SDBA eNews

October 9, 2019

LEAD STRONG: Women in Banking Conference Kicks Off Tonight

Despite an approaching winter storm, more than 240 women plan to gather for the SDBA's LEAD STRONG: Women in Banking Conference tonight and tomorrow in Sioux Falls.

The event begins this evening with a networking reception from 5:30 to 7 p.m. in Meetings Rooms 8-10 at the Sioux Falls Convention Center. Thursday will begin with registration and a continental breakfast from 8 to 8:30 a.m., with the conference welcome at 8:30 a.m.

This year's service project is the Helpline Center (211). The Helpline Center connects people across the state to resources and support and offers hope to those with thoughts of suicide. To help women in need, the SDBA will be collecting donations of unopened personal care items such as shampoo, body wash, deodorant, toothpaste and most-importantly feminine hygiene products, which are expensive to buy. The Helpline Center will distribute the items to organizations that work with women, along with resource cards about 211. Also welcomed are cash donations to the Helpline Center, which the SDBA will also collect.

The SDBA will have limited staffing at its Pierre office during the conference. 

ABA Foundation Honors Eight Banks with Community Commitment Awards

Eight banks earned the ABA Foundation’s highest honor today by being named Community Commitment Award winners for 2019. The annual awards recognize banks for their corporate social responsibility efforts in categories ranging from affordable housing to economic inclusion. This year’s winners also include a new award for banks going above and beyond to support military families. The 2019 winners will be presented with their award at the ABA’s Annual Convention in Seattle on Oct. 29. 

“Banks of all sizes are stepping up their corporate social responsibility efforts to serve their communities, and this year’s nominations in every category were incredibly impressive,” said Rob Nichols, ABA president and CEO. “The programs developed by our Community Commitment Award winners stood out to our judges and really demonstrate how banks are helping communities solve challenging issues.” 

First National Bank of Omaha (FNBO) and Wells Fargo & Company were co-winners in the affordable housing category. FNBO was recognized for its Habitat for Humanity of Omaha Loan fund, which was created to increase Habitat Omaha's ability to build and rehabilitate even more homes for low-income families. Wells Fargo & Company was recognized for its NeighborhoodLIFT® program, a collaboration with NeighborWorks® America and its network members, which offers homebuyer education plus down payment assistance grants for lower- and average- income households. 

Citibank, New York, was the supporting military families award winner for its support of Bring Them HOMES, an initiative developed by the Local Initiatives Support Corporation to increase affordable and supportive housing for low-income, homeless and at-risk veterans. 

First Interstate Bank headquartered in Billings, Mont., received honorable mention in the financial education category. See the full list of award winner.

President Approves Third South Dakota Disaster Request

Gov. Kristi Noem announced yesterday that President Trump has approved South Dakota's request for a third Presidential Disaster Declaration, covering the damage done by severe storms, tornadoes and flooding that occurred June 30 to July 21.

The declaration will allow federal money to be used to help local government entities recover from infrastructure damage in Butte, Gregory, Kingsbury, Lawrence, Meade and Tripp counties, as well as the Cheyenne River and the Lower Brule Indian Reservations.  A preliminary assessment of the damage was estimated to be $2.5 million.

“Many counties have been plagued by heavy rainfall and flooding time and time again this year,” said Noem. “I appreciate that the President and FEMA continue to understand the impact these storms and heavy rains have had on South Dakota and are willing to help us recover.”

In her request for a disaster declaration, Noem told the President that many areas had experienced record rainfall which resulted in flooding of roads and other infrastructure. Confirmed tornadoes and high winds caused property damage in other areas. She said two of the state’s major industries, agricultural and tourism, have been impacted.

This is the third federal disaster declaration for South Dakota this year. FEMA officials are now in South Dakota working on the first two federal disaster declarations and will continue to work on the third. More details on the process for the third disaster declaration will be announced at a later date.

IRS Proposed Rule Would Ease Transition Away from Libor

The IRS has proposed regulations intended to help market participants transition from the London Interbank Offered Rate to an alternative reference rate. With Libor’s fate beyond 2021 uncertain, many questions arose as to whether modifying contracts referencing Libor with an alternative rate would be considered a taxable event. At the urging of the Alternative Reference Rates Committee—of which ABA is a member—the IRS and Treasury Department issued the proposed guidance, which would generally allow market participants to make those contract modifications without tax consequences.

The proposal also includes certain safe harbors and guidance on a variety of tax-related issues. “The Treasury action today provides much more clarity around the tax issues related to converting legacy trades,” said ARRC Chairman Tom Wipf, who is also vice chairman at Morgan Stanley. “This clears the path forward, and I strongly encourage all market participants to take this opportunity to transition away from Libor and begin adopting the Secured Overnight Financing Rate,” the ARRC’s recommended reference rate.

Comments on the proposal will be due 45 days after publication in the Federal Register. ABA is reviewing the proposal and invites bankers to share their feedback to inform the association’s comment letter. Read the proposal. For more information, contact ABA’s John Kinsella or Curtis Dubay.

Final Rule Raising Real Estate Appraisal Threshold Takes Effect Today

The financial regulatory agencies have published in the Federal Register a final rule raising the appraisal threshold for residential real estate transactions from $250,000 to $400,000. The rule takes effect today.

The new threshold addresses numerous concerns raised by ABA and other industry stakeholders over the time and cost of appraisals. Under the final rule, transactions that qualify for the exemption must still obtain an evaluation consistent with safe and sound banking practices. While S. 2155 created an exemption from appraisals for rural residential transactions, with this rule, effective Jan. 1, 2020, these transactions will require an evaluation. Read the final rule. For more information, contact ABA’s Sharon Whitaker.

ABA Challenges Appellate Court's Reliance on Chevron Doctrine in NCUA Ruling

ABA last Friday filed a petition for the full D.C. Circuit Court of Appeals to review its decision in the association’s challenge the National Credit Union Administration’s 2016 field of membership rule. In August, a three-judge panel of the court upheld much of rule while remanding a portion related to redlining concerns. The request for a rehearing by the full “en banc” panel of judges is the next step in the legal process.

ABA argued that the three-judge panel’s decision “stretches Chevron deference beyond its limits” in ruling that NCUA could define a “local community” as a combined statistical area inhabited by up to 2.5 million people or define an entire state as a “rural district.” The panel concluded that when a statute directs an agency to define a term through regulation, this act suggests that Congress did not intend the terms to be applied according to their plain meaning, whereas Supreme Court precedent holds that an agency’s authority “go[es] no further than the ambiguity will fairly allow.”

“Rehearing en banc is warranted to realign this Court’s Chevron jurisprudence with that of the Supreme Court,” ABA explained. Under the Supreme Court’s Chevron doctrine, courts defer to administrative agencies’ interpretation of statutes they administer where Congress has not specifically addressed the question at issue. ABA also said the decision was incompatible with judicial review under the Administrative Procedure Act and thus warranted review. For more information, contact ABA’s Thomas Pinder 

SDBA Emerging Leaders Summit Hotel Block to be Released Next Week

The SDBA will hold its first, full-day event for emerging bank leaders, NEXT STEP: SDBA Emerging Leaders Summit, on Nov. 5-6 at the Hilton Garden Inn Sioux Falls Downtown. The hotel blocks for this event will be released on Tuesday, Oct. 15.

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 in Sioux Falls. 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

ABA to Host Webinar on Cybersecurity for Bankers

ABA will host a free webinar Monday, Oct. 21, at 1 p.m. CDT focusing on what bankers need to know about cybersecurity in 2020. ABA experts will provide the latest updates on cybersecurity, physical security and information security, along with an overview of the extensive resources offered by ABA. Access to staff experts and online resources is included in ABA membership. Register for the webinar

Compliance Alliance

Question of the Week

Question: This is regarding the recent threshold changes to Regulation CC. Since we have same-day availability and the amounts are actually in the customers’ favor, do we have to do a change notice to reflect the new funds availability thresholds?

Answer: Yes, it would still be required to be updated and provided within 30 days of the change as set out here:  

(e) Changes in policy. A bank shall send a notice to holders of consumer accounts at least 30 days before implementing a change to the bank's availability policy regarding such accounts, except that a change that expedites the availability of funds may be disclosed not later than 30 days after implementation.

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.

 SDBA eNews Archive

View past issues of the SDBA enews

Advertising Opportunity
Learn more about sponsoring the SDBA eNews.

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