SDBA To Hold Virtual Bank Technology Conference

Photo of Technology Registration is now open for the SDBA's Virtual Bank Technology Conference to be held Sept. 9-10. In light of the current COVID situation, this conference is being offered virtually via Zoom to allow participation in a safe manner.

The conference is designed to provide support as you keep on top of technology trends and scams, navigate the business of banking, and build and sustain your bank’s technology strategy. Join host and emcee, Trent Fleming, as we discuss timely technology topics that can help you as you make decisions that impact your bank, your staff and your customers.

On Wednesday, Sept. 9, from 10 a.m. to noon CDT, Fleming will present "Operational Efficiency Self-Assessment," followed by "Business Continuity and FFIEC Appendix J: Be Prepared and Compliant" by Jim Rumph with WIPFLI. On Thursday, Sept. 10, from 2-4 p.m. CDT, Jon Waldman with SBS CyberSecurity will present "How to Build a Valuable Incident Response Plan," followed by "Bank Technology and Customer Expectations" by Lisa Gold Schier with the American Bankers Association.

The fee is $300 per person for members of a state banking association, or $400 per person for non-members. Sessions will also be recorded and available for pre-registered attendees to watch at their convenience if they cannot make one of the sessions. Learn more and register.

Steve Hayes Named to FDIC Advisory Committee on Community Banking

Photo of Steve Hayes Steve Hayes, president and CEO of Dakota Prairie Bank in Fort Pierre, is one of three new appointments to the FDIC's Advisory Committee on Community Banking. The other new members are Teri Messerschmitt, South Ottumwa Savings Bank, Ottumwa, Iowa, and Patty Mongold, Mt. McKinley Bank, Fairbanks, Alaska.

Established in 2009, the Advisory Committee shares input with the FDIC on a broad range of community bank policy and regulatory matters. Committee members represent a cross-section of community bankers from around the country.

The Advisory Committee will next meet on July 28 to address a wide range of issues. The agenda includes a discussion of local banking conditions, a briefing on the FDIC’s Rapid Prototyping Competition, an update on supervision matters, a report from its Minority Depository Institutions Subcommittee, and a discussion of diversity and inclusion at community banks. The meeting will be Webcast live at http://fdic.windrosemedia.com beginning at noon CDT. Read more.

ABA Urges Banks to Require Face Coverings in Branches

In an email to member CEOs on Sunday, ABA President and CEO Rob Nichols urged banks to adopt and publicly announce a policy requiring anyone entering a bank branch to wear a mask or face covering. ‌

Nichols argued that universal masking in bank branches would protect employees’ and customers’ health and reduce transmission of the virus. And with COVID-19 cases on the rise in many states, and with businesses, workers and consumers hoping to avoid a new round of lockdowns, Nichols cited bank research suggesting that nationwide mask use could prevent shutdowns that could otherwise reduce GDP by 5%. ‌

Publicly announcing this policy would also help frontline employees as they engage with customers and branch visitors, Nichols added, helping to reduce the chances of confrontations. Nichols noted that this decision was made with the support of ABA’s Executive Committee and in consultation with ABA staff experts on risk management and viral transmission. Read the email.

In addition, the ABA has published a list of suggestions for putting such policies successfully in place. The resource addresses security challenges of masks or face coverings and provides tips for reminding bank customers about social distancing, talking points for managers to help address social distancing non-compliance by customers and talking points to use with branch staff when addressing customers wearing masks. View the resource.

OCC Issues Long-Awaited 'True Lender' Proposal

In a long-awaited move, the OCC on Monday issued a proposal establishing a “clear test” to determine when a bank making a loan is considered the “true lender” in the context of a partnership between a bank and a third party. Under the proposal, a bank makes a loan if, as of the date of origination, it is named as the lender in the loan agreement or funds the loan.

A loan originated by a bank that satisfies either part of this test would retain its status as a bank-originated loan if the loan is sold, assigned or otherwise transferred to a nonbank entity. In cases where the bank funds the loan, the OCC noted that “if a bank funds a loan as of the date of origination, the OCC concludes that it has a predominant economic interest in the loan and, therefore, has made the loan—regardless of whether it is the named lender in the loan agreement as of the date of origination.”

The proposal is intended to provide regulatory clarity and certainty to enable banks to engage in relationships with third parties. Comments on the proposal will be due on Sept. 3. ABA is currently reviewing the proposal and determining whether to file a comment letter. Read more. For more information or to join ABA's valid-when-made banker working group, contact ABA’s Jonathan Thessin.

ABA, Groups to SBA and Treasury: Create One-Page Form for PPP Loan Forgiveness

The ABA, Bank Policy Institute and the Consumer Bankers Association last Friday urged the Small Business Administration and the Treasury Department to create a one-page attestation form for Paycheck Protection Program borrowers with “de minimis” loan amounts to have their loans forgiven.

The groups noted that borrowers are still struggling even with the streamlined forgiveness application as well as frequent changes to the PPP and forgiveness requirements. “[M]ore and more borrowers are confronted with the need to use these lengthy forms, which takes a significant amount of time away from small business owners in running their daily business operations, when the real need is for an expedited process based on a de minimis exemption for loans under a specific dollar amount,” the groups wrote.

The groups said that Treasury and SBA have authority “to create a streamlined simple one-page attestation process for loan forgiveness” and urged them to make this process available for loans under an amount that could range from $150,000 to $350,000. Read the letter.

Meanwhile, in testimony to the House Small Business Committee last Friday, Treasury Secretary Steven Mnuchin urged Congress to consider forgiving smaller PPP loans by statute. He did not specify a loan threshold. Mnuchin also said the Trump administration supports adding additional PPP funds and allowing the hardest-hit small businesses to apply for a second payment.

Podcast: How Banks Can Manage Risks of Aerosolization

With the World Health Organization’s recent recognition of evidence that the novel coronavirus can be aerosolized in particles that remain in the air for long periods over long distances, how do banks need to adjust their COVID-19 risk mitigation procedures? Aerosolization is a different mode of transmission than the large droplets formed when, say, an infectious person sneezes, and the distance that aerosolized particles can travel make social distancing alone insufficient to prevent transmission.

On the latest episode of the ABA Banking Journal Podcast, ABA SVP Paul Benda discusses the science of coronavirus aerosolization and addresses several ways to address it. Beyond mask-wearing as a first-order risk mitigation (masks prevent or substantially reduce virus from being exhaled, he points out), Benda also discusses viral loads, HVAC and airflow adjustments, filtration options and branch and office design considerations. Listen to the episode. Access ABA resources on bank mask policies

FCC Adopts Call-Blocking Order with Protections for Lawful Calls

The Federal Communications Commission (FCC) voted last week to approve an order that would provide a safe harbor for telephone companies that block calls based on “reasonable analytics designed to identify unwanted calls,” as long as the analytics incorporates call authentication information. At ABA’s urging, the order includes important protections for banks and others who place lawful calls, including protections added since the FCC released a draft of the order in June.

The order requires telephone companies to cease blocking calls promptly when a caller makes a credible claim that its outbound calls are being erroneously blocked and the telephone company determines that the calls should not have been blocked. The order also requires telephone companies to provide a single point of contact for lawful callers to report erroneously blocked calls. Additionally, the order confirms that a telephone company may not impose any charge on callers for resolving blocking errors and that providing these redress mechanisms is a condition for obtaining safe harbor protection.

Read the order.
Read ABA’s comment letter.
For more information, contact ABA’s Jonathan Thessin.

Eide Bailly Conducting Bank Salary and Fringe Benefit Survey Digitally

The Eide Bailly Bank Salary and Fringe Benefit Survey is designed to provide banks with reliable and affordable data on more than 50 common positions in a community bank based on institution asset size and state and local demographics. Each year, banks participate in the annual bank salary and fringe benefit survey to obtain valuable information on salary trends and compensation programs for the banking industry.

Eide Bailly is offering the survey, which is endorsed by the SDBA, in a digital format to participating banks. An invitation with a link to participate in the survey will be sent via email to bank management in Montana, North Dakota, South Dakota and Wyoming by Monday, July 27, and banks will have 30 days to complete the survey. The 2020 survey is based on salary data as of April 30, 2020

The results will be available by Sept. 30. If you have questions about participating in the survey, visit Eide Bailly's website or email Sandy Sale.

Compliance Alliance

Question of the Week

Question: The bank is denying an application for a deposit account, but we did not pull a credit report to make this determination. Is an adverse action notice required?

Answer: If the bank did not use a credit report to deny the deposit account application, then an adverse action notice would not be required under the FCRA, and Reg. B adverse action requirements only apply to extensions of credit, as set out below. It’s important to consider, however, that notice may still be required under the bank's internal policy, so the bank would want to check there as well and be consistent with what it has done in similar situations in the past.

"(a) Account means an extension of credit."
https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1002/2/#a

We also are aware that banks oftentimes will pull a ChexSystem or something similar to better understand the deposit relationships the customer has had with others and will oftentimes send a denial based off that information to ensure the customer or potential customer who knows who to contact in the event of errors.

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

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.