Banking in 2024

At the time of this writing, Bruning Bank is finishing up a Compliance and Community Reinvestment Act audit by the FDIC. T he Bank has always welcomed outside audits to make sure we are doing things right and in compliance with regulations. Personally, I approach audits as a way to learn and improve my performance within the Bank.

Government regulation is an interesting subject, as it is needed to help protect consumers and businesses from bad actors that provide products and services to those consumers and businesses. The interesting topic is how much regulation is the perfect amount of regulation? Most people have an opinion on this topic, but the range of feelings vary widely.

Two new regulations are coming down the pipe. The first new regulation deals with entities, such as corporations, LLCs, partnerships, etc. Most entities with less than 20 employees and gross revenue of less than $5 million are now required to register with FinCEN, Financial Crimes Enforcement Network. T he main reason for registering is so the government knows who the Beneficial Owners are of these entities and to make sure the owners are not terrorists or other illegal individuals. Banks have been collecting this information for several years and will continue to collect this information. Entities created in 2024 will need to register within 90 days. Entities existing before 2024 will need to register by January 1, 2025. The following link can be used to find more information: https://www.fincen.gov/

The second new regulation is called Section 1071. This regulation requires banks to collect certain information about small businesses, including small agricultural operations. Small businesses are defined as having gross revenues of less than $5 million. Banks will have most of the information, but we may need to collect more, depending on the final rule. Currently, this regulation is being challenged in court by state banking associations, including Kentucky and Texas. Bruning Bank has joined the Kentucky bank association to help fight this rule. As the rule currently reads, banks are expected to collect up to 81 different pieces of information. We do not believe this regulation will go away, but we hope the amount of information collected will decrease to 13 pieces, which was required in the original law.

To close, regulation is a necessary part of the banking world, but we all need to help make sure the government does not overreach. You can help by communicating with your Representative or Senators.  If you have any questions or concerns, please contact your local Bruning Bank. We are here to help you and your business or operation – Build, Grow, and Thrive.

- Ken Mehlin, Executive Vice President, Chief Credit Officer -