• First, while the pandemic is far from over and we face a stretch of difficult times, the news that two coronavirus pandemic vaccines have now tested extremely well is a huge step forward. Let's hope the news continues to be positive moving forward, as the focus will be on getting enough doses and widely distributing them. . .and, on rebuilding our economy.

• Secondly, despite the unprecedented challenges and circumstances posed by 2020, New York community banks had a remarkable third quarter, as demonstrated by this new analysis from QwickAnalytics detailing this impressive performance. If anyone wants additional information on the Qwickrate report, please let me know.

• With the election over, the NYS Legislature is considering whether to reconvene a lame-duck session before the end of the year to discuss pandemic-related economic problems. Assembly Speaker Heastie said Assembly Democrats “have not ruled out a return to session this year to address the fiscal health of our state.” Senate Majority Leader Stewart-Cousins recently said there were no plans to meet again during 2020, but later clarified that she was not ruling one out. She would like to see if President-Elect Biden can persuade Congress to enact a federal relief package that will help close the state’s deficit, a position shared by Governor Cuomo. The state faces a deficit of nearly $15 billion, much of it pandemic-related, and Governor Cuomo has for months “temporarily” held back 20% of state aid due to schools and local governments. 

• The Governor still believes a federal stimulus package for the state could happen before the end of 2020, noting that under Biden “there is going to be a state and local package and we know that will go a long way to handling New York's economic problem. We don't know how far, but it's a matter of time now." However, Cuomo noted that if the gap cannot be closed with federal money, the state is looking at tax increases, layoffs, borrowing and early retirements. Cuomo has pushed back on plans to raise state taxes on the wealthy because it would not raise as much money as the state needs and could drive more New Yorkers to leave the state and seek residence in states with lower taxes -- which could further damage the tax base. The Governor instead says there should be a federal tax hike on the wealthiest.

• IBANYS continues to monitor whether the State Legislature will reconvene. Any agenda could also include additional forbearance legislation for residential investment properties and commercial retail space mortgage payments. IBANYS opposes the legislation, and is working with the Legislature and the NYS DFS. To access the legislation, and IBANYS' Memo in Opposition: Click here to read the legislation. Click here to read IBANYS Memo in Opposition.

• The New York State Department of Financial Services (DFS) announced a partnership with Global Cyber Alliance to help bring a “cybersecurity toolkit” to small businesses in the State. The partnership follows many small businesses having switched to online and remote work during the COVID-19 pandemic. DFS noted that according to the 2019 Verizon Data Breach Investigation report, more than 43% of cyberattacks are targeted at small businesses. The full toolkit and DFS sample cybersecurity policies can be found on the Department of Financial Services website.

• DFS and the European Banking Authority published guidance relating to Environmental, Social, and Corporate Governance ("ESG") practices that reflects heightened interest on the part of domestic and foreign regulators regarding ESG issues. It does not direct regulated entities to take specific actions relating to ESG, but “signals an intent” to put companies on notice of future regulatory involvement in the ESG space. The DFS Letter focuses on the "environmental" aspect of ESG, i.e., the effect of climate risks on the financial system broadly and regulated entities' assets and operations specifically. Superintendent Lacewell noted DFS expects regulated entities to begin "integrating the financial risks from climate change into their governance frameworks, risk management processes, and business strategies" and "developing their approach to climate-related financial risk disclosure." She also notes DFS expects that, in adopting climate principles, regulated entities will "take a proportionate approach that reflects [their] exposure to the financial risks from climate change."

• House Speaker Pelosi and Senate Minority Leader Schumer (D-N.Y.) wrote to Senate Majority Leader McConnell to urge the renewal of economic stimulus talks, citing the rising number of coronavirus cases. McConnell, who has taken over from Treasury Secretary Mnuchin as lead Republican on stimulus talks, said he hasn't spoken to Democrats about a relief package, which he says should be the smaller version that Senate Republicans support rather than the Democrats' $2.4 trillion plan.

• The SBA asked a federal judge to delay release of records involving millions of small businesses that received PPP loans, saying that publicizing them would do "irreparable harm" to millions of businesses by exposing allegedly confidential information. On November 5, a federal judge ruled the SBA must release borrower and loan information about the PPP by Nov. 19.

• ICBA's key advocacy priorities for the remainder of 2020 include encouraging community bankers to weigh in with Congress via ICBA's Be Heard grassroots action center. ICBA has also provided additional analysis 2020 election analysis and Community Bank Briefing.

• ICBA launched a new customizable grassroots message for community bankers urging Congress to include common-sense policies in any economic stimulus package. The message on ICBA's Be Heard grassroots action center urges support for simplifying PPP forgiveness, fully forgiving Economic Injury Disaster Loan advances, and excluding PPP loans from regulatory asset thresholds.Contact Congress now.

• President-elect Biden named advocates for Wall Street regulation to his agency review transition team, including Michael Barr, a senior Treasury Department official during the passage of Dodd-Frank; Leandra English, who left the CFPB during the Trump administration, and -- leading the team conducting a review of the Federal Reserve and other banking regulators -- Gary Gensler, who headed the Commodity Futures Trading Commission from 2009 to 2014.

• A Wall Street Journal analysis of government data and court filings found approximately 300 companies (employing more than 23,000) that received as much as half a billion dollars in pandemic-related government loans have filed for bankruptcy. Many said the PPP funds weren't enough to keep them going in light of the coronavirus and lack of additional stimulus payments.

• Legislation introduced by Sen. Lee (R-Utah) would protect borrowers and lenders from regulatory penalties associated with the Paycheck Protection Program (PPP) after ICBA raised the issue with policymakers. The Protections for Good Faith PPP Borrowers and Lenders Act (S. 4875) would remove PPP loans from asset calculations to prevent lenders from crossing asset-size thresholds and incurring additional regulatory burdens. It also would protect lenders from various penalties and enforcement actions and remove PPP loans from the CFPB's purview. The Senate bill follows the release of ICBA-advocated House legislation directing regulators to exclude PPP loan balances from bank and bank holding company regulatory thresholds within 30 days. H.R. 8675 applies to community banks with $15 billion or less in total assets.

• Makes the definition of “well managed” consistent for all filing types.
• Eliminates the filing requirement for FSAs that adopt without change the OCC’s model or optional bylaws. 
• Adds numerous provisions to 12 CFR 5.33 permitting national banks and FSAs to elect to follow the procedures applicable to state banks or state savings associations, respectively, for certain business combinations.
• For operating subsidiaries:
• Permits an eligible operating subsidiary of a qualifying national bank or FSA to engage in an activity that is substantively the same as a previously approved bank or FSA activity, respectively, by filing a notice with the OCC (national banks) or an application through expedited review (FSAs). 
• Removes the annual national bank operating subsidiary reporting requirement.
• For non-controlling investments by a national bank and pass-through investments by an FSA:
• With prior OCC approval, permits investments in enterprises that have not agreed to OCC supervision. 
• Provides an expedited review procedure for these investments under certain conditions.
• Expands the investments eligible for notice.  
• Permits investments without a filing in enterprises conducting activities limited to those previously reported by the national bank or FSA in a previous non-controlling investment or pass-through investment filing.
• Provides procedures for granting and revoking citizenship and residency waivers for national bank directors.
• Permits national banks to request approval for a reduction in capital over more than four quarters.
• Changes the definition of “troubled condition” for purposes of changes in directors and senior executive officers to align with OCC supervisory practices. The updated definition specifies that an enforcement action (a cease-and-desist order, consent order, or formal written agreement) must require the national bank or FSA to improve its financial condition for it to be considered in “troubled condition” solely as a result of the enforcement action.

• permitting national banks and federal savings associations to elect to follow the procedures applicable to state banks or state savings associations, respectively, for certain business combinations.
• expanding the operating subsidiary notice and expedited review processes to include activities that are substantively the same as activities previously approved by the OCC.
• permitting non-controlling investments and pass-through investments in entities that have not agreed to OCC supervision, and permitting certain other investments without a filing.
• providing procedures for granting and revoking citizenship and residency waivers for national bank directors.
• changing the definition of "troubled condition" for purposes of changes in directors and senior executive officers to specify that an enforcement action must require the national bank or savings association to improve its financial condition for it to be considered in “troubled condition” solely as a result of the enforcement action, which would align with OCC supervisory practice.
• adding chief risk officer to the list of positions for which a bank in troubled condition must provide notice when making a change in personnel.