SDBA to Hold Emerging Leaders Summit Next Week

Next Step: Emerging Leaders There is still time to register for the SDBA's first, full-day event for emerging bank leaders. The SDBA will hold NEXT STEP: SDBA Emerging Leaders Summit on Wednesday, Nov. 6, in Sioux Falls at the Hilton Garden Inn Downtown.

NEXT STEP: SDBA 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.

A networking reception will be held the evening prior to the Summit on Tuesday, Nov. 5, from 5:30 to 7 p.m. The networking reception, which will feature mentalist, magician and entertainer Nicholas Tweedy, will be held at R-Wine Bar at 322 E. 8th St. in Sioux Falls.

See the full agenda and register to attend.

Registration Now Open for 2020 National Ag Bankers School

Registration is now open for the SDBA's 2020 National School for Experienced Ag Bankers set for June 22-25 at Black Hills State University in Spearfish.

The 2020 National School for Experienced Ag Bankers is a seminar for experienced ag bankers who want to further develop their ag lending skills, learn new skills, confirm existing methodology and meet fellow bankers who share the same career path. Taught by a nationally-recognized faculty of bankers, academics and other real-world ag banking practitioners, this program is focused on ag lending opportunities and challenges that are relevant to ag bankers from across the United States.

Now that you have some experience in credit servicing, credit analysis and risk rating, the school instructors will provide course material primarily by case study, supported by lectures and intensive analysis. Instructors will provide valuable information and additional analytical tools that will guide and inform you on how to approach and resolve complex loans. You will gain skills that will help with early identification of problem loans and discovering solutions.

The school will be limited to 70 students, so register early. See the fill agenda and register to attend.

ABA, U.S. Chamber Foundation Announce Partnership to 'Hire Our Heroes'

The ABA yesterday announced a new partnership with the U.S. Chamber of Commerce Foundation intended to expand hiring opportunities for veterans across the nation. The partnership will enable more community banks to participate in the foundation’s Hiring Our Heroes Corporate Fellowship program, which allows transitioning service members and military spouses to intern with private sector employers for up to 12 weeks. Since the program started in 2015, 92% of fellowships have resulted in offers for permanent employment.

Through the partnership, ABA will work with Hiring Our Heroes to match interested banks with corporate fellowship opportunities in their region. At a panel discussion during the ABA Annual Convention, ABA Chair Laurie Stewart—president and CEO of Sound Community Bank in Seattle—shared her bank’s success story with the program. The bank hired Anthony Tran, a Marine Corps veteran transitioning out of the military, as a fellow, and he remains a full-time employee of the bank today.

“We are so happy with Anthony and what he has brought to the bank that we have already signed up for another corporate fellow,” said Stewart. “I strongly encourage other banks to consider participating in Hiring Our Heroes because veterans can help your bank in so many ways.” Tran’s story was also the focus of a new ABA video spotlighting the program. Learn more. Watch the video.

FOMC Announces Third Rate Cut of 2019

The Federal Open Market Committee announced yesterday that it would cut interest rates for the third time this year. The committee approved another quarter-point decrease in the target range for the federal funds rate to a range of 1.5-1.75% in a statement at the conclusion of the meeting.

The FOMC noted that labor market conditions remain strong and economic activity has continued to rise at a moderate rate, but that overall inflation and inflation for items other than food and energy are running below the Federal Reserve’s 2% target. In addition, business fixed investment and exports remain weak and the global outlook is uncertain.

The rate cut “supports the Committee's view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2% objective are the most likely outcomes, but uncertainties about this outlook remain,” the FOMC said, adding that it will “continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate.” Read the statement .

USDA Releases Interim Final Rule Providing Clarity on Hemp Production

The United States Department of Agriculture on Tuesday issued a long-awaited interim final rule establishing new regulations and procedures for the legal production of industrial hemp, as required by the 2018 Farm Bill. The law reclassified hemp as a legal agricultural commodity, but significant questions remained—including many related to banks’ ability to serve hemp producers and hemp-related businesses.

The regulations issued on Tuesday provide a standardized framework for how USDA will approve regulatory plans from states and Indian tribes that wish to oversee hemp production, as well as a federal plan for producers in areas without approved local plans. The framework covers how to maintain information on the land where hemp is produced, test THC levels and dispose of plants that do not meet the necessary requirements. They also address licensing requirements and compliance.

The interim final rule will remain in place for 730 days after publication in the Federal Register; comments will be accepted for 60 days following publication. Read the interim final rule. For more information, contact ABA’s Ed Elfmann or Rob Rowe.

South Dakota is one of only a handful of states that has not yet legalized industrial hemp production. During the 2019 South Dakota Legislature, Gov. Kristi Noem vetoed House Bill 1191, which would have legalized industrial hemp in South Dakota, saying South Dakota wasn't ready for it.

Podcast: Measuring and Managing the Risk of Employee Misconduct

Conduct issues have driven some of the most significant enforcement actions—including those affecting the reputation of the industry—both in the United States and around the world. As regulators and bankers take a close look at conduct risk, the latest episode of the ABA Banking Journal Podcast—sponsored by Money Concepts International—welcomes Tanya Weisleder, global head of conduct risk at Credit Suisse, to discuss:

The ways that employee misconduct can negatively affect not just the firm but also clients, employees and financial markets.
How conduct risk intersects with operational risk management, regulatory compliance and human resources.
How a firm with global reach sets a shared worldwide definition for conduct risk and the lenses Credit Suisse uses to evaluate conduct risk.
Methods for monitoring and measuring conduct risk, including materiality, intentionality and seniority.

Listen to the episode.

ABA Issues Principles for Strong Relationship Between Banks, Core Providers

As part of the ABA’s ongoing work to strengthen the relationship between banks and their core providers so banks can deliver the innovative products and services customers want and need, the association on Monday released a set of Principles for Strong Bank-Core Provider Relationships.

Developed by ABA’s Core Platforms Committee, the Principles offer reasonable standards for quality service, open communication, access to bank data, fair contracts and data security that banks can use as part of their conversations with core providers.

ABA President and CEO Rob Nichols and Core Platforms Committee Chairman Julieann Thurlow, who is president and CEO of Reading Cooperative Bank in Reading, Mass., unveiled the Principles during the ABA’s Annual Convention in Seattle this week. “Getting this relationship right is critically important to you and the core providers,” Nichols told Convention attendees. “We’re already hearing from bankers that their conversations with their cores are more responsive and solutions-oriented since the committee began its work.”

Nichols and Thurlow also provided a preview of the committee’s next steps, including conversations with regional and emerging core providers. During the Convention’s opening general sessions, Nichols also updated bankers on ABA’s advocacy agenda and achievements; new member tools, including the revamped aba.com; and other initiatives to help banks innovate. Read the principles.

Learn About CRA Credit That's Worth a Lot More

Meaningful CRA credit might be closer than you think. Join CRA Partners on Wednesday, Nov. 6, for a webinar to discover how your bank can receive CRA credit on both the lending and investment test, along with service credit consideration--all through CRA Partners' unique, turn-key program that works in your community. CRA Partners knows how difficult it has become to find meaningful CRA credit opportunities, so that's why they have developed a low-risk, profitable solution for banks that’s worth a lot more than just checking a box.

This complimentary presentation will share in detail how your bank can lead the fight against elder abuse in your community and earn lending, investment and service test credit on your next CRA exam. The webinar is intended for CEOs, CFOs, CRA/compliance officers and community development personnel seeking CRA credit opportunities.

CRA Partners is a compliance solution you can feel good about. Banks earn meaningful CRA credit for ensuring safe, secure living environments for seniors through its national crime prevention program, Senior Crimestoppers. Funded exclusively by its bank partners and endorsed by more 30 state bankers associations including the SDBA, Senior Crimestoppers protects low- to moderate-income senior citizens living in nursing homes, HUD communities and state veterans homes from theft, abuse and neglect.

The live, 30-minute webinar will be held at 10 a.m. CST. Register for the webinar.

Question of the Week

Question: I have a commercial loan for the refinance of his office and warehouse. The office is actually an old home though. Am I correct that this is not HMDA since it's not occupied as a home?

Answer: If the structure has been converted to a commercial office, it is no longer considered a dwelling and, thus, the loan is outside the scope of HMDA, if no other dwelling secures the loan.

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.
Comment 3 to §1003.2(f)(3): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/2/#2-f-Interp-3

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Tuesday, Nov. 5, 2019, 10-11 a.m. CST

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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.