July 27, 2022

IBANYS Weekly E-Newsletter

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President's Message Important Update: Fed Enacts Another Interest Rate Increase The Federal Reserve this afternoon enacted its second consecutive 0.75 percentage point interest rate increase, taking the benchmark overnight borrowing rate up to a range of 2.25%-2.5% as it seeks to tamp down inflation without creating a recession.  The June and July moves are the most stringent consecutive action since the Fed started using the overnight funds rate as the principal tool of monetary policy in the early 1990s.  Here is a comparison of today’s Fed Open Market Committee statement with the statement after   the Fed’s   previous policymaking meeting on   June 15.   Chairman Powell noted the Fed would eventually slow the magnitude of rate hikes, and left the door open about the size of the rate move at its next meeting in September – saying it could raise rates by 0.75 percentage point again, but it would be dependent on the data.  To read / hear Chairman Powell’s comments.:  https://www.cnbc.com/2022/07/27/real-time-updates-of-the-feds-big-rate-decision-and-powells-press-conference.html ********** A few important reminders and updates as we  prepare to turn the calendar to August: Registration is open for IBANYS' Executive Bank Symposium which is being held September 12- 14 in beautiful, charming, historic Lake George, NY! Today's newsletter provides all the details and registration information. New Venue!! New Format!! and New Agenda!!    With the annual August congressional recess is just around the corner, your local Members of Congress, the State Senate and State Assembly will all be back home in their districts. It's a chance to re-connect with your federal and state legislators, strengthen relationships, remind them of all that your banks do for your communities and customers (their constituents!) and to discuss important issues and priorities for community banks. ICBA offers tips for making lasting personal connections with lawmakers in this month’s  Independent Banker magazine.  Read more.    Here's how to contact your state and federal elected officials: https://www.nysenate.gov/find-my-senator  https://nyassembly.gov/mem/search/ https://www.house.gov/representatives https://www.senate.gov/states/NY/intro.htm  Here is a link to a new blog article by Jay Hack (Gallet Dreyer & Berkey, LLP)  regarding the proper handling of bounced check report on attorney escrow accounts.  The author has indicated that any bank, wherever located, that wants to maintain an escrow or trust account for a New York lawyer needs to know about this, regardless of who chartered the bank.  The Federal Reserve Bank of New York recently announced that Naureen Hassan has stepped down from her role as First Vice President and Chief Operating Officer and will be leaving in September 2022 for a senior leadership role in the private sector. As First Vice President, Hassan was the New York Fed’s second-ranking officer and an alternate voting member of the Federal Open Market Committee. In the interim, Hassan has moved to an advisor role to help facilitate a smooth transition. Helen Mucciolo, Chief Financial Officer and Head of the Corporate Group, will serve as interim First Vice President and Chief Operating Officer until a successor is named.

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Bank Obligations Regarding Attorney Escrow Accounts By: Jay Hack, Esq., Partner The courts in New York have no authority to regulate banks, but the courts are the regulatory authority over attorneys. Using the power to regulate attorneys and their ethical obligations, the courts have managed indirectly to impose requirements on banks by prohibiting attorneys from depositing escrow funds in a bank unless the bank agrees to play ball on what is generally conceded to be an important early indicator of misappropriation of escrow funds – bouncing a check on an escrow account. Read here

The Benefits Of Offering An Integrated Peer-To-Peer Service Through A Digital Banking Platform By: Greg Ryan, Core & Digital Specialist Peer-to-peer or Person-to-Person (P2P) transactions are now mainstream and a growing sector of consumers’ financial activity. Younger generations are leading the movement, and their use has spurred their parents and grandparents to adopt these technologies. With this increased usage, ensuring consumers have the highest level of security when transferring money online is critical. Click the link above to read.

We are proud to announce a strategic partnership with Rivel, Inc that offers our IBANYS Members a 20% discount on new contracts and 10% recurring savings every year thereafter. The Rivel Prospect Benchmarks® are the largest syndicated banking brand studies in the world. The survey program interviews hundreds of thousands of bank customers (Retail and Commercial) on how happy they are with their current bank, how likely they are to switch, what would make them switch, which banks they would consider switching to, and how best to reach them with a marketing message. The Rivel Customer Benchmarks® are the largest syndicated banking customer studies in the world. The surveys cover hundreds of thousands of customers (Retail and Commercial) who rate the banking institutions they use on dozens of metrics including responsiveness, value for fees, staff training, mobile app ease of use, ATM quality, runaround, call center quality, etc. We look forward to a long and rewarding partnership with Rivel, Inc. If you are interested in speaking with Rivel please contact: Bruce Paul at bpaul@rivel.com Dailey Betz at dbetz@rivel.com Melissa Randi at mrandi@rivel.com 203-226-0800

Click here to register

ICBA INFORMATION

Up with Coupons Larger interest payments can build a floor under your bond prices By Jim Reber, ICBA Securities Jim focuses on how larger interest payments can build a floor under your bond prices, and suggests strategies that can improve life for community banks. Read Here

ALBANY UPDATE

New York City data shows that the number of legal evictions in the city grew each month in the first half of 2022 as rents skyrocketed and pandemic tenant protections began to diminish,   City Limits reports. New York State has several important congressional primaries in both parties August 23.  Political strategist and educator Bruce Gyory provides a look at the most consequential primaries, including those in the 10th (Manhattan and Brooklyn), 12th (Manhattan’s East and West Sides) and 23rd (Western New York) Congressional Districts. There are also other races around the state worth charting, since their outcome could impact the outcome of the all- important general election campaigns.  https://empirereportnewyork.com/a-cheat-sheet-for-handicapping-the-congressional-primaries-in-nys-worth-watching/     (link) . . .PRIMARY RACE ANALYSIS: NY3, NY4, NY10, NY12, NY 17, NY 23...(link) Ahead of the Aug. 23 State Senate primaries, the new fundraising numbers recently were released for a swath of competitive races across the state. Get the latest fundraising hauls and how that’s impacted over a dozen races in   City & State’s state Senate races tracker. The increase in private sector employment in New York slowed in June, and overall unemployment was unchanged amid rising interest rates and concerns over a potential economic recession.   The number of private-sector jobs in New York increased by 19,700 last month, according to the State Labor Department -- a decline from May,    when the state added 27,200 jobs.   The statewide unemployment rate was unchanged from May, at 4.4%. Unemployment in   New York City increased from 6.1% to 6.2%, while outside of the City in New York it was 3.1% unchanged from May. Nationally, the unemployment rate is 3.6%.   Read More  Regulations for New York's coming retail cannabis sector are finally in place. And for people who want to get some of the first licenses, it's a lot to parse through.  Read More. Meanwhile, The chief counsel at the Office of Cannabis Management   has abruptly left.      The State Department of Financial Services (DFS)  is staffing up    to manage the increased demand for crypto firm licensing.   Governor Hochul has signed legislation (S.9348A/A.8292) directing the DFS to study bank overdraft fees in the state.  Read comments by the Governor and statement and DFS Superintendent Harris: State Senate Banks Chair Sanders and Assembly Banks Chair Fahy:   https://dingo.telicon.com/NY/library/2022/2022071578.PDF.

WASHINGTON UPDATE

ICBA and 43 state community banking associations -- including IBANYS -- called on members of the House Financial Services Committee to reject legislation that would impose new overdraft restrictions as the committee assembles today for a markup. The  joint letter  with the affiliated state associations and a  separate letter from ICBA said the Overdraft Protection Act of 2021 (H.R. 4277) would force many community banks to stop offering overdraft services—leading to bounced checks, declined transactions, credit rating harm, and other unintended consequences. “Community banks offer many deposit account services to address a variety of consumer needs in a highly competitive financial services marketplace,” ICBA President and CEO Rebeca Romero Rainey wrote. “As drafted, H.R. 4277 undermines overdraft protection services that our customers request.”  The committee previously pulled the overdraft bill from last month’s markup following strong ICBA and community bank opposition. ICBA will continue opposing the measure as lawmakers convene at 10 a.m. (Eastern time) for today’s markup and should the bill advance out of committee. READ THE LETTERS The House passed ICBA-advocated legislation to support   de novo bank formation    and is expected to vote today on an ICBA-backed bill to expand consumer access to   online notarization.   H.R. 4590 — which the House passed unanimously on a voice vote—would:  1) Require federal regulators to study the challenges faced by proposed depository institutions—including minority banks—seeking de novo charters;  2) Provide legislative recommendations to help these institutions obtain charters.  The bipartisan SECURE Notarization Act (H.R. 3962), which is expected to come to a vote today, would:  1) Authorize the nationwide use of remote online notarization for real estate transactions, financial services, and other legal documents.  2) Create a minimum national security standard for the use of RON.    ICBA will continue working to advance both measures through Congress. Sen. Charles Schumer made good on a long-held objective last week by introducing legislation  that  would legalize marijuana on the federal level. In an interview with American Banker, CFPB Director Chopra talked about litigating against large firms, fighting overdraft fees, and reining in Big Tech.     Read story → .  .  .Meanwhile, nine months into his tenure leading the Consumer Financial Protection Bureau, Director Rohit Chopra has carved out a role as one of the Biden administration's most aggressive regulators.  https://subscriber.politicopro.com/article/2022/07/politico-pro-q-a-cfpb-director-rohit-chopra-00048023?mkt_tok=ODUwLVRBQS01MTEAAAGF3qtVB8xDyKAl12koFr4Z-sqTBc9kQU4Xht1gARaeKOUChB3J6Z9ujnF1H8S8NwVGSUZq2xjUujjbYceb7TrGdSPuXYLf1-BRsCfJRLy2zRD1 President Biden is considering extending a pause on student loan repayments for several more months, as well as forgiving $10,000 in student loan debt per borrower as he seeks to appeal to young voters ahead of the November midterms,     Bloomberg reports. The Conference Board said Tuesday that its consumer confidence index fell to 95.7 in July from 98.4 in June, largely due to consumer anxiety over the current economic conditions, particularly four-decade high inflation. It's the lowest reading since February of 2021.   https://apnews.com/article/inflation-prices-consumer-confidence-540a7e866b29e504f67e1aec2e0ee547?mkt_tok=ODUwLVRBQS01MTEAAAGF3qtVBxjBWIe5EvBXtAr6S2ZxUhsnnvJ07BnqrVFnePRuWt2tsEe5O8m7mXys3_fwX9m18zCzEfxW97cjoqyhPtSM2I_j41Qo_wcY32pFpyeS Weakness in refinances and purchases pushed the Market Composite Index, a measure of mortgage loan application volume, down for the fourth week in a row to the lowest level since February 2000, the Mortgage Bankers Association (MBA) said on Wednesday.   https://www.marketwatch.com/story/mortgage-application-activity-drops-for-the-fourth-week-in-a-row-lowest-level-since-february-2000-11658919626?mod=panda_marketwatch_author_alert&mkt_tok=ODUwLVRBQS01MTEAAAGF3qtVB6RI6qugsbWXwJ62FlSnLeKD7i1YpIPFMy5yWn5oU6HA1sld821UQpa2J5n22jv2D4-Sft_9aQit6r3KPjtZcz0OUdHYgpxUdY_1gqdp Home-price growth remained strong in May despite rising mortgage rates and steep prices that are pushing some buyers out of the market. The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 19.7% in the year ended in May, down from a 20.6% annual rate the prior month. Siena College this month released its quarterly  consumer sentiment index for New York. The results showed  that New Yorkers  are increasingly glum about the economy. The consumer sentiment index is at its lowest ebb in 11 years, and is at an all-time low among upstate New York residents.    Read More The head of the Commodity Futures Trading Commission said his agency has a role in regulating cryptocurrencies, but stablecoins are payment systems that are best situated to oversight by the prudential banking regulators.  Chairman Behnam agrees with a report from the President’s Working Group on Financial Markets, which advocated legislation that would require stablecoin issuers to be insured depository institutions.  In a recent comment letter, ICBA called on the Commerce Department to recognize the risks posed by digital assets, including a U.S. central bank digital currency, as policymakers consider a regulatory framework.