Banking News

ABA Advocates for Changes to 2018 Farm Bill February 24, 2017

At a Senate Agriculture Committee field hearing in Kansas yesterday, ABA highlighted the critical role that the nation’s banks play providing credit to farmers and ranchers, and advocated for changes to the upcoming 2018 Farm Bill that would take into account the rising costs of agriculture.

Testifying on behalf of ABA, Shan Hanes, president and CEO of First National Bank in Elkhart, Kan., and a member of ABA’s Agricultural and Rural Bankers Committee, urged lawmakers to reform the USDA Guaranteed Farm Loan Program, calling for an increase to the lending limit cap on guaranteed ownership and guaranteed operating loans, as well as other reforms that would help modernize the programs. He also encouraged lawmakers to make changes to agriculture risk coverage and price loss coverage programs in response to volatility in commodity prices that farmers have experienced in the last few years.

Hanes also raised concerns over the increasing size and complexity of the taxpayer-backed Farm Credit System, which, if it were a bank, would be the ninth largest in the U.S. “Congress created the FCS as a public option for farm finance 100 years ago when farmers were having trouble getting the credit they needed,” Hanes said. “These conditions no longer exist, and yet we continue to have a government assisted, tax-advantaged farm lender providing credit to customers who would be able to easily borrow from taxpaying institutions like mine.” Read the testimony.

Sheltered Harbor Website Launches February 24, 2017

The Sheltered Harbor initiative -- an industry effort to improve sector-wide resilience in the face of a cyberattack -- this week launched its website, processes. The site provides detailed information about the initiative, including frequently asked questions, and a form for those interested in joining.

Led by the Financial Services Information Sharing and Analysis Center, Sheltered Harbor is a collaboration between a number of financial trade associations, including ABA. Bankers from several ABA member banks serve on the Sheltered Harbor board, including Reading Cooperative Bank in Reading, Mass.; Eastern Bank in Boston, Mass.; FirstBank in Denver, Colo.; Northwest Financial Corporation in Arnolds Park, Iowa; and Lewis & Clark Bank in Oregon City, Ore.

Sheltered Harbor enables banks to store encrypted customer account information in secure “data vaults” so that it can be quickly accessed and restored after a cyber incident. In the event that an institution is unable to recover from a cyber incident in a timely manner, Sheltered Harbor will ultimately allow data to be made available to customers through a service provider or other financial institution.

Sheltered Harbor members have access to industry data storage and recovery standards, and are acknowledged as being “Sheltered Harbor Ready” once they have implemented the appropriate processes. Visit the website. For more information, contact ABA's Doug Johnson.

Ely: New FCA Chair to Push for Non-Farm Partnerships February 24, 2017

In a recent speech, Dallas Tonsager, the chairman and CEO of the Farm Credit Administration, said that the FCA will continue working to bring clarity to the approval process through which Farm Credit System banks can participate in partnerships “with veterans’ groups, land grant universities and urban communities,” Bert Ely reported in the latest edition of ABA's Farm Credit Watch e-bulletin on Wednesday.

While Tonsager noted that such partnerships have led to hospitals, schools and other community facilities, Ely pointed out that “there is one problem -- the Farm Credit Act does not authorize FCS institutions to finance such facilities, even though they may be in rural America.”

Tonsager also raised the issue of the FCS’ structure in his speech, adding that he “would like to propose a year of dialogue” between FCS and FCA to determine whether the current structure of banks and associations is appropriate. Notably, however, “Tonsager ignored the very important role that Congress and the FCS’ taxpaying competitors should play in that discussion,” Ely added. Read Farm Credit Watch.

Nichols Announces Program to Help Bankers Run for Office February 23, 2017

As part of ABA’s efforts to promote a pro-growth policy environment, ABA President and CEO Rob Nichols on Monday announced that the association will pilot a workshop in the fall to help bankers run for state or federal office. Set for Sept. 13-15, 2017, in Washington, D.C., the program will provide information on how to file necessary paperwork, managing paid and earned media, fundraising, research and targeting and getting out the vote.

“It’s important that those casting votes on banking policy fully understand and appreciate the impact their decisions will have on a community and its residents,” Nichols remarked at ABA’s National Conference for Community Bankers in Orlando. Noting that just 35 of the 535 members in the last Congress came from the banking profession, he appealed to bankers and bank directors, as community and economic leaders, to run for public office. “When it’s time to set banking and economic policy, nothing beats real-world banking experience.”

Applications for the program will open in March but bankers can register their interest now at Accepted applicants will pay a $250 registration fee and their travel and hotel costs. Learn more now. For more information, contact ABA's Brittany Grimm.

As Tax Season Kicks Off, IRS Warns of W-2 Phishing Scam Targeting HR Employees February 22, 2017

The Internal Revenue Service February 22 warned the public of a widespread email phishing scheme that scammers are using to steal sensitive employee information and commit financial crimes, including filing fraudulent tax returns. The scam typically involves a fraudster sending a spoof email to a payroll or human resources employee that appears to come from the organization’s CEO requesting a list of employees and their W-2 tax forms. Scammers may also follow up with additional “executive” requests to wire money to a specific account, the IRS said.

The IRS noted that this year, scammers are targeting a broader cross-section of organizations, including school districts, tribal casinos, chain restaurants and other corporate and nonprofit entities. Read more about the scam and how to report it.

ABA, Groups Seek Forbearance on Variation Margin Rule February 16, 2017

With a March 1 compliance deadline looming for when swap dealers and major swap participants must exchange variation margin for swaps not cleared through a central counterparty, ABA and several other trade groups have urged regulators to provide a transition period to facilitate compliance.

“While the systemic risk implications of granting forbearance are low, it is clear to the associations that the documentation and operational challenges that are necessary to comply with the VM regulations by March 1 are high, despite concerted and continuing effort by our members and other market participants,” the groups said.

They warned that without a transition period, many market participants might have to significantly curtail their derivatives trading activities -- resulting in disruption and market fragmentation. “[R]egulatory forbearance with respect to the VM regulations strikes an appropriate balance between upholding the integrity of the regulations while preserving an open and stable derivatives market,” they said. Read the letter.

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2017 Milestones in Banking Awards

Please help us recognize those individuals who are celebrating their 40-year and 50-year anniversaries of service to our banks by completing and returning the following forms:

At least seven banks across the country received demand letters that challenge their website compliance with Web Content Accessibility Guidelines. We have reason to believe the number of these lawsuits will rapidly climb. Arkansas banks need to be on alert.

Click here to learn more

FS-ISAC Security Update

FS-ISAC Security Information Available to ABA Members

ABA members can now access FSā€ISAC security threat information via the FS-ISAC Weekly Risk Summary Report, designed for community institutions to deliver timely and actionable information on significant security threats.

Click here to access the most recent Weekly Risk Summary Report.