Pub. 10 2022 Issue 2


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Howard M. Headlee President Becky Wilkes Senior Vice President Beth Parker Director of Education Sara Matute Director of Member Services Brian Comstock Director of Communications & Marketing UBA Staff CONTENTS 1 ©2022 Utah Bankers Association | The newsLINK Group, LLC. All rights reserved. Utah Banker is published four times each year by The newsLINK Group, LLC for Utah Bankers Association and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and banker 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 Utah 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. Utah Banker is a collective work, and as such, some articles are submitted by authors who are independent of Utah Bankers Association. While Utah Bankers Association 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. 2 The Bottom Line: By Howard Headlee, President and CEO, Utah Bankers Association 4 Washington Update No Deal: States Slam On Brakes For CU Acquisitions of Community Banks By Rob Nichols, President and CEO, American Bankers Association 6 Introducing the 2022-2023 UBA Board of Directors 7 17th Annual Women in Banking Conference By Beth Parker, Director of Education, Utah Bankers Association 8 The Edulogue Bank Training in a New World By Beth Parker, Director of Education, Utah Bankers Association 10 Banks Are Worried About A CBDC. Not Nearly Worried Enough By Rob Blackwell, Chief Content Officer at Intrafi 12 SWOT-ing at the Crisscrossing Crypto Crackdown By Theo Kelly, Associate General Counsel, Compliance Alliance 15 Utah is the Silicon Valley of Financial Services By George Sutton, UBA Legal Counsel and Former Utah Commissioner of Financial Institutions 16 114th Annual UBA Convention By Brian Comstock, Director of Communications & Marketing, Utah Bankers Association 19 Craig White Named 2022 Distinguished Banker 20 Finding New International Business Customers in Your Midst By Jay Kenney, SVP & Southwest Regional Manager, PCBB 21 Bank Kudos 24 Bankers on the Move 28 UBA Associate Members 32 Associate Member Updates 35 The Utah Court of Appeals Clarifies the Duties a Bank Owes to Customers and Non-Customers By Brent Wride, Shareholder at Ray Quinney & Nebeker. 10 2 12 15 2 The Bottom Line Howard Headlee President and CEO Utah Bankers Association THE BOTTOM LINE Recently, I was rummaging through my mother’s basement when I found a fascinating letter to my father from the White House, signed by Bill Seidman. I guess I never knew of their relationship. The letter began, “The President and the Congress have agreed to hold a Conference on Inf lation. They would appreciate your participation ...” It concluded with, “The Conference on Inf lation is a bipartisan national effort to deal with our number one domestic problem. Your participation will be a real service to our country, and I do hope that you will be able to give us the benefit of your thinking.” That was pretty cool! And very relevant to today’s economic circumstances. I vaguely remember our country’s last big fight with inf lation; the year was 1980, and I was 16 years old. Ronald Reagan had just been elected with a mandate to fix the problem, which he did by working with Tip O’Neill and Howard Baker to implement some very tough economic measures. This led to a devastating election for Republicans in 1982, the year my dad just happened to be running for Governor of Michigan. But by 1984, inf lation was whipped, and Reagan was overwhelmingly reelected. So, imagine my confusion – and stunned disbelief – when I looked at the date on the White House letter: Sept. 24, 1974! I had no idea that our last big battle with inf lation lasted almost TEN YEARS! This makes today’s situation seem so much more daunting. It’s not that we don’t know what causes inf lation and what it takes to get it under control. But whipping inf lation requires political will, discipline, and bipartisan resolve. It took 10 years to muster those resources back in the ‘70s. Today, I wonder if it is even possible. Republicans are poised to make gains in the upcoming election, and perhaps they will take control of the House and even the Senate. Democrats will be desperate to retain the White House in 2024 and will have little incentive to help a Republican Congress whip inf lation. Rather, they will likely focus their efforts on shifting blame for inf lation onto Republicans. If you don’t believe me, just look at immigration. Building a world-class immigration system is not rocket science, so why have we had to endure a broken system for decades? Because it’s a great political weapon both parties use to try to win elections, there is little incentive to actually fix it.

Issue 2. 2022 3 My guess is that in the short run, political consultants for both parties will convince their party leadership that they can successfully build a narrative around inf lation that will punish their opponents. This will go on for as long as voters tolerate and reward it. But in the long run, after every American is much poorer, voters will have had enough, and one party will realize that the reward of ending inf lation is worth the tough medicine required. How long will that be? It depends on how long the American people tolerate political gamesmanship. I believe bankers can expedite the solution by clearly communicating the real causes of inf lation and what it will take to get it under control. We should organize an aggressive and united campaign to repudiate any opportunists that promote myths and false narratives about inf lation for political gain. Stopping inf lation is central to the core mission of banking – helping every American build wealth and pursue the American Dream. It will not be easy, but if we speak up now and keep the focus where it needs to be, we can dramatically reduce the amount of time it will take to stop the current erosion of American wealth. Americans trust banks far more than Congress, so I’m confident that we could have an impact. Just like PPP, America once again needs bankers to take the lead. n Stopping inflation is central to the core mission of banking – helping every American build wealth and pursue the American Dream. It will not be easy, but if we speak up now and keep the focus where it needs to be, we can dramatically reduce the amount of time it will take to stop the current erosion of American wealth. 4 Washington Update Rob Nichols President and CEO American Bankers Association NO DEAL: STATES SLAM ON BRAKES FOR CU ACQUISITIONS OF COMMUNITY BANKS It would have been the largest acquisition of a community bank by a credit union – but word came in mid-June that the deal was off between VyStar Credit Union and Heritage Southeast Bancorporation after a failure to receive regulatory approvals. If completed, the deal would have made Jacksonville, Florida-based VyStar the 13th largest credit union in the nation. The deal was just one of a growing list of mergers announced between tax-exempt credit unions and taxpaying banks in recent months – but states are starting to sour on the idea. Earlier this year, the Minnesota Department of Commerce blocked the acquisition of state-chartered Lake Area Bank by Royal Credit Union, officially clarifying that state law does not permit the acquisitions of state-chartered banks by credit unions. Similar actions have taken place in Colorado, Iowa, Tennessee, and Nebraska. Meanwhile, the Mississippi state legislature succeeded in passing a law stipulating that only FDIC-insured banks can acquire or merge with Mississippi-chartered state banks. The law, which goes into effect this July, puts a halt to any deals in progress that don’t comply with the new requirement. These are encouraging developments. The decision to merge is, of course, a business decision that must be made at the individual level. But states are increasingly acknowledging that allowing tax-exempt credit unions to gobble up taxpaying banks – taking them off the tax rolls for good – is poor public policy that imposes costs on consumers and taxpayers, and they’re taking sensible steps to prevent it from happening in the future. The fact that states are beginning to take action is due in no small part to banker advocacy – and it’s a good reminder of the importance of speaking up whenever we see the credit union

Issue 2. 2022 5 FEEL SECURE. BE SECURE. Contact us today! 801.489.9600 Video Surveillance Electronic Alarm Systems Vault and Safe Locks Access Control Under Counter Steel Pneumatic Drive Up Equipment Deal Drawers Audio/Visual Sound Systems Networking/Structured Wiring It’s wrong for credit unions to try and shoehorn self-serving pieces of legislation through Congress under the guise of promoting financial inclusion – just as it’s wrong for them to exploit their tax-advantaged status to subsidize acquisitions of taxpaying banks, pay for stadium naming rights or private jets, or open multi-million dollar headquarters. industry pushing the boundaries of the statutory limits imposed on it by Congress. Unfortunately, those attempts are only becoming more brazen. Recently, the industry lobbied to create a new loophole designed to enable credit unions to greatly expand their fields of membership and business lending capacity. The House bill, which we don’t expect to advance in the Senate, was included as part of a broader package of financial inclusion measures, despite the fact that the bill contained no language to ensure that these expanded powers would be used by credit unions to serve underserved communities. If credit unions were serious about promoting financial inclusion, they should welcome the opportunity to demonstrate their commitment to serving low- to moderate-income communities by meeting the same Community Reinvestment Act requirements banks must meet. But it’s become clear that credit unions aren’t interested in that mission – in fact, recent data has shown a general pattern of credit unions opening more branches on net in upper- and middle-income census tracts and closing more branches on net in low- to moderate-income census tracts. It’s wrong for credit unions to try and shoehorn self-serving pieces of legislation through Congress under the guise of promoting financial inclusion – just as it’s wrong for them to exploit their tax-advantaged status to subsidize acquisitions of taxpaying banks, pay for stadium naming rights or private jets, or open multi-million dollar headquarters. It’s encouraging that states are starting to scrutinize the credit union industry more closely. Now Congress must do the same. n Email Rob at 6 CHAIR Matt Bloye Wells Fargo Utah Regional Banking Director Salt Lake City VICE CHAIR Andrea Moss Nelnet Bank President & CEO Draper 2ND VICE CHAIR Mark Packard Central Bank President Provo IMMEDIATE PAST CHAIR Eric Schmutz State Bank of Southern Utah President & CEO Cedar City PRESIDENT Howard Headlee Utah Bankers Association President Salt Lake City CHAIR, REGIONAL BANK ADVISORY COUNCIL Brittany Westover JPMorgan Chase Intermountain Region Manager, Middle Market Salt Lake City CHAIR, COMMUNITY BANK ADVISORY COUNCIL Brad Baldwin First Utah Bank President & CEO Salt Lake City CHAIR, INDUSTRIAL BANK ADVISORY COUNCIL Lew Goodwin Square Financial Services Banking Services Lead Sandy BOARD MEMBERS Bruce Ashcroft D.L. Evans Bank Utah Region President Ogden Jan Bergeson Ally Bank Utah Market Leader Sandy Todd Boren Celtic Bank President & COO Salt Lake City George Daines Cache Valley Bank Chairman & CEO Logan Doug DeFries Bank of Utah President & CEO Ogden INTRODUCING THE 2022-2023 UBA BOARD OF DIRECTORS Frank Destra UBS Bank, USA Vice Chairman, President & CEO Kristin Dittmer Regions | EnerBank USA EVP & CFO Salt Lake City Terry Grant Altabank President & CEO American Fork Ed Haidenthaller Pitney Bowes Bank, Inc. President & CEO Salt Lake City Kay Hall Zions Bank EVP & CFO Salt Lake City Dan Kennedy Sallie Mae Bank President Salt Lake City Kisty Morris Morgan Stanley Bank Executive Director Salt Lake City Mori Paulsen Bank of America Salt Lake Market President Salt Lake City Todd Stewart Rock Canyon Bank President Provo Spencer White Utah Independent Bank President & CEO Beaver Drew Yergensen KeyBank Utah Market President Salt Lake City

Issue 2. 2022 7 Founder of Exitus – shared their personal stories of overcoming obstacles and finding a work-life balance while being role models in our community. Makenna went viral after running a 5:25 mile while nine months pregnant and later qualified for the 10k in the Olympic Trials, an inspiration to what women can achieve when they are determined and supported. Candace literally stepped off a plane from the war-torn streets of Ukraine to speak, recounting the sights and stories of abandoned orphans and young children walking across borders without adults in tow. She went on to empower the audience to realize their worth and know that they “belong at the table.” With an impressive collection of awards and recognitions, Viola Llewellyn – co-founder and President of Ovamba Solutions, Inc. – offered fascinating insight into how some cultures view finances and impressed upon us that our communities are made up of a myriad of potential customers from an unimaginable range of cultures and countries of origin. “I was thoroughly impressed by each of the guests today,” said one attendee. “They have given me new heights to aspire to.” We hope you will join us next year! n The Utah Bankers Association hosted its 17th Annual Women in Banking Conference on April 14, 2022. With nearly 150 attendees at the Salt Lake City Marriott University Park and over 300 more joining on Zoom, it was our largest Women’s Conference yet. Everyone enjoyed a day of networking, camaraderie, education, and motivation, plus a lineup of speakers that had it all. Dr. Susan Madsen, Founding Director of the Utah Women & Leadership Project at Utah State University, kicked off the conference by discussing why we need more women leaders and how to strengthen the impact of women and girls in the state. Phil Dean from the Kem C. Gardner Policy Institute provided an overview of the economic impacts of COVID, while Jackie Rolow from Shazam provided best practices for having tough conversations in the workplace. Sui Lang Panoke, Senior VP, Diversity. Equity. Inclusion. at Zions Bank, hosted a panel of the majority female executive team at Nelnet Bank. Each woman discussed their path to the top, the benefits and pitfalls of being women at the helm, and what they’ve learned along the way. Emotions ran high at times, as Makenna Myler – ASICS Professional Distance Runner – and Candace Rivera – CEO & 17TH ANNUAL WOMEN IN BANKING CONFERENCE By Beth Parker, Director of Education, Utah Bankers Association, and Brian Comstock, Director of Communications & Marketing, Utah Bankers Association 8 THE EDULOGUE By Beth Parker, Director of Education, Utah Bankers Association Bank Training in a New World Organizations must look for ways to upskill and reskill their workforce to meet changing job requirements, rapidly onboard and train workers, develop leadership skills that utilize changing technologies, and manage remote workforces. In addition, banks must address the urgent social and cultural priorities of diversity, equity, and inclusion, answer the wants and needs of the younger generation, and ensure that employees keep up with changing regulatory requirements under a new administration while managing risk. According to HR experts, employees increasingly need new skills – such as adapting to working remotely, along with communication, adaptability, and resilience – the top skills needed in the post-COVID workplace. As organizations shift to a more remote workforce, they must explore the critical competencies employees will need to collaborate digitally, provide strong, remote leadership, and solid customer service. The pandemic has shown how technology can be used to expand access, increase f lexibility, and move away from rigidity. There is now the opportunity for learning to become far more personalized, real-time, and life-long than we thought possible a few years ago. Learning and development should be about creating the right environment and culture to enable personalized learning and learning in the f low of work. It’s also important to consider which roles are critical to the success of essential workf lows. Organizations need to focus on the skills needed to drive the organization’s competitive advantage and the workf lows fueling that advantage. Encourage employees to develop critical skills that potentially open multiple opportunities for their career development, rather than preparing for a specific next role. A key factor to being successful post-pandemic is transitioning from designing for efficiency to designing for resilience. To build a more responsive organization, design roles and structures around outcomes that increase agility and f lexibility and formalize how processes can f lex. Also, provide employees with varied, adaptive, and f lexible roles to acquire crossfunctional knowledge and training. By fundamentally changing the role and focus of the learning and development function and typical growth ladders, banks can ensure they have the necessary skills to foster a lifelong culture of learning that helps their employees and the organization to thrive. The UBA and its partners provide access to exceptional instructors with years of industry insights and experience who facilitate interactive course sessions that focus on the important economic, regulatory, and competitive pressures facing the industry today, as well as management and leadership essentials, diversity in the workplace, and more. n The need for learning and development in America’s banks has never been more urgent than it is today. COVID-19 instigated global disruption, transformed economies, and changed the nature of work and the workforce. The need to address the critical social dynamics of diversity, equity, and inclusion while meeting the desire of younger generations for easy and immediate access to data has added an additional layer of stress and the need for training.

They asked banks to help. You did. Now what? Your customers needed help, and you were there for them. Congress and regulators leaned on banks, and you responded. Now it's time to help yourself. Get exam insight from your peers before your next exam. Bank Exam Prep Center is your regulatory exam central. Prep before your exam and be sure to return after to take a survey and share your experience. Visit the Bank Exam Prep Center • What questions are examiners digging in on? • What are the hot topics as field examiners meet with your peers? • How are regulators addressing COVID-19 lending practices? • What discussions are taking place over pandemic operational challenges? 10 By Rob Blackwell, Chief Content Officer at Intrafi When it comes to the creation of a U.S. central bank digital currency, many bankers take comfort in the conventional wisdom that any such move — if it happens at all — will take years to come to fruition. With many technical hurdles to overcome, not to mention the massive challenge in passing legislation to authorize a CBDC, they believe time is on their side. Indeed, a recent IntraFi survey found concerns raised by banking trade groups about a possible CBDC had not yet drifted down to most institutions. Only 13% of the more than 400 executives polled rated the creation of a CBDC as a subject of concern. In contrast, more than 40% of them were more worried by the Consumer Financial Protection Bureau’s crackdown on so-called “junk” fees or its pending rule to collect more data on small business loans. This complacency is dangerous. While I understand concerns about both these CFPB initiatives, their importance pales in comparison to what the Federal Reserve Board is contemplating now. If bankers are not careful, they may find themselves on the losing end as they watch the Fed create an alternative to federally insured deposits. This would inevitably drain funding from community banks, impacting the availability of credit nationwide, and likely fuel further consolidation in the industry. There may be other harmful impacts as well. The European Central Bank has estimated that if it implements its project to create a European CBDC, it will drain 12% to 20% of deposits out of the private-sector system, according to Randal Quarles, the former Fed vice chairman for banking supervision. Quarles warned that if that happened in the U.S., policymakers would inevitably seek to redirect some of those funds back to banks, and that would come with political strings attached. “That’s going to have to be reintermediated somehow … unless we want a contraction in the economy,” he said on an episode of IntraFi’s Banking with Interest podcast. That “will come with strings. It will be directed to where the politicians would like it. It will be withheld from where the politicians don’t want it … All of it is unavoidable if you have a central bank digital currency that is even partially disintermediating the private sector banking system.” BANKS ARE WORRIED ABOUT A CBDC. NOT NEARLY WORRIED ENOUGH.

Issue 2. 2022 11 To be sure, it is true that a CBDC is not yet ready for deployment. Speaking to the House Financial Services Committee last week, Fed Vice Chairman Lael Brainard said the development of a CBDC would take at least five years to develop after it has been authorized. She cited technical issues that must be sorted out, but used that as an argument for why Congress should not debate the issue too long. Some lawmakers also do not appear anxious for the Fed to move forward. Rep. Patrick McHenry, the top Republican on the House Financial Services Committee, told Brainard that “no one has made a compelling case” for why a central bank digital currency is needed. But banks must not take such comments as proof that Congress will not act. Despite some lawmakers’ misgivings, Brainard and supporters of a CBDC repeatedly have raised fears that the U.S. dollar will no longer be the world’s reserve currency unless it creates its own digital dollar. “In future states where other major foreign currencies are issued in CBDC form, it is prudent to consider how the potential absence or presence of a U.S. central bank digital dollar could affect the use of the dollar in global payments,” Brainard said. This is precisely the kind of argument liable to win over lawmakers from both political parties. “It is hard for us to see Republicans standing in the way if the role of the dollar in global trade is put at risk because there is a digital Euro but not a digital dollar,” wrote Jaret Seiberg, an analyst with Cowen Washington Research Group, in a recent note to clients. Quarles raised a similar fear, noting that “national security politicians, many of them conservative Republicans,” might support a CBDC because of fears of what China and other countries are doing. And although it may seem that lawmakers have a ways to go — and some reluctance — about pursuing a CBDC, history has taught bankers that is no guarantee action won’t happen, often much quicker than expected. Time and again, crises have pushed bills that the financial services industry thought would never pass quickly across the finish line. In August 2001, American Banker ran a story about how the prospects for the passage of an anti-money laundering bill were slim to none. By October, that bill was the law of the land. What happened to cause such a drastic turnaround? The Sept. 11 terrorist attacks. A similar dynamic occurred not even a decade later when the creation of the CFPB went from a pie-in-the-sky proposal by a relatively obscure Harvard law professor to the agency opening its doors a few years later in 2011 (and that professor later being elected to the U.S. Senate). While some may say these are exceptions, I would argue it has become increasingly the norm in passing controversial legislation. Those bills often sit on the backburner, stuck until a crisis vaults them to the front and spurs enactment. It is easy to imagine a scenario in which the position of the U.S. dollar appears precarious or some foreign crisis fuels doubts about whether the dollar is the world’s reserve currency. How quickly do you think lawmakers will act if that appears in jeopardy? For his part, Quarles appears confident a CBDC won’t happen. But that’s only because he is counting on the strong opposition of the banking industry. And while the banking trade groups have taken compelling positions against a CBDC, that will not be enough if those concerns do not drift down to individual bankers at the grassroots level. To bankers, the advent of an CBDC can’t be treated like a C- or even B-level concern. They must recognize it for the existential threat it poses — and ensure Congress hears their objections loud and clear. n “In future states where other major foreign currencies are issued in CBDC form, it is prudent to consider how the potential absence or presence of a U.S. central bank digital dollar could affect the use of the dollar in global payments” 12 SWOT-ING AT THE CRISSCROSSING CRYPTO CRACKDOWN By Theo Kelly, Associate General Counsel, Compliance Alliance INTRODUCTION In the 14 years since blockchain technology’s invention, banks have been left to compete with emerging business models and new stores of value, while operating in an uncertain vacuum of regulatory guidance. The resulting whiplash of lightningfast innovation seemingly incapacitated the U.S. regulators of currencies, commodities, and securities. With only crisscrossing guidance offered thus far, it may seem impossible to make a risk-based decision on whether, and to what extent, a bank should adopt blockchain technology, including cryptocurrency and web3. However, using the triedand-true SWOT analysis, banks can establish a baseline with which to evaluate the impact the crisscrossing crypto crackdown will have on their internal and external environment. First, a refresher on the more recent commentary and actions by banking regulators. We know that Basel will be releasing a second consultation later this year with an eye on a “global minimum prudential framework” to address risks associated with crypto assets. Their first consultation offered a riskweighting methodology. The U.S. Office of the Comptroller of the Currency (OCC) confirmed in July 2020 that national banks could offer crypto custodial services. However, Acting Comptroller Chu recently publicly remarked that it is time to ‘reset and recalibrate’. The Federal Reserve Board (FRB) hasn’t released much guidance other than to say they will be releasing guidance. The FRB did examine the pros and cons of a Central Bank Digital Currency (CBDC) but “does not favor any policy outcome.” And, the U.S. Treasury has offered a risk assessment of money laundering risks in the crypto asset space. The FDIC joined the OCC and FRB in their “Crypto-Asset Policy Sprint” statement but has offered little else outside of requiring banks to notify the FDIC prior to engaging in crypto-related activities. The CFPB broadened its own enforcement authority in this space last year, formalized in March by Executive Order. And finally, legislation introduced in early June appears ready to assign rulemaking and enforcement authority to the Commodity Futures Trading Commission (CFTC), leaving the Securities Exchange Commission (SEC) any leftover crypto assets that are classified as securities. THE BASICS It can be difficult to understand and analyze the risks associated with crypto assets if you don’t have a grasp of some foundational terminology. Unfortunately, there’s a lot of socalled ‘gatekeeping’ in the ‘crypto community’ – e.g., folks who use overly-complicated lingo to seem more tech-savvy than others. So, here are a few layperson examples to help understand the basic terms and concepts. What is blockchain? Have you ever worked on a document at the same time as another person or team? You can see others’ initials moving about on the page followed by their edits to the collaborative document. And the revision history is saved so everyone can see who made what changes. Well, this is a great analogy for

Issue 2. 2022 13 ‘distributed ledger technology’ (DLT). But the key difference between DLT and blockchain is that there is no single authority that maintains the data (e.g., OneDrive, Google, AWS). With blockchain, there is no centralized authority holding the data, and the data is not valid unless ‘approved’ by a program that runs on many different devices around the world. What is a crypto asset? Crypto assets are much like your everyday tangible assets: cash, contracts, artwork, investments, information, etc. However, crypto assets are entirely digital. Here, everyone knows that your unique address (known as a wallet address) owns those assets because of the transaction information stored on the blockchain. A dollar bill may be compared to a Bitcoin. A contract may be compared to a ‘Smart Contract’. A non-fungible token may be compared to your house Deed. Nearly every transaction made in your everyday life can be hosted on a blockchain. THE SWOT A SWOT analysis considers your internal strengths and weaknesses and external opportunities and threats. This template offers baseline considerations to review the risks and opportunities associated with the emerging crypto regulatory scheme. Strengths & Weaknesses • Management: The Board and senior managers of the bank have a clear understanding of the existing regulatory parameters surrounding crypto assets, are knowledgeable about the applicable rules to bank offerings, maintain an awareness of emerging changes, and have a system in place to update the bank’s operations quickly and efficiently to comply. • Internal Controls: The bank’s internal controls are builtout and appropriately monitored and tested to manage the increased credit, liquidity, and transaction risks associated with crypto asset custody, transactions, loans, issuance, and holdings. The bank stress tests contagion risks and enhances areas of identified deficiencies. The bank has consistent margin call triggers, procedures, and communication channels, where applicable. Evaluations of crypto assets as collateral are reviewed for fair lending purposes. • Personnel: Bank personnel are properly trained to understand and communicate the products and services offered to customers, are aware of and can appropriately mitigate the related risks, the number of assigned personnel is appropriate for the associated risks, and enough redundancy is built into roles to prevent any system failures that may result from termination of key personnel. Vendors undergo a risk-based due diligence review before business begins, and periodically thereafter. • Technology: The hardware and software used to transact, secure, and maintain crypto assets are wellmaintained and secure. External auditors are used to test and verify. The bank has a consistent and safe procedure for securing crypto collateral. • Insurance: The bank maintains appropriate levels of insurance related to all facets of crypto asset products and services. • Products: The bank can market and advertise crypto asset products and services in a manner consistent with existing laws and regulations, and an eye for fair lending and UDAAP risks. It has reviewed existing non-crypto products and services, identified the potential impacts, and updated those growth strategies to account for the internally driven competition. Opportunities & Threats • Management: The Board and senior managers of the bank can readily identify risks and opportunities presented by the lack of crypto asset laws and regulations. A SWOT analysis considers your internal strengths and weaknesses and external opportunities and threats. continued on page 14 14 • Personnel: Personnel are excited to join a bank that offers roles in the crypto asset space; however, this area may also come with increased competition for bank personnel who maintain desirable skills in a new field. • Technology: Rapid advances in technology offer opportunities to quickly adopt and roll out new product offerings and services; however, the maintenance and security of aging software and hardware suffer, and investments in new technology depreciate quickly. • Competition: The bank is an early adopter of crypto products and services but may now lack resources to act upon new trends, technology, and opportunities. • Reputation: The bank is well-posed to trigger crisis management plans, maintains open channels of communication with relevant stakeholders, and has identified and mitigated risks associated with crypto asset environmental risk factors. • Legal & Compliance: The bank’s compliance management system and risk management program appropriately identify and control crypto-asset risks, Theodore Kelly serves as Associate General Counsel for Compliance Alliance. Theo’s professional pursuits include competently guiding business leaders in all matters of regulatory compliance, learning and sharing ways in which blockchain technology can positively impact business operations, and writing publications related to emerging technologies in the legal, risk, and compliance spaces. including the emerging regulatory scheme, and the potential for increased litigation. CONCLUSION Given what little we know about the future legal and regulatory landscape of cryptocurrency, a comprehensive and bank-specific SWOT analysis may offer some comfort in the uncertainty. Take some time to discuss your bank’s crypto posture with your internal and external stakeholders and analyze the relevant strengths, weaknesses, opportunities, and threats for your bank. Continue getting involved in the discussions surrounding the proposed laws and regulations. And take this opportunity to enhance your risk management program and Compliance Management System to monitor and respond to the crypto regulatory crackdown we all know is coming. n Take some time to discuss your bank’s crypto posture with your internal and external stakeholders and analyze the relevant strengths, weaknesses, opportunities, and threats for your bank. continued from page 13

Issue 2. 2022 15 By George Sutton, UBA Legal Counsel and Former Utah Commissioner of Financial Institutions UTAH IS THE SILICON VALLEY OF FINANCIAL SERVICES This has made Utah an outlier in comparison to the national trend of numbers of state banks declining to practical insignificance. In some states, the fees paid by the small number of remaining state-regulated banks are no longer adequate to support a state regulator. This is especially true in the northeast and a few states in the intermountain west. According to FDIC statistics (as of Dec. 31, 2021), Connecticut has six state banks, Maine has three, New Hampshire four, Rhode Island three, and Vermont two. The numbers are somewhat better in the states surrounding Utah, but only slightly. Arizona has nine state-chartered banks, Idaho 10, Nevada 12, and Wyoming 24. These are mostly small banks, a legacy of past policies prohibiting branches. In contrast, Utah has 36 state-chartered banks, including many branchless banks serving nationwide markets. Serving nationwide markets makes a big difference in relative size compared to the few remaining community banks in surrounding states. The total assets of Utah’s state-regulated banks are $397 billion. That ranks fifth in the nation. Only New York, California, Texas, and North Carolina rank higher. The combined total size of all the state banks in states surrounding Utah – including Colorado and Montana – is $229 billion, roughly 58% of Utah’s total. And these numbers do not include national banks based in Utah, such as Zions, American Express, Synchrony, and Ally. The combined assets of all commercial banks based in Utah are $814 billion, which is the sixth highest in the nation behind Ohio, North Carolina, Delaware, New York, and California. Not bad for a state with about 1% of the nation’s population. The FDIC also reports that Utah banks directly employ 29,913 people. Employment in other parts of the financial services industry adds significantly to that total, making it one of the largest employment sectors in the state. Several things make this possible. A dramatic growth of banking opportunities due to new technologies, supported by competent and reputable organizers, accounts for many banks organized since the 1980s. Utah’s well-educated workforce is frequently mentioned, especially by banks operating nationally that could locate anywhere and choose Utah as their base. Strong support from our Senators and Representatives in Washington and our state government has played another key role, along with the competence and expertise of our state regulators. Utah’s regulators deserve special mention. The Department of Financial Institutions and the San Francisco Regional Office of the FDIC are the first stop in organizing a new state bank in Utah. Utah’s reputation as a center of innovation has drawn some premature, poorly developed or dangerous proposals. Weeding those out is as important as facilitating plans that are well developed and likely to succeed. Utah’s state and federal regulators have more expertise regulating newer kinds of banks, such as branchless banks, than regulators in any other state or region. They are uniquely qualified to ensure the integrity of Utah’s banks. n Former treasury and ABA official Wayne Abernathy once described Utah as the “Silicon Valley of financial services.” Like its namesake, the innovation that implies has been remarkably successful. For at least the past 40 years, Utah banks of all kinds – traditional as well as the kind of branchless banks providing specialized services to national markets – have consistently ranked among the strongest and safest banks insured by the FDIC. This noteworthy success should be a model for the nation. 16 More than 400 bankers, guests, and business partners converged on Sun Valley June 26-29 for the 114th Annual UBA Convention, gathering to explore the latest industry developments, reconnect with colleagues, and enjoy some fun in the sun with family and friends. As per tradition, the festivities kicked off with registration in the Exhibit Hall on Sunday afternoon. Bankers and their families connected with over 40 exhibitors – learning about their products and services, partaking in fun games and activities, and scoring some amazing swag along the way. Scott Anderson, President & CEO of Zions Bank, kicked off the Monday Business Session, sitting down for a fireside chat with Jon Huntsman, Jr., the former Utah Governor. He provided his unique perspective about world events, specifically in Russia and China, while also imploring the audience to be realistic about energy and the economy to find workable solutions. Natalie Gochnour, Director of the Kem C. Gardner Policy Institute at the University of Utah, provided an economic update, telling the audience that despite these trying and uncertain times, Utah is in good position to recover quickly, and bankers can really help in this environment. The morning was capped off by Brad Wilson, Speaker of the Utah House of Representatives, discussing the biggest challenges facing the state – drought, rising housing costs – and why he remains optimistic that Utah can overcome them. Following lunch on the terrace, attendees went to different breakout sessions, addressing hot industry topics such as cryptocurrency, cybersecurity, employee mental health, developing a strategic board, regulatory issues, and the evolving future of banking. After all that work, it was time for some play – Bingo-style! Teens got their own age category this year, alongside adults and kids, and all 3 age groups won some outstanding prizes. Tuesday was Activities Day, with attendees enjoying a fun run and walk, white water rafting, golf, horseback riding, trap shooting, and the first ever Pickleball Tournament! Later that evening, UBA Chair Eric Schmutz, State Bank of Southern Utah, and ABA Chair Scott Anderson, Zions Bank, were honored at the Chairman’s Reception & Dinner. After dinner, Bruce Rigby of Cache Valley Bank and Linda Anderson of Wells Fargo were recognized with 40 Year Service Awards, and Craig White of Utah Independent Bank was presented the Distinguished Banker Award (see page 19). To wrap up a busy but fun-filled day, guests were entertained by the world-famous Sun Valley Ice Show and a fireworks display. 114th Annual UBA Convention By Brian Comstock, Director of Communications & Marketing, Utah Bankers Association Wednesday’s Business Session was again led off by Scott Anderson, this time in his role as ABA Chairman. Anderson gave an uplifting report, reminding bankers that, “We are a noble profession. We do make a difference. We are at the heart of our communities.” State Treasurer Marlo Oaks also gave a passionate address, detailing the drawbacks of using ESG in capital markets. And Ben Browning, Bank of Utah, gave an Emerging Bank Leaders report, detailing the program’s mission and its achievements this past year. Then it was time for the annual membership meeting, in which bankers elected the 2022-23 UBA Board of Directors, including Matt Bloye – Region Bank President, Wells Fargo – as Chairman. Bloye introduced the event’s final speaker – James Lawrence, also known as the Iron Cowboy. He had attendees riveted for nearly an hour, recounting his incredible feat of 50 Ironman Triathlons in 50 states in 50 days, which he later topped by completing 101 in 101 days. Lawrence shared several positive lessons from his journey, inspiring the audience to be their best selves – the perfect exclamation point to an outstanding Convention. And though Lawrence said that “tomorrow is not guaranteed, the only important time is now,” it’s not too early to start making plans for the 115th Annual UBA Convention, which will be back in Sun Valley June 25-28, 2023. n

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Issue 2. 2022 19 Craig White, Chairman of the Utah Independent Bank, was recognized as the 2022 Distinguished Banker in a presentation at the 114th Annual Utah Bankers Association Convention on June 28, 2022. White is the 27th recipient of the UBA’s highest honor, joining a prominent list that includes his father, Bob White, the 1993 recipient. The Distinguished Banker Award – first presented in 1985 – is awarded periodically to a Utah banker who makes a lasting impact on his or her institution, community, and the banking industry. After serving for over 40 years in nearly every position in the bank, Utah Independent Bank is a thriving institution, thanks to Craig’s passion, commitment, kindness, hard work, and leadership. He has been a respected leader in banking, serving as Chairman of the Board of State Bank Advisors, and he was elected Chairman of the Utah Bankers Association in 2016. Despite a busy banking career, Craig and Julie are generous with their time. He served in two bishoprics, earned a Silver Beaver in scouting, and is devoted to teaching the youth in his community. He also guided the growth of his emerging CRAIG WHITE NAMED 2022 DISTINGUISHED BANKER community through service with the Chamber of Commerce, as well as Beaver’s Planning & Zoning Committee. n 20 Often, using new information can help broaden understanding. For community banks, learning there are international business customers in their own communities, but in unexpected places, may also open their eyes. Many community bankers may not think they have international business customers in their midst. Yet, working with many of our client banks has shown us there are more out there than meets the eye. These businesses may be within your communities and could use international services, giving you more fee income and more ways to support your customers. Not only could there be existing international businesses in your neighborhood, but there are also domestic businesses planning on global expansion. A JP Morgan Chase business survey we reported on for our article, “Reaping the Rewards of SMB Optimism,” notes that 14% of small and midsize businesses (SMBs) anticipate expanding beyond U.S. borders in the next three years. THREE PLACES TO FIND SMBS WITH INTERNATIONAL SERVICES NEEDS: 1. Areas where there have been recent bank acquisitions. You might not think about international businesses when you think of bank mergers and acquisitions (M&A). Yet, we have found that some SMBs have lost their relationship manager through M&A activity and could be looking for someone else to address their international needs, among others. 2. Distribution and manufacturing SMBs. Even if these customers have HQs and manufacturing within state boundaries, they likely have business with other countries for one or more components of their business. Plastics, metals, and machinery are popular imports from trading partners and are used to produce many local goods. 3. Younger business owners. Millennial and Gen Z business owners have grown up in a digital and more connected world, where global commerce is not seen as something only for big companies. Some young business owners may be leading an online business. Others may want to import sustainably sourced products, such as wool sweaters from Ecuadorian alpacas or small-batch coffee from Central America. Once you have determined where the SMBs are that need international services, you can turn your attention to how you can reach out to them. There are multiple ways, but we have found these approaches work well for our bank customers. • Send out targeted communications about your international services so that SMBs needing them will know to contact you. Emails are efficient and fast, while direct mailers can be more impactful, yet take more time. • Invest in localized digital ads, such as Google ads. Those businesses needing wire services or Canadian check imaging will know who to turn to. • Provide educational seminars on international business tips for your community. Likely, SMBs looking for a new service provider will gravitate to such sessions. Keep an ear open for those businesses that may be scrambling. With international business customers, community banks can expand their customer base, strengthen their customer relationships, and increase their revenue through fee income. Isn’t it worth a try? n Dedicated to serving the needs of community banks, PCBB’s comprehensive and robust set of solutions includes cash management, international services, lending solutions, and risk management advisory services. Jay Kenney can be reached at or By Jay Kenney, SVP & Southwest Regional Manager, PCBB FINDING NEW INTERNATIONAL BUSINESS CUSTOMERS IN YOUR MIDST

Issue 2. 2022 21 BANK KUDOS ALTABANK ALTABANK LAUNCHES BUSINESS ACCELERATOR PROGRAM WITH UTAH VALLEY CHAMBER Altabank and the Utah Valley Chamber of Commerce have partnered to create a comprehensive “Business Accelerator” program to meet the needs of growing businesses in the area. The program is currently fielding interest for cohort sponsorships and executive participants and is encouraging all Chambers of Commerce in the Utah Valley region to get involved. The proven 10-week, content-rich business strategy program will launch two sessions, one from August to November this year and another from January to April in 2023. The program will meet on Wednesdays from 9-11 am and include lunch each week. Graduation for the Business Accelerator program is expected to be attended by local dignitaries and leaders, wishing those who completed the program the best as they take their learnings to grow their businesses even further. ENERBANK USA HOME IMPROVEMENT GROWTH BRINGS REGIONS BANK NAME TO SALT LAKE Regions Bank’s home improvement lending division, EnerBank USA, officially opened new offices on the top three floors of 650 Main in Salt Lake City. Founded in 2002, EnerBank became part of Regions in October 2021, accelerating Regions’ focus on serving as the premier bank lender to homeowners. EnerBank provides point-ofsale financing options through a network of contractors nationwide, giving homeowners seamless financing solutions for home improvements ranging from planned renovations, expansions, and upgrades to emergency needs. The acquisition of EnerBank by Regions complements investments Regions has also made in its mortgage and digital home equity lending solutions. KEYBANK KEYBANK OPENS NEW BRANCH IN AMERICAN FORK KeyBank has opened a new branch in American Fork, the first new KeyBank branch in the western half of the U.S. in more than 10 years. Construction was completed in April, and doors opened to the public on May 9. The new, full-service branch – located at 717 West Main in American Fork – highlights KeyBank’s state-of-the-art financial wellness center model, which is staffed with financial wellness consultants rather than a traditional teller line. All transactions will be completed at desks, where consultants will conduct comprehensive financial wellness reviews and discussions. Clients can also meet with specialists in mortgage, investments, business banking and more at the new location. KEYCORP ISSUES 2021 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT Highlighting its purpose to help clients and communities thrive, KeyCorp recently released its 2021 Environmental, Social, and Governance (ESG) Report. The report includes expanded commitments from Key to help drive climate action and increase the representation of people of color in its senior leadership ranks. Key also announced that it surpassed the five-year goals of its National Community Benefits Plan. Through the plan, Key has provided more than $26 billion focused on economic access and equity. These investments and lending included affordable housing, home lending, small business lending, continued on page 22