Independent Banker - January 2025 - 23

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larger corporations that give their
banks wire instructions to pay their
corporate taxes to the IRS, or any
other entity that wires tax payments. "
2
FFIEC's CAT
The Federal Financial
Institutions Examination
Council will be sunsetting its
Cybersecurity Assessment Tool (CAT)
on Aug. 31. Banks will instead refer to
more updated tools.
" There are a lot of other assessment
tools out there to measure your
cybersecurity risk and your
thresholds, " Mitchum says, " and it's
up to each bank to determine which
tool would be best depending on their
risk exposures. "
3
CFPB's Section 1071 rule
While legal challenges
against the Consumer
Financial Protection Bureau in
regards to the Dodd-Frank Section
1071 small business data collection
rule are still going forward, banks
should still familiarize themselves
with this entirely new set of
regulations, says Mickey Marshall,
ICBA assistant vice president and
regulatory counsel.
" Banks should begin to work with
their cores and other technology
providers to try to figure out
technologically how they're going to
solve for the new data collection and
reporting requirements, " Marshall says.
Indeed, that will be a focus in early
2025 for the compliance team at
Western State Bank in Devils Lake,
N.D., says Kelan Oster, vice president
and senior compliance officer.
Under the CFPB's new rules, the
$2.2 billion-asset community bank is
considered a Tier 1 institution with
high small business loan volume
and therefore must comply by
July 18-the first group that must
comply, Oster says.
" Banks should begin to work
with their cores and other
technology providers to try
to figure out technologically
how they're going to solve for
the new data collection and
reporting requirements. "
-MICKEY MARSHALL, ICBA
When preparing for the new rule
based on your bank's tier level, it's
critical to get " the right people at the
table, " Oster says. " Those of us that
are HMDA reporters already know
that every data point has opportunity
for different interpretation based on
different types of loans or different
situations-and Section 1071 is
going to be no different. So, we need
to be very careful to make sure that
we're talking through each one of
those points with the appropriate
team members. "
Oster adds that whoever is charged
with compiling a bank's small
business loan data needs to be " on the
same page " when interpreting what
the bank should do in each situation
and for each loan type.
CRA modernization
In February 2024, ICBA and
other groups filed a lawsuit
against the federal banking regulators
for exceeding their statutory authority
with the Community Reinvestment
Act final rule.
4
Among other issues, the complaint
contends the rule evaluates bank
lending well beyond banks' deposittaking
footprint, as required by
CRA. The final rules will evaluate
bank lending across the entire
country, eliminating the statutory
focus on a bank's lending in its
" local community. "
" We're optimistic that our
challenge has merit and that we're
going to prevail. At the same time
banks should remember that the
CRA rule hasn't been substantively
updated since 1995, " Marshall says.
" It's highly likely that there will be
some form of CRA modernization
going forward. "
The regulators will likely want to
take a more quantitative approach
to the CRA, so bankers should
familiarize themselves with some of
the quantitative aspects of the new
rule to better prepare for eventual
compliance " once the dust settles, "
Marshall says.
Western State Bank's Oster agrees.
While the new CRA rules are currently
on hold, the " spirit " of what examiners
are trying to do with the new rule is
not. " We're still working on trying to
find ways to fine-tune our program, "
he says, " making sure that we're a little
more intentional about the things we
do, the decisions we make, and that
we're evidencing that we're serving our
community in the way we want to. "
Katie Kuehner-Hebert is a writer
in California.
independentbanker.org // 23
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Independent Banker - January 2025

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