SDBA eNews

May 14, 2020

SDBA Provides Results of Back to Normal Survey of Banks

The SDBA last week conducted a survey of member banks about their getting back to normal plans. A total of 37 of the SDBA's 72 member banks responded to the survey. The SDBA hopes banks find the survey results helpful as they decide how they will operate in the coming weeks. Click here to see the survey results.

The SDBA is providing additional reopening resources on its coronavirus web page:

SBA Announces Safe Harbor for PPP Borrowers with Loans Less Than $2 Million

Following the recent announcement that the Small Business Administration would review any Paycheck Protection Program loans made in amounts exceeding $2 million, the agency yesterday issued guidance extending an automatic safe harbor to borrowers receiving PPP loans with an original principal amount of less than $2 million. These borrowers “will be deemed to have made the required certification concerning the necessity of the loan request in good faith,” SBA said in updates to its PPP FAQ.

Borrowers that received PPP loans for amounts more than $2 million will be subject to review by the SBA for compliance with program requirements, including the certification of economic need. “If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness,” SBA said.

SBA added that borrowers who repay their loans after receiving notification from the SBA will not be subject to administrative enforcement or referrals to other agencies. Additionally, SBA’s determination regarding the necessity of the loan request will not affect the SBA loan guarantee.

Finally, SBA last night also announced that it would extend until May 18 the deadline for PPP borrowers who did have access to other sources of capital to return funds.  Read the updated FAQs

FDIC Proposes Rule to Facilitate Bank Participation in PPP, Money Market Facilities

To help provide certainty to banks participating in the Paycheck Protection Program and its associated lending facility, as well as the Money Market Mutual Fund Liquidity Facility, the FDIC proposed a rule on Tuesday to ensure that institutions would not be subject to increased deposit insurance assessments as a result of their participation.‌

Specifically, the proposal would remove the effect of participation in the PPP and PPPLF on various risk measures used to calculate a bank’s assessment rate and remove the effect of participation in the PPPLF and MMLF programs on certain adjustments to a bank's assessment rate. It would also provide an offset to a bank's assessment for the increase to its assessment base attributable to participation in the MMLF and PPPLF and remove the effect of participation in the PPPLF and MMLF programs when classifying insured depostitory institutions as small, large or highly complex for assessment purposes.‌

If finalized, the rule would take effect June 30, but have an application date of April 1, ensuring that the changes will be applied to assessments beginning in the second quarter of 2020. Comments on the proposed rule are due seven days after publication in the Federal Register. Read the proposed rule. For more information, contact ABA's Rob Strand

USDA Preparing to Open Application Period for Coronavirus Food Assistance Program

USDA is preparing to open the application period for the Coronavirus Food Assistance Program (CFAP), particularly the payments to agricultural producers to help offset direct losses as well as additional adjustment and marketing costs.

In advance of opening the application period, USDA is sharing information with producers on how they will apply, what type of information is needed and what the process will look like. This toolkit includes key messages, a newsletter article, an infographic and social media posts.

View the CFAP Stakeholders ToolkitMore information on CFAP will be available soon on

SDBA 2020 Ag Credit Conference Going Virtual

The SDBA's 2020 Agricultural Conference, which was set for July 8-10 in Pierre, is now going virtual. You won’t want to miss out on this opportunity to hear from leading ag experts in the fields of ag economics, ag technology, ag policy and ag marketing.

Join host Damian Mason as we virtually navigate through the ever-changing world of agriculture in South Dakota. Mason, who you may remember from the 2019 Ag Credit Conference, is a businessman, agriculturist, speaker, podcaster, writer and consultant.  

Be watching for the schedule of sessions, which will begin in late June.

Former Banker Appointed to South Dakota Legislature

Gov. Kristi Noem last Friday appointed Lynn Schneider of Huron to represent District 22 in the South Dakota State House of Representatives. Schneider will succeed the late Rep. Bob Glanzer, who passed away last month.

Schneider retired in 2017 as CEO of American Bank & Trust, Huron, after a 45-year career in banking, beginning with the Farm Credit Service and continuing with Farmers and Merchants Bank and American Bank & Trust. He was chair of the SDBA in 1995-1996. Schneider was a close friend and brother-in-law of Rep. Glanzer and served as treasurer for Rep. Glanzer’s legislative campaigns.

“I want to thank Lynn Schneider for stepping into this important role,” said Gov. Noem. “Lynn’s family and the Huron community suffered a great loss with Bob’s passing. I appreciate that Lynn has agreed to continue Bob’s legacy of service to his community and to our state in this way.”

Schneider’s appointment is effective immediately and will continue for the remainder of Rep. Glanzer’s current term, which runs through the end of this calendar year. Although no regular legislative session will be held during that time, Schneider would serve during a potential special session and could also participate in the Legislature's interim committee work. Read more

GSBC Launches Virtual Learning & Networking Initiative for Community Banks

The Graduate School of Banking at Colorado (GSBC) has launched GSBC Cares: A Virtual Education Experience as a service to the nation’s community banks amid the COVID-19 pandemic. 

The initiative comes at no cost to bankers and aims to support them by keeping them informed and connected, while giving them access to the industry’s top experts. GSBC Cares, hosted by GSBC faculty members and staff via Zoom Video Communications, encompasses three educational components:

  •  Virtual learning series, available to GSBC students (current and prospective), alumni, colleagues of alumni/students and all GSBC supporters.
  • CEO roundtable discussions, available to past and present participants of GSBC’s Executive Development Institute for Community Bankers.
  • Virtual networking opportunities, available to GSBC students and alumni.

“GSBC Cares is a service to community bankers as they continue to figure out ways to effectively run their financial institutions like they’ve never had to before,” said GSBC President Tim Koch. “GSBC is eager to launch this initiative and be there for our constituents to lean on. We will get through this together and come out stronger.”

The first virtual learning series, Investing During a Pandemic: The “New Normal,” will be held May 14, 21 and 28 at 2 p.m. CDT. As the year progresses, GSBC will design more programming to address the immediate challenges community banks face. Get involved with GSBC Cares.

GSB Offering Risk-Free Enrollment, Fees Freeze for 2021 Session

The Graduate School of Banking (GSB) at the University of Wisconsin-Madison was running at a 10-year high when it made the difficult decision to cancel its 2020 session due to circumstances around the pandemic. Students who’d previously enrolled were moved to the next sessionAugust 1-13, 2021–and new applications are currently being accepted.  

Given strong demand, coupled with unprecedented limits on availability, GSB encourages bankers to enroll now for 2021. The school is offering students the choice to freeze fees at the 2020 rate by paying fees in full by July 31, 2020 or to request an invoice be sent this fall after 2021 rates are set. 

For peace of mind, GSB has amended its enrollment policy for the 2021 session; students may apply to secure a spot but won’t risk a penny, not even the $350 enrollment deposit that is typically non-refundable. If a student doesn’t attend, they’ll receive a full refund or credit on account without penalty. 

GSB is also offering risk free enrollment for its 2020 fall schools– including the Sales and Marketing School, Financial Managers School and Bank Technology Security School.  Learn more and apply for a school.

Compliance Alliance

Question of the Week

Question: This is a CARES Act question on credit bureau reporting for consumer purpose loans. For those loans that have requested forbearance or other payment accommodations during the pandemic, we are not reporting those accounts as late (nor charging fees). However, if a loan does go past due and the borrowers have not requested a forbearance plan, our mortgage department wants to report those as late and charge late fees. Does the CARES Act question actually prohibit this?

Answer: Technically it does not--essentially the CARES Act addresses when the bank has provided an accommodation due to COVID-19. In the situation you describe, the bank hasn't provided an accommodation, so the CARES Act requirements really don’t come into play. In other words, the bank needs to report accurately and can't report them as current when they are, in fact, not current. For reference, I'm including the relevant provision as well as the link to our summary on the credit reporting provisions under the CARES Act:

(ii) REPORTING.—Except as provided in clause (iii), if a furnisher makes an accommodation with respect to 1 or more payments on a credit obligation or account of a consumer, and the consumer makes the payments or is not required to make 1 or more payments pursuant to the accommodation, the furnisher shall—

“(I) report the credit obligation or account as current; or

“(II) if the credit obligation or account was delinquent before the accommodation—

“(aa) maintain the delinquent status during the period in which the accommodation is in effect; and

“(bb) if the consumer brings the credit obligation or account current during the period described in item (aa), report the credit obligation or account as current.

C/A COVID-19 Credit Reporting Summary:

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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 and ask for our Membership Team.

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