SDBA's Fourth Annual Women in Banking Conference a Success

Photo of Women in Banking Conference attendees. Two hundred bankers from across the state came together in Sioux Falls for the SDBA's fourth annual LEAD STRONG: Women in Banking Conference. The event is designed to encourage, support and inspire women to succeed in the workplace.

The event began Tuesday evening with a reception at R-Wine Bar in Sioux Falls and continued on Wednesday with a full day of sessions at the Sioux Falls Convention Center. Topics included creating the most awesome version of you, strong communication and listening skills, how courage plays a part in leadership, overcoming imposter syndrome, building a powerful presence, roundtable networking and a panel discuss with women banking industry leaders.

Terri Luttrell with Abrigo in Austin, Texas, gave an eye-upcoming talk on human trafficking and the critical role that financial institutions can play in identifying and disrupting these crimes. This year's service project was donating gift cards to Call to Freedom, a group in Sioux Falls which helps victims of human trafficking.

Thank you to this year's conference sponsors: First Bank & Trust, First PREMIER Bank, Bell Bank, Federal Home Loan Bank of Des Moines, Dacotah Bank, First Fidelity Bank, Reliabank, Rivers Edge Bank, Davenport Evans, First Dakota National Bank, Richland State Bank and Vantage Point Solutions. Next year's Women in Banking Conference is set for Sept. 13-14, 2022, in Sioux Falls.

Yellen Keeps Up Push for IRS Reporting Proposal in Spending Bill

Treasury Secretary Janet Yellen this week called on House Ways and Means Committee Chairman Richard Neal (D-Mass.) to include in the reconciliation package the Biden administration’s controversial provision that would require financial institutions to report information to the IRS on gross inflows and outflows on customer accounts above a de minimis level of $600—a provision strongly opposed by ABA.

In a letter to Rep. Neal, Yellen claimed that the proposals “were designed to ensure that there will be no increase in taxpayer burden associated with this regime” and that “for already compliant taxpayers, the only effect is a distinct benefit—a lowered likelihood of costly and burdensome audits.” In addition, the letter claimed that the provision is “designed to minimize costs for financial institutions.”

However, ABA has raised significant concerns that the new requirements could lead to higher tax preparation costs and concerns for taxpayers, could also undermine public trust in banks and hinder progress toward promoting financial inclusion. Importantly, ABA also emphasized that the proposal would be a significant system and process challenge for banks with material costs and disruption.

While the provision was not included in the earliest stages of the bill’s consideration, Secretary Yellen’s letter makes clear that the provision is a top administration priority. ABA is urging banks and their customers to continue their grassroots efforts to ensure that this provision stays out of any future versions of the bill. To help engage bank customers on this issue, ABA has created sample language for customer communications and social media posts banks can use. The Association continues to closely monitor developments related to the bill and will provide additional updates to members as needed.

In related news, a group of 141 Republican lawmakers led by Rep. Tom Emmer (R-Minn.) on Tuesday wrote to congressional leaders, Yellen and IRS Commissioner Charles Rettig to express concern over the proposal. The lawmakers echoed concerns previously raised by ABA, including that it could leave Americans’ personal financial data vulnerable to cyberattacks and could also undermine public trust in banks and hinder progress toward promoting financial inclusion

FDIC Releases Strategic Plan for 2022-2026

The FDIC yesterday released a draft of its strategic plan for 2022-2026 for public comment. Comments are due Oct. 1. The agency’s strategic goals include ensuring that insured depositors are protected from loss without recourse to taxpayer funding, that FDIC-supervised banks are safe and sound, that consumers’ rights are protected and banks are investing in their communities, that large banks can be resolved in an orderly manner in the event of bankruptcy and that resolutions are orderly and receiverships are managed effectively.

The FDIC flagged several strategic challenges on the horizon—the largest of which was the trajectory of the nation’s economy as the pandemic recovery persists. The FDIC noted that “while the banking industry continues to perform well, the interest rate environment and economic uncertainty continue to pose challenges for many institutions. Overall, the industry must manage interest-rate risk, liquidity risk and credit risk carefully to remain on a long-term, sustainable growth path.”

Among the additional strategic challenges that will shape FDIC’s strategic priorities are: nonbank competition with community banks and regional banks; innovation, information technology and cybersecurity; economic inclusion; and workforce development and management. Read the strategic plan.

Fed Issues Paper on Bank/Fintech Partnerships; Bowman Discusses Innovation

The Federal Reserve last Thursday published a paper highlighting how community banks can partner effectively with fintech companies. The paper is intended to be a resource for community banks as they plan their innovation journeys. Among other things, it provides an overview of the banking and fintech landscape, discusses benefits and risks of bank/fintech partnerships and key considerations for engaging in these partnerships.

Discussing the paper at ABA’s Government Relations Council fall meeting last Thursday, Fed Governor Michelle Bowman—who holds the designated community bank seat on the Fed board—noted that in her agency’s outreach, “two important themes stood out. The first is establishing trust and aligning with fintech partners, and second, building a long-term culture committed to innovation.”

The paper is the latest of several initiatives the Fed has undertaken to help promote responsible innovation for community banks, Bowman added. Other initiatives included the joint publication of a vendor due diligence guide with the FDIC and OCC, a request for comment on interagency third-party risk management guidance and a request for information on banks’ use of artificial intelligence.

Bowman encouraged bankers to continue to engage with the Fed on issues related to innovation, including through an upcoming “Ask the Fed” program that will focus on community banks and services providers and an upcoming “innovation office hours” event later this month that will be hosted jointly by the Fed and the Kansas City Reserve Bank. Read the paper.

ABA Issues Staff Analysis of Biden's COVID Plan for Employers

ABA has published a members-only staff analysis of President Biden’s COVID-19 plan issued last Thursday. The action plan includes a requirement that private-sector businesses with 100 or more employees either “ensure their workforce is fully vaccinated” or require unvaccinated workers to be tested weekly for COVID-19. An Occupational Safety and Health Administration official stated on Friday that the emergency temporary standard (ETS) would be released “in the coming weeks.” It would take effect immediately.

In its analysis, ABA observed that governors and potentially other parties are expected to file lawsuits seeking an injunction once the OSHA ETS is released and that “courts rigorously assess whether OSHA is acting within its statutory authority when releasing an ETS.” Because of these expected challenges to the ETS, ABA stated that “banks may wish to consider carefully the resources and effort they expend at this time to develop a program in anticipation of compliance with the ETS.” ABA suggested that banks should continue to urge all employees to become vaccinated and to track the vaccination status of all employees. Banks also may consider requiring all employees to be vaccinated.

Biden’s action plan also includes an executive order that requires federal contractors to follow the COVID-19 safeguards published by a federal government task force, which is expected to mandate that federal contractors require their employees to be vaccinated. In its analysis, ABA stated that “there is reason to believe that the 2021 Executive Order does not apply to the vast majority of banks.” Read the staff analysis. For more information, contact ABA’s Paul Benda or Jonathan Thessin.

First Interstate Bank to Partner with Great Western Bank

First Interstate Bank, headquartered in Billings, Mont., yesterday announced a definitive agreement to partner with Great Western Bank (GWB), which is headquartered in Sioux Falls.

Under the terms of the agreement, which was unanimously approved by both parties’ Boards of Directors, the companies will unite under the First Interstate name and brand. Pending regulatory and shareholder approvals, the transaction is expected to close during the first calendar quarter of 2022; the conversion of GWB branches to First Interstate is expected to take place during the second calendar quarter of 2022.

“This is a transformative moment for our 53-year-old company,” said First Interstate President and CEO Kevin Riley. “The strategic and cultural alignment between our organizations is what makes this transaction so exciting, as we both pride ourselves on being community banks with a strong focus on relationship building, customer service and community outreach.”

With more than 170 locations throughout Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota, GWB’s footprint complements the Pacific Northwest and Mountain Regions that First Interstate currently serves. Read more.

ABA to Host Free Webinars on FedNow Service

ABA will host a two-part webinar series on the implementation of the Federal Reserve’s FedNow service. The first webinar, “Getting to Know the FedNow Serivce and How to Prepare,” will take place on Oct. 14 at 1 p.m. CDT. The second webinar, “Introducing FedNow Explorer—A Guide for Your Instant Payments Journey,” will take place Nov. 3 at 1 p.m. CDT.

ABA SVP Steve Kenneally and experts from the Fed will review FedNow features and best practices for implementation and provide an overview of the FedNow Service Readiness Guide designed to help ABA members with preparation. Fed officials will answer questions and provide a live demonstration of how to use FedNow Explorer, a digital experience launching this fall that will guide banks on their journey to implement instant payments. This free webinar series is available to ABA bank members and state association members. Register now.

Advanced Compliance Workshop To Be Held in Mankato

The Minnesota Bankers Association will hold the Advanced Compliance Workshop on Oct. 27-28 at the Mankato City Center Campus in Mankato, Minn. SDBA members have the opportunity to attend the training at the member discount rate.

This workshop has been specifically designed for the experienced compliance professional who requires the most up-to-date information affecting bank compliance. Attendees should have at least one year of compliance experience and/or have attended the basic compliance school.

Topics to be discussed by presenter Jerod Moyer with Banker’s Compliance Consulting include: TILA ability to repay and qualified mortgages; TILA HPMLs; refinance, renewals and modifications; RESPA Section 8; flood insurance; risk assessments; TRID hot topics; and hot topics/top violations.

Nessa Feddis, senior vice president and senior counsel with the ABA, will touch on FCRA, overdrafts, Washington update (including CRA, interchange routing and true lender rules), and third-party payment systems. The workshop will also include a presentation on elder abuse and an update of state statutes. Learn more and register.

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Question of the Week

Question: How often must bank management review the bank’s electronic banking policies and what criteria should be evaluated?

Answer: The Federal Financial Institutions Examination Council (FFIEC) Booklet addresses electronic banking. Under this guidance, once an institution implements its e-banking strategy, the board and management should periodically evaluate the strategy's effectiveness. A key aspect of such an evaluation is the comparison of actual e-banking acceptance and performance to the institution's goals and expectations. Some items the FFIEC suggest that an institution use to monitor the success of its e-banking strategy, include:

Revenue generated;
Website availability percentages;
Customer service volumes;
Number of customers actively using e-banking services;
Percentage of accounts signed up for e-banking services; and
The number and cost per item of bill payments generated.

Without measurable goals, management will be unable to determine if e-banking services are meeting the customers' needs as well as the institution's growth and profitability expectations. Accordingly, before the bank can perform an effective evaluation, the bank must define the goals and expectations, as above.

FFIEC IT Examination Manual (E-Banking), https://ithandbook.ffiec.gov/it-booklets/e-banking/risk-management-of-e-banking-activities/board-and-management-oversight/monitoring-and-accountability.aspx

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