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INDEPENDENT BANKERS ASSOCIATION
OF NEW YORK STATE
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SUMMARY Of IBANYS Government Relations Call Of April 8, 2016
April 8, 2016
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OPENING COMMENTS
IBANYS' President & CEO John Witkowski convened the call, welcomed those participating and thanked them for their time and attention. He encouraged all to provide input and comments on the issues addressed. He also urged participation at the upcoming ICBA Washington Policy Summit April 24-27, and especially meetings on "the hill" with New York's Senators and Congressional Representatives on April 26 and 27. It is an important opportunity. Bob Fisher and John Buhrmaster also also noted the importance, and said if CEOs cannot attend, they can designate senior officers to represent the bank.
FEDERAL UPDATE
Alan Keller of ICBA discussed several items.
- He discussed the successful outcome on the FASB's CECL position (FASB's new draft is much more favorable to community banks, and won't require the complex modeling as before). He noted that implementation by the regulators and auditors will now be critical.
- He also updated us on FASB's new rule on the definition of a rural lender, which specifies a lender that makes one or more in rural area, depending on asset levels and other criteria.
- Alan also reported that the House Rules Committee will meet next week regarding the ICBA-advocated bill (H.R. 3791) to raise the consolidated assets threshold under the Small Bank Holding Company Policy Statement from $1 billion to $5 billion.
STATE UPDATE
IBANYS Legislative Counsel Bill Crowell provided a state issues update.
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He discussed the approval of the State Budget for FY 2016-17. T
wo issues of concern and interest to IBANYS members were included: a minimum wage increase, and the proposed family leave provision.
The final budget will eventually increase the hourly minimum wage to $15 in New York City and Nassau, Suffolk and Westchester Counties by 2021. In the rest of the state it will increase to $9.70 in 2016, then increase .70 cents a year until reaching $12.50 in 2020. It will then be up to the State Department of Labor and Division of Budget to analyze regional economies, and various indices, to determine additional increases.
As for paid
family leave
, effective in 2018, employees will be able to take up to 12 weeks of paid family leave to care for an infant, a family member with serious health problems or to help support the family when someone is called into the service. By 2021, 67% of an employee's average weekly wage will become the norm for the program, which will be funded by nominal payroll deductions. Employees qualify by working 26 consecutive weeks.
- There was also a tax cut in the budget for those earning between $40,000 and $300,000 annually to 5.5% once the cuts are phased-in.
- Bill also reported on the four issues of interest to IBANYS (three of which are included on IBANYS' 2016 legislative agenda) that were included in the State Senate's one-house budget bill, but not in the final budget. Those items are: a) exempting banks with up to $1 billion in assets which have received at least a satisfactory CRA rating from their federal regulator in the most recent CRA exam from State DFS CRA examinations; b) extending from 12 to 18 months the examination cycle, similar to what federal provisions did recently, and c) establishing community bank service corporations. IBANYS intends to continue to advocate for each as stand alone bills, and seeking support in Assembly. The State Senate initiative also would have increased the ceiling of deposits from $250 million to $350 million that the State may deposit in each bank participating in the Community Bank Deposit Program. The Senate has asked for IBANYS' input on the idea of allowing credit unions to participate in the Community Bank Deposits Program, which allows the State to deposit funds in the banks. Credit unions would only be authorized to participate "in regions where there is no community bank presence". There was opposition to this among the G.R. committee members on the call, based on the "nose under the tent": theory, and the fact that the issue of "under banked regions" is ambivalent.
- Regarding our legislative amendment to define "lease" as an allowed deduction under the Qualified Thrift Deduction: While the State Tax Department has clarified it satisfactorily in the instructions, we believe it would be prudent to clarify it in law. The State Division of Budget is examining the issue. Under the QTL, a bank may get a 32% deduction of bad debt. Currently, bank must pass an asset test. Leases are not counted unless capitalized (when bank effectively owns property and paying off over time--usually not applicable, for example, in leased branches). This new amendment would allow those to also be included as assets. (Currently, only leases on balance sheet may be counted. This amendment corrects that, enables banks to include ANY leases for real property, putting banks in a better situation to take the deduction.)
- Bill also provided an update on the special additional mort tax. A credit available. The 2014 law did not make it available for more than one year. This new bill allows banks to carry that forward.
Other legislation:
- There was then a discussion of the latest legislative activities. Click here to see report.
- One new bill under consideration amends small biz revolving loan fund (which ESDC created several years back). This would allow loans for micro businesses (employing under 5 people), including micro loans ($5,000 or less). To qualify to use these funds, banks will have a preference if they do those these of loans.
- Another bill would state that if there are insufficient funds, banks must pay smaller checks first, before larger checks. IBANYS has opposed in past, and will oppose again.
- There is legislation to extend the Banking Development District program until 2023--a straight extender.
- One more bill, emanating from the NYS Dept. of State, would mandate that appraisal companies must be licensed, charged a fee and be under DOS purview, but those that are owned as bank subsidiaries would not be included.
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