SDBA eNews

September 19, 2019

SDBA To Hold New Event for Emerging Bank Leaders

Next Step: Emerging LeadersThe SDBA has developed a new event for emerging bank leaders. Registration is now open for NEXT STEP: SDBA Emerging Leaders Summit on Nov. 5-6 at the Hilton Garden Inn Sioux Falls Downtown.

NEXT STEP: Emerging Leaders is designed to help cultivate, connect, engage and empower South Dakota’s future bank leaders. This event will encourage emerging bank leaders to find and express their voices within their organizations, communities and the banking industry and provide opportunities to network and exchange ideas with other industry professionals. It will also increase emerging bank leaders’ knowledge of topics of interest to the banking industry and promote involvement and advocacy. 

The summit will begin on Tuesday, Nov. 5, with a networking reception at R-Wine Bar at 322 E. 8th St. in Sioux Falls. Connect with other attendees and be captivated by Nicholas Tweedy, mentalist, magician and entertainer.

Holly Hoffman, who was the last remaining member of the Espada Tribe and the last woman standing on Season 21 of CBS’ hit reality show “Survivor Nicaragua," will kick off the summit on Nov. 6 with her session "Lead Simply." Next, SDBA President Curt Everson will present "Civics 101." Other topics include making connections, behavioral styles, workplace culture, what makes a leader and speed networking.

All sessions on Wednesday, Nov. 6, will be held at the Hilton Garden Inn Sioux Falls Downtown. See the full agenda and register to attend

Updated Article Discusses How to Prepare for National Flood Insurance Program Lapse

With the National Flood Insurance Program set to expire at midnight on Monday, Sept. 30, unless Congress intervenes, an updated online feature from the ABA Banking Journal examines what bankers should do to prepare themselves and their customers. ABA Senior Counsel Diana Banks walks bankers through what to do before, during and after a lapse occurs.

Banks notes that before a lapse, institutions should carefully review guidance from the prudential regulators, consult with counsel to apply it to specific business areas, and encourage borrowers whose existing NFIP policies may be expiring soon to renew before the lapse occurs. When the lapse ends, bankers should verify whether the reauthorization is retroactive or not, and ensure customers understand their coverage in either case. Read the article. For more information, contact ABA's Diana Banks.

FDIC Final Rule Sets Community Bank Leverage Ratio at 9%

The FDIC on Tuesday approved a final rule allowing community banks with a leverage capital ratio of at least 9% to be considered in compliance with Basel III capital requirements and exempt from the complex Basel calculation. The final rule implements a section of the S. 2155 regulatory reform law that directed the agencies to set a community bank leverage ratio between 8% and 10%.

Under the final rule, banks with less than $10 billion in assets may elect the community bank leverage ratio framework if they meet the 9% ratio and if they hold 25% or less of assets in off-balance sheet exposures, and 5% or less of assets in trading assets and liabilities. For institutions that fall below the 9% capital requirement but remain above 8%, the final rule establishes a two-quarter grace period to either meet the qualifying criteria again or comply with the generally applicable capital rule.

ABA and the state associations originally raised the idea of allowing highly-capitalized banks to be exempt from the Basel III calculations in a comment letter more than four years ago. ABA President and CEO Rob Nichols welcomed the action from FDIC. “We applaud the FDIC for approving a community bank leverage ratio that recognizes the fact that the vast majority of community banks already meet or exceed risk-based capital requirements,” Nichols said. “We also appreciate the FDIC’s emphasis that the CBLR is an optional alternative to the risk-based capital framework.”

He added, however, that ABA continues to support an 8% community bank leverage ratio, “which the law provided for and which would allow hundreds of additional banks to qualify for the capital framework . . . We hope that as the FDIC becomes more comfortable with the CBLR, it will reassess this rule and allow community banks with ample capital to use an 8% ratio.”

ABA to Bankers: Ask Congress to Pass SAFE Banking Act

With the House expected to vote next week on the SAFE Banking Act—a bipartisan solution that would provide greater clarity to the industry about serving legitimate cannabis businesses—ABA is calling on all bankers to contact their lawmakers in support of the bill. Cannabis is now legal in some form in 33 states; the SAFE Banking Act would allow banks to serve cannabis-related businesses in those states and prohibit federal regulators from taking action against a bank solely because cannabis is involved. Contact your lawmaker.

CFPB to Make ABA-Advocated Changes to Complaint Database

The Consumer Financial Protection Bureau will continue to publish a database of consumer complaints, but it will make several key changes to increase transparency and provide full context for consumers, the agency announced yesterday. Among these changes are several advocated by ABA.

For example, the bureau said it will highlight consumers’ ability to contact their financial provider for answers before filing a report, which ABA has urged, and it said it will more prominently display disclosures making it clear that complaints are unverified and that the database is not a statistical sample of consumers’ marketplace experience. Such disclosures in part address ABA’s concerns that the reports in the database lack sufficient context and key data. The CFPB also said it will provide common answers and resources to help consumers before they submit complaints, which ABA had said the bureau was well positioned to do.

The bureau also said it would explore how it can expand a company’s ability to respond publicly to individual complaints and how it can better contextualize the complaint data. However, the bureau plans to continue publishing all previously disclosed fields, including consumer narratives, despite ABA’s strongly expressed concerns about privacy implications and the CFPB’s statutory authority to publish individualized complaint data. Read more. For more information, contact ABA's Jonathan Thessin.

Podcast: Compliance's Role in Innovation and Change Management

The mindset of bank compliance officers is shifting to focus on how they can support product innovation and change management, applying their expertise in regulations and process management ultimately to accelerate the innovation process.

On the latest episode of the ABA Banking Journal Podcast—sponsored by RIVIO Clearinghouse, the future of financial information exchange—community bank chief compliance officer Kevin Georgetti explains that compliance professionals "want to be there at the beginning of a process, so as we go through this world where we want to push products through very quickly, we can have that speed. If you're up front, you can go quicker."

Georgetti also talks about how to do compliant digital marketing, the compliance challenges faced by banks growing toward the $10 billion asset threshold and why more community banks are hiring compliance talent from large institutions. Listen to the episode.

South Dakota Farm and Ranch Stress Summit To Be Held Next Week

The SDSU Extension Rural Behavioral Health Team is partnering with the South Dakota Counselors Association to provide the South Dakota Farm and Ranch Stress Summit on Sept. 23-25 in Oacoma. 

The purpose of the Summit is to provide the ag community with information on working through individual stress and how to provide support to individuals dealing with stress. Including farmers and ranchers--as well as those in support positions such as counselors, bankers, consultants, clergy, crop insurance agents and other business members--in these conversations will strengthen communities across South Dakota. 

The Summit will be held at Arrowwood Cedar Shore and Conference Center in Oacoma. The SDBA is helping to sponsor the Summit. Learn more and register to attend

SDBA To Hold Compliance Workshop on October 15-16

With so much up in the air in this regulatory environment, one thing that remains constant is the need for a commitment to compliance. The SDBA will hold the 2019 Compliance Workshop on Oct. 15-16 at the Hilton Garden Inn Sioux Fall South.

Led by Compliance Alliance, the workshop will cover deposits and operations topics to give a well-rounded view of the compliance landscape. Attendees will have extensive opportunities to network and discuss common issues with their community banking peers. Compliance officers, internal audit staff, and any employee who assists with compliance management, monitoring, audit, review or training should attend this training.

The deadline to reserve a hotel room for the workshop is Monday, Sept. 23. See the full agenda and register to attend

Compliance Alliance

Question of the Week


We are moving to a new ChexSystem benefit whereby the credit score will be provided to us. However, we will not use the score in making the determination to deny an account opening. Since we are not using it, do we have to include the additional credit score disclosures?

Answer: If you did not use a credit score in your decision, then there is no technical need to add include the additional disclosures. However, the issue comes in the form of showing that the bank did not actually use the score. So, if the bank does choose not to utilize the credit score disclosures, then it needs to thoroughly document that fact.

Section 1100F of the Dodd-Frank Act amended the FCRA to include additional disclosure requirements when adverse action is taken because of the consumer’s credit score. ... But if the credit score did not play a role in the decision to take adverse action, these disclosures are not required.

Fed. Res., Consumer Compliance Outlook, Adverse Action Notice Requirements Under the ECOA and the FCRA:   

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.