Hope everyone is doing well! Here are a few things we really hope you will do today – details are below, and included in today’s newsletter!

• JOIN US in Washington next week for the ICBA CAPITAL SUMMIT (May 14 -17) and for meetings with our New York congressional delegation

• REGISTER FOR IBANYS ANNUAL CONVENTION June12-14. ONLY 31 DAYS UNTIL THE CONVENTION!! (more information below under IBANYS meetings)

• REGISTER For Hartman Advisors Cyber Security Roundtable on May 11 (tomorrow)

• REGISTER for InfoAgora stress testing webinar on May 24th

• SIGN UP FOR A Day with Jack Hubbard - June 21 (more information below under IBANYS meetings)

READ THE STATE & FEDERAL LEGISLATIVE/REGULATORY UPDATES (in the Albany and Washington DC section of this newsletter) on policies being presented by our state and federal banking committees and regulatory agencies. We need your voice to reinforce our efforts.

. . .Here's a bit more information.

•  ICBA’s CAPITAL SUMMIT IS NEXT WEEK -- May 14-17, Washington DC! Community banks face a number of important issues in Washington. IBANYS will lead a group of New York community banks into meetings "on the hill" with key members of the New York congressional delegation on Tuesday, May 16. WE NEED YOU IN DC! Join us so our political leaders can hear from you, and learn more about the importance of having community banks working in and for their communities. To register: https://www.icba.org/events/icba-capital-summit. Our fantastic partners, Luse Gorman and The Bonadio Group will be hosting a dinner for our DC contingent on Monday evening, May 15 to go over our issues and schedule. ICBA has released its Capital Summit advocacy materials, including a lobby card and one-pagers on priority issues. Join us!

• Our Albany and Washington sections include the latest updates on bill introductions, legislative activity, committee agendas and regulatory actions. Please review - there are interesting bills on the agenda(s) and we would like your feedback and comments – i.e., expanding the community banks deposit program to include Credit Unions, feasibility study on Public Bank, credit union municipal deposits, addressing the Capital Access program, and utilizing the Business Development Districts.

IBANYS MEETINGS

To all community banks in NYS:

Hope everyone is looking forward to beautiful summer weather! To be honest, I cannot think of a better way to close out the spring and kick off the summer than networking with fellow community bankers at the IBANYS ANNUAL CONVENTION at The Turning Stone Resort and Casino from June12-14. This year's theme is "Community Banks: The Heartbeat of All Communities"

We always have great speakers covering timely topics and we mix in a little fun. Our sponsors and partners always step up to support NYS community banks and IBANYS. We have 30+ exhibitors and only 1 or 2 sponsorships left and these companies enjoy coming to our convention.

What we need is to have YOU, your bank and your directors join us on June 12-14. If the President/CEO cannot attend, please allow others from your exec team or Board of Directors attend.

Each year IBANYS celebrates the great work community banks do for their customers. We need to stick together as community banks by supporting, communicating, networking with each other and our business partners. 

No better place than at the IBANYS ANNUAL CONVENTION.

The brochure is attached, and I encourage you to book your rooms as soon as possible! The room block ends on May 19th.

Any questions, contact me at 716.880.9518 or Linda Gregware at 518.436.4646.

ONLY 31 DAYS UNTIL THE CONVENTION!!

John

June 21^st – Jack Hubbard on Building and Strengthening Relationships - Turning Stone Resort and Casino: Hear from Jack on his years of experience (over 50) in banking and how his tactics survive in the world of social media and innovative technology. It will be a great day to hear from one of the leading subject matter experts in banking. Click here for registration information 

CONVENTION SPONSORS

BHG Financial

(Monday) Vendor Reception/Golf Tee

COCC

2nd 6 minute drill

Compass IT Compliance

Tuesday Entertainment

Dox Electronics, Inc.

Golf Tee

Federal Home Loan Bank of NY

Welcome Dinner Monday

Freed Maxick CPAs

Golf Drink Cart

Genesis PPG

Credit Card Machine

Harris Beach PLLC

Tuesday Dinner

Hartman Executive Advisors

Dinner Wine - Monday

Heilbronner Consulting

Golf Tee

ICBA/ICBA Securities

Tradeshow Floor

ICBA Securities

Breakfast Tuesday

InfoAgora, Inc.

Program Books

KOW Building Consultants

Golf Tee

NEACH

Golf Prizes

Newcleus Bank Advisors

6 minute Drill (3rd)

Pillar+Aught

Golf Lunch Boxes

Piper Sandler

(2) Golf Tees

Plante Moran

Golf Carts/Golf Tee

Pursuit

1st 6 Minute Drill

Rivel, Inc.

Refreshment Breaks

Roosevelt & Cross, Inc.

Golf Balls

SHAZAM

Wednesday Luncheon\

Smith & Wilkinson

Wednesday Breakfast

The Bonadio Group

Tuesday Dinner Wine

ICBA’s 2023 Capital Summit in Washington, D.C. will feature remarks by OCC Comptroller Hsu, FDIC Director Gruenberg, CFPB Director Chopra, Treasury Assistant Secretary/Financial Institutions Steele, senior representatives from the Fed, and Senate Banking Committee member Rounds (R-SD). . . Register here.  NOTE: IBANYS will coordinate meetings "on the hill" with members of the New York congressional delegation. We have New Yorkers on a number of key House committees, as well as

9 new members of the delegation since we gathered last spring. Watch for more details.

LEGISLATIVE UPDATE

• Here are the latest legislative inbtroductions and bill acticity from April 24 - May 5, as well as the relevant committee agendas for this week. Please read through them, as there are several items of interest to community banks. (For example, there is a Capital Access Program bill from Assembly Banks Chair Hunter, and a couple of Business Development District bills from Senate Banks Chair Sanders.) All these legislative updates are posted weekly on our website at www.ibanys.net  under the “Advocacy/Legislative Updates” tabs. 

• With the budget in the rear view mirror – four weeks late – the Legislature has less than a month – and just 14 scheduled session days – left before they are scheduled to leave Albany June 8 for the rest of the year. https://nystateofpolitics.com/state-of-politics/new-york/ny-state-of-politics/2023/05/08/4-issues-to-watch-as-new-york-lawmakers-close-out-session . . . More here: https://www.wamc.org/2023-05-08/theres-unfinished-business-to-hash-out-in-the-final-month-of-the-new-york-legislative-session

• State Attorney General James wants the Legislature to adopt what she said would be nation-leading regulations governing the cryptocurrency industry, which are intended to increase transparency and protect investors. James plans to release proposed legislation for the Legislature’s consideration before the end of their legislative session next month. https://www.timesunion.com/state/article/ag-james-seeks-nation-leading-crypto-industry-18079525.php?_gl=1*1gwg4dv*_ga*MTI2Mzc5NjUyNi4xNjgzNTUwNTU0*_ga_WE0RM2ZY79*MTY4MzU1MDU1My4xLjEuMTY4MzU1MDU1My4wLjAuMA..

STATE BUDGET AFTERMATH

• The state finally has a budget, although it was approved a  month late. For two very different political perspectives on the $229 billion spending plan, State Senate Minority Leader Rob Ortt (R-Western NY) and State Sen. Jabari Brisport (D-Brooklyn), a self-proclaimed socialist, discussed what made it in and what was left out of the budget.  https://nystateofpolitics.com/state-of-politics/new-york/politics/2023/05/05/dissecting-the-new-york-budget-from-both-sides-of-the-aisle-and-state#  

• Gov. Hochul’s strategy of conceding a late budget over an on-time spending plan that included fewer of her goals has been working so far.  However, political observers said she’s still finding her footing and warned that her tactics may not be prudent in the long run. 

REGULATORY UPDATE

• ICBA urged the New York State Department of Financial Services to fully exempt the state’s community banks from its proposed guidance on managing climate-related financial risks. Responding to a request for comment on the proposal, ICBA said:  1) Community banks cannot immediately implement and comply with a sweeping new framework that is not required by their primary federal regulators; 2) The guidance introduces an onerous and novel framework that would effectively require New York-chartered community banks to perform scenario analysis, which the Federal Reserve has said will be required only of the nation’s largest banks; 3) Climate-related financial risk management frameworks proposed by federal regulators would exempt community banks under $100 billion in assets. IBANYS and ICBA strongly oppose climate risk regulation of community banks. ICBA expressed concerns with Federal Reserve, FDIC, OCC, and SEC proposals. Here's an American Banker op-ed earlier this year. 

INDUSTRY INSIGHT

• Three years after the pandemic flattened the Manhattan office market, small businesses in the other boroughs are facing the biggest rent hikes in the city as storefront rents in Manhattan are falling – a burden landing mostly on store owners in predominantly Black, Latino and Asian neighborhoods, the Times reports.   

• Next week, the U.S. will remove the final pandemic-related restriction, a vaccine requirement for Canadian travelers.  Customs and Border Protection agents have not strictly been enforcing the vaccine requirement, but the possibility has deterred a lot of travel between Western New York and Southern Ontario. Rep. Brian Higgins (D-WNY) believes the removal comes far too late, noting Western New York lost roughly 40% of its cross-border commerce over a three-year period with impacts on tourism, retail, health care and professional sports organizations among other things. https://nystateofpolitics.com/state-of-politics/new-york/politics/2023/05/05/final-covid-border-restriction-will-be-lifted-next-week

• New York Fed President John Williams said: 1) interest rate increases will take a while to work their way through the economy before inflation returns to an acceptable level; 2) He doesn’t expect inflation to return to the Fed’s 2% goal until the next two years, and 3) Unemployment is likely to rise to a 4%-4.5% range, from its current 54-year low of 3.4%. Williams, a member of the FOMC, noted the Fed has not stated it is done raising rates, but added: “We’re going to make sure we’re going to achieve our goals and we’re going to assess what’s happening in our economy and make the decision based on that data. . .I do not see in my baseline forecast, any reason to cut interest rates this year,” he said, adding that additional rate hikes would be possible if the data doesn’t cooperate.  https://www.cnbc.com/2023/05/09/feds-john-williams-says-it-will-take-time-before-inflation-gets-back-to-2percent-target.html

REGULATORY UPDATE

• The FDIC board will meet tomorrow on its proposed rule on special assessments pursuant to its systemic risk determinations for Silicon Valley Bank and Signature Bank. The meeting follows ICBA’s repeated calls for the FDIC to exempt community banks from a special assessment in the wake of recent large bank failures, most recently in a letter to FDIC Chairman Martin Gruenberg. Since the immediate aftermath of the failures, ICBA has said Washington’s response should not affect community banks. In a recent blog post and video to community bankers, ICBA President and CEO Rebeca Romero Rainey said round-the-clock media outreach, the ICBA National Campaign, and focused advocacy efforts are helping to differentiate community banks from larger financial institutions among policymakers and the public.

• In its latest financial stability report the Federal Reserve said while domestic banks have ample liquidity, concerns about the commercial real estate market and commercial property debt have led it (the fed) to increase its scrutiny of banks with substantial commercial real estate risk. The Fed also noted that concerns about slowed growth and credit quality could drive banks to tighten lending and drive up the cost of funding for businesses and households, "potentially resulting in a slowdown in economic activity." Bloomberg

• New York community bankers: Use an ICBA customizable op-ed to spread the word that policymakers should block the CFPB's Section 1071 rule. The custom op-ed is available on ICBA’s “Tell Your Story” Toolkit, and cites the small-business data collection and reporting rule’s negative impact on privacy and its potential to harm the women- and minority-owned businesses the rule is designed to help. Also, use ICBA’s Be Heard grassroots action center to urge lawmakers to pass H.J.Res.50, which would provide for congressional disapproval of the 1071 rule and dictate it has no force or effect. ICBA offers a summary of the rule that details its scope of coverage, key definitions, compliance dates, collection & reporting procedures, and more.

LEGISLATIVE UPDATE

• ICBA has released its Capital Summit advocacy materials, including a lobby card and one-pagers on priority issues. IBANYS and community banks participating in the Summit will use these materials in our meetings on the hill with members of the New York congressional delegation next Tuesday, May 16.

• While credit unions cheer community bank acquisitions for helping them meet their growth goals, these taxpayer-subsidized deals remain fueled by bad public policy, ICBA Chairman Derek Williams wrote in a new op-ed. Writing in the American Banker, he said policymakers should take a closer look at these deals and whether government policy should continue supporting them, noting: “Far from ‘the free market at work,’ the record pace of credit unions' taxpayer-fueled community bank acquisitions is ultimately a negative externality of federal policies that have expanded credit unions' authority over the decades, allowed them to depart from their founding mission and preserved an outmoded tax exemption that dates back more than a century.” Weigh in with your members of Congress on credit unions during next week’s 2023 ICBA Capital Summit and via on ICBA’s Be Heard grassroots action center.

• The House Financial Services Committee today will hold a hearing on several draft bills to increase transparency at federal banking regulators following the recent failures of several large banks. Today’s Subcommittee on Financial Institutions and Monetary Policy hearing will include discussion of draft legislation to enhance transparency at the FDIC and Federal Reserve, expand reporting requirements for federal regulators, and establish an experience requirement for the Fed’s vice chair of supervision. A separate Subcommittee on Oversight and Investigations hearing  tomorrow will focus on the Government Accountability Office’s preliminary review of the Silicon Valley Bank and Signature Bank of New York failures.

• ICBA said the House Financial Services Committee’s draft stablecoin legislation does not go far enough in ensuring nonbank stablecoin issuers are adequately supervised, though it supports the draft bill’s goal of addressing gaps in regulatory authority. In a letter to the committee ICBA: 1) Supported the committee’s decisions to withdraw language that would have allowed nonbanks to access Federal Reserve programs and services and required a study of a U.S. central bank digital currency; 2) Called on the committee to close gaps in the stablecoin regime by applying the “same activities, same regulation” standard, rejecting a limited clock on application reviews, and ensuring substantive requirements in any stablecoin regulatory framework, and 3) Expressed concerns with a framework for state-qualified nonbank payment stablecoin issuers that would allow nonbanks to be licensed and overseen by their state regulator without approval by the Fed, a significant departure from the system of dual oversight of community banks. 

• The House Financial Services and Agriculture committees are hosting a joint subcommittee hearing today on the future of digital assets. ICBA has repeatedly called on policymakers to  ensure new policies  directed at the crypto sector fully reflect its risks and to prioritize research on the specific effects of digital assets on community banks and their customers. 

POLITICAL PERSPECTIVE

• President Biden has appointed his senior adviser and staff secretary Neera Tanden as Chief Domestic Policy Adviser and Special Assistant to the President. She will succeed Susan  Rice, who is stepping aside.  https://rollcall.com/2023/05/05/biden-names-neera-tanden-as-white-house-domestic-policy-chief/?mkt_tok=ODUwLVRBQS01MTEAAAGLmjFKgU0fRIv7yYCn-rUbAgRoy7I31AB9E1MgMzNNUL2Vc-OiZnjgBb25LVJjkWco_-YtCU4CNh0oP4z12O1kuxhacTrSwqC-HYnvvAwtT3__ 

• Rep. George Santos (R-L.I.) was charged with a host of financial crimes in court papers unsealed Wednesday. He surrendered to federal authorities in the morning and is expected to appear in a federal courthouse on Long Island, later today. https://www.cnn.com/2023/05/09/politics/george-santos-charged-justice-department/index.html. Officials said he has been charged with fraud, money laundering, theft of public funds, and false statements. Federal authorities said, he lied to his own donors, the House of Representatives, state unemployment officials, and others, resulting in seven counts of wire fraud, three counts of money laundering, one count of theft of public funds, and two counts of lying to the House of Representatives on financial forms. https://www.washingtonpost.com/national-security/2023/05/10/george-santos-charges/

• Rep. George Santos (R-L,I.) tops CQ Roll Call’s initial list of next year’s most vulnerable House members. Campaign insiders and election analysts believe New York and California will be key to determining which party will control the House after the 2024 election. In New York, Republicans Rep. Anthony D’Esposito (R-L.I.) -- who represents a district President Biden won by 15 percentage points -- and fellow New York GOP freshmen Mike Lawler (R-Hudson Valley) and Brandon Williams (R-Syracuse) are listed among the most endangered incumbents. https://rollcall.com/2023/05/08/most-vulnerable-house-list-runs-through-new-york-california/