SDBA eNews

January 30, 2020

Learn What's Next in Washington at State Legislative Day

Photo of Bob SellersOur Founding Fathers could not have envisioned 24-hour cable news networks, viral videos or fake news purveyors in foreign countries trying to influence elections, but they did expect politicians to be politicians--and humans to be, well, human. Learn about the latest in the Mueller investigation, legislation which could affect you directly, and executive orders which could change the direction of federal policy at the SDBA's State Legislative Day on Feb. 12 at the Ramkota Hotel & Conference Center in Pierre.

Former CNBC and Fox anchor Bob Sellers will be the featured speaker at this year's State Legislative Day. An Emmy-winning journalist with 25 years of experience in television, Sellers will help attendees prepare for what's coming from inside the Beltway and how it will play out from Wall Street to Main Street. Attendees will also get an update on the upcoming November elections, because as a former president once said, "Elections have consequences." 

Don’t miss your opportunity to make sure our industry is heard! Register now to attend the 2020 SDBA State Legislative Day. 

South Dakota Bankers Foundation to Provide Scholarships

The South Dakota Bankers Foundation is asking for assistance from bankers in promoting its scholarship opportunities. The Foundation currently offers five named scholarships to be awarded directly to South Dakota college or university juniors (seniors in the fall of 2020) with an expressed interest in banking, finance or business. These scholarships are:

  • Alan M. Graff Scholarship—$4,000
  • Herman Lerdal Scholarship—$3,000
  • Joyce Hazeltine Scholarship—$3,000
  • David S. Birkeland Scholarship—$3,000
  • Deb Gates Scholarship—$1,500

More details and application forms can be found on the SDBA's website. There is also a one-page flier that banks can print and display at their organizations. The application deadline is March 27, 2020. Questions, contact Halley Lee at 605.224.1653 or via email.

Otting Defends OCC's CRA Modernization at House Hearing

During an often contentious hearing before the House Financial Services Committee yesterday, Comptroller of the Currency Joseph Otting defended his agency’s proposed changes to the Community Reinvestment Act (CRA) regulations. Otting emphasized that the proposal is aimed at clarifying which activities count for CRA credit, updating where CRA performance is assessed, revising how CRA performance is measured and making CRA data reporting more transparent.

“If we’re proficient at our goal, a bank will be able to know every 90 days whether they’re in compliance with CRA,” Otting said, emphasizing the important role of objectivity and transparency in the proposed assessment framework.

The comptroller pushed back against a number of common misconceptions about the proposal, including that the proposal would permit redlining and that it employs the use of a single metric to determine a bank’s CRA rating. “There is no one ratio in this proposal. That is a myth—that is inaccurate,” Otting said. He added that under the proposal, examiners would be required to ”use a retail lending [distribution] test for each major type of product,” identical to what Federal Reserve Governor Lael Brainard called for in a recent speech.

Noting that the agency has actively sought input from industry and community industry stakeholders throughout the rulemaking process, Otting confirmed that the OCC would not extend the 60-day comment period on the proposal, and he would seek to finalize the rule within 60 to 75 days once the comment window closes. He emphasized, however, that “there will be a lot of outreach” as comments are reviewed. Read Otting’s statement.

FDIC Issues Advisory on Agricultural Lending Management

In a financial institution letter on Tuesday, the FDIC advised agricultural lenders on sound practices during economic cycles. Noting that the agricultural sector has been experiencing low commodity prices, trade and tariff uncertainties, adverse weather conditions and global supply-and-demand issues, the FDIC emphasized the importance of prudent credit risk management that focuses on a borrower’s cash flow and repayment capacity.

The FDIC also advised ag lenders to manage credit concentrations; monitor key cyclical and economic factors; and work constructively with ag borrowers experiencing financial difficulties. Read the FIL.

ABA Foundation Seeks to Reach 'One Million Minds' Through FinEd Programs in 2020

The ABA Foundation is calling on banker volunteers to help reach one million consumers with banker-led financial education lessons in 2020. Registration is now open for the Foundation’s 2020 financial education programs, including Teach Children to Save, Get Smart About Credit and Safe Banking for Seniors.

Through ABA’s Teach Children to Save initiative—which will be celebrated this year on April 24—bankers can visit local schools or youth groups in their communities to teach lessons about money and practical financial concepts. Registered bankers will receive real-time customer support, program and communication materials and will be featured in a list of participating banks on the ABA Foundation’s website. Last year, 9,850 bankers reached approximately 330,700 students through Teach Children to Save.

Bankers can also register for Get Smart About Credit, through which bankers visit classrooms across the country to help teens and young adults learn how to use credit wisely, and Safe Banking for Seniors, a national campaign of volunteer bankers helping older customers and financial caregivers understand and mitigate the risks of fraud and financial abuse.

Materials for all three programs are available in both English and Spanish. The ABA Foundation’s financial education programs are sponsored this year by Ally Financial, Bank of America, BB&T, Citi, JPMorgan Chase, U.S. Bank and Wells Fargo. Read more. Register now.

Podcast: Beyond Stovepipes and Silos in Financial Crimes

“For a long time, these were fields that were seen as kind of ancillary—compliance issues, have-to-dos and cost centers,” Juan C. Zarate says of anti-money laundering, fraud and cybersecurity. “Today, management of financial crime risk is now a fundamental part of banking.”

On the latest episode of the ABA Banking Journal Podcast, cyber and financal crimes expert Zarate addresses:‌

  • The capacity of cyber criminals to circumvent defenses, manipulate systems and even change fundamental data.
  • The “arms race” in financial crimes to stop threats from nation-states like Iran and North Korea.
  • The role of technologies like AI and machine learning in “deepening the moat” around banks, as well as the nearness of next-generation technologies like quantum encryption.
  • The technical skills banks need access to in today’s environment, including data science and engineers
Listen to the episode.

GSB Offers Online Seminar on Warning of Increased Cybersecurity Risk

Due to recent "increased geopolitical tensions and threats of aggression," the FDIC (FIL 03-2020) and OCC (Bulletin 2020-5a) jointly released guidance warning financial institutions against the likelihood of increased cyberattack activity targeting U.S. businesses, particularly the financial sector. The Graduate School of Banking in Wisconsin is offering the online seminar "FDIC, OCC Release Joint Warning of Increased Cybersecurity Risk" on  Wednesday, Feb. 5.

Jon Waldman, president of SBS Institute of EVP of IS consulting with SBS CyberSecurity, will break down what the guidance is warning against, including some of the top cyber-attack vectors to watch out for and controls to mitigate risk in 2020. The seminar will cover: modern cyber-attack methods including ransomware, malware, password attacks, phishing, ATM attacks, etc.; response, resilience and recovery capabilities; identity and access management; network configuration and system hardening; employee training; security tools and monitoring; and data protection.

The target audience is information security officers, IT managers, risk officers, internal auditors and executives looking to understand more about the proposed changes. The online seminar will be held at 2 p.m. CST, and the cost is $179. Learn more and register

ABA Launches Bank Training for Detecting Human Trafficking 

Recognizing the crucial role banks can play in combating human trafficking and human smuggling, the ABA on Tuesday launched a new online course on ways bankers can spot the signs of illicit financial activity associated with these crimes. There are approximately 25 million victims of human trafficking around the world, including 403,000 in the United States alone.

“Banks are in a unique position to help identify, prevent and disrupt these heinous crimes,” said Jim Edrington, ABA's chief member engagement officer. “It is critical for frontline staff to know the red flags and customer indicators that may be alerts for sophisticated human trafficking and human smuggling schemes, and this training will help them enhance the extraordinary measures they are already taking to support law enforcement in these areas.”

Part of ABA’s frontline compliance training, this 60-minute, self-paced course helps bankers identify possible financial and behavioral indicators of human trafficking and human smuggling; know the difference between the two crimes and be prepared to report potential criminal activity to the proper authorities. Training is appropriate for bankers in all job roles. Read moreRegister for the course.

Compliance Alliance

Question of the Week

Question:  Can I use proof of disclosing the closing disclosure to the borrower from the title company, or does the proof have to be from us the lender?

Answer:  As far as specific evidence of delivery for the closing disclosure, Reg. Z doesn't specifically require any one type of evidence. The bank, however, would want to have documentation showing that it complied with TRID's delivery/timing requirements. Additionally, the regulation does permit settlement agents to provide the CD. Ultimately, however, the creditor remains responsible for ensuring compliance with applicable regulatory provisions.

(1) Provision of disclosures —
(i) Scope. In a transaction subject to paragraph (e)(1)(i) of this section, the creditor shall provide the consumer with the disclosures required under § 
1026.38 reflecting the actual terms of the transaction.
(iii) Receipt of disclosures. If any disclosures required under paragraph (f)(1)(i) of this section are not provided to the consumer in person, the consumer is considered to have received the disclosures three business days after they are delivered or placed in the mail.

12 CFR 1026.19(f)(1)(iii):

(v) Settlement agent. A settlement agent may provide a consumer with the disclosures required under paragraph (f)(1)(i) of this section, provided the settlement agent complies with all relevant requirements of this paragraph (f). The creditor shall ensure that such disclosures are provided in accordance with all requirements of this paragraph (f). Disclosures provided by a settlement agent in accordance with the requirements of this paragraph (f) satisfy the creditor's obligation under this paragraph (f).

12 CFR 1026.19(f)(1)(v)(i):

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.

 BankTalentHQ Special Offer

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.