October 9, 2019
Community Bank Services

BKD 2010
Bankers Bank

Catch the SBA Arkansas Bank Lender Awards!
Find out who the winners are and how to be a winner
Only at    
Bank Management and Directors Conference Nov. 5th
Embassy Suites  -  Little Rock
Also, hear Razorback Women's Basketball Coach Mike Neighbors
kick off our event Nov.5th!
There's something for everyone!

HR and Medicinal Marijuana
ICBA Washington DC Update
The Growing Landscape of Cybersecurity
Compliance and Financial Accounting Update  
 SBA Arkansas Bank Lender Awards!   
And More! 

Check out the Agenda and Register!

(6 Free CPE Credits!)

Community Bankers Optimistic
Community bankers are optimistic about the future due to a favorable outlook for business conditions, monetary policy, and regulatory burden, according to the Conference of State Bank Supervisors.

The regulators' inaugural Community Bank Sentiment Index stands at 122, with 100 being neutral. According to the second-quarter index, 80 percent of surveyed banks said they believe profits will be the same or better in the future.

The index comes as the FDIC recently reported an 8.1 percent annual increase in community bank net income amid community bank successes on real-time payments, deposit-insurance assessment credits, cybersecurity assessments, and Fed Governor Michelle Bowman's confirmation for a 14-year term.
The Index  >> 

Ransomware Warning
The Internet Crime Complaint Center (IC3) has released an alert  on ransomware threats to U.S. businesses and organizations. Ransomware is a type of malware designed to deny access to a computer system or data until a ransom is paid. Cyber criminals often infect organizations with ransomware through email phishing campaigns or exploiting vulnerabilities in software or Remote Desktop Protocol (RDP).
The Cybersecurity and Infrastructure Security Agency (CISA) encourages users and administrators to review the IC3 Alert and CISA's resource page on ransomware for more information on protecting against and responding to ransomware.  

Community Banker Concerns Shift to Funding
Funding and cybersecurity top the concerns for community banks,  according to the sixth annual community bank survey conducted by the Conference of State Bank Supervisors (CSBS). It is a marked shift from previous years, when regulatory compliance costs were found to be the chief issue for community banks.  
This year's survey showed 36% of banks said funding costs were the most likely factor to influence future profitability, up from 11% in 2016. More than 70% of respondents ranked cybersecurity as their most important risk. Only four percent of surveyed banks said that regulation was most likely to influence profitability, compared to the 60% of respondents who named it as a top concern two years prior.  
In its sixth annual survey, CSBS canvassed 571 community banks in 37 states. Other key findings from the 2019 survey include:  
  • Compliance-related costs increased 4% in 2018, in contrast to the 13% drop reported the prior year; however, with a total of $4.9 billion, those costs are much lower than the peak of $5.4 billion set in 2016
  • Nearly 30% of bankers considered depopulation an important limitation to retaining core deposits
  • While last year's survey showed community banks were embracing technology, the actual number of those offering digital and online services remains largely unchanged due to cost.
The Survey  >> 

Management Interlock Rules Updated
The federal bank regulatory agencies finalized updates to rules  restricting the ability of a director or other management official to serve at more than one depository institution or depository holding company. The updates provide relief for community banks that have $10 billion or less in total assets.
Previously, the management interlock rules prohibited a management official working at a depository institution or holding company with more than $2.5 billion in total assets from simultaneously working at an unaffiliated depository organization with more than $1.5 billion in total assets. The previous thresholds were established by Congress in 1996. To account for changes in the market, the final rule increases both thresholds to $10 billion in total assets, as the agencies proposed previously.
Management officials will generally remain prohibited from serving with multiple depository organizations that are above the new thresholds, limiting the potential risk of anticompetitive conduct at larger institutions.  

Keep Debt-Collection Rule Limited to Third Parties
ICBA called on the Consumer Financial Protection Bureau to l imit  its debt-collection rulemaking to third-party debt collectors.

In a comment letter, ICBA urged the bureau not to promulgate the rule using its authority to regulate unfair, deceptive, or abusive acts or practices, which could ultimately cover community banks and other first-party debt collectors.

Rather, the bureau should use its sweeping authority under the Fair Debt Collection Practices Act, ICBA wrote.
The Letter  >> 
The Answer of the Week
QUESTION:   Is a depositor permitted to have multiple savings accounts and use them to exceed the transfer and withdrawal limitations? 
ANSWER:  The Federal Reserve Board has determined that if a bank suggests or promotes the establishment of or operation of multiple savings accounts with transfer capabilities in order to permit transfers and withdrawals in excess of those permitted by Regulation D for an individual savings account, the accounts should be considered transaction accounts. This determination applies regardless of whether the deposits have entirely separate account numbers or are subsidiary accounts of a master deposit account. However, multiple savings account, should not be considered to be transaction accounts if there is a legitimate purpose, other than increasing the number of transfers or withdrawals, for opening more than one savings account.
Reference: Interpretation 204.133(c) to 12 CFR 204.