SDBA eNews

September 10, 2020

SDBA Women in Banking Conference to Educate, Enlighten and Engage

Photo of women. Don't miss out on three opportunities to take part in this year's SDBA LEAD STRONG: Women in Banking Conference set for Sept. 23-24. Join us live at the Sioux Falls Convention Center, join a watch party in Rapid City at the Mount Rushmore Society Room or join virtually via Zoom from the comfort of your home or office. All sessions will be recorded for viewing at your leisure.

This year's sessions are designed to educate, enlighten and engage participants. Session topics include turning adversity into strength; letting go, saying no and having it all; working with your Board of Directors; mobile apps that are re-imaging everyday banking tasks and daring to thrive. The day will also include fun mini sessions on meditation, stretching and yoga, a virtual scavenger hunt and a mystery session. Watch a short video about this year's event.

Register early to receive a goodie box, which will be mailed to virtual participants or available at your seat if attending live. See the full agenda and register to attend

Noem Outlines Framework for $400 Million in CARES Act Funding for Small Businesses

Gov. Kristi Noem yesterday laid out a framework for up to $400 million in Coronavirus Relief Funds (CRF) to assist South Dakota’s small businesses negatively impacted by the COVID-19 pandemic.

“South Dakota is in a good spot as we rebound from COVID-19, but some of our small businesses were still hurt by this pandemic,” said Gov. Noem. “These folks are the lifeblood of our communities and economy. When I asked folks to adjust their way of life to help us flatten the curve, South Dakotans exercised their personal responsibility and responded. That adjustment significantly impacted the day-to-day operations, customer traffic and supply chains of a number of small business owners across our state. It’s my hope that this proposal will help folks stay open and overcome the unprecedented times we’ve faced these last several months. I’m looking forward to discussing it with the Legislature.”

Under Gov. Noem’s proposal, businesses would qualify for this grant if they are located in South Dakota, have at least $50,000 in gross revenue in 2019 and have had a reduction in business of at least 25% between March and May as a result of COVID-19. The calculation for “reduction in business” can be found here.

The proposed application period for the program would open on Oct. 12 and close on Oct. 23, 2020. Grants would be rewarded once all applications are received. Following the initial reward period, a second allocation of funds would be considered if additional funds are still available. Under current federal law, all funds must be distributed by Dec. 30, 2020. Grants would be awarded up to $100,000 per qualifying business.

To learn more about this framework and the fight against the COVID-19 pandemic in South Dakota, visit

ABA Supports Proposed Qualified Mortgage Rule Changes

In a comment letter to the CFPB filed late Tuesday, ABA offered support for recent proposals that would make changes to the qualified mortgage rule and ultimately allow the temporary “GSE patch”—which grants QM status to loans eligible to be purchased or guaranteed by Fannie Mae and Freddie Mac—to expire once the changes take effect.

ABA welcomed the CFPB’s proposal to replace the use of the 43% debt-to-income ratio as QM qualification standard and replace it with a price-based approach that would compare the loan’s annual percentage rate to the average prime offer rate for a comparable transaction. The proposal would also remove Appendix Q, which ABA also supported. “The proposed framework will promote access to credit for all communities in a safe and sustainable way,” the Association said. “These important modifications to the ATR-QM rule will improve the effectiveness of the law, enhance competition and market innovation, and mitigate negative impacts caused by the pending lapse of the temporary GSE patch.”

In its comments, ABA advised the CFPB to leave in place the general requirement to consider and verify consumers’ ability to repay—with robust clarifications that would ensure compliance—and noted that the APR should not exceed the average prime offer rate by more than two percentage points. ABA also urged the Bureau to revisit the current threshold separating the QM safe harbor from rebuttable presumption treatment.

ABA also joined a broad coalition of housing finance stakeholders in a separate comment letter calling on the CFPB to clarify that a QM/safe harbor designation does not confer compliance or override non-compliance with the Fair Housing Act, Equal Credit Opportunity Act or other consumer protection laws; increase the safe harbor threshold; increase the QM cap; and modify the treatment of short-reset adjustable-rate mortgages.

More Than 1,000 Banks Register for #BanksNeverAskThat Anti-Phishing Campaign

In just over a week since the campaign launched, more than 1,000 banks have registered to participate in #BanksNeverAskThat, a fresh, bold plug-and-play campaign that ABA created to fight phishing fraud by turning bank customers into expert scam spotters. The industry-wide initiative is one of the biggest consumer protection campaigns in ABA’s history, and all banks are strongly encouraged to participate.

Once registered, all participating banks will receive a toolkit full of ready-to-use assets. Designed to be humorous, eye-catching and engaging, the kit includes videos, GIFs, social posts, printables and more to help educate and protect bank customers. Participation in the campaign is free and available to all banks, regardless of ABA membership—and materials can be used as-is or branded with a participating bank’s logo. The public-facing #BanksNeverAskThat campaign will kick off on Oct. 1 as part of National Cybersecurity Awareness Month.

ABA Foundation and Junior Achievement Announce Partnership

The ABA Foundation and Junior Achievement today announced a new two-year partnership to work collaboratively to help our nation’s youth build the financial knowledge they need to own their economic success and plan for the future. The ABA Foundation and Junior Achievement will work in tandem to bring financial concepts to students across the country and prepare them for success in a global economy.

“With millions of Americans facing economic uncertainty amid the ongoing pandemic, the need for financial knowledge has never been greater,” said Corey Carlisle, executive director, ABA Foundation. “We are thrilled to partner with Junior Achievement, which shares a similar mission to the Foundation and will be a fantastic teammate in helping to educate young people on how to navigate the many challenging financial situations life can bring. Together, we will work to provide innovative financial education that reaches kids where they are.”

Through this new partnership, Junior Achievement and its network partners will leverage the ABA Foundation’s FinEdLink, a tool that pairs banker volunteers with classrooms and community groups interested in JA’s financial education programming being led by a banker. This will help maximize both banker participation in JA financial programs and the number of consumers reached with these important financial lessons.

Additionally, both organizations will work together to promote the Foundation’s annual Get Smart About Credit campaign and plan to collaborate on additional topics such as career readiness and effective financial education programming as opportunities arise throughout their two-year partnership. To learn more about the ABA Foundation’s financial education initiatives, visit

DOJ Warns of Active Impostor Scam Targeting Older Americans

The Department of Justice (DOJ) alerted the public to an impostor scam involving individuals claiming to represent the DOJ contacting members of the public in an effort to obtain personal information from older Americans by posing as investigators. Scammers may also leave a voicemail with a return phone number, which typically directs victims to a recorded menu that matches the recorded menu for the department’s main phone number. Read more.

Podcast: Giving Emerging Community Bank Talent 'Opportunities to Shine'

The fourth season of the ABA Banking Journal Podcast — sponsored by Reich and Tang Deposit Solutions — kicks off with Minnesota community banker Andy Schornack. On the younger side for a bank president and CEO, Schornack discusses his career trajectory, what excites him about banking and what he is doing at Flagship Bank and Security Bank and Trust to expand the leadership pipeline to give younger bankers “opportunities to shine” and build their management chops.

“We’ve acquired banks, we’ve done core conversions, we’ve rolled out online account opening,” Schornack says, noting that these projects “allow younger people to take on bigger roles and take on more responsibility.”

Schornack discusses how he forged his career as a bank executive during the 2008 financial crisis, and he talks about how his banks are responding to today’s crisis, including a 2% business loan program from Security Bank and Trust clients in three counties. Schornack also explores how banks are supporting entrepreneurship and responding to the needs of damaged small businesses in the Minneapolis/St. Paul area in the wake of this summer’s civil unrest. Listen to the episode.

Funny Money: Central Banking in Our Time

Money matters. Its purchasing power shapes the price system, the invisible hand guiding our decisions, professional and personal. Thus, for better or worse, central banking—aka, monetary policy—shapes our economic well-being more generally. 

As part of the Dykhouse Program Webinar Series in Macroeconomic Policy, Professor Joseph M. Santos of the Ness School of Management and Economics at South Dakota State University in Brookings will present the free webinar"Funny Money: Central Banking in Our Time" on Friday, Sept. 25, at 10:30 a.m. CDT. This webinar affords an accessible yet sufficiently rigorous introduction to the tactics, strategies and outcomes of contemporary monetary policy and how it shapes our lives, including how the Federal Reserve has responded to the macroeconomic consequences of the coronavirus and why. 

The target audience includes financial professionals in private industry and related public sectors (bankers and their regulators, for example), advanced-undergraduate and graduate students interested in macroeconomic policy, and anyone else who is curious about central banking in our time. Register for the webinar

 Compliance Alliance

Question of the Week

Question: Commercial Loan Scenario—Collateral is located in a SFHA, but is in a non-participating community. Because federal flood insurance would not be available, can the bank close the loan without flood insurance coverage?

Answer: If the property is in a non-participating community, then flood insurance is not required under the regulation. A private policy may still be required under the bank's internal policy for safety and soundness reasons, which is highly advisable to protect the bank’s collateral.

For reference:

"Flood insurance, either issued through the NFIP or from a private insurance provider, is required for the term of the loan on buildings or mobile homes when an institution makes, increases, extends or renews a designated loan, meaning all three of the following factors are present:

• The loan (commercial or consumer) is secured by improved real estate or a mobile home that is affixed to a permanent foundation (security property);

• The property securing the loan is located or will be located in an SFHA as identified by FEMA; and

• The community in which the property is located participates in the NFIP.

. . .

Nonparticipating Communities

Although a lender may make, increase, extend, or renew a loan in a nonparticipating community, a lender is still required to determine whether the security property is located in an SFHA and if so, to notify the borrower. The lender must also notify the borrower that flood insurance coverage under the NFIP is not available because the community does not participate in the NFIP. If the nonparticipating community has been identified for at least one year as containing an SFHA, properties located in the community will not be eligible for federal disaster relief assistance in the event of a federally declared disaster.

Because of the lack of NFIP flood insurance coverage and limited federal disaster assistance available, a lender should carefully evaluate the risk involved in making such a loan. A lender making a loan in a nonparticipating community may want to require the purchase of private flood insurance, if available. Also, a lender with significant lending in nonparticipating communities should establish procedures to ensure that such loans do not constitute an unacceptably large portion of the financial institution’s loan portfolio."

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Contact Alisa Bousa, SDBA, at 605.224.1653 or via email.