SDBA eNews

January 9, 2020

Brainard Floats Fed's Alternative Ideas on CRA Modernization

Federal Reserve Governor Lael Brainard, the agency’s point person for the Community Reinvestment Act modernization process, yesterday outlined the Fed’s approach to revising CRA rules and explained why the Fed did not join the notice of proposed rulemaking issued last month by the OCC and the FDIC. The Fed’s approach chiefly differs from the OCC and FDIC’s in how it measures CRA performance.

“We continue to believe that a strong common set of interagency standards is the best outcome,” she said in Washington, D.C. “By sharing our work publicly, we hope to solicit public input on a broader set of options for reform and find a way toward interagency agreement on the best approach. . . . Given that reforms to the CRA regulations are likely to set expectations for a few decades, it is more important to get the reforms done right than to do them quickly.” Brainard’s speech—which was not a formal regulatory proposal—came as the OCC and FDIC NPR was published today in the Federal Register, making March 9 the deadline for public comments.

Specifically, Brainard said, the Fed recommends two tests, one for retail lending applicable to all banks and one for community development activities applicable to larger banks, wholesale banks and limited-purpose banks. These tests would include qualitative standards to allow more tailored performance metrics. This differs from the OCC and FDIC proposal, which would measure both the share of retail lending to low-to-moderate-income individuals and areas, as well as the impact of that activity and combine those measures into a “presumptive rating” that could be adjusted by examiners based on performance context and other factors.

Bankers: Ask Senators to Pass AML Reform, Cannabis Banking Bills

With Congress back in session, ABA is urging the Senate to consider two important banking-related bills that have already passed the House with bipartisan majorities. Specifically, ABA is urging all bankers to contact their senators and ask them to pass the:

  • Illicit Cash Act (S. 2563), which would strengthen anti-money-laundering efforts by cracking down on anonymous shell companies.
  • SAFE Banking Act (S. 1200), which would allow banks to provide services to legal, state-licensed cannabis companies and ancillary businesses without risk of federal prosecution.
Bankers can visit Secure American Opportunity—ABA’s new grassroots engagement site—to contact their lawmakers. Take action now.

CorTrust's Jack Hopkins Named Banker of the Year by BankBeat Magazine

Photo of Jack HopkinsJack Hopkins, president and CEO of CorTrust Bank, has been selected BankBeat magazine’s 2020 Banker of the Year. According to BankBeat, Hopkins receives this recognition for his ongoing commitment to growing his bank in an era of increasing consolidation, along with his career-long commitment to leading the community banking industry forward.

This honor comes on the cusp of CorTrust Bank being named the top bank in South Dakota by Forbes Magazine last year. Additionally, CorTrust recently acquired First Minnesota Bank, growing CorTrust’s footprint in the Twin Cities to a total of 15 locations, adding to the 22 branches rooted in eastern South Dakota. 

Read the BankBeat article

SDBA State Legislative Day Hotel Blocks to be Released

Photo of State CapitolThe SDBA 2020 State Legislative Day on Feb. 12 at the Ramkota Hotel & Conference Center in Pierre is your opportunity to stay up-to-date on both state and federal legislation which could affect the banking industry, visit with state legislators and constitutional officers, and make sure our industry is heard.

The day will include an SDBA Legislative Committee meeting, luncheon, featured speaker Bob Sellers, Gov. Kristi Noem (invited), the chance to visit with legislators at the State Capitol, and an evening reception with state legislators and constitutional officers. The day will also include special sessions specifically designed for emerging bank leaders, as well as an emerging leaders networking reception the evening of Feb. 11.

The SDBA has room blocks at two hotels in Pierre. The hotel block cut off at the Ramkota Hotel is Jan. 12, and the hotel block cut off at the ClubHouse Hotel & Suites is Jan. 11. More details and register for the event.

Bakari Sellers, Leslie Sanchez to Keynote ABA Washington Summit

Bakari Sellers, a CNN political analyst and former South Carolina Democratic state legislator who at one time was the youngest African-American elected official in the nation, and Republican strategist Leslie Sanchez, a CBS News political contributor and a former White House official under President George W. Bush, will be keynote speakers at the ABA Washington Summit, to be held March 23-25 in Washington, D.C. 

Sellers and Sanchez will discuss the national political landscape just three weeks after Super Tuesday, the single primary day when the most Democratic nominating delegates will be up for grabs.

The ABA Summit is the largest annual gathering of banking leaders in the nation’s capital, giving bankers a unique opportunity to advocate for meaningful changes that grow the economy and give bank customers more choices. Registration is free for bankers, bank directors and trustees and ABA service members. Attendees are also encouraged to register for ABA’s Mutual Community Bank Forum, Emerging Leaders Forum and Women’s Leadership Forum, all of which are held in conjunction with the Summit. Learn more and register.

The ABA will provide a $750 scholarship to two emerging bank leaders from South Dakota to attend the Summit. The scholarship will work as a travel reimbursement to be paid after the event. To apply, contact the SDBA’s Halley Lee.

The SDBA offers a $500 stipend to help with the travel expenses of one person from each SDBA member bank to attend the Summit. Stipends will be paid after the event. Questions, call the SDBA at 605.224.1653.

Podcast: Regions CEO John Tuner on Tech Investments, Customer Experience

As banking becomes ever more technology-driven, many banks are shifting from a mindset that puts big tech projects off to one side to one that embraces ongoing innovation, development and deployment. Regions Bank, a growing regional firm with more than $128 billion in assets, exemplifies the latter mindset.

“We’re always thinking about how we can improve the customer experience,” says Regions President and CEO John Turner on the latest episode of the ABA Banking Journal Podcast. He discusses the company’s investments in online lending, automation, data, artificial intelligence, APIs and cloud computing. In addition to improved CX, these investments promise to reduce the future cost of innovation “so that we have a continuous cycle of investment in technology.”

Turner also discusses how Regions has reshaped its branch operations to provide more career opportunities for employees, how the firm is adapting as it grows organically in newer areas like Texas and the Midwest and what it would look for in a prospective acquisition. Listen to this episode.

ABA Seeks Stories of Banks Supporting Customers, Communities and Economy

The America’s Banks website demonstrates the tremendous impact banks across the country have on their customers, communities and the overall economy. The ABA is currently seeking stories that highlight the many ways that banks of all sizes open doors of opportunity every day--from helping customers buy a home or start a business to making transactions safe and convenient. The ABA is also looking for stories about veterans, reservists and military spouses currently working in the banking industry, as well as bank-led programs, partnerships and events that directly benefit military service members and veterans. To submit a story about your bank or for more information, contact the ABA's Amy Wertlieb.

FRB Minneapolis to Hold Webinars on Indian Country Homeownership 

The Federal Reserve Bank of Minneapolis is holding a series of informative webinars on Indian Country homeownership. The four-part webinar series on increasing homeownership across Indian Country is based on the Federal Reserve Bank of Minneapolis’ Center for Indian Country Development’s Tribal Leaders Handbook on Homeownership.

The first webinar will be held Thursday, Jan. 9, at 2 to 3:30 p.m. CST. The webinar will provide an overview of the Tribal Leaders Handbook on Homeownership, how tribal leaders can support homeownership, and planning to drive tribal citizen self-sufficiency and asset building, economic development and community transformation through homeownership development. Register for the webinar.

 The next three next sessions will be held:

The webinars are being hosted by the National Congress of American Indians' Partnership for Tribal Governance and the Federal Reserve Bank of Minneapolis’ Center for Indian Country Development. Questions, contact Tyler Scribner, NCAI policy analyst, via email

Compliance Alliance

Question of the Week

Question: We have a loan application which will be secured by our borrowers’ primary residence. It will additionally be secured by 40 acres of agricultural real estate that is owned by one of the borrower's father. My question is, do I have to provide a copy of the loan estimate to the father who is only pledging security?

Answer: There is not a requirement to give a copy of the loan estimate to the father in this case, under the TRID requirements. If the loan is subject to the right of rescission, the bank would need to give a closing disclosure to anyone with the right to rescind though, which may include the father. As always, be sure to check any internal policy requirements or investor guidelines, if applicable, since these often include additional disclosure requirements. 

…When two consumers are joint obligors with primary liability on an obligation, the early disclosures required by § 1026.19(a), (e), or (g), as applicable, may be provided to any one of them. In rescindable transactions, the disclosures required by § 1026.19(f) must be given separately to each consumer who has the right to rescind under § 1026.23. In transactions that are not rescindable, the disclosures required by § 1026.19(f) may be provided to any consumer with primary liability on the obligation. …

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.