SDBA eNews

June 18, 2020

SDBA Virtual Ag Credit Conference Starting Next Week

There is still time to register for the SDBA's Virtual Ag Credit Conference, which starts next week. The virtual event will be held as a series of four webinars on June 24 and July 1, 8 and 15 from 10-11 a.m. CDT. 

Don’t miss this opportunity to hear from experts on the economy, markets, technology and policy. 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 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. Dates don’t work in your calendar? No worries! The webinars will be recorded and available for pre-registered attendees to download and watch at their convenience. Learn more and register

SDBA Holding Photo Contest for 2021 Scenes of South Dakota Calendar

The SDBA is pleased to offer the 2021 Scenes of South Dakota Calendar, which will feature photos of South Dakota submitted by South Dakota bankers, their family members and customers.

If you or one of your bank’s employees, a relative or customer are an amateur photographer and would like the opportunity to have your creativity displayed in homes and businesses across the state, send the SDBA your photos of farms, barns, agricultural activities, historical South Dakota locations, county fairs, carnivals, parades or festivals, fall colors, winter snowfalls, spring flowers, summer fun, etc.

Any photo that shows the history or beauty of South Dakota qualifies. The deadline to submit a photo is July 31, 2020, and all photos will be judged with the top photos featured in the 2021 Scenes of South Dakota Calendar. Photo submission form

The calendar is exclusive to SDBA member banks and associate members. For those banks or associate members interested in purchasing the 2021 calendar, orders are due by Sept. 1, 2020. Calendar order form.

SBA Streamlines PPP Forgiveness Application for Many PPP Borrowers

The Small Business Administration yesterday released a three-page “EZ” Paycheck Protection Program loan forgiveness application requiring less documentation and fewer calculations than previously required. Form 3508EZ applies to borrowers who meet any one of these three criteria:

  • Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees.
  • Did not reduce salary or wages for any employee by more than 25% and did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
  • Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of health directives related to COVID-19.

The streamlined forgiveness form is expected to smooth the forgiveness application process for a substantial portion of PPP borrowers. SBA also updated the regular Form 3508 to reflect recent changes made by Congress in the PPP Flexibility Act and issued a new interim final rule that implements changes made by the PPPFA.

'Main Street' Program Opens for Lender Registration

Lenders may now register for the Federal Reserve’s Main Street Lender Program (MSLP), the Boston Fed announced on Monday, adding that lenders “are encouraged to begin making Main Street program loans immediately.”

Last week, the Fed announced several adjustments to the MSLP intended to facilitate participation by more small and midsize businesses. Responding to calls by ABA and others to increase small business access to the program, the Fed lowered the minimum loan size for certain loans from $500,000 to $250,000. The Fed also increased the maximum loan size for each loan option under the MSLP, increasing the term for each loan option from four years to five years and extending the repayment period for all loans by delaying principal payments for two years instead of one.

In other MSLP news, the Fed on Monday requested comment on extending MSLP eligibility to nonprofit organizations. Loan terms under the proposed expansion would be the same as for MSLP loans to for-profit businesses. Under the Fed’s proposal, eligible 501(c)(3) and 501(c)(19) entities would have between 50 and 15,000 employees; meet financial thresholds based on operating performance, liquidity, and ability to repay debt; have been operational for at least five years; and hold endowments of no more than $3 billion. Comments are due by June 22.

Powell: COVID-19 Affecting Availability of Coins for Banks

The coronavirus pandemic has affected the regular flow of coinage through the economy and the availability of coins for banks, Federal Reserve Chairman Jerome Powell said yesterday. With many stores and other commercial venues closed for much of the spring, “the flow of coins through the economy has stopped,” Powell told the House Financial Services Committee.

“We’re well aware of this; we’re working with the Mint and the reserve banks,” Powell added. “As the economy reopens, we’re beginning to see coins move around again.” Powell made the comments in response to a question from Rep. John Rose (R-Tenn.), who noted that several banks in his district had reported shortages of coin shipments from their regional Fed banks. “If your bank hasn’t already done so, they should certainly be in touch with their reserve bank to report the situation,” Powell told Rose.

According to a report in the Wall Street Journal, a Fed spokesman said that coin deposits from banks to the Fed were down by about 50% year-on-year since the pandemic took hold in March, a situation exacerbated by shortfalls in coin production at U.S. Mint facilities.

Podcast: Minority Banks and Financial Inclusion

First Independence Bank was founded 50 years ago to help rebuild Detroit’s economy in the wake of damaging urban violence. Today, in a new era of economic hardship due to the coronavirus pandemic and protests and unrest in response to incidents of racial injustice, minority depository institutions (MDIs) continue to have a unique role in serving distressed communities.

On the latest episode of the ABA Banking Journal Podcast—sponsored by Jack Henry—First Independence Chairman and CEO Kenneth Kelly tells the First Independence story and discusses: the historical struggles of and current environment for MDIs; talent development in the MDI sector; and the ongoing role of minority banks in promoting financial inclusion and helping minority communities build wealth.

As chairman of the National Bankers Association (NBA), Kelly also discusses the NBA’s recent strategic partnership with ABA and how ABA member banks can get involved to support the MDI sector. Listen to the episode

ABA Foundation to Host Webinar on Affordable Housing for Military Families

The ABA Foundation will host a free webinar on Wednesday, June 24, at 2 p.m. CDT on the distinct housing needs of the military community and how banks are working to support these individuals and their families. Speakers on the webinar will include Jennifer Hurwitz, deputy director of research and program evaluation for the Military Family Advisory Network, and Ruth Christopherson, SVP with Citi, the 2019 Community Commitment Award winner in the “supporting military families” category. Register now.

FFIEC to Host Webinar on BSA/AML Exam Manual Updates

The Federal Financial Institutions Examination Council (FFIEC) will hold a free banker training webinar on Friday, June 26, at noon CDT covering 2020 updates to the FFIEC BSA/AML Examination Manual. Register now.

 Compliance Alliance

Question of the Week

Question: The bank has received an application for a Paycheck Protection Program (PPP) transaction. The beneficial owner of the business is not a signor or guarantor. His ID provided is expired, and he doesn’t wish to provide a new copy. Is this a BSA violation if the bank does not obtain an updated ID from him?

Answer: The CIP regulations do not provide that the only way to verify identification is with an unexpired ID. The regulations list an unexpired ID as an example of a way to verify identification ("documents may include"), but it is not the only acceptable way to verify information with documentary evidence. The regulation allows each bank to create a policy that fits their own needs using both documentary and non-documentary evidence, so your scenario is not necessarily a violation of BSA, although it may be an exception to internal bank policy. 

(ii) Customer verification. The CIP must contain procedures for verifying the identity of the customer, using information obtained in accordance with paragraph (a)(2)(i) of this section, within a reasonable time after the account is opened. The procedures must describe when the bank will use documents, non-documentary methods, or a combination of both methods as described in this paragraph (a)(2)(ii).

(A) Verification through documents. For a bank relying on documents, the CIP must contain procedures that set forth the documents that the bank will use. These documents may include:

(1) For an individual, unexpired government-issued identification evidencing nationality or residence and bearing a photograph or similar safeguard, such as a driver's license or passport;

31 CFR 1020.220(a)(2)(ii)

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.

 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.