Pub. 16 2021-22 Issue 2

Please visit nebankers.org/education.html or call the NBA Education Center at 402-474-1555 for the most current event schedule.  AUGUST 2021 School of Trust & Financial ServicesAugust 23-27Manhattan, KSNew Account Documentation and Compliance WorkshopAugust 24Kearney, NEAdvanced Trust SchoolAugust 24-26Manhattan, KSNew Account Documentation and Compliance WorkshopAugust 25Lincoln, NE SEPTEMBER 2021 Fall Agri-business ConferenceSeptember 2-3Lincoln, NE Bank Compliance SchoolSeptember […]

The FASB’s new credit loss model is one of the most significant accounting changes in recent history. The time to act is now – here is how you can prepare and comply.

At the onset of the COVID-19 pandemic in the United States, strict shutdowns and stay-at-home orders created concern for the economy and municipal finances. Forecasts for tax revenue were bleak with anticipated double-digit declines, and many state and local governments braced for a serious financial blow by adjusting budgets, cutting expenses, and delaying non-essential projects. More than a year has passed since the beginning of the pandemic, many governments have published financial statements that include at least a portion of the pandemic, and we now have much more data about how the pandemic has affected municipal credit quality.

At the beginning of the year, Acting Director Dave Ujieo of the Consumer Financial Protection Bureau (CFPB) stated the agency would shift its focus to a more assertive role regarding enforcing regulations protecting consumers. Because of this shift, one of the chief enforcement priorities would be to emphasize protection and compliance with regulations for borrowers impacted by the COVID-19 pandemic. In addition, now that we are in the middle of 2021, the CFPB has published a report analyzing data on mortgage borrowers most affected by the pandemic and proposed a collection of rules extending protections at least until the middle of next year. Because of these publications, banks should prepare for a more significant regulatory emphasis on COVID-19 protections and fair lending practices.

Monitoring firewall traffic is a fundamental part of cybersecurity. It is well known that ingress filtering is crucial to business operations, but what about egress filtering? Neglecting egress filtering can be compared to neglecting your company’s yearly budget. Just for a moment, imagine giving all your employees blank checks and hoping they do not bankrupt you. If your first thought when reading that sentence is “we would never do that,” then you are part of the majority. There are many things to consider when implementing a company’s budget: Who has the authority to spend? On what are employees authorized to spend money? Which employees have bigger budgets than others? How much can the company afford to spend? To avoid financial hardships, your company tracks all outgoing purchases. In this example, the blank checks are traffic leaving your firewall, and the employee’s purchases are connections to anything on the internet. Controlling the egress flow of information is just as important as managing the outflow of cash to your organization. Implementing host-based egress filtering, especially whitelisting with DNS verification, decreases risk across your entire enterprise.

On May 25, 2021, Governor Ricketts signed the Nebraska Financial Innovation Act (“NFIA” or the “Act”) into law, making Nebraska the second state, following Wyoming, to establish digital asset depositories.1 NFIA authorizes the formation of digital asset depositories, either as a separate department of an existing financial institution or as a newly chartered digital asset bank, upon approval from the Nebraska Department of Banking and Finance (the “Department”).2 Once approved, a digital asset depository can engage in certain services relating to digital assets (e.g., cryptocurrency).

After tapering off during the pandemic, the trend of credit unions buying taxpaying community banks is back – and credit unions are becoming more aggressive than ever in their pursuit of acquisition targets. The first half of 2021 has already seen two precedent-shattering deals: Jacksonville, Florida-based VyStar Credit Union’s acquisition of a $1.6 billion Georgia bank is by far the largest purchase of a bank purchase by a credit union to date. And more recently, the announcement by Iowa-based Green State Credit Union that it would simultaneously acquire not one but two community banks in the Midwest.

One of the challenges for he NBA team is synthesizing the input we receive from our members with relevant statistical analysis. Attracting and retaining the next generation of bankers is one of those unique issues where member input and the data converge perfectly. Every member visit over the past year has included a conversation about the difficulty in hiring new banking professionals. We also recognize that Nebraska has one of the lowest unemployment rates in the country. However, did you know that the NBA online job board received more than 15,000 visitors last year? To enhance the banking industry’s ability to attract new and diverse talent, the NBA is pleased to roll out the new Job Board with upgraded features.