Legislative Priorities 2023 | FIBT

LEGISLATIVE PRIORITIES

MODERNIZE REG. O

Decades-old regulatory limitations on extensions of credit to bank executive officers and directors make it difficult for a C-group executive to have a bank credit card and a car loan without bumping up against those limits. A reasonable increase to would allow for day-to-day, routine banking for executives, directors, and their families without a substantial increase in risk of insider abuse.

ӹ We support tying the aggregate limit on extensions of credit to bank executive officers and directors, and credit card limits to those insiders to a measurable index such as the CPI, or at the very least, increasing those limits from $100,000 to $250,000 and from $15,000 to $50,000, respectively.

UNDERSTAND & SUPPORT COMMUNITY BANKS

Since 1910, FIBT proudly touts, “Never a loss of a depositor’s dollar.” At our core, relationship-based Community Banks are fundamentally different than large banks seen lately in the news. Fed policy has left TBTF banks to become even larger, limiting access and narrowing the availability to capital, particularly in rural markets. As such, we urge any increased regulatory scrutiny be targeted toward those large banks with riskier practices, with a close eye on the continued trend of Too Big to Fail banks scooping up failed regional banks.

ӹ Special assessments to the Deposit Insurance Fund due to large bank failures must exempt Community Banks.

SAFE HARBOR FOR CANNABIS-RELATED ACTIVITIES

As a payments processing leader, FIBT recognizes the challenge cannabis-related businesses face through the traditional banking system. Financial institutions processing cannabis-related activities are faced with significant regulatory scrutiny, regardless of whether a state has legalized cannabis use. The SAFE Banking Act would create a safe harbor from limitations on deposit insurance, downgraded loans, or other prejudicial regulatory action for banking legal cannabis-related businesses.

ӹ We urge support for the bipartisan SAFE Banking Act –H.R. 2891 & S.1323– as a way for banks to provide a safe resource for businesses that are otherwise legal.

ӹ FIBT has a number of customers invested in the cannabis-related industry. We consider the SAFE Banking Act a win-win: Industry benefits from the safety of the traditional banking system, and the bank’s liquidity will be supported by the resulting deposit base.

MODERNIZE CTR REQUIREMENTS

Thresholds for filing Suspicious Activity Reports and Currency Transaction Reports have remained unchanged for 50 years. Current thresholds leave BSA and compliance departments with inefficient, high-volume reporting that ultimately spurs little action from investigators with higher priorities and limited resources.

ӹ Urge support for tying SAR and CTR thresholds to an index like CPI, or at the very least from $10,000 to $30,000, with authority to complete a report under that threshold at our discretion.

ӹ Support enabling our ability to exempt customers with a longstanding relationship with our bank.

CONGRESSIONAL REVIEW OF THE CFPB SMALL BUSINESS LOAN DATA COLLECTION RULE

We encourage the support of Congressional Review Act resolution H.J.Res. 50 pushing back on the CFPB’s rule under Section 1071 requiring new burdensome data reporting on small business lending and any other legislation exempting community banks.

COMMON SENSE CRYPTOCURRENCY OVERSIGHT

We support a practical regulatory framework for cryptocurrency to fend off the instability and volatility in the crypto-related industry.

We oppose any consideration of a U.S. Central Bank Digital Currency and instead encourage Congress and financial stakeholders to implement FedNow to increase payments speed and otherwise eliminate the need for a CBDC.

LIMIT “TRIGGER LEADS” RELATED TO MORTGAGE APPLICATIONS

As a Community Bank, we’re committed to protecting our customers who submit mortgage applications.

Our Mortgage team encourages support for H.R. 2656, which prohibits a consumer reporting agency from providing a consumer report when the consumer makes a credit inquiry regarding a home mortgage loan.

ENCOURAGE ALIGNMENT, CONSISTENCY, AND RECIPROCITY OF MONEY TRANSMITTER LICENSURE

Our Fintech company, Kotapay, processes payments for businesses across the country. Generally, each state has its own licensing requirements to act as a Money Transmitter. Banks are exempt from MTL, but it is very expensive and time consuming for companies to become licensed themselves, especially if they are attempting to become licensed in each state. We have found that our solution can protect our customers in some states but not all, creating a large gap that can become very expensive for our customers if they are found to not be compliant.

REVIEW THE ROLE OF CREDIT UNIONS

Credit Union purchases of community banks and their further uninhibited bank-like behavior strengthens the need for Congressional review of the role of Credit Unions in today’s financial system. The statutorily limited role of a credit union to provide financial services to underserved communities while enjoying a federal and state income tax exemption has grown well-beyond legislative intent and should be reviewed and addressed.

ӹ Recent examples of credit unions undercutting banks in the North Dakota Market:

ӹ Fargo Credit Union recently priced a multi-family real estate deal that was $12 million at prime -1% at an 80% LTV, well below market.

ӹ Agricultural operating credit is consistently priced 1.5-2% lower than market.

ӹ Vehicle and large equipment pricing is consistently priced 1.5-2% lower than bank market.

ӹ Efforts by credit unions in North Dakota to significantly broaden their field of membership was recently defeated thanks to community bankers keeping a watchful eye.

First International Bank & Trust is a full-service, family-owned independent community bank built on the bond between our employees and customers. Founded in 1910 as Farmer’s State Bank, we first served the small community of Arnegard, North Dakota and have since grown to more than 30 branches spanning rural and urban communities in Arizona, Minnesota, North Dakota and South Dakota.

Stephen L. Stenehjem CEO & Chairman sstenehjem@FIBT.com

David Mason Director of Mortgage dmason@FIBT.com

Nate Martindale Corporate Counsel External Affairs nmartindale@FIBT.com

(701) 261-5103

S. Peter Stenehjem President pstenehjem@FIBT.com

Jason Johnson Chief Financial Officer jason.johnson@FIBT.com