I hope this message finds you all enjoying a happy and prosperous 2019. It’s January of an odd-numbered year, so we are hunkering in to the 66th Assembly of the North Dakota Legislature. As I write this, we are in the third full week of the session. Nearly 950 bills have been introduced so far. ICBND is tracking about 75 bills that could have varying degrees of effect to community banking. Obviously, the higher priority bills get more attention. In my limited space here, I won’t wander too far into the weeds of the bills and the issues we’re following. However, the ICBND Legislative Update is distributed and posted weekly for your reference.

We’ve just completed the marketing materials for a Fintech educational session on April 15, 2019 which will be sponsored by our newest endorsed member, Dakota Carrier Network. The session will also be held at their beautiful facility in Bismarck. Our keynote presenter will be Kevin Tweddle who is ICBA’s Chief Innovation Officer. We’re excited to offer this timely session and hope to see you there.

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We survived another election season and an interesting one it was.  At the macro level, voter turnout nationally was huge with nearly 100 million people voting representing an increase of almost 25 percent over the last midterm.  The divide of the suburban vote and urban vote continued to widen with Republicans losing more ground in suburban districts but maintaining a stronghold in rural areas.  100 new members of Congress will be making their way to DC.  Of those 100, 63 are Democrats and 37 are Republicans.

While the Republicans held the majority in the Senate (and even gained a couple seats), the majority in the House flipped with Democrats picking up 37 seats.  This was not altogether unexpected but will create some interesting leadership changes in the House.  Nancy Pelosi certainly has the upper hand for Majority Leader.  The House Financial Services Committee will be chaired by Maxine Watters which will make for a much different tone than we’re used to out of this committee. 

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Happy autumn everyone!  Wendy is in Minot today for one of our Fall Frontline Seminars and informed me it was snowing.  Goodness gracious!  It’s the first week of October only.  I don’t think I’m quite ready for the cold but the forecast seems to be screaming at me to get ready.  I think Mother Nature wins this one.  Again!

Of course, it’s also the political season in North Dakota with mid-term elections just a month away and the 66th Assembly of the North Dakota Legislature exactly three months from today.  At the federal level, all eyes are on the North Dakota Senate race with Congressman Cramer challenging Senator Heitkamp for that coveted seat.  As you know by the deluge of ads, a boatload of money is being spent by the national parties, the campaigns themselves and other special interest groups on this particular race.  It’s a tight race and will play significantly into which party comes out of this election with a majority in the Senate when the election dust clears. 

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I hope this message finds you enjoying a great North Dakota summer!  As I’ve traveled the state some this summer, it’s amazing how much better the crops look compared to a year ago.  I will confess that I haven’t been to the southwest reaches for a while so I hope things have improved down there as well – they certainly need the relief.  Let’s hope for cooperative weather through harvest!

It’s hard to believe August is already here.  Of course, that means your ICBND staff is in the home stretch of preparation for our 51st annual convention.  I hope you’re planning to attend.  I promise it will be fun and informative!  For me, part of that means a last minute scramble for a theme party costume that will appropriately embarrass my family and friends.  But this year, I was on top of things and ordered a costume already last week.  Upon my return home last night, my pirate costume had arrived (times two since I apparently don’t yet know how to navigate Amazon Prime…..uffda!).  During dress rehearsal for my wife and grandson, it appears that the online ad may have oversold the quality and fit of this particular garment.  For $9.95 plus free shipping you would think it would live up to its internet billing!  My grandson did enjoy a belly laugh however and he especially liked wearing the hat.

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Finally!  Senate Bill 2155 became the law of the land upon President Trump’s signature on Friday, May 25th .  A great way to end a great week as earlier the House brought S.2155 to the floor which passed by a vote of 258-159 including the support of 33 moderate Democrats.  This very welcome relief has long been in the making as ICBND and ICBA and their member banks for years have fought for regulation that is tiered to the size, risk, complexity and business model of community banks.  This bill represents the first significant “walk back” of Dodd-Frank.  It’s a heck of a start, but there’s a whole bunch more regulatory relief needed.  You have to like the momentum though!

ICBND sincerely thanks Senator Heitkamp, Senator Hoeven, and Congressman Cramer for their votes in support of this legislation.  A special thanks to Senator Heitkamp.  When things seemed to be falling apart after Ranking Committee member Brown divorced himself of the bill when went on counterattack, Senator Heitkamp took a lead role in reviving it and rallying support from her Senate colleagues on both sides of the aisle.

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Well, maybe we made it through another winter.  It’s supposed to be 50 degrees today in Bismarck and April is right around the corner.  Hopefully, it will bring with it some much needed moisture for our farm and ranch customers.  They could certainly use the relief!  And, so could our ag lenders!

     Speaking of relief, it’s been a decade of drought for community bankers when it comes to the subject of relief from the regulatory burden created in large part by the financial crisis 10 years ago.  Until now.  The advocacy efforts of community bankers across this country helped spawn a nice soaking shower in the form of Senate Bill 2155.  Introduced late last year, it’s been a bit of a roller coaster getting this bill to the Senate floor.  

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Happy New Year everyone! I hope you are enjoying a happy and prosperous 2018. And, I hope you’ve managed to escape the cold and flu season! I haven’t unfortunately and will remember January 2018 as the month of the “hack”. My wife says I’m a little annoying and should probably toughen up. But enough about me.

The ICBND calendar of events really starts to heat up in March and I encourage your participation. The Emerging Leaders Development Program schedule is set for the year and the puck drops on Friday, March 9th with a day-long session in Grand Forks followed by a joint social and hockey gathering with the ICBND Board of Directors that evening at the Ralph Engelstad Arena. A special thanks to Choice Financial and First State Bank for hosting the Board meeting and Emerging Leaders meeting, respectively, and to Bell Bank for their sponsorship support!

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Happy Holidays everyone! I’m gonna cut to the chase because for a non-election year, things have been more than a little wild in Washington, DC as it relates to community banking.

Let me start with the circus we call the Consumer Financial Protection Bureau (CFPB). Richard Cordray finally decided to step away from his role as director of the agency prior to his term being up apparently to run for Governor of Ohio. But, not before he flung one last arrow to the current administration. In an 11th hour move on the Friday after Thanksgiving (when generally nothing happens!), Cordray left office abruptly and placed a staffer in charge who was seemingly unfit by any measure of experience with the agency, the law or financial service related issues. The move seemed typical of the former director’s mantra that he answered to no one. 

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As I write this, we are just one short month removed from the 50th Annual ICBND Convention. Of course I’m biased, but I truly thought it was a fabulous event. In some ways, it feels like it was ages ago and in other ways it seems like just yesterday. I’m just now getting fully caught up on sleep. My adult children often tell me that I have FOMO. For those of you, like me, who didn’t know what FOMO stands for, it’s the affliction known as “fear of missing out”. As I’ve become a bit more self-aware in middle age, I somewhat regrettably admit that it probably describes me well - hence the need to catch up on sleep after this milestone event. By the way, FOMO must not be all that bad as these same adult children, plus a son-in-law and grandson, were all living with Stacey and me this summer!

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Well, I literally just ordered my costume for the theme party for the 50th Annual ICBND Convention in a couple weeks.  Assuming I fit into the “one size fits most” category, I will be proudly donning it Monday evening of the convention.  While I’m not much of a costume person, I thought I better try a bit harder this year given the 50 year milestone.  I’m almost nervous to see what Chairman Beall and Jordan Nelson will be wearing.  The jockey outfits last year were just short of disturbing!

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Spring is here again! Like last year at this time, I still haven’t played any golf. And also like last year at this time, I’m trying to figure out how two little dogs - a Schnauzer and a Schnorkie (yes….Schnorkie!) - can raise such havoc with my yard. I guess time and a little TLC can fix the latter. I’m not sure how to fix the former, but Stacey advises me that my “avoidance strategy” probably isn’t a good long term solution. She’s smart like that! By the way, Schnorkies are now referred to as “designer breeds” by the kennel club folks. They were called mutts when I was growing up. You can tell we live in times of extreme political correctness.

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The snow has almost all melted, spring is in the air, and the North Dakota legislative session is almost over. These are all good things!  There’s also cautious optimism that community banks might see some much needed regulatory relief with a new Congress and administration.  While regulatory relief for community banking isn’t as high on President Trump’s priority list as we’d like, it’s at least in the top five behind healthcare, tax reform, immigration and transportation.  The road so far, however, has been pretty bumpy with the at least temporary stalling of ACA repeal.  Hopefully, regulatory reform for community banks has a smoother path.  We’ll find out more later this month when we travel to DC for   ICBA's Capital Summit.

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2017 Brings Changes

I hope this message finds you all enjoying a happy and prosperous 2017. This is our first newsletter for 2017 and you likely already noticed from the cover page and cover story that we’ve implemented some changes at ICBND this year.  Effective January 1, 2017, the division of ICBND formerly known as ICB Purchasing Exchange has adopted a new tradename – ICB Marketing Solutions.

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As I write this, we’re in the midst of our first snow event of the season so I guess winter is officially upon us. While it seems like it’s been awhile since we had snow, the novelty of shoveling and plowing has already worn off.  Not a great sign.  My wife has also informed me that our older dog has again exercised her apparent right to move her bathroom indoors!  Also, not a great sign.

Speaking of seasons, how about that election season! I know we’re all glad it’s over, but it really was something to watch unfold.  At the national level, public pollsters and election models just absolutely missed it.  Republicans not only won the presidency, but also held a majority in the US Senate (which was somewhat unexpected) and lost many fewer seats in the US House than anticipated.

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As the father of three grown daughters, I understand the impact of reinforcement. As the youngest in my own family, my wife would probably say I need excessive reinforcement. I say she’s lucky! And, the latest Wells Fargo scandal has given regulators, particularly the CFPB, a boatload of reinforcement. Wells created over 2 million bogus accounts without customers’ knowledge. 5300 employees have been fired. Apparently rogue employees who conjured these schemes up themselves! Seems doubtful. The result so far - $185 million in fines and penalties, a trip to the US Senate Banking Committee woodshed, and the announcement of an investigation by the US House Financial Services Committee. I have a sense the final shoe has not dropped. I can only imagine there are a number of uncomfortable discussions being held behind closed doors at other mega-bank headquarters. My guess is the probes are just beginning. If it seems like I’m picking on Wells Fargo, I am. I don’t represent them.

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As I write this, we are in the home stretch of preparation for the 49th Annual ICBND Convention and Exhibition. It’s fun to be part of the “buzz” around the office as the staff of your association works hard to make this a premier event and a special occasion for our members. If you’ve not already registered, please do so! It promises to be fun and informative as we’ve assembled a quality lineup of educational and networking events along with our outstanding associate member exhibits.

On the regulatory front, we’re pleased to announce that a small contingent of ICBND member bankers will be meeting with Senator Heitkamp and CFPB Director Richard Cordray on August 10th in Bismarck. This is a great opportunity to share with Director Cordray the challenges of independent community banking in rural America under an increasingly burdensome regulatory regime.

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Each year as spring approaches I claim with good intention that I’m going to play more golf and even take some lessons. Well, it’s nearly June. I’ve played once. No lessons. Maybe I should take up fishing. Or, possibly just admit that I actually prefer doing yard work and playing hobby farmer. Anyway, I hope you’re doing a better job sticking to your spring resolutions!

Contrary to my golf game, activity at ICBND has been robust since our last newsletter. In late April, ICBND member bankers converged on Washington DC along with community bankers from across the nation for the 2016 ICBA Washington Policy Summit. This annual trek is to directly lobby our Congressional delegation and regulators addressing the major issues affecting community banking in our state. Our message focused on regulatory relief, system-wide data security standards, a level playing field with tax advantaged credit unions and Farm Credit, and certainty within the farm and rural safety net, particularly in this challenging ag market. Election year dynamics however, will prove challenging for any significant regulatory relief before November.

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Just in case you think your advocacy voice is never heard, I’m here to tell you it is! Bear with me and I’ll explain.

Last week, the CFPB released its interim final rule easing mortgage restrictions on many small creditors by expanding the number of community banks eligible for escrow and balloon loan exemptions. This resulted from community banking relief provisions in the recently passed Highway Bill.

So, effective March 31, 2016, any small creditor (in our case, community banks having $2 billion or less in assets who originate fewer than 2,000 loans per year including portfolio loans) that makes a SINGLE loan in a rural or underserved area in the previous year can receive; (1) the portfolio balloon loan exception (including Qualified Mortgage safe harbor status) and (2) the higher priced loan escrow exemption for rural lenders. This is a big deal for ICBND members as community banks were only eligible for these exemptions previously if they operated “PREDOMINANTLY” (meaning more than 50% of mortgage loans) in rural or underserved areas.

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I hope this edition of Community Banker finds you enjoying a healthy and prosperous New Year. Before delving into the exciting things ahead of us in 2016, let’s look back a bit at what transpired since our last edition. In December, community bankers gained some regulatory relief through signage of the Highway Bill, of all things. Dogged advocacy by community bankers and community banking trade associations exempted community banks from burdensome regulations like Fed dividend cuts and redundant privacy notices while expanding exam cycles for certain highly rated banks and restoring cuts in crop insurance programs.

While we hoped for more expansive regulatory relief in 2015, the community banking provisions in the Highway Bill are a start. With 2016 being an election year, additional meaningful relief will be challenging, but we will continue to chip away at this regulatory behemoth.

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It’s hard to believe, but we’re already in the midst of the holiday season and 2016 is within arm’s reach. Rather than lament about the passing of time, I’d rather take some time and reflect on ICBND activities this past year.

I’m happy to say that your association had a very successful 2015. The 64th North Dakota Legislative Session consumed much of our attention the first several months of the year. ICBND members fared well this past session including property and income tax relief along with ICBND-sponsored legislation changing the Good Funds Law to specifically allow funding flexibility at closing for certain real property transactions. While the state session adjourned in the spring, our advocacy work is never done enhancing the political presence, influence and reputation of independent community banking at the local, state and national levels.

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