Fed to Remove Caps on Coin Distribution

The Federal Reserve has announced that it will return to regular coin distribution for all coin denominations beginning on Friday, Jan. 15. The Fed had previously capped coin orders due to coin circulation issues that resulted from the COVID-19 pandemic.

The Fed noted that while coin circulation “has not fully returned to normal patterns,” steady deposits from financial institutions and increased production at the U.S. Mint have enabled it to remove coin allocations. The Fed said it will continue to monitor coin circulation and urged all FedCash Services customers “to continue to order only what they need to meet near-term demand and to deposit any excess coin to the Federal Reserve.”

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SDDH Announces Beginning Stages of Priority Group 1D Vaccinations for Next Week

The South Dakota Department of Health yesterday announced that starting on Monday, Jan. 18, the Department and its health partners across the state will start vaccinating a prioritized population group, within Group 1D, of the state’s vaccination plan. This first prioritized population group will be those 80 and over as well as high-risk individuals and will be expanded to other groups within 1D as vaccines become available. The modification comes amidst the federal government’s plan to release vaccines to states to speed up vaccinations nationwide.

“Given the progress we’ve seen in groups A through C, we are confident that with an increase in vaccine allocations, we can move into a limited population of group 1D. We will begin with those 80 and over and high-risk individuals, and from this starting point, adjust accordingly as allocation permits,” said Secretary of Health Kim Malsam-Rysdon. “We want to reassure those who’ve already received their first dose, and those in groups A through C who are already in the queue, that their second-dose will be available.”

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SBA to Open PPP Portal to Lenders with Less Than $1B in Assets on Friday

The Small Business Administration will open the Paycheck Protection Program portal on Friday to lenders with $1 billion or less in assets to begin processing both new and second-draw loan applications. The program will then open to all other lenders on Tuesday, Jan. 19.

The program opened on Monday morning for certain lenders reaching underserved communities, including community development financial institutions and minority depository institutions, to make first-draw loans and was opened to second-draw loans by these lenders on Wednesday.

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$50 Million Gift Kickstarts First Need-Based Scholarship in South Dakota

First PREMIER Bank, PREMIER Bankcard and T. Denny Sanford yesterday announced a gift of $50 million to establish a need-based scholarship in South Dakota. The $50 million gift is just the start of what will be a $200 million endowment to fund future need-based scholarships in perpetuity. 

“Today’s announcement is historic for South Dakota and will help us retain talented young people in our state for generations,” said Gov. Kristi Noem. “We’ve identified the need for this type of scholarship for years, and I'm asking the Legislature to match this incredibly generous gift so that we can continue to make South Dakota stronger for our kids and grandkids.”

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SDDH Launches New COVID-19 Vaccination Info Tools

The South Dakota Department of Health yesterday released two tools designed to better inform South Dakotans on the ongoing COVID-19 vaccine distribution and administration process. These tools are in addition to the already available dashboard, which is updated daily.

The first tool is a county-by-county map linking residents to the health care system(s) charged in overseeing vaccine distribution and administration in their area, in collaboration with the Department of Health. The second provides residents an estimated timeline of vaccine availability, depending on which priority group (A-E) they belong to in accordance to Phase 1 of South Dakota’s vaccination plan. The latter is also available in Spanish. Detailed information on prioritized populations can be found here: English/Spanish.

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SDBA to Hold State Legislative Day Virtually

Picture of state seal.The SDBA will hold its 2021 State Legislative Day on Feb. 10 virtually via Zoom. This is your opportunity to stay up-to-date on both state and federal legislation which could affect the banking industry and make sure our industry is heard. 

Featured speaker Joan Woodward, president of Travelers Institute and executive vice president of public policy at Travelers, will present "Woodward on Washington: An Economic and Political Outlook." Prior to working for Travelers and Goldman Sachs, Woodward worked on Capitol Hill for 12 years as deputy chief of staff for the U.S. Senate Finance Committee. She also was the chief economist for the Senate Governmental Affairs and U.S. House Budget committees.

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SDBA to Hold Virtual Cannabis/Hemp Banking 101 Webinar

Picture of cannabis products. With the passage of Amendment A and Initiated Measure 26 legalizing medical and recreational use of marijuana in South Dakota, the SDBA is committed to supporting its member banks during this transition.

The SDBA, in conjunction with the Montana Bankers Association, is hosting the Cannabis/Hemp Banking 101 Webinar on Jan. 20-21. The webinar, which will be held virtually via Zoom, is an opportunity to learn cannabis/hemp banking basics and a chance to ask questions of industry experts. 

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CDC Recommends Bank Workers Be in Third Phase of Vaccinations

A panel of the Centers for Disease Control and Prevention last Sunday voted to include financial services workers in Phase 1c of COVID-19 vaccinations. Under the recommendations of the CDC’s Advisory Committee on Immunization Practices, banking employees would be prioritized for vaccine doses alongside workers in sectors considered essential but with a substantially lower risk of exposure to COVID-19.

ABA strongly urged the committee to include frontline bank employees—such as tellers and loan officers—in Phase 1b, given their regular contact with the public. “We believe these frontline workers face the highest risk of infection, pose the greatest risk of spreading the virus if infected, and are absolutely essential, especially in communities where residents may not have access to electronic banking tools,” ABA said in a letter to the CDC last week.

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Congress Approves COVID-19 Relief Bill, Reauthorizes PPP

House and Senate lawmakers late Monday night passed a $900 billion bipartisan coronavirus relief package. President Donald Trump on Tuesday night suggested he might not sign the bill, calling it a “disgrace” and demanding a boost in payments to households.

The ABA has prepared a staff analysis for bankers of the provisions currently included in the 5,500-page bill that affect the banking industry. Among other things, the bill includes several ABA-backed provisions, including:

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ABA Offers Resources, Talking Points on Relief Bill

The ABA has prepared a resource for banks to help them immediately prepare for the large number of EIPs that could be sent via ACH on the first day of processing—which could come as early as this weekend.

ABA is encouraging banks to take steps including planning to have call center and ACH operations staffing levels ready as well as ordering and moving sufficient cash to meet a surge in ATM and branch withdrawals as EIPs land in customer accounts. ABA has also prepared a set of talking points that address the EIPs, as well as other key provisions of the bill.

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ABA-Advocated Provisions Expected in Bipartisan COVID-19 Package

As negotiations continue on Capitol Hill over a bipartisan, $908 billion coronavirus relief package, draft language released by the congressional negotiators indicates that several ABA-advocated provisions are likely to be included. These key provisions include a $300 billion Paycheck Protection Program reauthorization along with several enhancements: a simplified forgiveness application; language holding PPP lenders harmless; and clarification on agent fees, the deductibility of Economic Injury Disaster Loan advances from PPP loan forgiveness and the tax-deductibility of business expenses paid for with PPP loan proceeds.

Amid the fluid negotiations, ABA continues to advocate for extensions on CARES Act provisions like the treatment of troubled debt restructuring accounting to ensure banks can continue to provide a wide range of forbearance options to borrowers affected by the pandemic. For more information, contact ABA’s James Ballentine.

FDIC Finalizes Changes to Brokered Deposit Rules

The FDIC on Tuesday finalized long-awaited changes to modernize its existing brokered deposit rules and foster greater innovation by financial institutions. The final rule establishes a new framework for designating an entity as a “deposit broker” and amends the methodology for calculating the national rate and national rate cap for specific deposit products.

The final rule narrows the definition of “deposit broker.” It also designates certain business relationships and services that meet the rule’s “primary purpose exemption,” and do not require an application to the FDIC. These designated exemptions include: deposits where the agent has less than 25% of the total “assets under administration” for its customers; health savings accounts; deposits related to certain real estate and mortgage servicing transactions; certain retirement funds; and customer funds held for various regulatory, tax and other government purposes.

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SD Bankers Foundation Scholarship Application Deadline Extended

The application period for the South Dakota Bankers Foundation’s new post-secondary scholarships has been extended to Dec. 31, 2020. SDBA member banks can apply for one of 40, $2,000 scholarships.

The scholarships must be awarded to South Dakota college juniors/seniors with an expressed interest in banking/financial services or second-year South Dakota technical school students with an expressed interest in banking/financial services. There is no match required by member banks, however banks may choose to supplement the $2,000 scholarship to increase its attractiveness. Recipient banks must award the $2,000 as one scholarship.

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Beacom School of Business to Hold Virtual Networking Event

The University of South Dakota Beacom School of Business' Career Success Center is planning a Spring 2021 – Virtual Networking Event on Thursday, Jan. 21, at 3-5 p.m. CST. The event is an opportunity for employers to network, virtually, with students.

Businesses will be able to virtually chat with students individually or as a group. During businesses' time with students, they are welcome to share information about their company and any full-time, part-time or internship opportunities they may have available immediately or in the near future (e.g. spring 2021 or summer 2021). During the event, businesses may collect contact information when they visit with students to keep in touch with them moving forward.

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BHG to Host Webinar Featuring Risk Management Experts

Bankers Healthcare Group (BHG), a new SDBA associate member, is hosting a free webinar “Regulatory Risk Trends in Small Business Lending Today and Under the New Presidential Administration" on Thursday, Dec. 17, at 1 p.m. CST. The session will tackle some of the most relevant regulatory and compliance challenges banks are facing today, including fair lending, UDAAP and data collection rules that impact small business lending, among others.

Join BHG's panel of speakers including former senior examiners of the OCC, FDIC and CFPB and industry leading compliance experts for this informative session. The presentation will be followed by a live Q&A session with audience participation. Register for the webinar.

ABA, State Bankers Associations Call on Congress to Extend TDR Provision

ABA and 51 state bankers associations yesterday called on lawmakers to extend the troubled debt restructuring provisions in the CARES Act that allow banks to suspend generally accepted accounting principles for COVID-19 related loan modifications.

Once a loan is classified as a TDR, the groups said, it often requires twice the regulatory capital of other loans, and is ineligible for consideration as collateral at the Federal Reserve, often requiring the bank to take remedial steps against a loan, including foreclosure. The associations wrote that "[i]t is critically important that the TDR relief in the CARES Act (Section 4013) be extended before the end of 2020 so that America’s banks can continue to fulfil their role as financial first responders in the communities they serve."

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Noem Announces New SDHDA Executive Director

Gov. Kristi Noem announced that Lorraine Polak will be appointed executive director of the South Dakota Housing Development Authority (SDHDA), effective Jan. 8, 2021. Polak will replace Mark Lauseng, who is retiring.

“Lorraine has a great understanding of SDHDA’s programs and all the opportunities that they present,” said Gov. Noem. “She will be a dedicated leader and an invaluable partner as it relates to carrying out SDHDA’s mission for the people of South Dakota.”

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SBA Outlines Procedures for PPP 'Loan Necessity' Questionnaires

The Small Business Administration last Wednesday outlined procedures for lenders in handling the loan necessity questionnaires that SBA is requesting for PPP loans totaling $2 million or more. The procedures were detailed in a user guide and introductory letter sent using SBA’s PPP forgiveness platform.

According to the documents, lenders will receive notice of requests from SBA for questionnaires via the SBA forgiveness platform at forgiveness.sba.gov. The questionnaires—SBA Form 3509 for for-profit borrowers and Form 3510 for nonprofit borrowers—are available there, and the platform now accepts online submission of the completed questionnaires. Lenders must notify the borrower of the request within five business days and should advise the borrower to complete the form within 10 business days, SBA said. Lenders must upload the completed questionnaire, manually enter borrower responses and upload supporting documentation within five business days of receiving it.

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SBA Releases PPP Loan Data; ABA Updates Talking Points and Resources

The Small Business Administration on Tuesday released names, addresses, loan amounts and names of lenders for all Paycheck Protection Program borrowers. The release came after a court order in a lawsuit brought by media organizations seeking the data.

After the data release, ABA heard that some third-party businesses were using the publicly released data to solicit business from PPP borrowers, specifically referencing the name of the lending institution—in some cases not disclosing that they are unaffiliated with the PPP lender, and others are implying a business relationship where none exists. ABA has updated its bankers-only talking points document with information to help bankers respond and provided a free sample email that bankers can adapt to communicate with their clients.

ABA Survey: 51% of Ag Borrowers Profitable in 2020

Amid ongoing stresses in the ag sector and economic dislocation from the COVID-19 pandemic, lenders reported that just under 51% of their agricultural borrowers were profitable in 2020, a decline of six percentage points from the prior year, according to the latest agricultural lenders survey conducted by ABA and Farmer Mac. About half of the lenders, 49%, said do not expect borrower profitability to improve in 2021 and respondents expressed the most concern about the grain, dairy and cattle sectors.‌

Credit quality and the deterioration of agricultural loans were ranked as the top concerns facing lenders in 2020 for institutions of all sizes and across all regions. Competition from other lenders and weak loan demand were also ranked as leading concerns. Nearly 60% of lenders said they expect delinquencies to increase for agricultural production loans over the next year. Nearly three in five lenders reported that demand for agricultural production loans was flat over the last six months.

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