for purposes of § 1003.2(f), regardless of whether they are used as residences. Houseboats, floating homes, and mobile homes constructed before June 15, 1976, are also excluded, regardless of whether they are used as residences. Also excluded are transitory residences such as hotels, hospitals, college dormitories, and recreational vehicle parks, and structures originally designed as dwellings but used exclusively for commercial purposes, such as homes converted to daycare facilities or professional offices.

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.