OFFICIAL PUBLICATION OF KANSAS BANKERS ASSOCIATION 2024 Kansas Ag Bankers Conference 2024 Harold A. Stones Government Relations Conference Highlights 28th Annual Bank Technology & Operations Conference & Showcase MARCH/APRIL ISSUE 2 2024
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© 2024 Kansas Bankers Association | The newsLINK Group, LLC. All rights reserved. The Kansas Banker is published six times each year by The newsLINK Group, LLC for the KBA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the Kansas Bankers Association, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. The Kansas Banker is a collective work, and as such, some articles are submitted by authors who are independent of the Kansas Bankers Association. While the The Kansas Banker encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at 855.747.4003. CONTENTS Chairman's Message 6 The “Not-So-Political” Political Article By Mark Schifferdecker, Chairman, KBA Washington Update 8 The Real Losers in the Reg II Fight By Rob Nichols, President and CEO, American Bankers Association 10 2024 Kansas Ag Bankers Conference March 6-7, Manhattan Hilton Garden Inn 14 2024 Pioneer Award Winner Jack Galle 15 Make Plans to Attend the CEO Summit and Annual Meeting August 8-10, The Broadmoor, Colorado Springs 16 Let’s Revisit the Corporate Transparency Act By Murphy Ray Jr., FORVIS 18 2024 Harold A. Stones Government Relations Conference Highlights Feb. 7, Topeka Country Club 22 28th Annual Bank Technology & Operations Conference & Showcase Feb. 12-13, Wichita Hyatt Regency Hotel 26 Pebble Plan One of KBA’s 2023 NXTSTAGE Financial Technology Pilot Competition Winners 27 KBA Family Code Word Campaign 28 Kansas Bankers Press for Regulatory Relief During ABA’s Washington Summit In Memory 30 Kirby B. Clawson Arlen Arthur Gabriel 32 Picturing Kansas 33 Increase Net Interest Income and Win More Deals! By Strunk Cover photo by Nicki Tomlinson, Labette Bank, Oswego Executive Doug Wareham, President & CEO Kathy Taylor, EVP, General Counsel Terri D. Thomas, EVP, COO Administration Alex Orel, SVP, Government Relations Eric Stofer, SVP, Chief Financial Officer Sara Blubaugh, SVP, Administration & Board Secretary Julie Taylor, VP, Computer & Information Systems Kelly VanZwoll, JD, VP, Staff Attorney & Gov’t Relations J.W. Wells, Ag Division Coordinator/ Government Relations Assistant Alana Seelbach, AVP, Administration & Special Projects Communications & Marketing Mary Taylor, SVP, Director of Communications & Marketing Bree Hull, AVP, Communications & Marketing Rayanna Breshears, Communications & Marketing Intern Education and Conferences Brenda L. Unruh, SVP, Director, Education & Conferences/Strategic Partnerships LeAnn Mott, VP, Education & Conferences Natalie Wareham, AVP, Education & Conferences Insurance Alex Greig, President, KBA Insurance Inc. Kent Owens, SVP, KBA Insurance Inc. Elizabeth Roche, SVP, Employee Benefits Administration Jenny Figge, SVP, Operations Cole Thompson, AVP, KBA Insurance Inc. Clinton Moore, KBA Insurance Inc. Legal/Compliance Jackie Kuhn, JD, VP, Staff Attorney Gwen Hill, JD, VP, Staff Attorney Jamie Cosgrove, JD, VP, Legal Dept. Manager Dylan Serrault, JD, VP, CFBS Manager Bobby Young, JD, VP, Staff Attorney Adeel Syed, JD, VP, Staff Attorney Neal Barclay, AVP, Compliance Specialist/Auditor Jeff Narron, AVP, Compliance Specialist/Auditor Kerry Clark, AVP, JD, Staff Attorney & Publications Editor Lewis Walton, AVP, JD, Compliance Specialist/Auditor Heather Williams, Compliance Operations Specialist/Auditor Sarah Weltmer, Compliance Operations Specialist Lindsay Bryant, Compliance Operations Specialist, Auditor Shannon Capps, Compliance Operations Specialist, Auditor Meridith DeForest, AVP, Administrative Legal Assistant Sarah Lynch-Chaput, Legal Intern Gabe Walker, Legal Intern Tom Thomsen, Legal Intern
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The “Not-So-Political” Political Article If you are like me, you’re already completely fatigued with politics, and more specifically, the November presidential election. I’ve heard that this will be the longest presidential campaign ever since the Democrat and Republican candidates have already been determined. Perhaps a long-extended vacation to avoid the oncoming barrage of political campaign ads would be the best bet for us all. Please know the purpose of this article is not to endorse a presidential candidate. KBA does not and should not be in the business of doing that — there are plenty of other organizations to fill that role. After all, there are many Republican, Democrat and Independent Kansas bankers, and the KBA has a strong tradition of working well with policymakers from all facets of the political spectrum. Rather, the purpose of this article is to remind us that who a newly elected president appoints to lead the various banking regulatory posts can have huge implications for our industry. Like many of you, I am blessed to be part of a multigenerational community banking family. From my earliest recollections, my grandfather and father were people who helped the citizens of the community of Girard to grow their farms, businesses and personal lives. Regrettably, the current bank regulatory climate is the worst in my lifetime. If you had told me five or 10 years ago that the ABA, state banking associations and other business organizations would someday be compelled to file six lawsuits against the Federal banking regulators, I wouldn’t have believed it. As an industry, we have reached an unprecedented level of regulatory overreach and we have presidentially appointed regulatory officials who seem to be pressing harder than ever for new costly regulations or harmful restrictions that threaten the viability and sustainability of our banks. It’s become a challenge to simply keep track of all the regulatory overreach lawsuits that have been filed. I asked our very own Kathy Taylor, KBA’s EVP & general counsel, to give me a list of the current lawsuits banking associations have filed against Federal regulators, and they are as follows: CFPB: • Challenge to funding as unconstitutional. • Challenge to expansion of UDAP authority in exam manual. • Challenging constitutionality of implementation of Section 1071. • Challenging the final rule on cap of credit card late fees. FDIC: • Challenging constitutionality of guidance on multiple fees for represented items. All Federal Regulators: • Challenging final CRA rule as being beyond regulatory authority. CHAIRMAN’S MESSAGE Mark Schifferdecker, Chairman, KBA 6
Each of these lawsuits was brought as a last-resort response to regulatory proposals that go far beyond the statutory authority granted to bank regulators by Congress. These suits are also in direct response to many of those same presidential appointees failing to acknowledge concerns expressed about how these new burdensome rules and restrictions will negatively impact our banks and our customers. While I’m hopeful our industry prevails in the courtroom, I also know it’s essential for every banker to be highly engaged and involved in “grassroots” advocacy for our industry. The future of our industry, especially the community bank model, is under attack. It’s up to us to push back in the courtroom or at the ballot box if regulators and policymakers fail to listen. As stated above, I didn’t draft this article to endorse a presidential candidate, but I want all of us to be keenly aware that presidential elections have consequences. Regardless of your political affiliation or conviction, the POTUS has the important task of appointing the heads (or interim heads) of the Federal banking regulatory agencies. These bank regulatory leaders are not merely figureheads — they have significant influence over policy, issues, direction and even bias regarding significant issues that have lasting effects on the success and sustainability of our banks. Regardless of who occupies the White House come January 2025, I hope the appointed regulatory leaders that govern our industry choose a more measured approach that recognizes the positive role banks play in communities, large and small, urban and rural, across America. Failing to do so will lead to harmful consequences for the communities and customers we serve. I want to thank each of you for your advocacy and challenge you, your board and staff to be even more engaged as we enter another contentious and wild election season. Mark Schifferdecker GNBank President & CEO Chairman of Kansas Bankers Association Board of Directors P.S. If you decide to take that long extended vacation until after Nov. 5, please give me a call. I might just join you. 7
n 2010, the Durbin Amendment was dropped into Dodd-Frank in the dead of night, and without so much as a hearing, the government imposed restrictions and price controls on debit cards and connected checking accounts. Bankers warned that mega-retailers would not pass on any savings at the checkout and that bank customers would ultimately foot the bill in lost rewards. Both predictions have proven true, but for reasons clear only to the Federal Reserve, the government is poised to double down on this misguided policy with another 30% cut in debit interchange followed by an automatic biannual adjustment. This “one-way ratchet” will continue to hack away at debit programs every two years based on data and a formula of the Fed’s choosing without public comment. The Fed is proposing to slash the interchange rate cap from 21 cents to around 14.4 cents — and recent research estimates that this move could reduce interchange revenue for banks by $3 billion annually. That’s essentially the equivalent of the government reaching into banks’ pockets, taking money allocated to ensuring affordable, seamless, secure banking products and services, and handing it over to the very largest retailers. Retailers will claim that they intend to pass those savings on to consumers. But as we’ve seen in the 13 years since the original Durbin price caps took effect, those promises ring hollow. That means that the real losers in this fight will be American consumers. Not only will consumers not gain the advantage of lower prices in stores, but the Fed’s proposed changes to Regulation II will fundamentally affect the economics of what banks do — and that, in turn, affects the products and services they are able to offer their customers and communities. Banks use interchange revenue to fund free or low-cost checking accounts and other services that consumers value. Prior to the enactment of the Durbin amendment, for example, many banks offered debit card rewards programs — but those programs were eliminated when the revenue streams funding them dried up due to government price controls. These new proposed cuts to interchange revenue will have an even more dire consequence: They will undermine banks’ efforts to foster financial inclusion by providing access to the free and low-cost transaction accounts that help unbanked Americans get their foot in the door — a first but necessary step to true inclusion. Our colleagues at the CFE Fund, which oversees the Bank On initiative that ABA has proudly championed, recently wrote to the Fed to emphasize what makes the national account standards work: They were designed to address the needs of low- and moderate-income consumers (bill pay, debit card access, ATM access). They were designed to knock down the barriers that keep so many consumers outside the banking system (minimum balance, credit checks, overdraft fees). And, importantly, they were designed to be economically sustainable for banks offering the accounts. Interchange fees play an important role in that sustainability equation. If banks do not have the revenue streams to support these and other low-cost accounts, they have two options: Pass the costs on to consumers or stop offering and/or marketing the product altogether. The Real Losers in the Reg II Fight WASHINGTON UPDATE By Rob Nichols, President and CEO, American Bankers Association I 8
Bank On accounts are currently offered by a growing list of banks across the country. And to ensure we can continue that momentum, ABA has been working hard on behalf of its members to elevate these concerns to policymakers. But we can’t do it alone — we need your help. With the Fed recently extending the comment deadline to May 12, ABA is calling on all bankers to share how this change in regulation will affect their bank and their customers. You can send a letter easily through ABA’s grassroots platform, SecureAmericanOpportunity.com. Banks put interchange to work funding low-cost banking services that help consumers find their way into the regulated banking system — enabling them to take advantage of deposit insurance protections, build credit and do so many other things that can only happen with a banking relationship. If the Fed’s Reg II proposal moves ahead, the very largest retailers will pocket that surplus to pad their bottom line — and consumers won’t see a penny of it. That’s a tradeoff that leaves our country poorer. Email Rob at nichols@aba.com. If the Fed’s Reg II proposal moves ahead, the very largest retailers will pocket that surplus to pad their bottom line — and consumers won’t see a penny of it. Blue Cross and Blue Shield of Kansas is an independent licensee of the Blue Cross Blue Shield Association. See all the deals: Blue365Deals.com Blue365® is a free health and wellness discount program offered to you as a member of Blue Cross and Blue Shield of Kansas. We offer year-round discounts on gym memberships, fitness gear, healthy eating options and more. Healthy living is just a deal away KBA 0324 9
2024 Kansas Ag Bankers Conference March 6-7, Manhattan Hilton Garden Inn This year’s event was a definite success! We had an exceptional line-up of presenters, 305 attendees and 22 tradeshow sponsors in attendance. Here are some of this year’s highlights! Dr. David Kohl, Ph.D., Professor Emeritus, Virginia Tech, AgriVisions Solutions, LLC Business and Economic Outlook Once again, the ever-popular Dr. David Kohl was the opening keynote speaker at this year’s Kansas Ag Bankers Conference! The economy, interest rates and input costs were a part of the conversation. KBA President & CEO Doug Wareham, Astra Bank and KAB Division President Mikel Hadacheck, and GNBank, N.A. and KBA Board Chairman Mark Schifferdecker presented Dr. David Kohl with KBA’s highest honor, the Flint Factor Award. Ed Elfmann, SVP of Agriculture and Rural Policy, American Bankers Association Federal Ag Policy Update ABA’s SVP of Agricultural & Rural Banking Ed Elfmann (left) and KBA’s President & CEO Doug Wareham (right) discuss current important federal ag policies, including Access to Credit for our Rural Economy Act, also known as ACRE. Ed thanked Kansas bankers for their involvement in sharing the importance of this bill with their constituents. H.R. 3139: ACRE Act of 2023 now has 56 co-sponsors. Jackson Takach, CFA, Farmer Mac Futureproofing Ag & Ag Lending Takach stressed that the combination of higher interest rates and inflation still does not put agriculture into the same scenario as in the late 1970s and early 1980s. A key difference now is that, largely, producers still have stronger income and cash on their balance sheets compared to the late 1970s. 10
Randy Blach, CattleFax Cattle & Protein Market Situation and Update Randy Blach, CattleFax, kicked off day two of the Kansas Bankers Ag Conference in Manhattan! Attendees received a timely and insightful perspective on domestic and global cattle and protein markets. Alex Weber, American Ninja Warrior UNSTOPPABLE Alex Weber gave the attendees the tools they needed to be leaders in all areas of their lives and how to overcome any challenges that could stop them. Justin Trompke, AgWest Commodities Grain Markets: Managing Market Volatility and Capturing Opportunity Justin Trompke, AgWest Commodities, explored the factors driving today’s grain markets, and attendees learned why having a plan in place can help ag producers be prepared when an opportunity comes. Eric Snodgrass, Nutrien Ag Solutions High Impact Meteorology According to Snodgrass, the hype surrounding isolated weather events often leads people to make predictions about future weather patterns, yet it’s important to recognize that weather is inherently non-linear. 11
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2024 KANSAS BANKERS CONFERENCE SPONSORS THANK YOU! 13
KBA’s Kansas Ag Bankers Division is honored to announce that the 2024 Pioneer Award Winner is Jack Galle. Jack is the Market President & Loan Officer for Commercial and Agricultural Lending at Legacy Bank in Pratt, Kansas. Jack has been an outstanding member of the banking community for over 45 years, and his contributions to the industry cannot be overstated. Jack graduated in 1978 from K-State, where he studied agricultural economics. His passion for banking started early in his career, working for his hometown bank in Moundridge, Kansas, in the early 80s before moving to Hutchinson National Bank as a correspondent banker and ag lender. 2024 Pioneer Award Winner Jack Galle Jack relocated to Pratt in 1989 and began working as a community bank ag lender and branch president at Iuka State Bank. During his tenure, he managed the bank’s operations while it went through multiple ownership changes in the 1990s. Later, Jack briefly worked at People’s Bank for a couple of years in 2006 before joining First National Bank in Pratt. At First National Bank, he served as the lead lender and focused primarily on ag lending. In 2018, Legacy Bank acquired and merged with First National Bank in Pratt, where Jack currently serves as market president and loan officer for commercial and agricultural lending. He was responsible for leading the bank’s ag lending efforts, and his contributions helped make the merger successful. Jack is a skilled banker and a civic-minded member of the community and has been a part of the Pratt community for over 35 years. He has served on numerous organizations, including the Pratt Hospital Board, USD 382 Board of Education, Rotary, Economic Development and the Pratt Chamber of Commerce. Congratulations, Jack! 14
Make Plans to Attend the CEO Summit and Annual Meeting August 8-10 The Broadmoor Colorado Springs he KBA Officers, Board of Directors, and staff are excited to welcome you back for our 2024 CEO and Senior Management Summit and Annual Meeting on August 8-10. This year, we celebrate our 39th year at The Broadmoor in Colorado Springs, a five-star resort with luxury accommodations, exceptional service and culinary delights. The Bank Management Committee has crafted an agenda full of respected industry leaders who will share their thoughts on the current state of banking. Our speakers this year include Senator Jerry Moran, Congressman Tracey Mann, Federal Reserve Governor Miki Bowman, Kansas City Federal Reserve Bank President Jeff Schmid, ABA President Rob Nichols, former Federal Reserve President Tom Hoenig, economist Chris Low, KBA Board Chairman Mark Schifferdecker, and KBA President & CEO Doug Wareham. On Friday morning, August 9, we will hold our annual Jim Maag Golf Tournament. On Friday evening, we will host our casual, relaxed reception and networking dinner at the incomparable Cheyenne Mountain Lodge, a private event space that overlooks Colorado Springs with breathtaking views. On Saturday morning, we will begin with breakfast and golf awards, and we will highlight a very special family celebrating a Century of Family Banking, as well as several of our well‑known and seasoned bankers who will be inducted into the 50 Year Club. Our full brochure and registration information were sent out in early April. As always, our room block is very close to being sold out at the resort. However, if you still need to make room reservations, we encourage you to do so as soon as possible by calling The Broadmoor at (855) 634-7711. If a night you are trying to reserve is sold out, please ask The Broadmoor to place you on their waitlist. They are excellent about getting our bankers in as rooms become available closer to our event date. If you have reservations at The Broadmoor and find that you are unable to attend this year, please call (785) 232-3444 or email bunruh@ksbankers.com before canceling your rooms. If you allow us to cancel your room reservation for you, we can be assured that the rooms will be placed back into our block and used for bankers who are on the waitlist. We can’t wait to see each of you in Colorado Springs this August! Thank you for all that you do for your banks and your communities! T 15
Let’s Revisit the Corporate Transparency Act ast spring, we briefly discussed the Corporate Transparency Act (CTA). During that discussion, we discussed what the CTA is, who must comply, what is needed for beneficial ownership information (BOI) reports, exemptions, effective dates and the three rulemakings planned to implement the CTA. As a financial institution (FI), you are exempt from the CTA; however, many of your business customers are not. It is important for you, as their FI, to initiate a conversation regarding what the CTA is, how it will affect your customers and any future penalties for noncompliance. When Does BOI Reporting Become Effective? Effective Jan. 1, 2024, it became mandatory for many companies in the U.S. to file BOI reports regarding their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. Filing these reports is simple, secure and free of charge. Reporting companies created or registered prior to Jan. 1, 2024, will have until Jan. 1, 2025, to report BOI. Reporting companies created or registered in 2024 must report BOI within 90 calendar days after receiving actual or public notice that its creation or registration is effective. Lastly, reporting companies created or registered on or after Jan. 1, 2025, must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective. Once the initial report is filed, both existing and new reporting companies will have to file updates within 30 days of a change in their BOI. The BOI reporting rule is one of three rulemakings planned to implement the CTA. Rule Two/Access Rule. On Dec. 21, 2023, FinCEN issued a final rule implementing the Access Rule. The Access Rule prescribes the circumstances under which BOI reported to FinCEN may be disclosed to authorized BOI recipients and how it must be protected. The Access Rule reflects FinCEN’s careful consideration of detailed public comments received in response to its Dec. 16, 2022, “Notice of Proposed Rulemaking” on the topic, along with extensive interagency consultations. The rule states FinCEN is authorized to disclose BOI under specific circumstances to six categories of recipients: (1) U.S. federal agencies engaged in national security, intelligence or law enforcement activity; (2) U.S. state, local and tribal law enforcement agencies; (3) foreign law enforcement agencies, judges, prosecutors, central authorities and competent authorities (foreign requesters); (4) financial institutions using BOI to facilitate compliance with customer due diligence (CDD) requirements under applicable law; (5) federal functional regulators and other appropriate regulatory agencies acting in a supervisory capacity assessing financial institutions for compliance with CDD requirements under applicable law; and (6) treasury officers and employees. Each category of authorized recipients will be subject to specific security and confidentiality requirements, in line with the CTA, to protect the security and confidentiality of BOI. To access BOI, domestic agencies must satisfy several security and confidentiality requirements set out in the CTA and the Access Rule. The requirements include establishing standards and procedures to protect the security and confidentiality of BOI, entering into an agreement with FinCEN specifying those standards and procedures, establishing and maintaining a secure system for storing BOI, establishing and maintaining auditable BOI request records, restricting access to BOI, conducting audits and providing FinCEN with reports and certifications. Financial institutions that obtain BOI from FinCEN must develop and implement administrative, technical and physical safeguards reasonably designed to protect the information. Financial institutions will be able to satisfy this requirement by applying to BOI the same security and information handling procedures they use to protect customers’ nonpublic personal information in compliance with Section 501 of the Gramm‑Leach-Bliley Act and its implementing regulations. For each BOI request that it makes, a financial institution will have to certify that the request satisfies applicable criteria. Certain geographic restrictions will also apply. L By Murphy Ray Jr., FORVIS 16
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2024 Harold A. Stones Government Relations Conference Highlights Feb. 7, Topeka Country Club he newly rebranded Harold A. Stones Government Relations Conference, formerly known as the Public Affairs Conference, concluded in early February with an outstanding turnout! Over 177 Kansas bankers gathered in Topeka for insightful discussions surrounding both state and federal legislative and regulatory policies impacting the banking sector. The event commenced with a warm welcome from KBA Board Chairman Mark Schifferdecker of GNBank, N.A., in Girard. Chairman Schifferdecker expressed gratitude for the collective effort in conveying a unified message to state lawmakers, elected officials and representatives from our Kansas Congressional Delegation on behalf of Kansas banks and the communities they serve. A brief moment of silence was observed in honor of Harold Stones, the esteemed figure after whom the conference is named, who sadly passed away last year after leading the KBA from 1981 to 1997. Kansas Governor Laura Kelly set the tone for the conference with an insightful overview of her legislative priorities and the current state of the Kansas economy. Following the governor’s address, KBA President & CEO Doug Wareham delved into critical federal issues facing the industry. Highlights of the conference included the engaging Legislative Leadership Panel, the graduation ceremony of the 2023 Bank Leaders of Kansas (BLOK) class and the introduction of the 2024 BLOK Class. In the afternoon sessions, attendees were provided with a comprehensive Federal Issues Update from the ABA, along with a captivating fireside chat featuring Jeffery Kuzbel, the new president and CEO of FHLB. KBA’s Senior Vice President of Government Relations Alex Orel provided an update on pertinent state legislative matters. Additionally, Doug Wareham delivered insights into the partnership between KBA and the Fort Hays State Robbins Banking Institute, along with the newly launched Internship Connection Program. Wareham concluded the conference proceedings before the eagerly awaited annual legislative reception, where over 100 Kansas lawmakers and distinguished guests engaged with bankers to discuss crucial industry matters. Heartfelt appreciation goes out to all who journeyed to Topeka for this enriching event, and we eagerly anticipate reconnecting with you next year on Feb. 7, 2025! T Kansas Governor Laura Kelly It was an honor to have Kansas Governor Laura Kelly at this year’s Government Relations Conference. She gave an overview of the state legislative affairs, covering topics from Medicaid expansion to tax reform. Chairman Schifferdecker thanked Governor Kelly and Senator Jerry Moran for their efforts that allowed farmers and landowners in the Rattlesnake Creek Basin more time to address impairment claims made by the U.S. Fish and Wildlife Service. 18
2023 BLOK Graduation & Introduction of 2024 BLOK Class Congratulations to the 2023 BLOK class! These bank leaders completed the four-session BLOK program and now head back to their banks with a better understanding of: 1. The structure and governance of the KBA; 2. The state and federal legislative process; 3. The variety of state and federal agencies that govern the banking sector; and 4. The importance of their role as a volunteer KBA leader. And welcome to the 2024 BLOK class. Your journey has just begun! KBA Board Chairman Mark Schifferdecker KBA Chairman Mark Schifferdecker, GNBank, N.A., in Girard, welcomed attendees to the 2024 Government Relations Conference at the Topeka Country Club. He thanked everyone for their attendance and emphasized the importance of supporting BankPAC, engaging with your lawmakers and participating in the legislative process. 2023 BLOK Class 2024 BLOK Class KBA President & CEO Doug Wareham KBA President & CEO Doug Wareham gave a federal issues update. He spoke about oversight issues with our Federal regulators. He covered progress in gaining supporters for the ACRE Act and efforts to oppose the Credit Card Competition Act. Wareham also shared information on Free Market Kansas, a non-profit organization that has been formed to educate Kansans on any proposed policy that will restrict their control of personal financial decisions, jeopardize the safety and security of their personal financial information, or attack our free market economy. Legislative Leadership Panel Senate President Ty Masterson and Senate Minority Leader Dinah Sykes participated on a panel moderated by KBA VP of Government Relations & Staff Attorney Kelly VanZwoll. Legislative leaders talked about state issues impacting the Kansas economy and the banking industry. They covered various topics, including taxes, water, Medicaid expansion, foreign land ownership and the upcoming 2024 elections. 19
Jess Sharp, EVP of Advocacy & Innovation, ABA KBA President & CEO Doug Wareham and KBA EVP of General Counsel Kathy Taylor sat down with Jess Sharp, EVP of Advocacy and Innovation at American Bankers Association, to discuss hot topics in Washington, D.C., including the Credit Card Competition Act, ACRE, CFPB’s Proposed Rule on 1071 and the Safe Banking Act. Jeffrey Kuzbel, FHLBank Topeka President/CEO New FHLBank Topeka President & CEO Jeff Kuzbel joined KBA President & CEO Doug Wareham and Chairman Mark Schifferdecker for a panel on FHLB to discuss market conditions, including liquidity and proposed changes to the FHLB system, including the recently released System 100 Report. State Legislative Update with Alex Orel, SVP of Government Relations KBA SVP of Government Relations Alex Orel gave an update on the Kansas state legislature and the KBA’s legislative priorities. Orel gave a summary of tax reform efforts and the likelihood of a tax package passing this session. He also spoke about KBA’s efforts to modernize and update the Uniform Consumer Credit Code. Finally, KBA’s Government Relations team will continue to monitor any ESG proposals and will work to defend the Kansas banking industry from harmful legislation. 20
2024 HAROLD A. STONES GOVERNMENT RELATIONS CONFERENCE SPONSORS THANK YOU! 21
28th Annual Bank Technology & Operations Conference & Showcase Feb. 12-13, Wichita Hyatt Regency Hotel We had an exceptional line-up of presenters, 118 attendees, amazing sponsors and 44 exhibitors. Check out some of this year’s highlights! KEYNOTE SPEAKERS Regulatory Panel Dave DeFazio FinTech Transformers: Rise of Primacy Dave DeFazio stunned the attendees with the enormity of banking apps being utilized by the Gen Y and Gen Z age groups. This trend is changing overall consumer attitudes and banking behaviors like never before. Being aware of this trend and strategizing to stay ahead of the curve is critical. (Left to right) Moderator Mike Aylward, KBA Technology Committee Chairman; Lacey Peters, Federal Reserve Bank of Kansas City; AJ Steiger, FDIC; David Sanders, FDIC; Robert Hurd, OCC; and finally Kylee Fine, OSBC. 22
Chad Knutson, SBS CyberSecurity Assumed-Breached Testing: Why You Should Test as if a Hacker Was Already in Your Network Chad Knutson, SBS CyberSecurity, expressed how much more effective it is to test as if a breach has already occurred. This helps determine how far the attacker can go before any safeguard measures (people or technology) stop them and if technical defense mechanisms can be relied upon to minimize the impact of a successful spear phishing attack. Morgan Wright, SentinelOne The Coming Cyberspace Cold War with Russia Morgan Wright, SentinelOne, provided an extremely eyeopening presentation discussing Russia’s cyber weapons capabilities. Why have they not yet used its latest weapons against the ongoing battle with Ukraine? The United States is very likely the reason. More opti ons for your customers, without more risk to your bank. Why Partner With Us? Ag Resource Management offers an innovative solution to lenders by mitigating your risks with watch list and non-performing loans. We can help you take these assets off of your balance sheet and increase your lending ability. We achieve this with a blend of proprietary technology and data validation in valuing a growing crop, monitoring that crop, and keeping track of collateral as it approaches maturity. Loans are processed swiftly and we communicate with you throughout the process. We’re just a call away. Get started today with our teams in Kansas. Ryan Schreibvogel 1805 East Mary Street, Suite B Garden City, KS 67846 (620) 371-4858 RSchreibvogel@armlend.com Wade Simpson 7505 NW Tiffany Springs Pkwy. Suite 220 Kansas City, MO 64153 (816) 226-4574 WSimpson@armlend.com ARM is an equal opportunity provider. 23
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2024 BANK TECHNOLOGY & OPERATIONS CONFERENCE SPONSORS THANK YOU! 25
s part of the 2023 NXTSTAGE Financial Technology Pilot Competition, our four winners each receive a feature article to promote the promising, next-generation solutions they offer for banks across Kansas. In this issue, we are proud to highlight Pebble Plan and their innovative services and small business assistance. Pebble Plan gives banks a low-cost/high-return opportunity to de-risk their small business loan portfolios while strengthening client relationships and increasing community engagement. As a hybrid FinTech+EdTech startup, they provide both business education and financial preparedness through software that helps entrepreneurs either stress-test new businesses before seeking financing or re-envision struggling ventures before they get too far off track and start missing payments. This is a win for both banks and the communities those banks serve; the banks get better-prepared borrowers, and the communities get more businesses with a greater likelihood of success. The Pebble Plan app serves as a collaborative planning workspace that helps business owners identify gaps in their operating plans and financial knowledge and then helps them fill those gaps through a built-in curriculum, financial validation tools and on-demand help. Most small business loan delinquencies start as operational problems before they become financial problems. By addressing operational problems through education and accountability, banks can reduce delinquencies and defaults before they get started. Think of Pebble Plan as your first line of defense against preventable delinquencies and a way to guide at-risk credits back to stability while freeing up your staff to focus on more urgent matters. Multiple programs and purchase options are available with features like one-week implementation, flexible pricing and no contracts. The software does not connect with core systems and does not require any changes to disclosures. For details, please visit www.pebbleplan.com/kba. PEBBLE PLAN One of KBA’s 2023 NXTSTAGE Financial Technology Pilot Competition Winners A 26
KBA Family Code Word Campaign Thanks to the generous support of the OSBC and the Kansas Bankers Educational Foundation, we’ve launched a statewide Code Word campaign to combat fraudulent phone activity. Broadcasting on every radio and TV station in the state, our campaign features both English and Spanish commercials and radio spots. But wait, there’s more! We’ve also created eyecatching ads and postcards with QR codes, perfect for distributing to your customers. Help us spread the word by featuring these materials in local newspapers and sharing our videos on your social channels and websites. Together, let’s make a difference in protecting our communities from financial fraud! Please use #familycodeword on your socials. Don’t fall victim to a scam. Create a family code word. Scan the QR Code for more info. No seas víctima de una estafa. Crea una palabra clave familiar. Escanee el código QR para obtener más información. CODIGO QR 27
Kansas Bankers Press for Regulatory Relief During ABA’s Washington Summit en Kansas bankers joined KBA staff in early April for the annual ABA Washington Summit, attended by more than 1,300 banking industry advocates from across America. Team KBA was able to meet with members and/or staff from all six Kansas Congressional Delegation offices and delivered information on issues ranging from support for the ACRE Act and SAFER (Cannabis) Banking Act to opposition against the Credit Card Competition Act and various federal regulatory proposals, including the 1071 small business lending rule to further restrictions on debit card interchange revenue to community reinvestment act reform to the CFPB’s ongoing war against several forms of bank fee income. Special thanks to the Kansas bankers who stepped up to carry our state and industry’s message to Washington, D.C. KBA-member bankers and KBA staff participating in ABA’s recently held Washington Summit included Alex Orel (KBA SVP — Government Relations), Jonathon Johnson (Home Savings Bank, Chanute), Brad Yaeger (Legacy Bank, Wichita), Deron O’Connor (Astra Bank, Hays), Gary Schmitt (INTRUST Bank, Wichita), Kyle Campbell (Astra Bank, Abilene), Justin Sparks (Bankers’ Bank of Kansas, Wichita), Brian Whitesell (Landmark National Bank, Manhattan), Gil Trout (Emprise Bank, Wichita), Mark Larrabee (Arvest Bank, Shawnee Mission), Doug Wareham (KBA President & CEO), Sarah Keeny Moon (Citizens Bank of Kansas, Derby) and Kathy Taylor (KBA EVP — General Counsel). Gary Schmitt (INTRUST Bank), Brad Yaeger (Legacy Bank) and Gil Trout (Emprise Bank) thanked Senator Moran for championing the ACRE Act and working to push back on the regulatory tsunami coming from federal bank regulatory agencies. T Mark and Aimee Larrabee (Arvest Bank), along with KBA staffers Kathy Taylor and Doug Wareham, paused for a photo with Senator Moran at a KBA-hosted meet-and-greet held at the Hyatt Regency on Capitol Hill in Washington, D.C. 28
Kyle Campbell (Astra Bank at Abilene) shared the negative impacts of losing interchange fee income for the bank’s small businesses and consumer customers during KBA’s visit with Bill Birsic, banking liaison for Sen. Roger Marshall. KBA’s EVP & General Counsel Kathy Taylor and former KBA Chairman Jonathon Johnson (Home Savings Bank at Chanute) welcomed Cong. Tracy Mann to the KBA-hosted meet-and-greet and thanked him for his support of numerous KBA and ABA federal legislative initiatives. Cong. Jake LaTurner concurred with KBA concerns on mortgage trigger leads and overreach by the CFPB proposals to modify the UDAAP Rule and impose restrictions on various bank fees. KBA Federal Affairs Committee Member Mark Larrabee thanked Brandon Naylor with Rep. Sharice David's office for recognizing the negative implications on consumers and small businesses from the socalled Credit Card Competition Act, which would impose a new routing mandate on credit card transactions. Cong. Ron Estes was confident Congress would avoid a government shutdown by adopting an omnibus spending bill. Estes also highlighted how the House Ways and Means Committee would soon be considering what portions of the Trump-era tax relief would be extended by Congress. KBA Political Action Committee Chairman Jonathon Johnson (Home Savings Bank — Chanute) and KBA SVP of Government Relations Alex Orel paused for a photo at ABA’s BankPAC booth. The Kansas Bankers Association (KBA) was the first state in America to present their full fair share contribution to the ABA in 2024. Thank you, Kansas bankers, for supporting KBA and ABA’s BankPAC!!! 29
IN MEMORY Kirby B. Clawson March 21, 1934-March 1, 2024 Kirby Clawson, 89, of Plains, Kansas, passed away Friday morning, March 1, 2024, of congestive heart failure, at St. Catherine Hospital in Dodge City, Kansas, with his children gathered around. Kirby stayed active until the end, coming into the office Tuesday and still visiting about history and business with family members on Thursday night. Kirby, the fourth of eight children, was born to C. H. “Dutch” and Bernice Pauline (Beaver) Clawson in the family home on the prairie, three miles east of Hitchland, Texas, on March 21, 1934. Kirby grew up riding a horse to attend a one-room schoolhouse in Hitchland as a child during the days of the Dust Bowl and Depression. In 1948, the family moved to a farm five miles west of Gruver, where Kirby attended and graduated from high school in 1952. Kirby didn’t stray far from home when he attended Panhandle A&M College at Goodwell, OK, where he was active in ROTC, the photography club, the museum club and the yearly cattle auction that continues to this day. Kirby took a mandatory art appreciation course there, which seeded his love for art that continued throughout his life. Kirby was also on the livestock judging team and graduated with a B.S. in animal husbandry in 1956. After graduation, Kirby farmed, ranched and continued to help his father at the Stateline Grain Company in Hitchland. On March 19, 1960, Kirby married a lovely Kansas girl, Mary Collingwood, who had been teaching school in Liberal, Kansas. After marriage, they made their home in Hitchland, Texas. On April 1, 1962, Kirby and Mary moved to the farm northwest of Satanta, Kansas, where they spent nearly 50 years raising crops, cattle and their six children. Kirby loved the challenge of farming, looking after the land, and improving and making the land more productive. Kirby helped many young men get started in the farming business by renting them ground and offering them advice over the years. Kirby was also blessed to be able to hire some good friends to help in many different capacities. He and his family are very grateful for all these relationships and the positive things that resulted from the expertise and hard work of many people. Kirby served as a member and officer of the Southwest Kansas Irrigation Association, was a director of the REA Board, a member of the Satanta Chamber of Commerce, the Satanta School Board, and was one of the original Ground Water Management #3 board members. Kirby served on the board of the Collingwood Grain Company for 20 years and as chairman of the Board of The Plains State Bank (now Bank of the Plains) from 1977 until the early 2000s. Kirby was a partner in the High Plains Ponderosa Dairy for the past two decades. God blessed Kirby with a mind for business and an incredible memory for recalling details. Kirby shared his business knowledge, passion for good cattle and farming expertise with his children. He began turning over the reins of the businesses to them 30 years ago as he stepped into a guiding and nurturing role — encouraging them to start new ventures and learn from their successes as well as their failures. In 2010, Kirby and Mary moved to Plains, Kansas, where Kirby spent most of his days sharing his wisdom and his humor with his children, grandchildren and anyone who visited. People often came to the Clawson Office to seek him out for his advice. 30
Kirby was preceded in death by his wife, Mary Ruth, son Andrew Jerome Clawson, granddaughter Heidi Grace Clawson, great-grandson Wesley, Kade Klahr, his parents, three brothers — Max, Rodney, and Chuck — and one sister, Wanda Stevens. He is survived by his children: Marilyn (Greg) Giles, Dan (Tamra) Clawson, David (Jeanne) Clawson, Kenby (Lana) Clawson, and Mary Beth (Brent) Woods; nineteen grandchildren: Abby Giles, Betsy Giles, Matthew (Tami) Giles, and Josiah Giles; Cooper (Leah) Clawson, Jacqueline (Dean) Klahr, Walker (Laura) Clawson, Gatlin Clawson, and Korben Clawson; Layne (Rachel) Clawson, Ann Clawson, and Carl Clawson; Kyla (Brady) Larson, Kendal (Caroline) Clawson, Kurtis (Paige) Clawson, and Kathryn (Corey) Spraggins, Adeline Woods, Emmett Woods, and Audy Woods; and 14 great-grandchildren with three more on the way in the next few months. Kirby is also survived by his sisters — Ella Mae Clawson, Margaret Bell, Karen (Bill) Seyb and sister-in-law Jo Alice Clawson — and a host of other relatives and friends. Arlen Arthur Gabriel June 10, 1945-January 9, 2024 We are saddened to announce the passing of Arlen Arthur Gabriel of Eudora, Kansas, who passed away at the age of 78, on Jan. 9, 2024, at the St. Luke’s Rehabilitation Institute in Overland Park, Kansas. Arlen was born in Lawrence, Kansas, on June 10, 1945, to Arthur and Alberta Bell Gabriel. He grew up with his parents and sister, Belva Gabriel-Thrasher, in De Soto, Kansas, all of whom preceded him in death. He leaves behind a nephew, Jon Kobler (De Soto, Kansas), and niece, Kelley Kobler-Chapman (Bret, Lenexa, Kansas) as well as a great-niece, Katelyn Chapman (Overland Park, Kansas), and great nephew, Jacob Chapman (Dallas, Texas). Arlen was also preceded in death in 2000 by his beloved wife, Nancy Charles Gabriel, who left behind two children, Dane Petersen (Jill, Kansas City, Missouri) and Christie Kairos (Sunny, Portland, Oregon). Arlen graduated from De Soto High School in 1963 where he excelled at sports and as an honor roll student. He later graduated from the University of Kansas with a liberal arts degree with a concentration in Business. Arlen also spent four years in the Army in service to his country during the Vietnam War. Arlen was also known as the “voice of the wildcats.” He started announcing for the DHS football team when he was a junior in high school and did so for the next 25 years. Arlen also had a long and successful career in the banking industry. He was the president, CEO and chair of the DeSoto State Bank. Arlen was also heavily involved with the Community Bankers Association and was a true champion of community banks. He was an unwavering supporter who dedicated himself to serving on all CBA committees and served as CBA chairman from 1993 to 1994. Arlen loved the state of Kansas and loved to travel. Over the years, he put those two things together and visited every county in the state of Kansas. Many of those trips were with his best friend of 75 years, Phil Kraus. Arlen enjoyed playing softball and golf for many years. Over the years, he took many golf trips with Phil and his other buddies to enjoy some of the best golf courses around the country. Arlen was a loyal fan of the University of Kansas and their football and basketball teams. He was never short on insight about a recent Jayhawk game and always had the inside scoop on new recruits. Arlen was a kind, witty, generous and fun-loving man who always had a smile and a joke for everyone. He was a devoted husband, a supportive brother and a caring uncle and friend. We will always remember Uncle Arlen’s warmth, humor and wisdom. He will be in our hearts forever. 31
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