With the recent roll-out of the vaccines for COVID-19, our hope is that you will be able to see your family and friends again soon in the new normal. We anticipate that you will be able to have your lobbies back open to your banking customers in the near future. We wanted to remind you that we continue to have some of our staff working remotely at this time due to COVID-19, however, personalized service is important to us so you should always be able to speak to a team member when you call into our offices. We ask that you stay safe and let us know if there is anything MIB can help you with during this difficult time we continue to be in.
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Check Fraud Update
Dal Bolt, NCP AAP - Director | ECCHO
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Check payments fraud is a part of check payments risk, and has been since the dawn of check payments. A landmark court case, Price v. Neal, decided in an English court in 1762 has long been used as the precedence for addressing and assigning the responsibility for forgeries and counterfeit check payments. This case determined that the party in the best position to know the drawer’s signature is responsible for a forged or counterfeit check.
The Uniform Commercial Code (UCC) incorporated this doctrine in Article 4-401 when it provides that a bank may charge its customer’s account for a check that is “properly payable”, which is further defined as “authorized by the drawer and in accordance with any agreement between the customer and bank.”
The UCC presentment warranties found in Articles 3-417 and 4-208 made by the presenting bank to the paying bank specifically states that the presenting bank “has no knowledge that the drawer’s signature is not authorized.”
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NACHA Sees Record Spike in ACH Payments during Pandemic
ABA Daily Newsbytes - Feb 5, 2021
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A total of 26.8 billion payments were made on the ACH Network in 2020—up 8.2% from a year prior—with a record of more than 2 billion new payments added, according to new figures released by NACHA yesterday. Of the total number of payments, 15.2 billion were debit payments and 11.6 billion were credit payments. The total value of ACH payments in 2020 was $61.9 trillion, up 10% from 2019. Check payments, meanwhile, fell by more than 21%.
Same-day ACH payments also continued to rise in popularity; same-day transactions rose 39% to 347 million, and total value increased 86% from 2019. NACHA will continue the expansion of its same-day ACH services in March, when it will implement a later same-day ACH window. Read more.
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Fed: 9 in 10 Small Businesses Seek Emergency Aid Amid COVID-19 Hardships
ABA Daily Newsbytes - Feb 4, 2021
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The vast majority of small firms—95%—said that the coronavirus pandemic affected their business, with 26% reporting temporary closures, 56% reporting reductions in operations and another 48% reporting modifications to their operations, according to the latest Small Business Credit Survey released yesterday by the Federal Reserve Banks. The survey was based on responses collected between September and October 2020, just after the closing the of the first round of Paycheck Protection Program funding.
For the first time in the survey’s five-year history, more businesses reported decreases in revenues and employment than increases; 78% of firms reported a decrease in revenue, while 46% reported declines in employment. More than half of all firms surveyed reported their financial condition as “fair” or “poor.” Sixty-five percent said that they were facing challenges meeting operating expenses, while 44% struggled to make payments on debt and 43% struggled to pay rent.
Nine in 10 firms sought some type of emergency funding to help meet these financing challenges, including 82% who sought a PPP loan, 47% who sought an Economic Injury Disaster Loan and 35% who sought an EIDL grant. Among PPP applicants, 96% who applied said they received at least some funding, and 80% said they expect their PPP loan to be forgiven in full.
Nearly half—48%—of PPP borrowers applied for funds through a small bank, while 43% applied to a large bank, 9% used an online lender, 5% used a credit union, 3% used a finance company and 2% used a community development financial institution. Borrowers also had the most success with receiving a fully funded PPP loan from a small bank (78%), compared to large banks (70%), online lenders (47%), credit unions (63%), finance companies (41%), and CDFIs (44%).
The Fed also asked firms if they would apply for additional government aid if offered. Sixty-four percent said they would apply, and of that, 39% believe it is unlikely their business would survive without further assistance until sales return to normal. Read the report.
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Consumer Fraud Losses Surge in 2020: FTC
ICBA Newswatch Today - Feb 9, 2021
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The Federal Trade Commission said it received more than 2.1 million fraud reports from consumers in 2020. Consumers reported losing more than $3.3 billion to fraud in 2020, up from $1.8 billion in 2019.
According to the FTC, imposter scams remained the most common type of fraud reported to the agency, followed by online shopping, internet services, prizes and sweepstakes, and telephone and mobile services.
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Common Community Names at .Bank Domain to be Available in March
ABA Daily Newsbytes - Feb 9, 2021
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Starting on March 1, a set of common community names for the .bank domain will be open for application from fTLD Registry Services, which oversees the domain. Names such as Farmersandmechanics.bank and firstamerican.bank will be available on a first-come, first-served basis for applicants that meet eligibility requirements.
Applications submitted before 11 a.m. EST on March 1 will not be considered. Prior to the launch of .bank in May 2015, fTLD reserved numerous domain names that were not available for immediate registration. Read more.
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MIB Community Banking Conference
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Please note new date!!
The MIB Community Banking Conference is going to be held August 25-27, 2021 at the Intercontinental Hotel on the Plaza in Kansas City, MO.
This will be the same great conference with the same great content you have come to expect from MIB.
If you have any questions regarding the conference or to inquire about sponsorship opportunities, please contact Donna Harden (dharden@mibanc.com).
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Fourth Quarter:
Employee of the Quarter - Amy Green, MIB
Honorable Mention - Jeemol Smith, MIB
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Question:
If a bank signs a long term contract to convert its in-house processing to a third-party data processing service, how does the bank account for its data processing equipment?
Answer:
ACS 360-10 requires that the equipment be accounted for as held for use as long as the equipment is still in use. Once the bank stops using the data processing equipment, the carrying amount of the equipment should be written down to its salvage value (if any).
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