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Bank Management and Directors Conference Nov. 5th
Embassy Suites - Little Rock
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Come hear Coach Neighbors kick off a great one-day event Nov.5th!
Something for everyone!
Telecommuting
HR and Medicinal Marijuana
Washington D.C. Update
The Growing Landscape of Cybersecurity
Compliance and Financial Accounting Update
SBA Arkansas Bank Lender Awards!
And More!
(6 Free CPE Credits!)
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Delay Should Not Postpone Preparations
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With a pending proposal by the Financial Accounting Standards
 Board to delay the Current Expected Credit Loss (CECL) standard's implementation deadline to 2023 for certain institutions, top accounting officials at federal agencies warned banks not to "rest on their laurels" when it comes to implementing CECL. Rather, banks should use that additional time for forecasting, parallel runs, establishing or modifying internal controls and "generally integrating the results of CECL into business processes," FDIC Chief Accountant Robert Storch said at a conference of the American Institute of CPAs.
While institutions have made progress toward implementing the CECL standard, Storch noted that about a
third of smaller community institutions have yet to develop an implementation plan.
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Fed Governor Bowman Confirmed for Full Term
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ICBA congratulated Michelle "Miki" Bowman on her confirmation to
 serve a full term on the Federal Reserve Board of Governors. While her previous bipartisan confirmation was for a term that expires Jan. 31, 2020, the Senate voted to confirm her for a full 14-year term.
Bowman made history last fall as the first person to fill the Fed's community banking seat, which exists because of ICBA's successful advocacy for Congress to require community bank representation on the Fed board.
"Governor Bowman's diverse professional experience and seasoned judgment have already begun to diversify and strengthen the board," ICBA President and CEO Rebeca Romero Rainey said.
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Movement on Cannabis Banking Bill
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Senate Banking Committee Chairman Mike Crapo (R-Idaho) indicated that he will hold a committee vote on a bill to help financial institutions serve marijuana-related businesses in states where cannabis is legal. "We're working to try to get a bill ready," Crapo told Politico. "I'm looking to see whether we can thread the needle."
During a July committee hearing Crapo added that he hoped to have a committee vote on a bill by the end of the year. He said he might draft his own bill or work to amend other pending bills, such as the SAFE Banking Act and States Act. Crapo said he was
motivated to move by the challenges faced by businesses that are connected to cannabis. "The impact on the ability of small and large businesses to operate justifies our attention," he said.
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Support for Bank Service Company Examination Coordination Act
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State bank regulators support the passage by the House of H.R. 241, the Bank Service Company Examination Coordination Act of 2019. This bill clarifies the ability of state and federal regulators to effectively coordinate bank vendor supervision, thus enabling banks to leverage the latest financial technology on behalf of their customers and communities. This CSBS-supported legislation advances a key component of CSBS Vision 2020, the state initiative to modernize financial services regulation.
The Bank Service Company Act authorizes federal regulators to examine bank vendors for potential risks. The majority of state banking regulators have the same responsibility and authority under state law to oversee the same vendors. Banks rely on these third-party service providers to support core banking functions like loan origination, cybersecurity, cloud computing and payment processing.
Examination of TSPs is a critical piece of assessing the safety and soundness of a financial institution, ensuring the stability of the entire banking system where state regulators oversee nearly four in every five U.S. banks.
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Loan Purchase Caps for Fannie Mae and Freddie Mac Raised
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The Federal Housing Finance Agency (FHFA) raised the cap structure on the multifamily businesses of Fannie Mae and Freddie Mac (the Enterprises). The new multifamily loan purchase caps will be $100 billion for each Enterprise, a combined total of $200 billion in support to the multifamily market, for the five-quarter period Q4 2019 - Q4 2020. The new caps apply to all multifamily business - no exclusions.
To ensure a strong focus on affordable housing and traditionally underserved markets, FHFA directs that at least 37.5 percent of the Enterprises' multifamily business be mission-driven, affordable housing. This new minimum of 37.5 percent responsibly assures that the Enterprises' multifamily businesses have a strong and growing commitment to affordable housing finance.
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Pay Data Collection Requirement Dropped
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The Equal Employment Opportunity Commission does not intend to renew its authority to collect data on employees' pay and hours worked (known as Component 2 Data) after that authority expires. That expiration is currently set for April 2021, under a federal court order that is under appeal.
The Obama administration had sought to collect Component 2 Data-which calls for submission of 3,660 data points per employer establishment-before the Trump administration halted the effort in 2017. In April 2019, the federal district court in D.C. ordered the EEOC to collect the expanded set of data. Employers with 100 or more employees are required to submit the data for calendar years 2017 and 2018 by Sept. 30, 2019. That requirement is not affected by EEOC's announcement.
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QUESTION:
What is the OFAC 50% rule?
ANSWER: The 50 percent rule is how OFAC determines whether companies not appearing on the Specially Designated Nationals list (SDN) are considered blocked because they are owned by other companies or people who do appear on the SDN list. Persons whose property and interest in property are blocked pursuant to an executive order or regulations that are administered by OFAC are considered to have an interest in all property of an entity in which such blocked persons own, whether that's individually or in the aggregate, directly or indirectly, a 50 percent or greater interest. That means if person A owns 50 percent of company X, company X is also blocked even though company X does not appear on the SDN list. If company X is blocked and it owns 50 percent of company Y, company Y is also considered blocked, even if that entity doesn't appear on the SDN list. Those entities that don't appear on the OFAC SDN list are sometimes referred to as shadow blocked entities because they do not actually appear on the list but are still considered blocked and U.S. persons are prohibited from transacting with them.
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