January 20, 2022

Loan review or credit risk review is a significant risk management function. According to the 2020 regulatory guidance on credit risk review, it is integral to every insured depository institution’s safe and sound operation.

Years ago, IRA owners could take multiple distributions and roll them over in the same year – as long as they rolled over only one distribution per IRA. Some individuals took this opportunity to an extreme by opening multiple IRAs in order to take advantage of this rule. For example, a business owner with a cash flow problem might use multiple IRA distributions to meet payroll. By maintaining 12 separate IRAs, the owner could take a distribution to meet expenses and roll over that distribution within 60 days – assuming, of course, that the owner had the assets to complete the rollover. But if not, another distribution from a different IRA could replace the funds taken from the first IRA. This “robbing Peter to pay Paul” potentially could go on all year.

Vendor due diligence – it’s a favorite topic of a few people, but in today’s risky environment, it’s one of the most important ways to protect your organization. Vendor due diligence is how an organization examines a current or potential vendor’s risk to its business operations. Vendor due diligence is a key component of vendor management required by the Federal Banking Agencies.

On Dec. 1, 2021, the Consumer Financial Protection Bureau (CFPB) released the Data Point: Overdraft/NSF Fee Reliance Since 2015 report, which expands on their earlier Data Point: Checking Account Overdraft, published in 2014. Data reviewed by the CFPB comes from the Consolidated Reports of Condition and Income, or “Call Reports,” which are submitted to the regulatory agencies. The CFPB’s analysis includes those banks and credit unions under their supervision and those with assets over $1 billion.

With the 2021 change in administration in Washington, D.C., the anti-money laundering (AML) regulatory climate has already seen significant impacts. On Jan. 1, 2021, the Senate voted into law the National Defense Authorization Act (NDAA). Within the NDAA, the Anti-Money Laundering Act of 2020 (AMLA) became law and amends the Bank Secrecy Act (BSA) for the first time in nearly two decades. The BSA, adopted in 1970, has not had a significant overhaul since the USA PATRIOT Act (commonly known as the Patriot Act) in 2001 in response to the September 11 terrorist attacks on the United States. AMLA is significant in U.S. anti-money laundering laws and priorities, and financial institutions must be prepared for the changes.

In a December 2021 poll of banking executives, we asked respondents two questions about their outlook and concerns for 2022.

Cryptocurrencies and Digital Ledger Technologies (DLT) have become topics nearly impossible to measure. Innovations come hourly, as do the challenges.

As I begin serving you in my new role as Chief Executive Officer and President of the Colorado Bankers Association, I want first to express my sincere gratitude and appreciation to our member banks and bankers for placing their trust in me.