With a request for information posted in the Federal Register on Monday, the FDIC is looking for feedback on insured depository institutions’ current and potential digital asset activities.

According to the agency, there are “novel and unique considerations” related to digital assets—often called digital currency or cryptocurrency—and “given that banks are increasingly exploring the emerging digital asset ecosystem,” information gathered will help inform FDIC’s understanding of industry and consumer interests.

The OCC on Tuesday said it will formally “reconsider” the agency’s June 2020 final rule revising the agency’s Community Reinvestment Act rules and that banks subject to the rule may pause efforts to comply with it. “While this reconsideration is ongoing, the OCC will not object to the suspension of the development of systems for, or other implementation of, provisions with a compliance date of Jan. 1, 2023, or Jan. 1, 2024, under the 2020 CRA rule,” the agency said.

ABA President and CEO Rob Nichols welcomed the news. “By reconsidering its CRA Rule, the OCC provides an opportunity for the regulatory agencies to pursue a joint rulemaking in this area,” he said. “We still believe there is a compelling need to modernize CRA rules so they reflect the modern banking system and meet the needs of communities. Today's action by the OCC can help us get there.”

Amid substantial growth in online purchases in recent years, the Federal Reserve last Friday reopened its rule on the Durbin Amendment. Specifically, the Fed issued a proposal that would amend Regulation II, which implements Durbin, to apply the requirement that debit card transactions be able to be processed on at least two unaffiliated payment card networks—for example, a PIN debit and a signature debit network—to card-not-present transactions, which have grown from 10% of debit purchases in 2009 to 23% in 2019.

When the Fed first issued Reg II, “the market had not developed solutions to broadly support multiple networks over which merchants could choose to route [CNP] transactions,” the Fed said, noting that technology has since evolved to address these issues. “Despite these developments, and in contrast to the routing choice that currently exists for card-present transactions, merchants are often not able to choose from at least two unaffiliated networks when routing card-not-present transactions, according to data collected by the Board and information from industry participants,” the Fed said.

If you haven’t yet registered to attend the 2021 Quad States Convention on June 14-15 in Rapid City, S.D., the early bird deadline to register is Friday, May 14.

The South Dakota Bankers Association invites you to celebrate all that we have accomplished this past year as we REIMAGINE, REINVENT and REVOLUTIONIZE in A NEW DIRECTION at the 2021 Quad States Convention. This year’s event will include bankers and business partners from South Dakota, North Dakota, Montana and Wyoming.

Chuck Hegerfeld, BankStar Financial, Elkton, has been appointed to the United Bankers’ Bancorporation, Inc. (UBBI) and United Bankers’ Bank (UBB) Boards of Directors.

Hegerfeld has been president and CEO of BankStar Financial since 1998. He brings more than 30 years of bank management experience and is a graduate of South Dakota State University and the Graduate School of Banking at Colorado. Hegerfeld is a member of the South Dakota Bankers Insurance & Services (SDBIS) Inc. Board of Directors, an officer and director at Elkton Development Corporation, and is involved in various local community and nonprofit organizations.

John McGrath, First PREMIER Bank, Sioux Falls, has been appointed to the Board of Directors for the South Dakota Bankers Association (SDBA), the professional and trade association for South Dakota’s financial services industry. SDBA Chair Steve Bumann, BankWest, Pierre, appointed McGrath to fill a vacant seat on the SDBA Board of Directors through April 30, 2022.

McGrath is SVP – chief credit officer at First PREMIER Bank. He has a commercial economics degree from South Dakota State University and has worked in the banking industry for 43 years. McGrath started his career in 1978 with First National Bank of the Black Hills (now Wells Fargo) in Rapid City and the following year joined Miners & Merchants Bank in Lead. In 1984, McGrath moved to Norwest (Wells Fargo) and worked in Deadwood, Sioux Falls and Rapid City before joining First PREMIER Bank in Sioux Falls in 1994.

The South Dakota Bankers Association (SDBA), the professional and trade association for South Dakota’s financial services industry, recently held elections for three of the 10 seats on its Board of Directors. Elected to serve on the SDBA Board of Directors were:

• Nathan Franzen, President of Ag Banking, First Dakota National Bank, Yankton
• Keith Knuppe, Senior Vice President-Loan Officer, BankNorth, Warner
• Pennie Lutz, President/CEO, Richland State Bank, Bruce

This is Franzen, Knuppe and Lutz’s first term on the SDBA Board of Directors. They started their three-year terms on May 1, 2021.

The ABA Foundation will host a free webinar on Wednesday, May, 12 at noon CDT examining new research from the FINRA Foundation and AARP Fraud Watch Network on the drivers of chronic fraud victimization. The virtual panel will also feature a banker expert from Citi, who will discuss strategies to protect elders and other vulnerable customers from fraud. Register for the webinar.

The Small Business Administration informed trade associations on Tuesday that Paycheck Protection Program funding has been exhausted and that the PPP application portal stopped accepting applications for loans from most lenders.

SBA said that it has reserved approximately $6 billion in funding for previously submitted loan applications subject to hold codes that have yet to be resolved. There is also approximately $8 billion remaining in congressionally mandated funding for PPP loans made by designated “community financial institutions,” defined for bankers’ purposes as minority depository institutions and community development financial institutions.

In a significant move yesterday, the Federal Reserve proposed new guidelines that it will use when evaluating requests for master accounts with the Fed or access to the agency’s financial services. The proposal comes amid growing requests from fintech firms and other providers to gain access to the payments system. Comments on the proposal are due 60 days after publication in the Federal Register.

Under the proposed guidelines, the Fed will consider:

In advance of his speech last night to a joint session of Congress, President Biden yesterday unveiled the "American Families Plan," a $1.8 trillion proposal that calls for significant federal spending on education, children and families, nutrition and other initiatives through direct expenditures and targeted tax credits.

The administration proposes to pay for the President’s plan through an increase of the top individual rate to 39.6% from 37%, elimination of the capital gain rate preference for taxpayers with income of more than $1 million, elimination of certain real estate 1031 exchanges and an increase in Internal Revenue Service enforcement.

The SDBA reminds those planning to attend the 2021 Quad States Convention on June 14-15 in Rapid City to reserve their hotel rooms soon as some venues are filling quickly. This year's convention is being held at The Monument, which is the former Rushmore Plaza Civic Center. 

The SDBA has reserved blocks of hotel rooms at the Holiday Inn Rapid City-Rushmore Plaza, Howard Johnson and Ramkota Hotel and recently added a block of rooms at The Rushmore Hotel & Suites. The cut off dates for the room blocks vary by hotel from May 11-17. View hotel details. 

The South Dakota Supreme Court heard arguments for and against Amendment A in Pierre on Wednesday. Voters last November approved Amendment A, which legalizes recreational marijuana for people over age 21 and gives the power of regulation to the South Dakota Department of Revenue.

In February, a Circuit Judge ruled in favor of those trying to stop Amendment A, and supporters are appealing to the state’s highest court. At the heart of the lawsuit is whether the amendment comprises more than a single subject, which it cannot, and whether the amendment is considered to be an amendment or a revision to the South Dakota Constitution.

By a bipartisan vote of 321 to 101 on Monday night, the House passed the SAFE Banking Act of 2021, the ABA-supported bill that provides clarity to financial institutions seeking to serve legitimate cannabis businesses. “We thank Rep. Perlmutter (D-Colo.) and the bill’s 180 cosponsors for their leadership and support and urge the Senate to move quickly to pass this much-needed legislation to clarify these issues for both the banking industry and regulators,” ABA President and CEO Rob Nichols said after the bill's passage. 

Earlier in the day, ABA and 51 state bankers associations wrote to lawmakers in support of the bill, which provides a safe harbor for depository institutions seeking to serve legitimate cannabis-related businesses in states where such activity is legal. The SDBA thanks Congressman Dusty Johnson for voting in support of the bill. 

The 2021 Bank Compliance School is set for May 24-27 in Bismarck, N.D., and virtually. Compliance Alliance is offering the school in partnership with the South Dakota Bankers Association, North Dakota Bankers Association, Montana Bankers Association and Wyoming Bankers Association.

Lending compliance will be covered on May 24-25, and operations compliance will be covered on May 26-27. Attendees can register for the entire school or the lending or operations modules. Compliance officers, internal audit staff and any employee who assists with compliance management should attend the school.

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

ABA and six other financial trade groups last Thursday requested that the Internal Revenue Service improve its Get My Payment website to provide more accurate and timely information about the status of economic impact payments. In a letter to the IRS, the groups called for timely updates to the database that would allow, for example, a recipient to know as soon as possible if his or her ACH payment was returned and reissued as a paper check. The groups also requested that the website accept bank routing information from payment recipients again to reduce reliance on paper checks.

To improve the payment process, the groups also asked that the site include a notice informing recipients that financial institutions do not have access to recipient information and that the information provided on the site may be inaccurate due to delays in updating accurate status of the payment.

Financial institutions complying with the Current Expected Credit Loss standard (CECL) in 2023 have to manage a myriad of new data, modeling and forecasting considerations. With new requirements comes new expertise and time constraints.

The Graduate School of Banking (GSB) at the University of Wisconsin will be host an in-depth virtual workshop, CECL Foundations, on May 11-12. The workshop will describe the new standard, recommend modeling best practices, identify key players at the financial institution, examine forecasting and share case studies from those who have done it before, including the SEC-filing institutions who implemented last year.

The future of the banking industry depends on developing the next generation of leaders today. As banking continues to evolve, it is critical for leaders to continue their growth and development.

The ABA will hold the Emerging Leaders Forum virtually on April 28-29. Bankers participating in this two-day virtual forum will hear from ABA leadership and experts on the science of energy management, organizational change, strategic thinking and other thought-provoking topics. Confirmed speakers include ABA Chairman Jim Edwards, ABA CEO Rob Nichols, Dr. Sahar Yousef and Professor Lucas Miller from UC Berkeley, Wharton professor Jonah Berger and expert negotiator Scott Wayne.

Whether you're in need of on-demand project support, looking for a scalable win-win to connect with students from underrepresented backgrounds or looking for ways to connect with students in this virtual environment, micro-internships can be a valuable tool. BankTalentHQ, an SDBA endorsed vendor, has partnered with Parker Dewey, an organization which specializes in coordinating the innovative concept of micro-internships.

Micro-internships are short-term, professional projects that typically require between 10 to 40 hours of work by the college student or recent grad and are due within a few days to a few weeks. While the projects may not be the best use of time for you or your team, college students and recent grads are excited to gain professional experience.  As a result, not only do you get on-demand support, but this also allows banks to see if someone is a good fit for a permanent role.