SDBA eNews

June 30, 2021

SDBA to Hold Ag Credit Conference on July 21-22

SDBA Agricultural Credit ConferenceThe SDBA will hold its 2021 Agricultural Credit Conference on July 21-22 at the Ramkota Hotel & Conference Center in Pierre.

This conference focuses on the unique needs of ag bankers and the need for quality information and training to better serve their customers. The SDBA has lined up speakers on a variety of timely topics to help ag bankers navigate through challenging times. Experienced and new ag lenders, as well as CEOs, will all benefit from this conference. 

Session topics include the U.S. economy in 2021 and beyond, current fraud trends impacting the banking industry, cutting expenses versus increasing yields, proper loan restructuring, weather risk in production agriculture, higher prices and increased volatility in the grain and cattle markets, avoiding the pitfalls of marijuana and hemp, federal banking and policy update, and speed networking. Learn more and register.

There is also an opportunity for business partners to exhibit and sponsor at this year's event. Learn more or contact Halley Lee with questions. 


SDBA Seeking Photos for 2022 Scenes of South Dakota Calendar

Scenes of South Dakota Calendar CoverThe SDBA is currently accepting photo submissions for its 2022 Scenes of South Dakota Calendar. The calendar features 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, 2021, and all photos will be judged with the top photos featured in the 2022 Scenes of South Dakota Calendar. Photo submission form

SDBA member banks and associate members can also place an order to purchase the 2022 Scenes of South Dakota Calendar. Calendar orders are due Sept. 1, 2021. Learn more and place an order.


SD Department of Health Releases Medical Cannabis Administrative Rules

The South Dakota Department of Health (DOH) last Thursday released its proposed administrative rules to implement the medical cannabis program created by voters in Initiated Measure 26 (IM 26). IM 26 directs the DOH to enact final administrative rules for medical cannabis by Oct. 29, 2021, and the agency is on schedule to meet this deadline, according to a press release. 

“The proposed administrative rules are one of many steps our Department has taken to develop a safe and responsible medical cannabis program in South Dakota, as the voters intended,” said Secretary of Health Kim Malsam-Rysdon.

To gather initial comments on these proposed rules and to answer questions from the public, DOH held two medical cannabis telephone town-halls on Monday. DOH will begin the formal approval process for the rules, which also require the South Dakota Legislature’s approval, in September after seeking further feedback from stakeholders and the public. 

On July 1, IM 26, which only concerns medical cannabis, will go into effect. The full text of the law can be found under South Dakota Codified Law 34-20G

View the proposed rules. Learn more at MedCannabis.sd.gov.


ABA Urges Bankers to Comment on Fed's Payments System Access Guidelines

ABA is calling on bankers to comment on the Federal Reserve's proposed guidelines on requesting access to the nation's payments system, given the recent uptick in such requests from non-traditional financial services providers. To address these rising number of requests, and per ABA’s request, the Fed has proposed guidelines to evaluate new applicants.

ABA considers the proposed guidelines a good first step, but with the rapid development of diverse crypto currencies and digital assets, the need for responsible, consistent, clear oversight across all business models is more important than ever. The proposed guidelines need to be strengthened to ensure the safety and soundness of the payments system and the broader financial system.

Comments on the proposed guidelines are due on July 12. ABA has provided a sample comment letter for bankers to easily complete and send through its grassroots platform, Secure American Opportunity. Take action now.


FDIC Modifies Resolution Plan Rules

The FDIC last Friday outlined a modified approach to implementing its rule requiring insured depository institutions (IDIs) with $100 billion or more in total assets to submit resolution plans. The FDIC’s announcement had been expected, following a 2018 federal legislation promoting tailoring of financial regulations put in place following the 2008 financial crisis. The modified implementation rules extend the resolution plan submission frequency to a three-year cycle and provide new details on the FDIC’s intended engagement with the affected firms and the capabilities testing it will require from them throughout the filing cycle.

The new approach also exempts filers from some content requirements that have been less useful to the FDIC or are obtainable through other supervisory channels. In addition, on a case-by-case basis, the FDIC plans to exempt filers from certain content requirements based on its evaluation of how useful the information would be in planning a resolution of the IDI in question. Each filer will receive a letter from the FDIC that specifies exempted plan content and the due date for the next filing.

Resolution plans will be submitted in two groups, with the first group consisting of IDIs whose top-tier parent company is not a U.S. global systemically important bank or a Category II banking organization under the Federal Reserve’s tailored enhanced prudential standards, Regulation YY.

The second group will be all other IDIs with $100 billion or more in total assets. For institutions with less than $100 billion in total assets, the moratorium on submission of IDI plans announced in November 2018 remains in effect. Read more. For questions, please contact ABA’s Hu Benton.


U.S. House Votes to Repeal OCC 'True Lender' Rule

The U.S. House last Thursday voted 218 to 208 to repeal the OCC’s “true lender” rule. The rule, finalized in 2020, established a test to determine when a bank is considered the true lender on a loan made in a partnership with a nonbank entity. On May 11, the Senate voted to repeal the rule using a Congressional Review Act resolution.

The measure now goes to the White House, where President Biden is expected to sign it. Following the vote, the OCC reaffirmed its long-standing position that "predatory lending has no place in the federal banking system."

“Moving forward, the OCC will consider policy options, consistent with the Congressional Review Act, that protect consumers while expanding financial inclusion,” the agency said. “Both of these priorities are part of the agency’s mission of ensuring that national banks and federal savings associations provide fair access to financial services for all Americans and that customers are treated fairly.”

ABA and other trade groups have previously written in opposition to the Congressional Review Act resolution, stating that the next comptroller of the currency should analyze the rule and consider whether to initiate a new rulemaking to create a more robust true lender framework for providing safe and affordable credit to consumers. Read ABA’s letter.


SD Banking Commission to Hold Public Hearing to Adopt Rules

The South Dakota Banking Commission will hold a public hearing on Thursday July 8, at 1:30 p.m. CDT via telephone to consider the adoption of proposed rules.

Proposed Rule 20:07:06:01.02: The effect of the proposed rule is to abate the examination fee assessed to state-chartered banks for the June 2021 semiannual examination fee assessment period. The reason for adopting the rule is to manage the accumulation of money in the Banking Revolving Fund.

Proposed Rule 20:07:06:02: The effect of the proposed rule is to provide additional flexibility in the process of sending notice to state-chartered banks for future fees owed by each bank. The reason for adopting the rule is to provide the Division additional time to prepare and validate fee assessments for each state-chartered bank after the June 30 and December 31 reports of condition and income are validated and finalized by the FDIC. The Division generally has access to finalized data between 45 to 60 days after the June 30 and December 31 reporting dates.

Those interested in presenting amendments, data, opinions or arguments for or against the proposed rule may do so via phone at the hearing or by mail or email prior to the hearing. Written comments must be submitted to the South Dakota Division of Banking at 1601 N. Harrison Avenue, Suite 1, Pierre, SD 57501 or by email to [email protected]s at least 72 hours before the public hearing. Interested parties may attend by calling 605.679.7263 and using conference code 224866985 and pressing #. 

After the public hearing, the South Dakota Banking Commission will consider all written and oral comments it receives on the proposed rules and may modify or amend a proposed rule at that time to include or exclude matters that are described in the notice. Learn more


FinCEN Recognizes Law Enforcement Successes Resulting from BSA Reporting

The Financial Crimes Enforcement Network last week recognized several state and federal law enforcement agencies for their work using information reported by financial institutions under the Bank Secrecy Act (BSA)  in its criminal investigations with its annual Law Enforcement Awards.

The reports provided intelligence that led to arrests related to Paycheck Protection Program fraud, the identification of drug organizations, dismantlement of a terrorist organization’s online infrastructure and convictions for money laundering through real estate.

“The law enforcement work that we recognize today highlights both the importance of an effective partnership between FinCEN, financial institutions and our law enforcement agencies, and the value of BSA reporting in protecting the American people from fraud, cybercrime and the illicit finance threats confronting our nation,” said FinCEN Acting Director Michael Mosier. “These cases concretely aided people all around us–victims of crime and exploitation. This tireless work is about helping the most vulnerable among us, a matter of financial integrity but also human integrity.” View the award recipients.


  

Question of the Week

Question: We're going to be changing our disclosures in a way that we believe would require us to give a 30-day advance notice under Regulation DD.  I know that Reg DD applies to consumers, but what about consumers that have DBA accounts?

Answer: You are correct that Regulation DD applies only to consumer accounts, and although DBA/sole proprietorship accounts are held by consumers, the commentary to the regulation clarifies those accounts held by individuals as sole proprietors are not covered under Regulation DD.  As a result of that, disclosures relating to sole proprietorship account that are changing would not be required by regulation to be given on any timing schedule, and instead, you'd follow your account agreement as to how and when the bank will provide updated disclosures.

"(a) Account means a deposit account at a depository institution that is held by or offered to a consumer. It includes time, demand, savings, and negotiable order of withdrawal accounts..."

12 CFR 1030.2(a) https://www.consumerfinance.gov/rules-policy/regulations/1030/2/#a

"3. Sole proprietors. Accounts held by individuals as sole proprietors are not covered."

Commentary to 12 CFR 1030.2(h)-3 https://www.consumerfinance.gov/rules-policy/regulations/1030/Interp-2/#2-h-Interp-3

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