SDBA Emerging Leaders Summit Going All Virtual

The SDBA is going all virtual with its 2020 NEXT STEP: Emerging Leaders Summit on Oct. 27-28. In order to ensure the safety and well-being of our members, the decision was made to cancel the live portion of the event but continue with the virtual component via Zoom. All registrations have automatically been converted to virtual.

This year’s line up of speakers promises to engage and enlighten emerging leaders. Sessions will address leadership, cultural intelligence, gratitude and communications, as well as musings from SDBA President Curt Everson as he prepares to ride off into the retirement sunset. There will also be a variety of interactive activities to allow participants an opportunity to connect with one another and reinforce the speakers’ messages.

The member cost for the Summit is $200, or $300 for non-members. To receive a goodie box prior to the start of the event, please register by Oct. 23.  See the agenda and register to attend. 

SDBA to Hold Retirement Celebration for President Curt Everson

Save the date for a virtual retirement reception for SDBA President Curt Everson on Tuesday, Nov. 10, at 4-5 p.m. CST. After more than 18 years leading the SDBA on behalf of South Dakota's banking industry, Everson is retiring at the end of this year.

Everson's virtual retirement reception will be held via Zoom. Be watching for more details to come, including the Zoom link to participate. 

SBA Streamlines PPP Forgiveness for Small Loans

The Small Business Administration last Thursday released a much-anticipated, streamlined loan forgiveness application for Paycheck Protection Program loans totaling $50,000 or less. While eligible loans account for just 9% of overall PPP loan dollars, they amount to about two-thirds of all PPP loans.

The two-page forgiveness application, Form 3508S, includes certifications from the borrower but does not require calculations to be submitted with the application. Applicants must submit documentation verifying forgivable payroll and non-payroll expenses. Borrowers are required to retain the documentation supporting their certifications for six years, but do not need to submit it.

Once the application is received, the lender must confirm that it received the borrower’s certifications and documentation. “Providing an accurate calculation of the loan forgiveness amount is the responsibility of the borrower,” SBA said in an interim final rule, reiterating previous guidance that “lenders may rely on borrower representations. . . . [T]he lender does not need to independently verify the borrower’s reported information if the borrower submits documentation supporting its request for loan forgiveness and attests that it accurately verified the payments for eligible costs.”

"It appears that our collective, relentless efforts to push both Congress and the administration toward simplified PPP loan forgiveness have paid off," said SDBA President Curt Everson. "While all of us would have preferred to see the threshold for simplified forgiveness set at a level higher than $50,000, this move by SBA and Treasury will make the loan forgiveness application process much less of a headache for the vast majority of borrowers and for you as their banker."

Everson said highlights regarding the new form and instructions include:

• Forgiveness application form is only one substantive page, plus an optional borrower demographic information disclosure page.
• Borrowers alone are required to attest to expenditure of loan proceeds for forgiveness-eligible purposes and amounts
• Lenders need not independently verify borrower’s reported information if the borrower submits documentation supporting its request for loan forgiveness and that the borrower attests that they accurately verified the payments for eligible costs.
• Per the accompanying instructions, borrowers eligible to use the new form “are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages”.  

SBA also provided guidance on lender responsibilities when borrowers apply for forgiveness of costs—regardless of which form they use—exceeding the PPP loan amount. In these cases, the lender should confirm that it received the borrower’s documentation and, if applicable, confirm the borrower’s calculations “up to the amount required to reach the requested Forgiveness Amount.”

• Download Form 3508S.
• Download the instructions for Form 3508S.
• Read PPP FAQs
• Read the interim final rule.

Governor Noem Announces Small Business Relief Program

SDHDA Executive Director Mark Lauseng to Retire

ABA, Financial Groups Oppose Proposed Payments Charter Changes by OCC

ABA and six other financial trade groups on Tuesday said they “oppose the OCC’s effort to grant commercial companies like Amazon or Facebook a national payments charter to access the Federal Reserve payments system and safety net.”

In a letter to Congress, the groups said they “oppose any effort by the OCC to offer a payments charter, particularly one that would ultimately grant these companies access to the Federal Reserve payments system—the most critical part of our country’s financial infrastructure—and its corresponding federal safety net without protecting the financial system and consumers from the concomitant increase in systemic risk.”

ABA urged lawmakers to ensure that any new charters be conducted through an open and deliberative notice and comment process. The association emphasized that “a transparent process is further heightened, given a recent court decision and continuing litigation has raised additional uncertainty around the OCC’s authority to issue such charters.” The groups said Congress should have a role in the deliberations, “including whether a federal money transmitter license that would preempt a patchwork of state licensing laws is practical.” Read the letter.‌

Fed's Clarida: Pandemic Recession May Be 'Briefest in U.S. History'

While the pandemic-related recession has been by far the deepest one in postwar history, “it also may go into the record books as the briefest recession in U.S. history,” Federal Reserve Vice Chairman Richard Clarida said yesterday. Despite the surge in new COVID-19 cases that were reported this summer in a number of states, “the flow of macrodata received since May has been surprisingly strong, and GDP growth in the third quarter is estimated by many forecasters to have rebounded at perhaps a 25 to 30% annual rate,” he explained.

“I must also acknowledge that the economic outlook is unusually uncertain, and, moreover that the ultimate course the economy follows will depend on the course of the virus, social-distancing norms and mitigation efforts put in place to contain it,” Clarida added. “While economic recovery since the spring collapse has been robust, let us not forget that full economic recovery from the COVID-19 recession has a long way to go.”

Clarida will be a keynote speaker at ABA’s Unconventional Convention next week. Other keynote speakers will include former FDA Commissioner Scott Gottlieb, CNN host Van Jones, FDIC Chairman Jelena McWilliams, former Whole Foods Markets co-CEO Walter Robb, CNN political analyst Bakari Sellers, CBS News political analyst Leslie Sanchez and Yale psychologist Laurie Santos. ABA is offering special registration discounts for this event, along with a “bring the bank” option, through which institutions can register up to 25 bankers for less than the price of six individual registrations. Read Clarida’s speech. Register for the Unconventional Convention.

State Financial Regulators, Secret Service Release Ransomware Mitigation Tool 

The Conference of State Bank Supervisors, the Secret Service and the Bankers Electronic Crimes Taskforce this week released a self-assessment tool for banks to determine how susceptible they are to ransomware attacks. The tool is made up of 16 questions and can help banks identify security gaps and assist in assessing efforts to control and mitigate risks associated with ransomware.

“Ransomware can result in a sudden and unplanned suspension of critical core banking services, and payment of a ransom does not guarantee records can be restored in a timely fashion or even restored at all,” according to the groups. “In severe cases, this could result in the financial institution’s failure.” Read more.

Question of the Week

Question: If the bank takes a commercial property in a business name as an “abundance of caution” and the property is in a flood plain; is the bank still required to make sure that there is flood insurance?

Answer: If the commercial property has a structure on it that is in a flood zone, then flood insurance is required. There is not an abundance of caution exemption in the flood rules, unfortunately.

"(a) In general. An FDIC-supervised institution shall not make, increase, extend, or renew any designated loan unless the building or mobile home and any personal property securing the loan is covered by flood insurance for the term of the loan. The amount of insurance must be at least equal to the lesser of the outstanding principal balance of the designated loan or the maximum limit of coverage available for the particular type of property under the Act. Flood insurance coverage under the Act is limited to the building or mobile home and any personal property that secures a loan and not the land itself."

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

• Tuesday, Oct. 20, 10-11 a.m. CDT
• Thursday, Oct. 22, 1-2 p.m. CDT

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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Questions/Comments
Contact Alisa Bousa, SDBA, at 605.224.1653 or via email.