SDBA eNews

January 28, 2021

Don't Miss Out on SDBA's Virtual State Legislative Day

SDBA State Legislative DayThe SDBA will hold its 2021 State Legislative Day on Wednesday, Feb. 10, virtually via Zoom. This is your opportunity to stay up-to-date on both state and federal legislation which could affect the banking industry and make sure our industry is heard. 

Featured speaker Joan Woodward, president of Travelers Institute and executive vice president of public policy at Travelers, will present "Woodward on Washington: An Economic and Political Outlook." Prior to working for Travelers and Goldman Sachs, Woodward worked on Capitol Hill for 12 years as deputy chief of staff for the U.S. Senate Finance Committee. She also was the chief economist for the Senate Governmental Affairs and U.S. House Budget committees.

The day will also include the SDBA Legislative Committee meeting, a Washington update from Sen. Mike Rounds and Gov. Kristi Noem has been invited to speak. The day will conclude with a “call to action” where participants will be asked to connect virtually with their respective state legislators. Learn more and register.

ABA to Hold 2021 Washington Summit Virtually 

ABA Washington SummitThe balance of power in Washington has shifted, and with the new administration and Congress comes new opportunities to advance sound public policy on the issues facing banking. All of us are obligated to provide our real world expertise, perspective and assistance where needed. As the nation continues to address the immense economic shock caused by the pandemic and build a recovery plan, the banking industry is more important than ever.

The ABA will hold the 2021 Washington Summit virtually on March 16-17. Be the first to hear what lawmakers, regulators and the administration are planning in the weeks and months ahead. Pandemic response and relief, financial inclusion, cannabis banking, as well as clarity and context on fair lending, AML/BSA reform and non-bank entrants to the financial system will be on the agenda.

Bankers can participate in the Summit for free. The event will also include the Emerging Leaders Forum, Women’s Leadership Forum and Mutual Community Bank Forum. Learn more and register.

SBA Issues Procedural Notice Addressing Second-Draw Loans

As the Small Business Administration works to resolve several issues with the Paycheck Protection Program flagged by ABA earlier this week, it issued a procedural notice late Wednesday night outlining how it will move forward with the processing of second-draw PPP loan applications for borrowers who still have an unresolved issue related to their first-draw loan.

SBA said that beginning yesterday, its platform began processing new second-draw loan applications for unresolved borrowers. These applications will be automatically moved to a “research” status and will require additional documentation. “It is imperative that lenders respond timely, as SBA will need time to review the documentation to determine whether the unresolved issue(s) can be cleared,” SBA said. “Lenders should work with their borrowers to assess the situation.”

Once SBA deems the issue resolved, applications will be automatically moved to the next stage of process and will not need to be re-submitted by the lender. However, SBA noted that “lenders that submitted a Second Draw PPP Loan guarantee application before Jan. 27, 2021, that was rejected due to an unresolved issue with the first draw PPP Loan, should resubmit these applications.”

SBA also issued procedural notices related to various provisions of the most recent COVID-19 relief law. The notices address modifications of SBA’s 7(a) program, the elimination of certain 504 program fees, and a notice to lenders that SBA has informed eligible borrowers of assistance available under section 112 of the CARES Act.

CFE Fund: 60 Financial Institutions Now Offering Bank On-Certified Accounts 

The Cities for Financial Empowerment (CFE) Fund announced yesterday that 60 financial institutions—including 46 banks—with more than 28,000 branches nationwide are now offering Bank On-certified accounts. Since ABA last October called on all banks to consider offering accounts that meet standards established by the CFE Fund, eight banks have been newly-certified, 23 banks are actively pursuing certification, more than 70 have requested additional information and nearly 200 participated in a webinar earlier this week to learn more.

Bank On-certified accounts provide benefits to both banks and customers, with low costs, no overdraft fees, robust transaction capabilities via a debit or prepaid card and bill pay capabilities. Banks report that Bank On-certified accounts bring new customers in the door, with more than 75% of these accounts being opened for customers that are new to the bank. According to the CFE Fund, consumers now have access to account offerings that meet Bank On standards in 99 of the 100 largest metropolitan markets, in all 50 states and the District of Columbia. Financial institutions offering Bank On certified accounts comprise more than 45% of the national deposit market share.

“More banks offering Bank On-certified accounts means greater access to the banking system and the economic opportunities that come with a bank account,” said ABA President and CEO Rob Nichols. “Our announcement urging banks to join this important movement has led to an impressive increase in the number of banks pursuing Bank On certification, and we will continue to work with institutions across the country to help them offer these accounts in their communities.”

ABA has also been actively engaged with 20 core technology providers—including Fiserv, FIS, Jack Henry and Associates and Finastra—that have committed to simplifying the process for their bank clients to create and offer a Bank On-certified account.

ABA Calls for 'Circuit Breaker' Ahead of ACH Threshold Increases

The ABA last Friday provided feedback to NACHA on its proposed plan to increase the dollar limit for same-day ACH transactions. NACHA proposed to phase-in the increases over three stages, with the threshold increasing from $100,000 to $1 million in March 2022, then to $10 million in March 2023 and finally to the standard ACH limit of $99,999,999.99 by March 2024.

‌The ABA strongly supported increasing the level to $1 million as proposed, but raised concerns about the potential increases in fraud and operational risk that could arise as a result of the subsequent proposed increases. As NACHA proceeds with the second planned increase, ABA advocated for a “circuit breaker” that would allow NACHA to pause any further increases on short notice.

‌The ABA urged NACHA only to move ahead with the third and final increase “only after an extensive circuit breaker review process that takes into consideration the risk associated with raising the transaction limit by $90 million per transaction. If it is determined the increase will create a significant risk, then implementation should be deferred.” Read the letter. For more information, contact ABA’s Steve Kenneally.

Free Article Examines Top Ag Lender Concerns

As the farm economy works through a prolonged downturn amid a global economic slowdown, many agricultural lenders continue to be worried about the same factors as they did last year, the recent joint ABA/Farmer Mac 2020 Agricultural Lenders Survey report showed. A new article in the ABA Banking Journal digs into the survey findings, including a breakdown by geographic region.

The survey found that for ag lenders, credit quality and deterioration of agricultural loans, weak loan demand and competition from other lenders were some of the top concerns again in 2020, though regional variations were noted, writes ABA’s Tyler Mondres. For example, a quarter of lenders in the Great Plains said that competition became more aggressive but lenders in the south were most likely to report no change. Read the article.

Federal Banking Agencies Issue FAQs on Suspicious Activity Reporting 

The federal banking agencies last week issued a set of frequently asked questions providing clarity about suspicious activity reporting and other anti-money laundering issues. The agencies issued the FAQs at the recommendation of the Bank Secrecy Act Advisory Group, of which ABA is a member. The FAQs clarify existing expectations and do not establish new requirements.

The agencies said that the FAQs are intended to enable financial institutions to focus resources on activities that "produce the greatest value to law enforcement agencies and other government users of Bank Secrecy Act reporting."

Among other things, the FAQs address SAR character limits, maintaining a customer relationship following the filing of a SAR, requests by law enforcement for financial institutions to maintain accounts as well as receipt of grand jury subpoenas and law enforcement inquiries. Read more. For more information, contact ABA’s Rob Rowe.

Registration Now Open for SDBA's Virtual IRA Update Seminar

The SDBA will hold the IRA Update Seminar on March 2 virtually via Zoom. This seminar is designed to review two major pieces of legislation—the Secure Act and CARES Act. There have been a number of IRS notices that came out during 2020 further explaining these two pieces of legislation.

Topics that are timely for this time of year will also be discussed. Covered topics include changes in contribution eligibility, making the transition from 70.5 to 72 for required minimum distributions (RMDs) and how to calculate RMDs in 2021, beneficiary options and an update on COVID-19 distributions that were allowed in 2020.

Seminar presenter Michael O’Brien has been a key player in the retirement services industry for more than 30 years and has provided consulting and educational services to all facets of the retirement industry. Learn more and register.

 Compliance Alliance

The new round of Paycheck Protection Program guidances are landing, and as C/A did in the spring of 2020 they will be offering access to their tools and huddles to all community banks across the United States--regardless of membership--for the challenging weeks ahead. Learn more.

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.

For timely compliance updates, subscribe to Bankers Alliance’s email newsletters.

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