SDBA eNews

February 6, 2020

Change in SDBA State Legislative Day Lineup, Still Time to Register

Photo of Mark ZinderDue to a scheduling conflict, Mark Zinder will be taking the place of Bob Sellers as the keynote speaker at the SDBA State Legislative Day on Wednesday, Feb. 12, in Pierre.

Zinder is a seasoned financial professional and keynote speaker with a unique gift for making the complicated clear as he examines the trends and ideas actively shaping business today. Armed with unique insights and a keen understanding of macroeconomic trends, Zinder shares his knowledge and experiences at meetings and conferences around the world. He is also a regular guest on Fox Business and CNBC, sharing his expertise and positive outlook while tackling tough questions on the future of the global economy. 

In his general session "Is It Difference This Time?," Zinder will discuss current events that are playing out like they did in the past but will also explore events that are not rooted in any historical context that might have you asking, “Is it different this time?” In his emerging leaders session "What Happens Next?," attendees will discover how we are nearing the end of the information technology revolution while another is just beginning, providing a fresh wave of prosperity. 

There is still time to register for the 2020 State Legislative Day. Learn more and register.

SDBA Seeking Candidates for Vice Chair

Are you interested in becoming an officer of the South Dakota Bankers Association?

SDBA officers include the chair, chair-elect, vice chair and immediate past chair. The SDBA is currently seeking people who are interested in running for the vice chair position, which will be elected at the NDBA/SDBA Annual Convention on June 9, 2020, in Bismarck, N.D.

The current chair-elect, Steve Bumann (BankWest, Pierre), will automatically assume the chair position on June 9. The current vice chair, Kristina Schaefer (First Bank & Trust, Sioux Falls), will be eligible to run for chair-elect. The position of vice chair will be up for election. Current Chair Shawn Rost (First Interstate Bank, Rapid City) will automatically become the immediate past chair.

If you are an executive officer of any SDBA member bank, you are eligible to run for vice chair. Learn more.

ABA: Interest Rate Caps Would Harm Consumers

ABA yesterday warned lawmakers of the potential consequences of imposing interest rate caps on consumer credit products. At a time when nonbanks are increasingly seeking to provide financial products to consumers outside of the heavily-regulated banking system, ABA cautioned that overly-aggressive legislative proposals to address abuses by these entities could ultimately restrict credit access, particularly for borrowers who are most likely to face credit challenges.

“Legislation to cap lending prices is not as advertised by some advocates: It is more than just ‘interest rate caps’ and would undermine basic presumptions about how consumer credit markets operate,” ABA said in a statement submitted for the record of a House Financial Services Committee hearing. These proposals “likely would significantly reduce access to good mainstream financial products such as credit cards,” in addition to raising costs. For example, ABA highlighted new data demonstrating that if Congress were to impose an all-in rate cap equivalent of 27%, 13.8 million subprime borrowers could lose credit access.‌

ABA emphasized that credit card interest rates should be determined by market forces. “Card issuers currently set credit card interest at appropriate rates given a borrower’s risk level. If issuers were required to keep rates artificially low, many consumers would lose access to credit, which myriad studies have shown has real, damaging effects on households.”

Read ABA’s testimony.

ABA Opposes Proposed Changes to Postal Pricing System

In a comment letter on Monday, ABA urged the Postal Regulatory Commission not to move forward with its decision to replace the consumer price index cap on United States Postal Service pricing with a new system that would effectively allow the USPS to raise postal rates as volume declines. The association warned that such a change “will accelerate the Postal Service’s decline,” and cause many ratepayers to leave the system permanently.

The letter came in response to a revised notice of proposed rulemaking for the statutory review of the system for regulating rates and classes for market dominant products. ABA noted that in general, the proposal places too much emphasis on assuring adequate revenues for the USPS and does not meaningfully incentivize the USPS to pursue efficiency and cost reductions.

With the exception of proposed improvements to workshare pricing discount programs, ABA urged the PRC to reconsider the majority of the proposal. “For bankers, stability, predictability and just and reasonable rates are paramount, and it is not clear. . . how the PRC has considered these factors.” Read the letter. For more information, contact ABA’s Robin Cook.

FHFA Proposes Updated Seller, Servicer Eligibility Requirements

The Federal Housing Finance Agency last Friday proposed updated standards that mortgage lenders would have to meet in order to sell loans to or service loans on behalf of Fannie Mae and Freddie Mac. The proposed update includes new requirements for the servicing of Ginnie Mae mortgages. Comments on the changes are due in 60 days.

Under the requirements, which were last updated in 2015, sellers and servicers would be required to maintain a base net worth of $2.5 million plus 35 basis points of the unpaid principal balance for Ginnie Mae servicing and 25 basis points of the unpaid principal balance for all other 1-to-4-family loans serviced. Depository institutions would continue to rely on their prudential regulatory standards to meet the GSEs’ capital and liquidity requirements.

Nonbanks’ minimum capital ratio would remain unchanged, while their minimum liquidity would rise from 3.5 basis points of their total agency servicing to 4 basis points for GSE servicing and 10 basis points for Ginnie Mae servicing. Their incremental liquidity charge for non-performing assets would be 300 basis points for the portion of agency NPLs over 4% of agency servicing. Unused but available portions of committed servicing advance lines of credit would no longer be allowed to meet minimum liquidity requirements. Read the proposed standards. For more information, contact ABA’s Joe Pigg.

Podcast: One Bank CEO on How Diversity Fuels Innovation

It takes a "diversity of imagination" to drive innovation in community banking, says Lead Bank CEO and Vice Chairman Josh Rowland on the latest episode of the ABA Banking Journal Podcast, sponsored by Franklin Madison. Rowland—who has been recognized as one of the most innovative community bank CEOs—explains Lead Bank's board diversity strategy, which has resulted in the majority of the bank's independent directors being women.‌
"There's this vast resource of incredibly energetic and experienced women and people of color who should be asked to join our banks," he says. "Being more representative of our community so that we could help them achieve success was very obvious as a starting point."
Rowland also discusses how the "creative friction" of diverse points of view has helped Lead Bank develop fintech partnerships that drive its financial inclusion strategy. Listen to the episode.

Sen. Cory Gardner to Keynote ABA Washington Summit

Sen. Cory Gardner (R-Colo.) will discuss the outlook for cannabis banking legislation and other key issues during keynote remarks at the ABA Washington Summit, to be held March 23-25 in Washington, D.C., ABA announced Wednesday. Gardner is a lead co-sponsor in the Senate of the ABA-advocated SAFE Banking Act, which passed the House with a large bipartisan majority last fall and is awaiting action in the Senate.  

The bill would allow banks in states that have legalized cannabis in some form to provide banking services to legitimate marijuana businesses, as well as their suppliers and vendors. 

Other announced speakers during the Summit include CNN political analyst Bakari Sellers and CBS News political contributor Leslie Sanchez. 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 policy changes that help grow the economy and allow banks to better serve their customers and communities.

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.

FTC Observes Tax Identity Theft Awareness Week

The Federal Trade Commission is observing Tax Identity Theft Awareness Week. Through a series of events taking place Feb. 3-7, the FTC and its partners will highlight signs of tax identity theft and government imposter scams, which typically involve a scammer using a victim’s Social Security number to either file a tax return and claim a refund or earn wages that are reported as the victim’s income. They will also share helpful tips for all consumers on how to protect themselves and will include tailored information for active duty service members, older adults and small businesses. Learn more.

Banks can also access turnkey materials to educate consumers on preventing identity theft and avoiding scams through the Safe Banking for Seniors program. Register for free at to receive the collection of resources. For more information, contact ABA’s Sam Kunjukunju.

Compliance Alliance

Question of the Week

Question:  Our bank has a question for CRA reporting.  When we have a start-up businesses, do we report the revenue as "unknown" since there is no real revenue information (only projections)?

Answer:  For start-ups, the bank should use $0 if the business is pre-revenue. The bank will not use any pro-forma or projected revenue figures.

For a start-up business, the institution should use the actual gross annual revenue to date (including $0 if a new business has had no revenue to date). Although start-up businesses will provide the institution with pro forma projected revenue figures, these figures may not accurately reflect actual gross revenue and therefore should not be used.

A Guide to CRA Data Collection and Reporting (Page 14 of 2015 version):

Not a member? Learn more about membership with Compliance Alliance by attending one of our live demos:

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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.

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