Your IBANYS Team: 
Working Together To Make 2016 A Great Year 
For New York C ommun ity Banks !
 
In This Issue

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Have You Contributed to NYSIBPAC This Year?
If not...now is the time! We need your help in this statewide election year to support candidates and committees who understand community banks' needs. Can we count on you?
CLICK HERE for our 2016 PAC contribution form. Help support IBANYS' political action efforts in New York State.

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June 15, 2016
GOVERNMENT RELATIONS
 
ALBANY

The NYS legislative session is scheduled to adjourn for the year tomorrow, Thursday, June 16. With the end near, a number of issues are still fluid, and may change with little advance notice.  IBANYS continues to closely monitor and engage on proposals and initiatives we have been following: Those we support, oppose and/or seek to impact. Among the issues are matters involving foreclosure, enhancing credit union powers and aut horities (including their push to be allowed to accept certain public deposits and participate in the state business development district program), cash checkers' ability to make loans and others.
  1. Foreclosures: The Governor has now made the foreclosure debate. He outlined a proposal that would not mandate that banks undertake maintenance and repair of vacant and abandoned properties but would provide for an expedited foreclosure process contingent upon a determination that the property is vacant and abandoned. That would require an applicant bank, after such a ruling, to secure and maintain the property until sale. Banks which voluntarily use the expedited foreclosure
    process option would not be able to avail themselves of deficiency judgments. The Governor's proposal would also impact mandatory settlement conferences, create a statewide vacant and abandoned property registry and several other matters. The Assembly has already passed its bill, similar to the bill proposed by Sen. Klein and the Senate IDC. It would require banks to maintain these  properties during the foreclosure process.  Senate Republicans to date have no formal proposal. IBANYS has proposed a carve-out an exemption for New York headquartered banks whose loan portfolios include an extremely small percentage in foreclosure. It is not at all clear at this point in time where this process is headed The Governor has announced more than $100 million in funds will be available to help homebuyers purchase and renovate "zombie" properties , and assist existing low- and middle-income homeowners with major repairs and renovations. It includes $22 million in settlement funds from J.P. Morgan Chase. Funding is through  the New York State Homes and Community Renewal (HCR) to establish the new Neighborhood Revitalization Program (administered by HCR's State of New York Mortgage Agency)the and provide grants for not-for-profit organizations and municipalities throughout the state to rehabilitate, repair and improve homes. 
  • Credit Unions: Two bills that IBANYS strongly opposes would provide expanded powers and authorities for credit unions. S.3616, Funke/ A.774, Rodriguez would allow credit unions to receive certain public deposits. This is the same legislation IBANYS helped defeat last year, and we hope to do so again now. Here is a link to our Memo of Opposition. Also, A.3521B, Robinson/ S.5521A, Montgomery would permit credit unions to receive taxpayer dollars by allowing them to participate in the State Banking Development Districts program. Here is a link to our Memo of Opposition. These bills would each make an already uneven competitive playing field even more so in favor of tax-exempt federal and state credit unions, which pay no federal, state or local income taxes, no sales taxes and no MTA surcharge. We urge New York community bankers to contact your local State Senators to express your opposition to these bills. To find contact information for your senators, click on the link below.
https://www.nysenate.gov/find-my-senator
  • Check Cashers Ability to make loans: Proposed legislation would allow check cashing stores to issue loans. The so-called "Community Financial Services Access and Modernization Act"  would allow over 500 licensed check cashing centers to obtain state licenses to issue business and commercial loans. Assemblyman Rodriguez, the sponsor in the Assembly, claimed it would fill a credit void in many minority and low-income areas underserved by traditional lending institutions. Opponents caution it could lead to predatory lending, and potentially open the door to "payday loans" which are currently illegal in the state.
Other legislative activity
  • S.7183, Savino/A.9746, Richardson 
    relates to defining consummation of a mortgage loan, clarifying state law regarding the TILA-RESPA Integrated Disclosure Rule (TRID) which took effect last October. The legislation, developed with significant input from IBANYS, has now passed both the Senate and Assembly. It  would a mend Section 2 of the New York State Banking Law as it related to defining consummation of a mortgage loan. It clarifies that consummation occurs when the mortgage applicant executes the promissory note and mortgage. The legislation has passed both the the Senate and Assembly. The bill awaits the Governor's signature.
  • Two  IBANYS-drafted and supported bills  sponsored by Senate Banks Chair Savino (IDC-Brooklyn/S.I.) have passed the State Senate. S.5624 would establish community bank service corporations. State chartered community banks could invest in and use the organizations to gain economies of scale, and reduce compliance costs.  Also,  S.5297, which would  e xempt community banks with assets under $1 billion from State DFS CRA exams if they have satisfactory or better ratings from their primary federal regulator. has been referred to the Banks Committee.   Meanwhile, the Legislature and Governor continue to focus attention on reaching consensus on a few major issues, including dealing with heroin addiction, ethics reforms and campaign finance reform.                  

    Maria V ullo  DFS Confirmation On Tap
    The State Senate is expected to confirm Maria Vullo as  Superintendent of the State Department of Financial Services. At her Senate Banks Committee confirmation hearing last week, current Acting Superintendent Vullo stated: " I believe in compromise to get things done for the benefit of everyone." Vullo described herself as "pro-business and pro-consumer" and noted she does not believe the two terms are mutually exclusive. Vullo wants the New York financial industry to grow, but also serve lower-income residents whose financial needs are not being met.  "I think you might see creative, innovate initiatives to try to address those concerns. Press reports commented Ms. Vullo signaled she would take a more business-friendly approach than her predecessor, who was known for his pursuit of big banks.
WASHINGTON, D.C.

ICBA Backs Repeal Of Durbin Amendment
 ICBA is supporting H.R. 5465 (Neugebauer, R -TX) -- legislation that would overturn the Durbin amendment price controls on debit card interchange rates. The bill wouldadvance part of House FinancialServices Chairman Hensarling's Financial CHOICE Act. ICBA believes the large retailers that advocated interchange price-setting have not passed on to customers an estimated $8 billion annual "windfall" despite having promised lower prices. ICBA also noted the Durbin amendment limits consumer choice as the mega-retailers steer customers to more profitable payment networks. ICBA is also supporting
S.2707/H.R.4773  that would effectively nullify the federal Labor Department's overtime final rule issued last month. The bill would prohibit the Department from issuing a similar rule without first analyzing its impact on all employment sectors. It would require the analysis include hard-dollar and non-financial costs. The current rule extends overtime pay to 4.2 million additional workers, increases the salary taste used to exempt employees from overtime pay and permanently indexes the thresholds for inflation. 

Ryan Proposes Major Regulatory Reforms, Includes Items From "Plan For Prosperity"
House Speaker Paul Ryan (R-WI) proposed a comprehensive regulatory reform, including a number of provisions advocated by ICBA and IBANYS. Speaker Ryan's "Better Way" agenda includes items from ICBA's "Plan for Prosperity" regulatory relief program, and also closely aligns with Financial Service Chairman Hensarling's Financial CHOICE Act. Among the provisions proposed are reforming the CFPB, easing mortgage rules on portfolio loans, establishing tailored banking regulations and enhancing community bank and thrift access to capital.


IBANYS MEETINGS & CONFERENCES
 
Our  2nd Annual Lending Conference ,  co-sponsored with T.Gschwender & Associates, is June 28-29  at the Woodcliff Hotel & Spa in Fairport (Rochester). The program is designed for: Loan Officers, Mortgage Officers, Consumer Lending Officers, Commercial Lending Officers, Credit Officers, Credit Officers, and CFOs and other senior management members who are involved in the credit and lending process. Participants can earn up to 12 CPE credit hours. In today's climate of rate  environment, market conditions, steep competition and increased regulatory oversight, the lending and credit process offers community banks both opportunities and challenges -- in mortgage lending, consumer lending, commercial lending and small business lending.  We have an outstanding slate of speakers to share their knowledge and expertise throughout this one-and-a-half day conference.  We'll cover  all aspects of the lending process, with presentations and discussions on loan review, risk, sales, portfolio management and the impact of CECL.  For  reservations, contact the Woodcliff Hotel & Spa at 1-800-365-3065.  Tell them you are with the Independent Bankers Lending Conference. Room rate is $159++ single/double.
. . .Click on the links below for information on the  updated program agenda, registration and available sponsorship opportunities.  

Click here for program & registration details

Click here for sponsorship opportunities 

Also, the Independent Bankers Association of New York State and New York Bankers Association co-sponsor the 2016 Human Resources Management Conference  June 23 - 24 at the Holiday Inn in Saratoga Springs, New York. Presentations and discussions will focus on topics such as  employee benefits; r ecruiting strategies/talent acquisition; d eveloping and retaining high potentials; p erformance reviews/performance management. Plus, employment law, regulatory updates for affirmative action employers, new FLSA exemption rules, creating a high-performance culture, building a collaborative workplace, implementing a culture survey,  compensation issues, health care strategies and financial benchmarks, and demonstrating HR performance to senior management.   Click on the link below for details on program and registration.   
IBANYS' 42ND ANNUAL CONVENTION: 
October 3-5,  The  Turning Stone Resort

IBANYS' 42nd Annual Convention will take place at The Turning Stone Resort October 3-5. We'll have a full menu of top notch speakers and presenters, including Steve Greenberg, veteran political analyst and commentator who will preview the critically important 2016 election for community banks. With every member of the New York State Legislature and New York Congressional Delegation up for election, and control of the State Senate expected to be hotly contested, it will be a timely presentation. Steve Greenberg will be our closing keynote speaker Wednesday morning, October 5.

Ray O'Conor will be our opening night Keynote speaker  Monday evening, October 3 . Ray is a former President of Saratoga National Bank & Trust and former IBANYS Chairman. He is the author of  She Called Him Raymond: A True Story of Love, Loss, Faith and Healing --   a candidate for the 2016 Pulitzer Prize for non-fiction.  Ray has also been a newspaper columnist, Special Agent with the U.S. Department of Defense and U.S. Border Patrol Agent. His presentation will share the story behind his book, and provide a look into the true tale of two ordinary people who led extraordinary lives during the most tumultuous of times. 

Of course, we'll also have:
  • A full menu of speakers, panel discussions and presentations on the most important issues and trends impacting New York community banks
  • And, our traditional business show, silent PAC auction and much more! Watch for program details and sponsorship opportunities.
INDUSTRY INSIGHTS

CONTINUITY WEBINAR:
Tuesday, June 28: 1:00 - 1:30 PM

"FFIEC's New Proposed Rule: 
Changes To Compliance Rating System 
--  What Does This Mean To YOU?"

The Federal Financial Institutions Examination Council (FFIEC) is proposing to change the existing Consumer Compliance Rating System (CC Rating System) that agencies use when examining financial institutions. Under the proposed system, each institution's rating would be based on an assessment of the adequacy of its Compliance Management System (CMS). Every institution needs to fully understand the potential impact of the proposed change. This half-hour webinar will explain exactly what your institution needs to know about the FFIEC's proposed change. The webinar is designed for CEOs, CFOs, COOs, Chief Compliance Officers, Chief Risk Officers, Internal Auditors, Risk Managers, and other regulatory and risk management professionals. 
TO REGISTER: Call 866-631-5556
  The webinar will cover:
  • The FFIEC's objectives in developing the proposed changes;
  • The areas of your CMS that will be evaluated to determine your consumer compliance rating,and
  • How you can begin preparing now to ensure that your CMS will meet agency expectations.
Continuity's experts will give participants a peek into Continuity's platform, demonstrating benefits Continuity clients receive. After the webinar, Continuity will provide participants with the proprietary RegAdvisor (R) alert created by Continuity's Regulatory Operations Center (R) -- which is typically sent only to Continuity clients. 
TO REGISTER: Call 866-631-5556
Computer Services, Inc. Webinar: 
Thursday, June 23, 2016 from 2:00 PM to 3:00 PM 

"Quarterly Compliance Update: 
June 2016"
Banks of all sizes are now expected to comply with the 2011 supervisory guidance on model risk management. Join CSI for this free webinar and get answers to the questions community and mid-size bankers are asking about meeting these regulatory expectations.  In addition to sharing important regulatory updates from this quarter, CSI's Chief Risk Officer Keith Monson will provide an executive summary of model risk management requirements and how they may affect your financial institution. 
Don't miss this critical update on model risk management and standards for validation under the guidance.  Tune in on June 23 to learn about:
  • Regulatory updates from this quarter
  • What constitutes a model
  • Model validation requirements
  • The difference between validation and back-testing
  • Next steps for financial institutions 
  To register, click the link below: 

ICBA Securities "Community Banking Matters" Webinar --
Tuesday, June 21 
ICBA Securities, the Institutional broker/dealer of the Independent Community Bankers of America, will present a webinar on Tuesday, June 21 -- exclusively for the state associations that endorse ICBA Securities and other community banks. This will be the fourth in their 2016 webinar series. Whether your challenge is increasing earnings, improving capital levels, reducing concentrations, improving your A/L position or some combination thereof, the solution may be hidden in your loan portfolio. Liquidity and pricing continue to improve for whole loans, and performance in many asset classes has been exceptional. It is important to understand and consider every alternative for actively managing the largest asset class on your balance sheet and positioning your institution for success. T he presenter will be David Visinsky, Senior Vice President of Vining Sparks. The webinar will last for approximately one hour.

What You'll Learn:
  • The benefits of being a seller or a buyer of loan product
  • How to strategically identify salable blocks in your portfolio
  • Potential benefits to bank capital from loan sales
  • Important criteria for buyers of loans to consider
  • Examples of recent loan packages purchased by community banks
To Register, click on the link below:

https://cc.readytalk.com/registration/#/?meeting=krgvun38ri00&campaign=3uzci064mfco
For information, email Jim Reber at jreber@icbasecurities.com, or call (800) 422-6442.

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Mortgage Applications Are Down
Mortgage application volume decreased 2.4% last week from the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association.  Mortgage applications to purchase a home fell 5% from one week earlier, but were 16% higher than the same week a year ago. Applications to refinance a home loan (more rate-sensitive) fell 1%, seasonally adjusted, from the previous week but were nearly 52%  higher than a year ago. 
Potential homebuyers are more concerned about finding a home to buy than about securing a good interest rate on a mortgage.  Nearly one-third of said they were worried they won't be able to find a home for sale this year, according to an online survey by  Harris Poll  on behalf of Trulia, while only 20% are worried mortgage rates would rise before they bought.

What Others Are Saying: 

"TheStreet" website's Richard Suttmeier:
TheStreet, Inc. (formerly, TheStreet.com, Inc.) was co-founded in 1996 by Jim Cramer and Martin Peretz. It is headquartered at 14 Wall Street in New York City.

"The FDIC Quarterly Banking Profile shows community banks aren't positioned to help stimulate economic growth on Main Street. T he Federal Deposit Insurance Corporation has good news and bad news for investors in U.S.  community banks."  The good news, according to the FDIC Quarterly Banking Profile for the first quarter."
  • Net income improved by more than 7% year over year for community banks but declined at the larger FDIC-insured financial institutions.
  • Net Interest Margin at community banks was 53 basis points above the larger banks.
  • The percentate of unprofitable community banks declined to the lowest since 1998.
Here's the bad news: Community banks have been increasing their loan exposures to commercial real estate loans, including construction and development Loans. The number of FDIC-insured community banks overexposed to CRE loans rose to 340 institutions, up 21% from a cycle low of 281 in March 2014." 

IBANYS Provides Key Benefits 
To Members. . .
Are YOU Taking Advantage? 
During the past year or so, IBANYS has introduced several new initiatives that can provide real value and benefits to community banks. Take a look at these programs, and if you have questions, contact us or visit our website at www.ibanys.net. We hope you'll decide to take full advantage of these exciting opportunities. 
  • IBANYS President & CEO John Witkowski and NYBDC President & CEO Patrick McKrell announced a new partnership with Excelsior Growth Fund (EGF), a nonprofit Community Development Financial Institution formed by New York Business Development Corporation ( NYBDC). EGF has been endorsed by IBANYS as the exclusive online lending partner for association members.  EGF provides innovative financial solutions and business advisory services to underserved small businesses in New York State through a fast, simple and secure online lending platform. Its core product is the EGF SmartLoan™, which features amounts up to $100,000, approvals within 1-2 days and disbursements within one week. Importantly, interest rates a fraction of those typically offered by online lenders.  EGF offers banks a unique customer retention solution when a customer either does not qualify for a bank's loan offerings, or is seeking the fast,   transparent process available through online lenders. To facilitate retention, EGF shares performance information on the referred loan portfolio on a quarterly basis and offers the opportunity for the bank to purchase referred loans at par at any time. 
     
    Additional details on the EGF SmartLoan, including eligibility criteria, are available at: 

    For details, or to make a referral, contact Bryan Doxford, Chief Lending Officer at Excelsior Growth Fund:  bryan.doxford@excelsiorgrowthfund.org or  (212) 430-4512
    IBANYS and the New York Business Development Corporation (NYBDC) has announced a partnership 
  • The "My Wellness Resource Card" offers a low-cost, non-traditional program to help community banks to save time and money. It helps provide on demand health care from U.S. board-certified doctors who provide
  • diagnosis, treatment options and necessary prescriptions via unlimited telephone medical consultations. The My Wellness program offers discounts and significant savings on a variety of medical and dental products, and is designed to improve productivity, decrease absenteeism and boost morale without straining your bottom line. It's an exciting new way for community banks to provide health care benefits, reduce cost and retain employees. For more information, contact Alan Justin, Managing Partner at (716) 907-5500. 
  • We also joined the "Cure the Blue" effort to raise funds and awareness regarding prostate cancer in New York State. We are partnering with the Buffalo Bills Alumni Foundation, and hope to see a number of IBANYS members participate. Please join us in supporting this worthwhile cause. Visit www.curetheblue.com to get involved!

IBANYS Webinars Are Specifically Designed For Community Banks!

Are your officers, directors and employees getting all the information they need on the latest trends, issues and developments impacting the bank? New York's community banks cope with a wide array of challenges. Your bank's officers, board members and employees know their responsibilities and potential liabilities are not about to diminish. Are you doing everything you can to ensure that they have access to the very latest information and tools they need to meet their responsibilities, and to properly prepare the bank for the future?  One way to do so is by signing them up for IBANYS' webinars. Our programs are specifically designed to meet the needs of community banks, and are both effective -- and, cost-effective. Your bank's officers, directors and employees can participate directly from their offices. There's a good reason  why a rapidly growing number of your industry and association peers are taking advantage of these webinars. 

Review
 our upcoming programs by clicking the link below:
https://ibanys.fed.financialedinc.com/store/webinar 
`
. . . T. Gschwender & Associates, Inc. 
T. Gschwender & Associates is a diversified consulting company that has been providing services to financial institutions and businesses in the Northeast United States since 1984. Their financial institutional clients include small community banks and credit unions with less than $100 million in assets to much larger regional institutions with over $5 billion in assets. Their business clients include small sole proprietorships to middle-market privately held corporations.
  • For their financial institutional clients, they like to describe themselves as a highly sophisticated "Credit Department," able to handle all functions from initial borrower due diligence to collateral liquidation, and everything in between. Their goal is to provide these services in a timely and cost effective manner, allowing clients to tap into resources they would not otherwise be able to employ internally. 
  • For their business clients, they provide Accounting/Bookkeeping, Business Advisory, Business Valuations, and Tax Services. They also leverage on their numerous banking clients to assist businesses obtain loans at a reasonable rate. Whether you are a new business, growing rapidly, or experiencing some challenges, their Associates can help!

T.Gschwender's consultants all have extensive banking and corporate management experience. Some of their associates have been with the company since the it was started, and their current staff provides a wide depth of experience, holding high level positions within banking, accounting, and regulatory institutions. With expertise spanning "both sides of the street", the company's Associates provide a well balanced and thorough approach to all that they do.

T. Gschwender & Associates, Inc. is a privately held company that was started by Tom Gschwender on November 9, 1984 and purchased by Bharpur "Bo" Singh on April 1, 2008. For information, please call (315) 701-1293 or visit the website at: www.tgschwender-assoc.com

 
. . .that  New York State  has the second-longest foreclosure process timeline in the country, trailing only New Jersey? New York's foreclosure timeline averages 986 days -- over 3 years

On the flip side, Alaska's timeline averages just 151 days, and Texas, Delware, New Hampshire, and Alabama also have short timelines, generally averaging a few months to complete the process.

New York community banks play a key role in our state and local economies. Help spread the good news among your customers, business and elected leaders and media!

Click here for quotes from Governor Cuomo and DFS Superintendent Lawsky extolling the performance and value of New York community banks.

Click here for the full NYS Study on community banking.

Click here to read IBANYS President & CEO John Witkowski's comments on the new tax changes and benefits for New York community banks as approved in the 2014-15 State Budget.

 

Click here for IBANYS' letter to the Editor of Consumer Reports Magazine correcting failure to mention community banks as an alternative to using "big banks."

_________________________________

John J. Witkowski
President and Chief Executive Officer
 
Stephen W. Rice
Director of Government Relations and Communications

Linda Gregware
Director of Administration and Membership Services 

William Y. Crowell, III
Legislative Counsel