SDBA eNews

January 16, 2020

South Dakota Legislature Opens This Week

On Tuesday, Gov. Kristi Noem delivered the annual State of the State Address to open the 2020 South Dakota Legislature in Pierre. Among other topics, Noem outlined why South Dakota is the best state in the country to own and operate a business.

“…I grew up with a Dad who dreamed of all four of his kids being able to stay on the family ranch if they wanted to. My vision for South Dakota is the same," Noem said. "We must ensure that every South Dakotan can build their life here and make a good living, so they can provide for their families and maintain our traditions and way of life. This is why I am committed to four pillars of protection for South Dakotans: keeping taxes low, limiting government spending, fighting government intrusion, and keeping government open and honest. 

Last week, Noem sent the Legislature her "Four Guardrails" for a path forward on decriminalizing industrial hemp, which will be one topic of discussion this session. Read more.

Bankers can stay current on legislative issues of importance by reading or listening to a podcast of the SDBA’s weekly Legislative Update and reading the Legislative Bill Watch. The publications and podcast are posted at on Fridays during session. You can also request to receive email notifications when the publications are posted online by contacting  Alisa Bousa.

The full legislative schedule, listing of bills, legislators and committee schedules can be found at

FHFA Weighs More Forceful Action on 'Continued Threat' of PACE Loans

Building on previous warnings about risks associated with home retrofitting loans financed through tax assessments, the Federal Housing Finance Agency yesterday asked for public input on additional steps to deal with the “continued threat” that these loans pose to homeowners and the housing finance system.

The controversial Property Assessed Clean Energy, or PACE, loans for energy-efficient retrofitting—such as solar panels and high-efficiency air conditioners—often take lien priority over existing and subsequent first mortgage liens. FHFA has warned since 2014 that GSEs Fannie Mae and Freddie Mac cannot buy mortgages on homes with a first-lien PACE loan attached to it, yet PACE loans still “present a threat to the quality and stability of large amounts of [GSE] loans,” the agency said.

Specifically, FHFA asked whether it should direct the GSEs to reduce loan-to-value ratios or increase loan-level price adjustments on new loan purchases in states or localities where PACE loans are available, and if so, by how much and for what loans. The agency also sought feedback related to Federal Home Loan Bank advance collateral, how the GSEs can best obtain often-obscure PACE loan information, and PACE loan effects on consumers. Responses to FHFA are due by March 16. Read the request for information. For more information, contact ABA’s Joseph Pigg.

Lawmakers Concerned About 'Real-World Impacts' of CECL Standard

During a House Financial Services subcommittee hearing yesterday, lawmakers on both sides of the aisle expressed serious concerns about the economic effects of the Financial Accounting Standards Board’s current expected credit loss standard on the cost and availability of credit for consumers. 

“Switching to CECL . . . will have significant real-world impacts on community banks, minority banks and other providers of credit and banking services,” said Rep. Gregory Meeks (D-N.Y.), warning that if banks curb lending as a result of CECL, it could create a ripple effect that could disproportionately affect low- to moderate-income borrowers. Rep. Vicente Gonzalez (D-Texas), who last year co-sponsored an ABA-supported bill calling for an economic impact study of CECL, added that “the CECL standard leaves many questions unanswered, even for those who have already implemented it.”

FASB Chairman Russell Golden told lawmakers that his organization will closely monitor information from institutions already implementing the standard—as well as findings from a forthcoming Treasury study on CECL’s effect on regulatory capital—to understand if changes are needed to the standard ahead of the 2023 implementation deadline for smaller institutions. He added that “we’re always open to improving our standards . . . there will be a lot of information about the CECL rollout from the larger public companies that we can all review and study.”

OCC Seeks Bank-Specific Data to Inform CRA Revamp

Now that the OCC and FDIC have formally issued their proposal to modernize Community Reinvestment Act rules, the OCC last Friday requested public input and bank-specific data to help determine how the proposal might be revised to achieve CRA’s purpose.

While the agencies analyzed currently available historical data to develop their proposed rule—including Home Mortgage Disclosure Act, call report and credit bureau data—the OCC is seeking to supplement the analysis with bank-specific data on retail domestic deposit activities, CRA-qualifying activities and retail loans originated and sold within 90 days, among others, over the past three years. The request for information includes specifics about the data being requested. The OCC requested the data by March 10. Read the RFI. For more information, contact ABA’s Krista Shonk

Dacotah Bank Acquires First State Bank of Claremont

Dacotah Bank has signed agreements to purchase First State Bank of Claremont and Stohr Agency, which include the Groton and Langford locations.

“We are pleased to announce to the First State Bank of Claremont and Stohr Agency customers and communities that Dacotah Bank is here for you,” said Joe Senger, Dacotah Bank CEO.

First State Bank of Claremont’s Groton and Langford locations fit well in the middle of Dacotah Bank’s existing footprint. Dacotah Bank has locations across South Dakota, North Dakota and Minnesota. Closely surrounding First State Bank of Claremont’s locations are branches in Aberdeen, Clark, New Effington, Roslyn, Sisseton and Webster. Along with the geographic alignment of locations, the customer base is a natural fit as well. Groton and Langford are agricultural-centric communities, and Dacotah Bank is the 12th largest Ag lender in the nation.

First State Bank of Claremont president Jeff Stohr shared, “our bank has roots dating to 1903 and our family has associated with it since 1937.  We have fantastic employees who will continue serving the customers and communities we cherish.  In many ways, our objectives align well with Dacotah Bank, and they will bring greater lending capacity and a variety of additional products and services that I believe will serve our employees, customers and communities well for years to come.” 

The addition of Groton and Langford bring Dacotah Bank’s total number of locations to 34. The agreement for acquisition is pending regulatory approval.

Podcast: A Bank Strategy that Bridges the Gap

“When you think about what’s happening in America, there’s a bifurcation,” says Orvin Kimbrough. “You have more and more people pushing to the upper echelons of economic continuum, and you have many more who are pushing to the lower end, and the middle group is being squeezed.”

Kimbrough—the CEO of Midwest BankCentre in St. Louis, who joined the bank as CEO in 2019 after a long career in nonprofit leadership—aims to build on his experience to bridge that gap and position the bank to succeed across customer segments. It’s a strategy that was recently recognized with an ABA Foundation Community Commitment Award for the bank's community development efforts among St. Louis’ African-American and Bosnian-American communities.

On the ABA Banking Journal Podcast, Kimbrough also discusses his unusual path to the bank C-suite, Midwest BankCentre’s partnerships with community and faith-based organizations, and ensuring that a bank’s board and C-suite represents all segments and communities the bank aims to serve. Listen to the episode.

SDBA State Legislative Day Hotel Blocks Extended

The 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 SDBA has room blocks at two hotels in Pierre. The hotel block cut off at the Ramkota Hotel has been extended to Jan. 19, and the hotel block cut off at the ClubHouse Hotel & Suites has been extended to Jan. 24. 

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. More details and register for the event.

USD Invites Banks to Take Part in Speed Networking With Students

The University of South Dakota's Beacom School of Business Career Success Center will hold a speed networking event for employers to come on campus and network with students on Thursday, Jan. 23, from 3-5 p.m. in Vermillion. 

Employers will set up a table, and small groups of students will rotate around and visit with each table in 10 minute intervals for approximately one hour. The last 30 to 45 minutes of the event will be an open time for students to visit more in depth with employers or to make connections with a company. 

Employers are welcome to share information about their company and any full-time, part-time or internship opportunities that they may have available immediately or in the near future. Employers may collect student contact information when they visit with students to keep in touch with them. Register for a table. Questions, contact Mandy Hanson, Career Success Center manager. 

Compliance Alliance

Question of the Week


We do business in a state with dower rights. I just want to make sure that a spouse who is not on the title to real estate but uses the home as a primary residence does not receive the right to rescind—is this correct?

Answer: That is correct. For purposes of the rescission rules, dower does not constitute an ownership interest.

An ownership interest does not include, for example, leaseholds or inchoate rights, such as dower.
Comment 2 to §1026.2(a)(11):

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.