SDBA eNews

July 8, 2021

Senate Lawmakers Introduce Bill to Level Playing Field Between Banks, FCS

Sens. Jerry Moran (R-Kan.), John Boozman (R-Ark.), Mike Rounds (R-S.D.), Kevin Cramer (R-N.D.) and Roger Marshall (R-Kan.) last week introduced S. 2202, the SDBA and ABA-advocated Enhancing Credit Opportunities in Rural America Act of 2021, which would end the taxation of interest earned from agricultural real estate loans.

This would not only reduce servicing costs for community banks providing these types of loans, it would also level the playing field between banks and the tax-advantaged Farm Credit System—making it easier for banks to support the farm sector through real estate loans. A bipartisan companion bill was introduced in the House earlier this year by Reps. Ron Kind (D-Wis.) and Randy Feenstra (R-Iowa).

“This critically important legislation . . . will help lower the cost of credit for farmers and ranchers in rural America,” said ABA President and CEO Rob Nichols, welcoming the bill’s introduction in the Senate. “ECORA offers a straightforward solution to help farmers and ranchers during this time of lower farm incomes without creating new government payments or programs. We urge Congress to help our country’s farmers and ranchers by moving quickly to pass this timely bill.” For more information, contact ABA’s Ed Elfmann.

FinCEN Issues National Anti-Money Laundering Priorities

The Financial Crimes Enforcement Network last week issued government-wide policy priorities for anti-money laundering and countering the financing of terrorism. According to the priorities, the most significant AML/CFT threats currently facing the country are corruption, cybercrime, domestic and international terrorist financing, fraud, transnational criminal organization activity, drug trafficking organization activity, human trafficking and human smuggling, and proliferation financing.

In a separate interagency statement issued by FinCEN and the federal banking agencies, the agencies stated that publication of the priorities “does not create an immediate change to Bank Secrecy Act requirements or supervisory expectations for banks.” The agencies said they will revise their BSA regulations within the next six months to address how the priorities will be incorporated into banks’ BSA requirements.

The agencies added that they will not examine banks for the incorporation of the priorities into their risk-based BSA programs until the effective date of the revised regulations. The priorities list will be updated every four years, as required by the Anti-Money Laundering Act of 2020. Read the listRead the interagency statement .

FSB Outlines Next Steps on Climate Risk Disclosures, Tackles Climate 'Data Gaps'

As the annual summit of G20 finance ministers and central bank governors kicked off in Italy yesterday, the Financial Stability Board released its roadmap for global regulatory coordination on climate-related financial risks. The FSB roadmap focuses on four main approaches: firm-level disclosures, data, analysis of vulnerabilities and regulatory and supervisory practices.

Regarding disclosures, in order to promote consistency, the FSB said it would use frameworks based on the work of the Task Force on Climate-Related Financial Disclosures and the in-development IFRS sustainability disclosure standards. Once those standards are issued and should the International Organization of Securities Commissions endorse them, local regulators would then adopt their own frameworks for using the international standards.

The FSB noted that the climate data available to financial institutions is not currently suitable for climate risk management and said it is taking further action in 2022 to fill data gaps and identify forward-looking metrics. These efforts will align closely with efforts to analyze vulnerabilities under different climate scenarios. “Addressing such data gaps will enhance the assessment and monitoring of climate-related risks to financial stability and enable market participants to incorporate climate-related financial risks more effectively in their decisions, including the pricing of credit and allocation of capital,” said FSB Chairman and Federal Reserve Vice Chairman for Supervision Randal Quarles.

ABA, State Associations Urge Rejection of State-Level Model Data Bill 

ABA and 49 state bankers associations on Tuesday urged the Uniform Law Commission to reject a draft of model state-level legislation on consumer data privacy that does not provide sufficient exemptions for banks, which are already subject to stringent federal data security standards and includes the potential for banks to be subject to lawsuits.

The associations wrote that state privacy legislation has and should continue to recognize existing federal frameworks crafted by Congress and the strong privacy and data security standards already in place for the financial sector under the [Gramm-Leach-Bliley Act] and other financial privacy laws. The final draft contains several problematic provisions the associations said—adding that "we regretfully cannot support the act in its current form should it be introduced in the states and urge its disapproval by the commission.”

If passed, the proposed legislation would be eligible for introduction in the states with the backing of the ULC. Read the letter. For more information, contact ABA’s Andy Guggenheim.

ABA Publishes Staff Analysis on Reg X COVID-19 Amendments

ABA has published a members-only staff analysis on the Consumer Financial Protection Bureau's Regulation X amendments to assist borrowers affected by the COVID-19 pandemic. The amendments include recommendations from ABA and establish temporary special safeguards to help ensure that borrowers have time before foreclosure to explore their options, including loan modifications and selling their homes.

The final rule takes effect Aug. 31 and builds on existing rules, which prohibit a servicer from making the first notice or filing required by law until a borrower’s mortgage loan obligation is more than 120 days delinquent.

The staff analysis provides takeaways from the five key amendments and recommends that banks train servicing staff to provide consumers full and accurate information about their forbearance options. Read the staff analysis. For more information, contact ABA’s Teshale Smith or Sharon Whitaker.

Fed: CECL Tool for Community Banks to Launch July 15

The Federal Reserve said last week that it plans to launch a new tool, the Scaled CECL Allowance for Losses Estimator, or SCALE, to help community banks implement the current expected credit loss standard. The Fed will launch the spreadsheet-based tool on July 15 during an “Ask the Fed” webinar featuring speakers from the Financial Accounting Standards Board and the Conference of State Bank Supervisors. Bankers can register for the webinar at

The tool uses industry or peer data from the Call Report as the starting point for estimating an allowance for credit losses. Banks must further adjust this starting point to reflect bank-specific facts and circumstances to arrive at a final CECL estimate. The intent of this approach is to simplify CECL calculation for community banks.

IntraFi Network to Host Webinar Explaining FDIC Deposit Insurance Coverage

IntraFi Network will host a series of webinars titled FDIC Deposit Insurance Coverage and Related Matters. This free webinar is designed for CPAs, all levels of bank employees and executives who would like to learn more about FDIC deposit insurance coverage and related matters.

Topics will include: coverage background, basic coverage rules, agency or custodial accounts, coverage for government accounts, examination preparation and reciprocal deposits. CPAs can receive one CPE credit (approved by NASBA), and and non-CPA attendees will receive a certificate of attendance. 

Joe DiNuzzo, a former attorney with the FDIC and an expert in FDIC insurance regulations, will lead the session. The session will include a Q&A segment to address specific concerns. Upon completion, attendees will have a thorough understanding of how FDIC insurance coverage works and other matters relating to FDIC insurance. 

The webinar will be offered five times starting on Tuesday, July 13, with the last webinar to be offered on Nov. 16. See the webinar dates and register

Registration Open for ABA/IBA Women's Leadership Symposium

Registration is open for the ABA and Illinois Bankers Association Women's Leadership Symposium, to be held virtually on Tuesday, July 13. The virtual symposium provides an opportunity for career advancement through mentorship and one-of-a-kind executive education.

The symposium features keynotes from diversity, equity and inclusion thought-leader and author Raven Solomon and relationship capital expert Deborah Tsai Munster. Attendees will also have opportunities to connect with fellow banking leaders and hear remarks from industry leadership. Register here.


Question of the Week

Question: Under the FDCPA, if the bank is collecting on its debts, how often is the bank required to send the Validation Notice?

Answer: 15 USC 1692g(a), FDCPA, requires a debt collector to send a validation notice within five days after the initial communication with a consumer, in connection with the collection of any debt, a debt collector shall send the consumer a written notice. However, debt collector DOES NOT include any person collecting or attempting to collect on a debt which was originated by such person. In other words, if the bank is collecting on its own debts, they are not required to provide a validation notice of the debt.

“(a) Notice of debt; contents Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing—” 15 USC 1692g(a),

(6) The term "debt collector" means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 1692f(6) of this title, such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests. The term does not include -- (F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor. Regulation F, § 1006.2(i)(1),

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