ABA Newsbytes | ABA Urges FinCEN to Reevaluate BOI Collection Burden on Banks

Before it makes changes to the rule spelling out the policies and procedures banks must have in place to collect beneficial ownership information for their small business customers, the Financial Crimes Enforcement Network needs to accurately calculate the burden that collection currently places on financial institutions, and to consider the parts of the existing rule that work and those that do not, ABA said Friday in a letter to the agency.

FinCEN is currently seeking to renew without change existing BOI collection requirements for legal entity customers. In its letter, ABA said it supports the goals of the data collection, but it wanted to use the opportunity to alert the agency to issues surrounding an anticipated revision of the customer due diligence, or CDD, rule. Among those things, the agency massively undercounts how much time it takes for banks to comply with BOI collection requirements, the association said. The agency also now directly receives BOI on small business reporting companies from those entities, which it plans to share with banks, “so those aspects of the CDD rule that require banks to collect similar duplicative information should be reassessed.”

“Finally, as FinCEN contemplates revisions to the 2016 CDD rule, it is essential that FinCEN understand the aspects of the CDD rule that work as intended—to further [Bank Secrecy Act] purposes—and those that do not, by requiring banks to depart from a risk-based approach to BSA compliance,” ABA said. “As just one example, the CDD rule mandates collection requirements at virtually all account openings, regardless of legal entity risk profile or whether the legal entity is already well known to the bank.” Read the letter . For more information, contact ABA’s Heather Trew.

CISA: Top 10 Endpoint Recommendations

CISA

An excellent reminder on the cyber equivalents of blocking and tackling. Regular external assessments/audits, train the Human Firewall, BYOD policy, EDR, Inventory, MFA, Least Privilege, Patches – where does your organization sit in regards to each area? Our free CPG assessment is a good tool to measure your progress.

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ABA Banking Journal: White House Announces New Policy Guiding Infrastructure Protection

President Biden yesterday signed a national security memorandum launching what the White House characterized as a comprehensive effort to protect U.S. infrastructure against all threats and hazards. Among other things, the memo directs federal, state and local governments to prioritize establishing minimum requirements for risk management, including requirements that address specific industry sector risks and cross-sector risks. It also keeps the Treasury Department as the federal agency coordinating risk management efforts in the financial sector.

The memo replaces a decade-old presidential policy document on protecting critical infrastructure. The Department of Homeland Security will lead the effort, with the Cybersecurity and Infrastructure Security Agency acting as coordinator between the various agencies overseeing the federal government’s designated 16 critical infrastructure sectors.

In terms of regulatory requirements, the policy said that rules adopted by all federal, state and local governments should leverage existing guidance when applicable. “Regulatory frameworks should be risk- and performance-based when feasible; informed by existing requirements, standards and guidelines; aligned to reduce unnecessary duplication; complementary to voluntary public-private collaboration; and scalable and adaptable to an evolving risk environment,” the memo states.

ABA EVP Paul Benda, vice chair of the Financial Services Sector Coordinating Council, said the updated directive reaffirms Treasury’s important role and builds on the successful public-private sector collaboration for cybersecurity and critical infrastructure. “It also updates the rules for how ‘systemically important entities’ are designated, allowing the U.S. government to better identify and prioritize national systemic risks across all sectors of the economy,” he said. “These changes will better align risk designations to avoid duplication and ensure they are tailored to the risks facing financial institutions today.”

Read the article.

FinCEN Director Offers Tips for Filing Suspicious Activity Reports

FinCEN Financial institutions can improve the value of their suspicious activity reports for law enforcement by taking steps such as providing citations and identifying known ties to foreign countries, Financial Crimes Enforcement Network Director Andrea Gacki said Monday. Speaking at an anti-money laundering conference in New York City, Gacki said her agency received nearly 119,000 SARs between April 1, 2022, and March 31 of this year, for an average of 5,000 a month. Given the importance of SARs to law enforcement, she shared three best practices for increasing their utility for FinCEN.
First, at the beginning of each SAR, include a “bottom-line, upfront” paragraph that identifies and explains why the reported activity is suspicious, Gacki said. Second, include a citation or clear explanation of any external information that triggered the determination that the activity was suspicious, such as news reports. Third, identify any links to foreign countries, including IP addresses. Such links provide FinCEN the opportunity to collaborate with its counterparts in other countries, she said.
Gacki also discussed FinCEN’s collection of beneficial ownership information, as required by the Corporate Transparency Act. She said the agency has received more than 1.7 million reports since the reporting requirement went into effect on Jan. 1. She also noted that the agency is continuing its phased approach to providing BOI access, with financial institutions scheduled to receive access in spring 2025.

Read Gacki's remarks.

Women in Banking Power Hour | May 29 | 3:30-5pm CDT

EVENT DESCRIPTION

Are you wondering about the 2024 Women in Banking event? Do you miss your other WIB friends and colleagues? Are you ready to cut out early and join us for our second Women in Banking POWER HOUR? Join us virtually at 3:30 CDT/2:30 MDT on 5/29 for a Lead Strong: Women in Banking POWER HOUR (and a half).

Because we are GRATEFUL for all of you. Because we are GRATEFUL for our awesome industry. Because we are GRATEFUL to be done with work an hour and a half early on 5/29, we are offering this FREE, hour-and-a-half session. For these 90 minutes, we’ll be “Banking on GRATITUDE”.

WHAT'S ON TAP

Melissa Hiatt, MA, CDWF, CDTLF, Strengths Communicator will present Unleashing the Superpower of Gratitude.
GRATITUDE is associated with a myriad of benefits, both mental and physical. Feeling thankful can improve sleep, mood and boost your immune system. It can also decrease depression, anxiety, and chronic pain symptoms. Ummmm… YES PLEASE! Engage with colleagues in exploring and expressing gratitude. Just imagine how well you’ll sleep tonight!

Registration is required to help us manage our Zoom numbers; however, there is no cost to attend. The link will be sent out 24 hours prior to event.

GSB Scholarship Deadline: May 10

Graduate School of Banking, in collaboration with SDBA, is a scholarship to applicants for the upcoming school session. The scholarship pays $1,500 per session toward GSB tuition for each of three GSB resident sessions, totaling $4,500. Applicants must be entering their first year at GSB.

Apply for this year’s scholarship HERE

To learn more about the Graduate School of Banking, please visit gsb.org or call 608-243-1945.

SDBA Welcomes Newly Re-elected Board Members

Pennie Lutz

Pennie Lutz is president and CEO of Richland State Bank in Bruce, where she has worked for 27 years. Until recently, She also served as the bank’s compliance officer and now serves as the Information Technology officer and CRA officer. Prior to joining the bank, she worked as an FDIC examiner out of the Sioux Falls office for almost seven years. Lutz, who is originally from Clear Lake, has a degree in business administration with an emphasis in accounting from the University of South Dakota. Lutz serves on the SDBA’s Women in Banking Work Group.

Pennie and her husband, Rob, have two grown children, Sierra and Spencer. Any spare time is spent in the garden or enjoying the lake. She is also an EMT with Bruce Fire and Rescue and is involved in the Bruce Community Club.

“I am honored to be able to work with a great group of people continuing to advocate for community banks.”

Keith Knuppe

Keith Knuppe is senior vice president-loan officer for BankNorth in Warner, where he has worked for twenty-two years (sixteen under First State Bank of Warner and the past six for BankNorth). Knuppe was raised on a ranch by New Underwood and received an ag business degree with minors in economics and marketing from South Dakota State University. He has been involved in the Warner football program as an assistant football coach for twenty-two seasons and has also been very involved in other youth programs in Warner. Knuppe is a founding board member of the Warner Area Community Foundation and a twenty-year member of the local Lions club.

Knuppe has served on the SDBA Ag Credit Committee for eighteen years, was part the 2013 National ABA Ag Conference planning committee, and served one term as a SDBA Board member. In his free time, Keith enjoys fishing, hunting, and spending time with his family, chasing his kids to all of their different events.

“Engagement in the SDBA has always been a priority for me to be able to learn, support, and promote the banking industry.”

Nate Franzén

Nate Franzen Nathan Franzén is president of ag banking at First Dakota National Bank in Yankton. He obtained degrees from Northern State University in management and marketing and an MBA from the University of South Dakota and is also a graduate of the ABA’s Stonier Graduate School of Banking. Franzén began his banking career in 1994 and has worked at First Dakota for more than 25 years.

Franzén is past chair of the SD Agriculture and Rural Leadership (SDARL) Foundation Board, ABA Agriculture and Rural Bankers Committee and SDBA Ag Credit Committee, and is the current board chair for the SD Agricultural Foundation. He has been heavily involved representing the Banking industry throughout his career. Franzén has testified before congress and met with many Senators, Representatives, and administration officials over the years.

“I am so proud of the Banking industry. We are a vital industry to the financial success of individuals, businesses, communities, and the economy at large. I am proud of our impact and bring passion to the effort of telling our story to leaders in our state and country.”

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CFPB Publishes Research Finding Higher Price Complexity Leads Consumers to Pay More

April 30, 2024 / Source: CFPB

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) issued a new report that suggests consumers tend to pay more for products that have more complex pricing structures. The report is based on experiments with multiple rounds of buyers and sellers interacting in simple markets, and found that participants tended to pay more when prices were broken into sub-parts and were harder to understand. The research has implications for understanding how junk fees impede fair and competitive pricing in markets like auto loans or mortgages, where consumers have to evaluate extended warranties, add-ons, closing costs, and a wide variety of other fees instead of an all-inclusive price.

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