IBANYS Weekly E-Newsletter |
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Visit our website at www.ibanys.net to review all our daily updates on COVID-19 beginning on March 16.
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The President's Message
By John Witkowski, President & CEO
We are publishing our newsletter a day early this week due to the Thanksgiving holiday. This year has brought so many challenges and difficulties, and perhaps it is more important than ever that we pause to reflect on all that we are thankful for in the face of the public health and economic crisis we have all endured during 2020.
Thanksgiving has been celebrated nationally on and off since 1789, with a proclamation by President Washington after a request by Congress. In 1863, President Lincoln proclaimed a national day of "Thanksgiving and Praise..." be celebrated on the last Thursday in November.
We hope that you continue to be safe and healthy, and that you find a way to safely celebrate this special holiday -- perhaps the most American of all our holidays. This year, some of us may be sharing a virtual Thanksgiving with family and friends--but the day's meaning may be more important than ever.
We know that many more challenges are ahead. . .but we also know that together, we have much to be thankful for as we prepare to move forward.
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IBANYS Welcomes our Newest Member Bank |
We would like to welcome Ulster Savings Bank. On April 12, 1851, the Ulster County Savings Institution was chartered by the New York State legislature and became the first savings bank in Ulster County, New York.
On June 19, 1851, Severyn Bruyn, Ulster Saving Bank’s very first customer, made a $120 deposit. Back then, it was a major transaction! Today, Severyn could’ve done a whole lot more - like insure his home, get his taxes done, and plan for his retirement -all in one place, at Ulster Savings Bank.
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IBANYS Preferred Partners & Associate Members |
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The Bonadio Group Financial Institutions Virtual Seminar
Tues. & Wed., Dec. 8 and 9, 9am – 11am |
4 CPE Credits
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The Bonadio Group along with special guest speakers from M&T Bank, Luse Gorman Law, and Piper Sandler & Co., will deliver informative presentations and industry updates on:
- LIBOR & SOFR
- Year End Financial Reporting
- Community Bank Capital Management During and After COVID-19
- Strategic Considerations for Board Members and Senior Management Regarding Recent Bank Performance, Capital Raising & M&A
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Senior Lending Summit
December 3, 2020
10:00 - 4:00 p.m. EST
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Who's it for
Community Bank Presidents, Senior Credit Officers, Commercial Portfolio Managers, Loan Administration/review Managers, Senior Bankers responsible for lending functions.
What will it be like?
This will be an all-virtual event. Great lectures, roundtable discussions, numerous case studies, and opportunities to network.
- Discussion and updates on PPP
- Review of Current Industries and Economic Trends
- Loan Pricing and Structuring
- Internal Loan Review
- Portfolio Management and Trouble Asset topics
5 hours of instruction are scheduled
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Lake Shore Savings Bank Signs with COCC for Efficient and Flexible Technology |
SOUTHINGTON, Conn. – COCC, a leading provider of next generation technology services for financial institutions, is proud to announce its new partnership with Lake Shore Savings Bank as the bank’s core technology provider. Headquartered in Dunkirk, N.Y., Lake Shore serves the communities of Western New York with 11 locations along Lake Eerie, including Buffalo. The bank, with $682 million in total assets, chose COCC to improve efficiency and flexibility with a cost-effective and state-of-the-art solution
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Setting up your ALLL/CECL model for Q4 2020 |
Year end is fast approaching. And so far, the impact to the banking universe of the COVID recession has been largely blunted by the CARES Act, which enabled financial institutions to provide deferments to customers without having to downgrade or move credits to the TDR category. Additionally, the PPP loans have provided many community banks with an additional source of income and customers. 2020 may turn out to be not a disaster for the industry. 2021 may…or may not…be the year when the deferred losses impact the bottom line and we find ourselves in the midst of a credit crisis.
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2020 compensation survey available! |
We know 2020 has been a challenging year. To keep your community bank competitive, you need the best talent, and to attract and retain the best talent, you need the right tools.
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IBANYS Webinars
Are you participating in IBANYS webinars? Now is the time! IBANYS webinars provide timely, important information on subjects of interest to New York community bankers including human resources, business development, investment, compliance and security and much more. They are valuable not only for their content, but for their convenience and low-cost. Take part from the comfort and privacy of your office, without leaving the bank.
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Subscription Tokens
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How does it work:
Tokens can be used to purchase live or recorded webinars anytime, with no expiration! Tokens for both live and recorded webinars are available for an additional fee. (What’s the difference? Click here for the full description.)
Once you have your Subscription Token code, you can immediately register for webinars by using the code at checkout! (Subscription tokens not applicable for full series registrations, or other specials.)
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- As New York faces one of its most difficult budget cycles since the recession of 2008-09, Governor Cuomo said the state would be forced into hiking its income tax on its wealthiest earners if Congress does not pass a federal aid package. "If we don't get funding from Washington, there will be an income-tax increase." Even the revenue from a tax increase is unlikely to cover the mutl-billion dollar budget gap created by the COVID-19 pandemic. Even if New York increased its taxes on its richest residents beyond the tax rate in California, the state would still need billions of dollars to make up the shortfall. The Governor has raised the possibility of a mix of tax increases, spending cuts, borrowing layoffs of government workers.
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According to a new Siena College Research Institute poll, most voters in New York want Gov. Andrew Cuomo to keep the emergency powers that have enabled him to unilaterally direct the state’s response to the Covid crisis.
- State Senate Majority Leader Andrea Stewart-Cousins said Senate Democrats will have a "supermajority" of at least 42 members of the 63 member chamber in 2021, which would be a veto-proof majority (giving them a two-thirds majority so they won’t need to rely on any Republican support to override a veto by the Governor. Stewart-Cousins noted: "It will be the biggest Senate majority conference in the history of New York state.”
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New York State leads the nation in what it pays to the federal government compared to what it gets back from Washington, according to a report released by New York State Comptroller DiNapoli. New York taxpayers paid $23.7 billion more in federal taxes than the state received in federal spending in federal fiscal year 2019.
- The NYS Legislature is still considering whether to reconvene a lame-duck session to discuss pandemic-related economic problems. Assembly Speaker Heastie and Senate Majority Leader Stewart-Cousins have not ruled out a return, although Stewart-Cousins recently said there were no plans to do so. 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.
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IBANYS is closely monitoring whether the Legislature will reconvene, as the 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.
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- The House and Senate are on recess this week for Thanksgiving. The House will return on December 1. The Senate will return on Nov. 30.
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The Small Business Administration said it has forgiven 367,321 Paycheck Protection Program loans worth $38.4 billion as of noon Sunday. In a new section of its PPP webpage, the agency also said it has received 595,144 loan submissions worth $83.2 billion. ICBA, joined by IBANYS, is calling on community bankers to continue pressuring Congress to include PPP reforms in the next economic stimulus package, such as simplifying forgiveness, addressing the conflict with EIDL advances, and excluding PPP loans from regulatory asset thresholds. More information on the lame-duck Congress is available in ICBA's 2020 election analysis and the latest Community Bank Briefing webinar.
- The SBA has begun asking some PPP borrowers to document why they needed the loans, drawing concern from advocacy and trade groups who note such disclosures weren't required when the businesses applied for aid. The "Loan Necessity" questionnaire is aimed at borrowers who took loans of $2 million or more under PPP.
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Federal regulators announced ICBA-advocated relief from regulatory burdens caused by participating in federal coronavirus response programs. Under the interim final rule, community banks that have crossed certain regulatory asset thresholds will be able to calculate their asset size during calendar years 2020 and 2021 based on the lower of either total assets as of Dec. 31, 2019, or total assets as of the normal measurement date. The rule applies to the community bank leverage ratio, the Fed’s debit card interchange and routing rule, management interlocks, call reports, examination frequency rules, the Small Bank Holding Company Policy Statement, and other thresholds. It applies to institutions with less than $10 billion in total assets as of Dec. 31, 2019. ICBA has told policymakers since August that the surge of PPP loans has swelled community banks' balance sheets, inadvertently subjecting them to additional regulatory burdens.
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President-Elect Biden is expected to nominate Janet Yellen, the first woman to lead the Federal Reserve, to be the next Treasury secretary. If confirmed, she would be the first woman to hold that office as well.
- President-Elect Biden reportedly does not want congressional Democrats to pare back their demands in order to reach a Covid relief deal with Republicans in the lame duck session. Speaker Pelosi has said that no deal is better than a bad deal, and has pushed for a roughly $1 trillion package, while Senate Majority Leader McConnell has said he supports something closer to $500 billion. A spokesperson said: “The President-elect fully supports the Speaker and Leader in their negotiations.”
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IBANYS previously urged New York Congressional Delegation To Support PPP Changes. As the stalemate between Congress and the Trump administration regarding the next coronavirus legislative package continues, IBANYS has written to the New York Congressional Delegation (and shared the letter with the NYS Legislature as an FYI) urging support of a number of important changes ICBA has suggested be made to the Paycheck Protection Program. Read IBANYS' letter to Congress. Read IBANYS letter
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News Release | NR 2020-158 November 23, 2020
WASHINGTON—The Office of the Comptroller of the Currency (OCC) today issued a final rule that updates its rules for national bank and federal savings association activities and operations.
The rule is part of the OCC’s continuous effort to modernize its rules and remove unnecessary requirements to relieve banks of unnecessary burden, encourage economic opportunity, and promote the safe, sound, and fair operation of the federal banking system.
The amendments take effect April 1, 2021.
The final rule changes 12 CFR 7 to update or eliminate outdated regulatory requirements that no longer reflect the modern financial system and to clarify and codify recent OCC interpretations. Among the changes are:
- incorporating and streamlining interpretations addressing permissible derivatives activities for national banks;
- codifying interpretations to permit national banks and federal savings associations to engage in certain tax equity finance transactions;
- codifying interpretations regarding national bank membership in payment systems and clarifying that federal savings associations are subject to the same requirements as national banks;
- expanding the ability of national banks and federal savings associations to choose corporate governance provisions under state law;
- clarifying the extent to which national banks may adopt anti-takeover provisions permissible under state corporate governance law;
- clarifying when national bank participation in a financial literacy program on the premises of, or a facility used by, a school or other organization would not be a branch;
- codifying interpretations of the National Bank Act relating to capital stock issuances and repurchases; and
- applying rules relating to finder activities, indemnification, equity kickers, postal services, independent undertakings, and hours and closings to federal savings associations.
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Bulletin | OCC 2020-101 November 19, 2020
To: Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division Heads; All Examining Personnel; and Other Interested Parties
Summary
The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network (FinCEN), and the National Credit Union Administration (collectively, the agencies) today issued a joint fact sheet recognizing the important role of charities and other nonprofit organizations during the coronavirus pandemic. The joint fact sheet clarifies how banks1 may provide services to charities and other nonprofit organizations consistent with FinCEN’s risk-based approach for conducting customer due diligence.
Note for Community Banks
The joint fact sheet applies to the OCC’s supervision of community banks.
Highlights
The joint fact sheet
- explains that the level and type of customer due diligence should be appropriate for the risks presented by each customer, including charities and other nonprofit organizations.
- notes that FinCEN’s 2016 Customer Due Diligence rule does not create a regulatory requirement, and there is no supervisory expectation, for banks to have unique, additional due diligence steps for charities or other nonprofit organization customers.
- provides considerations that may be useful to banks when determining the customer risk profile of a charity or other nonprofit organization.
Related Link
1 "Banks" refers collectively to national banks, federal savings associations, and federal branches and agencies of foreign banking organizations.
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News Release | NR 2020-156 November 20, 2020
WASHINGTON—The Office of the Comptroller of the Currency (OCC) today proposed a rule to ensure fair access to banking services provided by national banks, federal savings associations, and federal branches and agencies of foreign bank organizations.
The proposal would codify more than a decade of OCC guidance stating that banks should provide access to services, capital, and credit based on the risk assessment of individual customers, rather than broad-based decisions affecting whole categories or classes of customers.
“Fair access to financial services, credit, and capital are essential to our economy,” said Acting Comptroller of the Currency Brian P. Brooks. “This proposed rule would ensure that banks meet their responsibility to provide their services fairly since they enjoy special privilege and powers because if the system fails to provide fairness to all, it cannot be a source of strength for any.”
The proposal implements language included in Title III of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, which charged the OCC with “assuring the safety and soundness of, and compliance with laws and regulations, fair access to financial services, and fair treatment of customers by, the institutions and other persons subject to its jurisdiction.” The statute expanded the OCC responsibilities to include fair access separately from fair treatment following the last financial crisis during which the government had provided substantial public resources to support the banking system.
The proposal builds upon the fundamental principle of nondiscrimination and would prevent banks—alone or in coordination with others—from limiting fair access to banking services by preventing a business or person from entering, or limiting their ability to enter, a particular market, or disadvantaging a person to benefit another person or interest.
The proposal would apply to the largest banks in the country that may exert significant pricing power or influence over sectors of the national economy. The proposal would require a covered bank to ensure it makes its products and services available to all customers in the community it serves, based on consideration of quantitative, impartial, risk-based standards established by the bank. Under the proposal, a covered bank’s decision to deny services based on an objective assessment of the person’s creditworthiness, ability to pay, or or other quantitative, impartial, risk-based reasons would not violate the bank’s obligation to provide fair access. However, under the proposal, the bank may not deny a customer service to disadvantage, limit, or prevent the customer from entering or competing in a market or business segment, or to benefit another person or business activity.
Related Link
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News Release | NR 2020-158 November 23, 2020
WASHINGTON—The Office of the Comptroller of the Currency (OCC) today issued a final rule that updates its rules for national bank and federal savings association activities and operations.
The rule is part of the OCC’s continuous effort to modernize its rules and remove unnecessary requirements to relieve banks of unnecessary burden, encourage economic opportunity, and promote the safe, sound, and fair operation of the federal banking system.
The amendments take effect April 1, 2021.
The final rule changes 12 CFR 7 to update or eliminate outdated regulatory requirements that no longer reflect the modern financial system and to clarify and codify recent OCC interpretations. Among the changes are:
- incorporating and streamlining interpretations addressing permissible derivatives activities for national banks;
- codifying interpretations to permit national banks and federal savings associations to engage in certain tax equity finance transactions;
- codifying interpretations regarding national bank membership in payment systems and clarifying that federal savings associations are subject to the same requirements as national banks;
- expanding the ability of national banks and federal savings associations to choose corporate governance provisions under state law;
- clarifying the extent to which national banks may adopt anti-takeover provisions permissible under state corporate governance law;
- clarifying when national bank participation in a financial literacy program on the premises of, or a facility used by, a school or other organization would not be a branch;
- codifying interpretations of the National Bank Act relating to capital stock issuances and repurchases; and
- applying rules relating to finder activities, indemnification, equity kickers, postal services, independent undertakings, and hours and closings to federal savings associations.
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