March 30, 2022
IBANYS Weekly E-Newsletter
The President's Message
By John Witkowski, President & CEO

I hope everyone is staying safe and healthy. . .Just a few notes from me up top for today's newsletter.

First, I want to thank the banks that have already registered for our 2022 “Spring Into Action” Virtual Conference hosted by IBANYS.  This 2-day virtual meeting next Monday and Tuesday, April 4 – 5 will cover many important topics that impact community banks today.  Here’s the added bonus: Banks “Pay One Price” to enable their entire employee base to participate. 
  • Members of your team can come and go as many times as they want over the two days.  
  • Pick and choose which topics will benefit you and your team of associates.
  • Topics include the economy, balance sheet management, investments, marketing, cyber and many more.
  • You can receive CPE credits after you register, attend the event and complete the attestation form.

. . .Here is the brochure and the link to register.  Please have your team join us for a few days of excellent speakers providing great information! If you have any questions, please contact Linda Gregware at 518.436.4646 (office) or John Witkowski at 716.880.0518 (cell).
 

Our virtual Directors Conference is April 11, just a week later.  . .and, don’t forget to save the date and plan to attend our in-person Annual Convention June 13 -15 at the Turning Stone Resort & Casino. (Click here for more detailed information.) For full details on all IBANYS’ 2022 meetings, please  visit  https://ibanys.net/meetings-schedule/.


Also: A reminder that ICBA's Capital Summit is only a month away (May 1 –4, Washington, D.C. IBANYS is coordinating “Hill Meetings  with members of our New York congressional delegation, focusing on the offices of those serving on the House Financial Services, Small Business, Agriculture, Ways & Means, Energy & Commerce and other key committees, plus Senators Schumer and Gillibrand.
Please join us for these important sessions! See full details in today's Washington section.

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Lastly, I wanted to share with you some interesting data that came across my desk this week on the housing market, consumer confidence, inflation, and competition from non-banks.

  • According to the Case-Shiller index, home prices Increased 19.2% in January from a year ago, up from an 18.9% annual increase the previous month. Meanwhile, the Federal Housing Finance Agency (FHFA) reported that house prices: rose 1.6% in January from the previous month and were up 18.2% from the same time a year ago. 

  • Consumer confidence Improved slightly in March: The Conference Board’s index rose to 107.2 from 105.7 in February.

  • Inflation will mean the average U.S. household has to spend an extra $5,200 this year ($433 per month) compared to last year for the same consumption basket, according estimates by Bloomberg Economics. 

  • The ”American Banker” ran an article noting that Amazon, Apple, Facebook and Google are infiltrating financial services. While they still depend upon banks to back their payment cards and loans, their vast audiences mean any financial product they offer is a competitive threat.   Read story →



As always, we thank you for your continued participation and support of community banking.

. . .John
IBANYS MEETINGS
IBANYS Virtual Conference
April 4-5, 2022 - via ZOOM
NYS Community Banks "Spring" into Action
"Spring into Action" Virtual Conference – April 4-5 (8:30 – 2:45 each day) – Your bank “PAYS ONE PRICE” FOR ALL BANK EMPLOYEES TO PARTICIPATE (each person must be registered and provide an email address). A registrant may attend the entire event or pick & choose which sessions they prefer to attend and may sign in and out of the meeting. We have an outstanding slate of speaker who will share their knowledge and expertise on various topics including the economy, PEP, CECL, compliance and much more. Please click the link below for the detailed agenda and registration information. 

2022 Virtual Bank Directors Conference - Live Webinar
April 11, 2022
8:30 a.m. - 1:45 p.m.
The role of a community bank director is one that is always changing and has never been more critical to the success of your bank. The 2021 IBANYS Virtual Directors Conference is an informative and engaging event designed to help you gain the tools essential to guide your bank’s growth and profitability and sustain its vision for the future. 
COMMUNITY BANKS — MOBILIZED
BANKING FOR THE FUTURE

Below is a list of sponsors to date - THANK YOU!!
  • SHAZAM
  • Neach
  • Federal Home Loan Bank of NY
  • Bankers Healthcare Group (BHG)
  • Shield Compliance
  • ICBA
  • The Baker Group
  • T. Gschwender & Associates
  • Plante Moran
  • COCC
  • Piper Sandler
  • Roosevelt & Cross
  • Hartman Associates
  • Pillar+Aught
  • Wolf & Co.
  • Pursuit
  • Sunwealth
IBANYS ANNUAL CONVENTION
June 13-15, 2022
Turning Stone Resort & Casino
Detailed Brochure and Registration Information - Register Today!

A block of rooms have been reserved at the Turning Stone Resort & Casino. Reservations can be made by contacting the Turning Stone Resort at (800) 771-7711. Refer to group: IBANYS Convention. Room cut-off: May 19, 2022. (We cannot guarantee room availability and pricing after this date.) Tower King/Double Rooms rate= $164. Tower Junior Suites rates $244 (single/double occupancy).

WE STRONLY RECOMMEND YOU MAKE YOUR RESERVATIONS EARLY. THE ROOMS WILL SELL QUICKLY. Cancellations must be made 48 hours prior to day of arrival.
MEET THE CONVENTION SPEAKERS
Patrick Dix, Vice President of Strategic Alliance SHAZAM
Patrick Dix is a seasoned media professional and the leader of SHAZAM’s strategic alliances efforts. In a 25-year career as a broadcast journalist, he received recognition for outstanding reporting with awards from The Society of Professional Journalists, The William Randolph Hearst Foundation and the Midwest Broadcast News Association.
ASSOCIATE & PREFERRED PARTNERS
CECL Coffee Talk Q&A
Attend one or all sessions:

Friday, April 8 at 10:00 am ET
Duration: 45 minutes

Friday, May 13 at 10:00 am ET
Duration: 45 minutes
Grab a beverage and join our monthly discussion series on all things CECL. We'll begin each session by addressing the latest questions and concerns we've received from banks, then open things up for an audience Q&A — and hear how your CECL compliance work is going, clarify misinformation, swap suggestions and more. Each session will be different, and any banker can attend one or all, whether you use our CECLSolver tool (part of QwickAnalytics) or not. Just register to let us know you'll attend.

Time's Almost Up for CECL: See How CECLSolver Can Help
MBK Associates - Zoom Meeting on SERPS for Community Banks
When: Apr 13, 2022 10:00 AM Eastern Time EST
IBANYS is teaming up with MBK Associates to provide information and a case study on SERPS for community banks and their executive teams. Mark Kostrzewski, is President and CEO of MBK Associates and has over 40 years’ experience in helping financial institutions develop their retirement benefits. Here is a quick overview of what Mark will discuss on April 13, 2022 at 10am.
 
  • Supplemental Executive Retirement Plans (SERPS) can provide a strategic planning tool in addition to an enhanced executive retirement benefit for Community Banks.
  • Supplemental Executive Retirement Plans (SERPS) can not only create additional retirement benefits for C level executives, but also provide the bank with a powerful competitive recruiting tool.
For example, SERPS
  1.  provide the bank with a meaningful compensation tool to compete with larger publicly traded institutions that typically offer stock incentives to their management talent as a recruiting incentive.
  2.  provide the bank with a mechanism to offset the contribution and benefit limitations that qualified plans place on highly compensated C level executives.
  3. can be structured to be balance sheet neutral and provide a cost recovery mechanism to the bank.
 
To learn more about this you can do so by registering for the Zoom meeting below:
 
When: Apr 13, 2022 10:00 AM Eastern Time (US and Canada)
 
Community financial institutions know Main Street for our superior check program and service. But did you know we are also a quality, trusted provider of payment book solutions?
 
While many providers are discontinuing service for payment books, Main Street remains a trusted resource in providing payment book options at an affordable cost.
Because we value our relationship with you and the financial institutions you serve, I wanted to make sure you were aware of this additional service from Main Street to share with your members.
 
Please visit our website below to learn more!
ICBA INFORMATION
ICBA Securities and its exclusively endorsed broker, Vining Sparks, will present a webinar "Interest Rate Swaps: Not Just for Hedging" exclusively for the state associations that endorse ICBA Securities, as well as other community banks. This is the third webinar in the 2022 webinar series and will take place at 10:00 CDT on Tuesday, April 12, 2022.
Despite having a reputation as being complex and difficult to understand, the types of derivatives used by mid-size and smaller depositories are quite simple. Large financial institutions have used them for nearly four decades and many smaller depositories are increasingly utilizing them to meet customer needs, improve earnings, compete with larger institutions, and control interest rate risk.
Please join us for this one-hour session where we will:
  • Explain derivatives in simple, easy to understand terms
  • Cover the economic advantages of using derivatives
  • Discuss the governance and accounting requirements associated with derivatives
The webinar will last approximately 1 hour.
Rick Redmond, CMA
Rick joined Vining Sparks in November 2008 and currently serves as director of balance sheet strategies for Vining Sparks IBG and President for Vining Sparks Interest Rate Products, LLC. He has over 35 years of financial services experience, with the last 16 years spent working directly with community financial institution clients. He spent the earlier part of his career working for two large regional banks where his roles included treasurer, director of treasury risk management and assistant comptroller-financial analysis and planning. Rick is an often-featured speaker at Balance Sheet Management and Capital Markets Product conferences. He graduated from Auburn University with a BS in Accounting and Finance in 1979 and the BAI Graduate School of Banking at the University of Wisconsin in 1992. 
Katharine Bray 
Katharine joined Vining Sparks in November 2008 and currently serves as director of sales and trading for Vining Sparks Interest Rate Products, LLC. In this role, Katharine oversees marketing, strategy development, trading and post-trade client support. Katharine’s background includes 20 + years of combined capital markets/bank/financial management experience. Katharine received her undergraduate degree from Averett University with a Bachelor of Science in finance and her MBA from Wake Forest University. 
ICBA Capital Summit 2022
Join community bankers from across the country to advocate for our industry—in person. You have the power to share your personal story and put a name to our industry's key legislative priorities.
Rising tide
Bonds to own for a rate hike environment
By Jim Reber
Community bankers are nothing if not predictable, and I mean that as a compliment. They are bright, enterprising, have a nose for the risk/reward dynamic and a sense of duty and loyalty to their customers and staff. They’re also deathly afraid of rising interest rates.
ALBANY UPDATE

  • Here’s the latest bill activity for last week, as well as committee agendas for this week. There were no bill introductions last week.  Here is the other most recent updates bill activity for the week of March 14 - 18.


  • With the April 1 “deadline” looming, the state budget may be a late one: Legislators and Gov. Hochul wrestle over how, at minimum,  $216 billion in taxpayer money should be spent , as well as how to fund child care and whether New York's criminal justice system needs to undergo further changes.   Read More  .  .  .  .”City & State” notes: Here’s our tracker of the budget debates to watch.   Disagreements and protests were prominent yesterday as  signs of deals were scarce, State of Politics reports.    Housing activists are sounding the alarm that thousands of New Yorkers are facing eviction and foreclosure as both moratoria have expired.   Read More .   .    .A rebate program in which households would receive a check or an outright suspension of the state taxes on gasoline remains on the negotiating table in the budget talks.   Read More

  • New York business owners want the state to use some of the billions of dollars it received in federal relief aid to cover rising unemployment costs that threaten to swamp struggling businesses,   Gannett Albany reports.

  • The ratio known as the “tax burden” measures the proportion of total income that residents pay toward state and local taxes. To determine the residents with the biggest tax burdens, WalletHub compared the 50 states across the three tax types of state tax burdens- property taxes, individual income taxes, and sales and excise taxes- as a share of total personal income in the state.  New York State, ranked number one for overall tax burden (at 12.75%) and for individual income tax burden (at 4.9%).  https://www.news10.com/news/ny-news/new-york-is-2022s-state-with-the-most-tax-burden/


  • Two years into the COVID-19 pandemic, local businesses across the nation have either shuttered or adapted, which for some has meant relocating. Many businesses have made their way from dense metropolises for some more breathing room upstate.

  • Gov. Hochul wants Congress to pass additional COVID-19 federal funding that would go toward preparation for future variants and ensure an adequate supply of testing and vaccines, according to a letter she sent Tuesday to members of the state congressional delegation.  Read More.   .   . Legislators are considering bills meant to crack down on COVID-19 pandemic-related price gouging and fraud.  Read More

  • In this statewide election year, a new Siena College poll examined the state of the Democratic and Republican gubernatorial primaries. Gov. Hochul has a commanding 40-point lead, but If former Gov. Cuomo runs in the primary, she leads him by just 8 points,  38% to 30%, with 10% for Rep. Suozzi and 7% for NYC Public Advocate Williams.   Read More.   The GOP gubernatorial candidates (excluding Andrew Giuliani, based on his last name) remain mostly unknown to most voters, even among Republicans. Giuliani: 25-50% favorability rating with all voters, 46-29% with Republicans; Rep. Lee Zeldin: 20-20% overall, 35-12% with Republicans; Rob Astorino: 21-18% overall, 33-10% with Republicans; Harry Wilson: 13-9%, overall and with Republicans.  https://scri.siena.edu/2022/03/28/hochul-has-commanding-lead-over-williams-with-cuomo-in-race-hochul-leads-38-30-other-two-way-behind/

  • IBANYS has been asked by NYS DFS to coordinate feedback from state chartered bank executives, and to participate in a round table on managing the financial risks from climate change. DFS guidelines have been developed, including which size of banks the guidance should apply to like OCC’s Principles for Climate-Related Financial Risk Management for Large Banks. DFS is addressing these potential concerns in the draft guidance by emphasizing a proportionate, risk-based, and iterative approach. The guidance is for supervisory dialogue, and institutions can start qualitatively with existing data, then gradually evolve to be more sophisticated. DFS is not setting a timeline for implementing the expectations in the guidance right now, which is to give institutions time to do the work at a pace that makes sense to them. Read the guidance


  • Senate Banks Chairman Sanders (D-Queens) is focused more on his legislation to create a state/public bank -- rather than on establishing local municipal public banks -- IBANYS continues to oppose to the legislation and has drafted a Memo in Opposition.  . . . Also Read IBANYS Background & Talking Points Opposing this legislation and proposed possible alternative approaches to help meet the needs of unbanked and underbanked populations.
Biden-Harris Administration Expands SBA Pilot Program Targeting Access to Capital for Underserved Entrepreneurs 
Vice President Kamala Harris Unveils Improvements to SBA Community Advantage Pilot Program at White House Event with SBA Administrator Isabella Guzman, Extending it to 2024, Ending New Lender Moratorium, and Lifting Loan Caps
 
WASHINGTON – Today, Vice President Kamala Harris and Administrator Isabella Casillas Guzman, head of the U.S. Small Business Administration (SBA) and the voice for America’s 32.5 million small businesses in President Biden’s Cabinet, will announce impactful reforms to the agency’s Community Advantage (CA) loan program, a key SBA tool for Community Development Financial Institutions (CDFIs), Community Development Companies (CDCs), microlenders and other critical mission-based lending partners, that prioritizes equitable access to capital for low-income borrowers and those from underserved communities.

WEDNESDAY April 6th: Path to Prosperity Virtual Event

The FDIC, SBA and USDA have partnered nationally and will be presenting a regional series titled “Path to Prosperity.” The inaugural event in the “Path to Prosperity” series is being held on April 6, 2022, from 12:30 pm until 5:00 pm EST, covering the northeast portion of the United States.
The no-cost series will feature experts in the banking and lending industry, community partners and stakeholders. This series will provide useful information, tools, and resources for small businesses and individuals an opportunity to engage in dynamic discussions intended to create economic progress. This virtual event will include panel discussions comprised of economic and lending experts. There will be facilitated conversations, identifying challenges, sharing best practices, and innovative solutions to accessing capital. Presenters will share how financial institutions, non- profits and community-based organizations can encourage the development of a “Path to Prosperity” by incentivizing unbanked and under-banked small businesses individuals to establish a sustainable relationship with an insured financial institution.

In addition, the federal agencies will highlight resources available, including FDIC’s “Money Smart Financial Education Program,” SBA’s Capital, Contracting, and Technical Assistance Programs and USDA’s guaranteed Rural Business Loan Programs.
The event goals are:

  • Incentivize unbanked and under-banked small business owners and individuals to establish a sustainable relationship with an insured financial institution,
  • Expand technical assistance and financial education for small business owners and individuals to improve their bankability, and
  • Increase the number of SBA certified lenders for capital access for minority-owned businesses.
Path to Prosperity
Wednesday, April 6, 2022
12:30 PM EST - 5:00 PM EST

WASHINGTON UPDATE
With the return of earmarks, members of the New York congressional delegation scored hundreds of millions of dollars for projects back home as part of the $1.5 trillion federal budget signed into law this month.   Read More

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The Consumer Financial Protection Bureau said credit card issuers  charged $12 billion  in late fees in 2020 and that many have made these penalties “a core part of their profit model.”  The CFPB—which is reporting on late-payment fees as part of its initiative targeting “junk fees”—also said:
  • It expects credit card issuers to hike fees due to inflation.
  • Many major issuers charge the maximum late fee allowed under immunity provisions set by the Federal Reserve Board in 2010.
  • Subprime and private-label cards are particularly susceptible to late fee charges.
  • Late fee volume fell when stimulus checks arrived in 2020 and 2021, particularly for households with lower credit scores.
  • Low-income areas, areas with high shares of Black Americans, and areas with lower economic mobility are disproportionately affected. 

The CFPB recently extended   until April 11 the deadline to comment on "exploitive junk fees" charged by financial institutions.   ICBA has called   the request for information a "misguided effort that paints a distorted and misleading picture” of the industry while reiterating that community banks already follow multiple federal laws and the CFPB's own rules requiring them to clearly disclose terms and fees.

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The Biden administration released its fiscal 2023 budget without an ICBA-opposed IRS bank reporting proposal it sought to pass last year.  The proposal, first introduced in last year’s budget, would have required banks to report customer account information to the IRS. It ran into stiff opposition after ICBA and community bankers uncovered the plan and enlisted consumers to speak out via its   #KeepMyBankingPrivate campaign.  While Treasury Secretary Yellen has told Congress she still supports the IRS reporting proposal, the House last year pulled it from a broad tax and spending bill that subsequently stalled in the Senate. While that brought the plan to a halt, at least temporarily, exclusion from the fiscal 2023 budget does not guarantee the proposal will not be taken up by Congress.  2023 Budget: Treasury’s Green Book outlining the $5.8 trillion budget’s revenue proposals does not mention the IRS reporting proposal. It does include various provisions to:

  • Raise the Corporate Income Tax Rate to 28%.
  • Make the New Markets Tax Credit permanent.
  • Increase the top marginal income tax rate for high earners.
  • Create a new 20% minimum tax for households with assets of $100 million or more, which would include taxation of unrealized capital gains.
  • Reform the taxation of capital income.

Among its provisions, the budget requests roughly $30 billion in discretionary funding for the USDA. It would provide $13.2 billion for the federal crop insurance program and would fully support the estimated $10.7 billion demand for farm loans. ICBA will continue working, with strong support from IBANYS, to ensure federal tax and budget initiatives support community banks and the communities they serve.
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The House Financial Services Committee released its April hearing schedule.
  • Tuesday, April 5: the role of financial institutions in slavery.
  • Wednesday, April 6: the state of the international financial system.
  • Wednesday, April 20: improving fire safety in federally assisted housing.
  • Wednesday, April 27: semi-annual report of the Consumer Financial Protection Bureau.
  • Thursday, April 28: Financial Crimes Enforcement Network oversight.
  • Thursday, April 28: digital banking trends.

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The OCC   issued a bulletin   with the designated points of contact banks must use to satisfy recently established interagency incident notification requirements, effective May 1.  The final rule requires a banking organization to notify its primary federal regulator of any significant computer-security incident as soon as possible and no later than 36 hours after it determines a cyber incident has occurred.  The OCC said banks may satisfy notification requirements by contacting their supervisory office or by using BankNet contact information.  In a    comment letter  last year, ICBA expressed opposition to the rule, noting that community banks are already required to report incidents under the Gramm-Leach-Bliley Act.

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President Biden’s nominee Lisa Cook cleared another hurdle toward becoming the first Black woman to join the Federal Reserve Board. The U.S. Senate voted to discharge her nomination from committee, clearing the way for the full Senate to vote on Cook's confirmation.  Cook is a professor of economics and international relations at Michigan State University. She has spent most of her career in academia, with stints in government and visiting positions at Federal Reserve banks of Minneapolis, New York and Philadelphia and the National Bureau of Economic Research. She became a board member of the Chicago Fed in January. She was also senior economist on the White House Council of Economic Advisers from 2011 to 2012 and worked for the Treasury Department from 2000 to 2001. 

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ICBA recently released a summary of the SBA’s recent disclosure that it will directly contact more than 1,000 lenders about erroneous 7(a) program payments under Section 1112 of the CARES Act.  The ICBA summary covers a recent briefing in which the SBA said it plans to work with lenders to claw back the mispayments, which do not involve either the Paycheck Protection Program or 504 loan program.  The law directed the SBA to make up to six months of loan payments for preexisting 7(a) loans during the pandemic, but an internal review found potentially 8,000 loans from approximately 1,100 lenders may have included erroneous payments.  ICBA’s summary details the SBA’s multi-step process for reconciling the incorrect payments. View the summary.   

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ICBA continues adding speakers to its lineup for the 2022 ICBA Capital Summit  May 1-4 in Washington, D.C. In keynote remarks and breakout sessions, this year’s Capital Summit  speakers will include:

  • CNN political analyst and USA Today columnist Kirsten Powers.
  • Senate Banking Committee member Mike Rounds (R-S.D.).
  • Acting Comptroller of the Currency Michael Hsu.
  • FDIC Acting Chairman Martin Gruenberg.
  • Assistant Treasury Secretary for Financial Institutions Graham Steele. 

Learn more. Registration is open for the 2022 ICBA Capital Summit  Learn more. . . .IBANYS is coordinating hill meetings on Tuesday, May 3 with New Yorkers on the House Financial Services, Small Business, Agriculture, Energy, Homeland Security, Labor, Budget and Ways & Means Committees, as well as sessions with Senators Schumer and Gillibrand.  Join us in Washington!

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