SDBA eNews

June 11, 2020

Bankers Take Part in SDBA Virtual Annual Business Meeting, FDIC Town Hall

Photo of Shawn RostMore than 100 member bankers and business partners took part in the Association's Virtual Annual Business Meeting on Tuesday. The meeting is traditionally held during the SDBA/NDBA Annual Convention, which was canceled due to the pandemic.

The Annual Business Meeting's agenda included the election of SDBA officers, comments from the outgoing and incoming SDBA chairs, an association update from SDBA President Curt Everson and a South Dakota Bankers Foundation update from Halley Lee.

"The greatest accomplishment I think the South Dakota Bankers Association had this past year was advocating for our industry with our congressional delegation and working to show them the problems with the PPP program and helping them modify the rules and change the process and procedures to make it easier for us to help our customers and our communities to survive this pandemic," said 2019-2020 SDBA Chair Shawn Rost (pictured). "That is what we are all about."

The SDBA's 2020-2021 officers are:

  • Chair Steve Bumann, BankWest, Pierre
  • Chair-Elect Kristina Schaefer, First Bank & Trust, Sioux Falls
  • Vice Chair David Bangasser, Dacotah Bank, Sioux Falls
  • Immediate Past Chair Shawn Rost, First Interstate Bank, Rapid City

South Dakota bankers and business partners then joined with bankers and business partners from North Dakota for a Virtual Town Hall with FDIC Chair Jelena McWilliams. 

"I am very proud of the work that you are doing in your communities. I know that your communities are largely rural. In a lot of those communities, you are it. You are just not the banking presence, you are the epicenter of the economy's activity," McWilliams said. "I think you have done a phenomenal job working with your communities, and you have a lot of exposure to different industries that have been heavily affected by the pandemic, including oil and gas, cattle ranching, farming, etc., and you have adjusted pretty quickly."

More than 300 people took part in the Virtual FDIC Town Hall. Joining McWilliams were members from her staff, ABA President and CEO Rob Nichols and ABA EVP of Congressional Relations and Political Affairs James Ballentine. The SDBA thanks its bankers and business partners who took part in both of the two virtual events. 

Register Now to Take Part in SDBA Virtual Ag Credit Conference

Make plans to take part in the SDBA's 2020 Virtual Agricultural Credit Conference, which is a series of four webinars on June 24 and July 1, 8 and 15 from 10-11 a.m. CDT. The lineup is:

  • Dr. Chris Kuehl: The COVID Economy: Where From Here?
  • Doug Johnson: Convergence of the Big Three in Agriculture: Ag Economy, Ag Technology and Ag Experience
  • Troy Bockelmann and Ryan Moe: Commodities Outlook and How It Impacts the Ag Economy
  • Ed Elfmann and Sen. Mike Rounds: Fireside Chat: Washington Update.

The virtual sessions will be moderated by host Damian Mason, who you may remember from the 2019 Ag Credit Conference. Mason is a businessman, agriculturist, speaker, podcaster, writer and consultant.  

The registration fee for the series of four webinars is $400 per person for members of a state banking association or $500 per person for non-members. The webinars will be recorded and available for pre-registered attendees to download and watch at their convenience. Learn more and register

ABA: Banks Must Be 'Part of the Solution' to Addressing Racial Inequities

In a joint message to ABA member bank CEOs yesterday, ABA Chair Laurie Stewart and President and CEO Rob Nichols addressed the killing of George Floyd and other recent instances of racial injustice and inequity that have taken place across the nation and shared how the Association intends to respond.

Stewart and Nichols acknowledged that “unacceptable racial disparities in health, wealth, income, education and other measures of opportunity continue to grow,” noting that black and Hispanic Americans have been disproportionately affected by the coronavirus pandemic and subsequent economic downturn. “We cannot look away from these facts, we cannot declare them someone else’s problem, we cannot fail to engage,” they said. “We must be part of the solution.”

To that end, they announced that ABA will identify short- and long-term steps the Association can take to help member banks address these challenges at their institutions and in the communities they serve and urged bankers to share feedback on solutions that could create meaningful change. They also highlighted recent ABA actions to promote diversity, equity and inclusion in the financial services industry, including hiring a DE&I executive last year to help banks expand their DE&I efforts; forming banker-led advisory groups to develop DE&I leading practices that can be shared among banks; and launching a strategic partnership earlier this year with the National Bankers Association, the leading trade association for minority depository institutions.

“This is the time for our industry to reassess what we are doing to support and lift up all communities in this country,” they added. “America’s banks demonstrated how capable, caring and committed they are when they prioritized the well being of their employees and customers during the pandemic. We must similarly step up and prioritize the needs of those harmed by systemic inequities.” Read the message.

SBA, Treasury Issue Guidance on PPP Flexibility, New Application Form for Borrowers

As expected, the Small Business Administration and Treasury Department late last night released an interim final rule to reflect changes made by H.R. 7010, the Paycheck Protection Program Flexibility Act. SBA also published updated, streamlined application forms for borrowers and lenders to use for loans made on or after June 5, 2020.

The interim final rule codifies several changes to the program. Specifically, it:

  • Confirms that borrowers that use less than 60% of their PPP loan amount for payroll costs during the forgiveness covered period will still be eligible for partial loan forgiveness.
  • Extends the end date of the “covered period” for a PPP loan from June 30, 2020, to Dec. 31, 2020.
  • Provides a five-year maturity for loans made on or after June 5, 2020, and provides an option for loans made prior to that date to extend maturity from two years to five years at the mutual agreement of the borrower and lender.
  • Extends the loan forgiveness period from eight weeks to 24 weeks. (For loans made prior to June 5, 2020, borrowers may opt to keep the forgiveness period at eight weeks.)
  • Clarifies that if a borrower submits its forgiveness application within 10 months of the end of the loan forgiveness period, the borrower will not have to make any payments on the loan before the date SBA remits the forgiven amount to the lender.
  • Reiterates that the last day a lender can obtain an SBA loan number for a PPP loan is June 30, 2020.

SBA signaled that it will issue additional revisions to its interim final rules on loan forgiveness and loan review procedures to address changes H.R. 7010 made to the PPP loan forgiveness requirements, as well as guidance on advance purchases of PPP loans.

'We Were Economic First Responders': Behind the Scenes with the PPP

Banks have delivered more than $500 billion in Paycheck Protection Program loans, saving tens of millions of Americans from layoffs during the COVID-19 emergency. A new cover story and podcast series from the ABA Banking Journal tells the behind-the-scenes story in bankers’ own voices. 

“We were economic first responders,” explains Citizens Bank of Edmond President and CEO Jill Castilla in an interview. “We had a duty to get the funds to our community and to get them to the businesses that needed it.” The article explores how banks dealt with unclear and inconsistent government guidance, frantic customers, a remote work environment, technology obstacles—and found a sense of purpose in meeting their communities’ needs.

The first episode of a special three-part podcast—entitled “All Hands on Deck”—describes how bankers approached the program, navigated regulatory hurdles and built the big teams necessary to deliver the PPP. Bankers are encouraged to share the article and podcast series on social media to educate their customers about banks’ role in delivering the largest economic rescue program in U.S. history.

SBA Releases New PPP Data, Including List of Top PPP Lenders

As of June 6, more than 4.5 million PPP loans had been made, totaling $511 billion over two rounds of funding, according to new data released by the Small Business Administration. For the first time, the data included a list of the top 15 PPP lenders.

The top five PPP lenders by net dollar amount were JPMorgan Chase, Bank of America, PNC Bank, Truist and Wells Fargo. By number of loans made, top lenders were Bank of America, JPMorgan Chase, Wells Fargo, Cross River Bank and U.S. Bank.

Lenders with less than $10 billion in assets accounted for 44% of all PPP loans, while lenders between $10 billion and $50 billion accounted for 20% and lenders with more than $50 billion accounted for 37%. The overall average loan size was $113,000. As of the report date, approximately $130.7 billion in PPP funding was still available.

In South Dakota, 21,363 PPP loans were made totaling $1.6 billion. View the data.

USDA Rural Development to Hold Business & Industry CARES Act Program Webinar

The Coronavirus Aid, Relief and Economic Security (CARES) Act passed by Congress authorized nearly $1 billion in additional loan guarantee authority for the U.S. Department of Agriculture and created the Business and Industry (B&I) CARES Act Program. 

For the first time, agricultural producers may access this program if they are ineligible for financing from USDA’s Farm Service Agency. Any loan guaranteed by the B&I CARES Act Program must be used as working capital to prevent, prepare for or respond to the effects of the coronavirus pandemic.

USDA Rural Development will hold the South Dakota B&I CARES ACT Program Webinar on Thursday, June 18, at 11 a.m. CDT. Webinar topics will include program compliance and documents, application requirements, program resources, application process examples and guidance on how to apply.

For questions on the webinar, contact Tammi Schone at 605.352.1102. Register for the webinar. Cares Act program highlights.

CFPB Releases Guide to Building Elder Fraud Prevention Networks

To mark World Elder Abuse Awareness Day on Monday, June 15, the Consumer Financial Protection Bureau yesterday released resources on building networks to detect and prevent elder fraud. Networks among key stakeholders—including financial institutions, law enforcement, Adult Protective Services and senior-serving businesses and nonprofits—can enhance banks' ability to identify and stop senior fraud, the bureau said. The guide include resources for organizing a network retreat, convening stakeholders, expanding network capabilities, facilitating meetings and more. Access the resources.

 Compliance Alliance

Question of the Week

Question: If we doubt the collectability of a check that a customer presents to the bank, are we able to put “an indefinite” hold on the funds?

Answer: While Reg. CC does not specify the allowable duration of an exception hold for this reason, the Reg. says that the depositary bank may extend the hold for “a reasonable period of time.” The Fed has told us in guidance that “reasonable” is generally understood to be one additional day for on-us checks and five additional business days for local checks. The bank can impose a longer hold, but it would bear the burden of showing that the hold time is “reasonable.”

If an exception contained in paragraphs (b) through (f) of this section applies, the depositary bank may extend the time periods established under §§229.10(c) and 229.12 by a reasonable period of time.

12 CFR §229.13(h)(1):

A "reasonable" time period is generally defined as one additional business day (making a total of two business days) for on-us checks, and five additional business days (total of seven) for local checks; your institution may impose longer exception holds, but you may have the burden of proving that they are "reasonable."

A Guide for Financial Institutions:

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 and ask for our Membership Team.

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