October is Cybersecurity awareness month. Hartman Advisors, an Associate member of IBANYS shares some insights below (Associate Member section) on ways to keep your customers safe and tips for providing your employees with comprehensive and ongoing training and resources to reduce the risk of costly mistakes.

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The 2022 Crowe Bank Compensation Survey Report —which provides insights on compensation, human resources, and benefits—is now available for purchase.  With responses from 429 financial institutions, the report provides key information on:  Calibrating compensation structures using industry benchmarks;  Structuring salary and incentive pay to support business strategy;  Aligning board member compensation to the industry; Identifying trends in human resources programs and turnover. Learn more. 

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Lastly, a few items of interest from the press that came across my desk:

•  A report that examined trends between 2010 and 2021 found that the country's biggest banks only opened 638 branches in low-to-moderate income communities made up primarily of people  of  color. That accounts for just 15% of their total branch openings. Read story.  Interestingly, Bank of America Corp. plans to deposit $100 million in banks that focus on minority communities, doubling its previous commitment to invest $100 million in minority depository institutions. BOA executives said the investments are aimed at expanding the banks' capacity to make loans for housing or businesses, and individual bank deposits will likely range from $1 million to $10 million. Reuters

•  FS-ISAC plans to test banks' cybersecurity defenses in "hyper-realistic" simulations of malware, phishing and ransomware attacks. Read story  

• The "American Banker" noted that with the threat of recession lurking and loan demand slowing, a new theme could emerge during community bank earnings season this month: cost cutting. https://www.americanbanker.com/news/will-inflation-drive-more-community-banks-into-cost-cutting-mode?mkt_tok=ODUwLVRBQS01MTEAAAGHRyS-vTrnI8WmPJX4VDfccUpmd-wm4WjwgsqOemUBcsIjqNdPzDLZfgwzN6ji34ybMWEVyhbbguRE-OvS0KWEgOo_ccLWLa_buW9PAgZBMSmz

MEMBER BANK NEWS

Does your bank have news you’d like to share? If so, please send us an email (lindag@ibanys.net) and your news will be placed in our weekly e-newsletter.

We look forward to sharing your news and all that you do for and in your communities.

IBANYS MEETINGS

Financial Services Insights

October is National Cybersecurity Awareness Month

Meet the Team

Rich Tibbitts, CISO Advisor

Rich Tibbitts believes that cybersecurity should be embedded in the culture of any organization that exists in the world today. With more than a decade of experience in the CISO advisory space working with many industries and with organizations of all sizes, he knows better than most that cybersecurity is not a technical, back-office activity, but a necessity for business success.

At Hartman, Rich leads the CISO advisory team and ensures that all client services are tailored for an executive audience, consistent, and delivered on time and on budget. Previously, Rich was the program director for cyber risk management at Gartner Research Board, where he worked with more than 60 global CISOs from the world’s largest and most complex organizations.



Learn more about Hartman's risk management consulting services here.

ICBA Securities and Stifel, the ICBA’s exclusively endorsed broker, are excited to open advance registration for the 2022 Balance Sheet Academy to all attendees of this year’s Bond School held in April. This exclusive opportunity is for a limited time, so reserve your seat today.

Balance Sheet Academy

Oct. 17-18 | Memphis, TN

Register Here

Who Should Attend?

The in-person seminar is structured for more experienced investment managers, particularly those who have attended Bond Academy. It incorporates balance sheet strategies into the day-to-day management of an institution's investment portfolio, liquidity and interest rate risk management. Bank personnel with an intermediate level of understanding of investments who are integral to the investment and balance sheet management process will benefit the most from this advanced course. New directors serving on the investment or asset-liability committee will also find this course beneficial.

Agenda

Courses will focus on the understanding, development and implementation of strategies for balance sheet management, liquidity and capital management, loan portfolio management, investment portfolio construction, among other topics. A complete agenda is forthcoming.

Costs/Person

Members: $595

Nonmembers: $695

Members & Nonmembers: Save $150/session per additional registration from your bank.

CPE Credit

Earn up to 12 credits

Questions

(901) 762-5312

fixedincomeevents@stifel.com

ICBA Securities is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, through www.learningmarket.org

• The New York Department of Financial Services plans to unveil its planned climate risk guidance in the coming weeks. It will reportedly focus on how banks can manage the operational risks posed by rising temperatures and increase in extreme weather events. Harris previewed the climate guidance in an interview with American Banker, saying banks "cannot sacrifice" their fair lending and equity obligations "in order to mitigate climate risk." Read story . Harris said the guidance, whose early plan was first announced in February, would focus largely on banks and independent mortgage lenders’ “operational resiliency” and how they will be affected by climate change, and less on the transition risks financial institutions face as the world moves to switch from fossil fuels to cleaner energy sources. The DFS Climate Risk Division was created last year. November. Dr. Nina Chen, the first head of the division, recently left when named to lead the OCC’s climate change efforts. 

• State Comptroller DiNapoli released his latest fiscal stress scores for municipalities for all counties and towns, 44 cities, and 11 villages. It identified eight local governments in stress. “The infusion of aid from the federal government and robust local sales tax revenues helped to put local governments on solid fiscal ground in 2021. . .municipalities shouldn’t assume this will last.” 20 local governments ended their fiscal year in 2021 in some form of fiscal stress, down from 30 a year ago. https://content.govdelivery.com/accounts/NYSC/bulletins/32fe587. 

• The State Department of Labor announced the next steps in the state’s $15 minimum hourly wage plan. The minimum wage outside New York City and its immediate suburbs will increase to $14.20 an hour on Dec. 31. It is currently $13.20. New York residents can participate in a public comment period by writing to regulations@labor.ny.gov by Dec. 11. The wage increase plan will either be accepted or denied in time for the change to take effect by Dec. 31. Read More. Meanwhile, Democratic state lawmakers who initially supported reducing the overtime threshold for farm workers to 40 hours are now suggesting ways to ease the burden of the coming change on small farmers. Read More. (Farm laborers are set to be paid overtime for hours beyond a 40-hour work week by 2032 following a decision issued by state Department of Labor Commissioner Roberta Reardon, the Times Union reports.)

• Senate Majority Leader Schumer urged federal officials to increase their efforts to protect consumers from cybersecurity breaches and investigate those responsible for such hacks. Schumer cited a handful of recent data breaches at private and public organizations, including Suffolk County. The county’s website was the target of what appears to be cyberattack in which “…threat actors accessed and/or acquired certain personal information from one or more County agency servers.” The County officials and noted that the county had to shut down all of its computer systems to protect government data. Schumer wants a stricter requirement for companies to report data breaches to make as many consumers as possible aware of any possible exposure. https://www.cnn.com/2022/10/02/politics/chuck-schumer-cybersecurity-protections-investigations/index.html

• There’s a lot of competition for the first retail cannabis licenses in New York: The state received more than six applications for every license it will hand out in the first round of licensing, The Buffalo News writes.

• Election Day is just 34 days away. Here is a comprehensive rundown of key races to watch statewide, and for House and state legislative seats: https://www.gothamgazette.com/state/11571-races-to-watch-new-york-2022-general-election. Long Island has emerged as an unlikely battleground in the bitter fight for control of the House of Representatives, with both Democrats and Republicans gearing up to pour large sums of money into the contests there, The New York Times reports.

• New York State is providing $200 million in grant funding for small businesses in their earliest stages of development, to help them gain a foothold in the post-pandemic economy. Read More. Applications for the first-in-the-nation “Seed Funding Grant Program” opened last month. The program provides flexible grants to support early stage, micro and small businesses in a still recovering New York State economy, to help ensure small businesses that opened shortly before or during the pandemic have the funds to continue to operate and grow. https://dingo.telicon.com/NY/library/2022/2022091347.PDF More on the Seed Funding Grant Program Can Be Found Here.

• Gov. Kathy Hochul was in Syracuse with Sen. Schumer Tuesday to announce a new $100 billion deal to build a semiconductor manufacturing plant. The computer memory chip specialist Micron will build a chip manufacturing facility in the White Pine Commerce Park in the town of Clay, potentially bringing tens of thousands of jobs to the region, U.S. Sen. Chuck Schumer said Tuesday during a news conference. Read More. . .Now that the historic Micron Technology chip fabrication announcement has been made, the work begins -- Central New York has spent a lot of time getting ready for, ensuring the region has and continues to have the people needed to make the project a success.

• With the midterm election only 40 days away, MorningConsult is providing a "2022 Midterm Tracker" featuring daily tracking of the generic ballot and the president's approval rating among likely voters; the latest “buzz” on key players and issues; which issues voters are prioritizing, and which party they most trust to handle them. Check out the data here: Congressional Democrats lead their Republican counterparts by 5 percentage points on the generic ballot (49% to 44%). Learn more.

• ICBA and other groups expressed strong opposition to amendments that would attach credit card interchange reforms to must-pass defense legislation. The amendments from Sens. Durbin (D-Ill.) and Marshall (R-Kan.) would: 1) Include the Credit Card Competition Act of 2022 (S. 4674) in the pending National Defense Authorization Act; 2) Direct the Defense and Treasury departments to conduct a study on interchange fees at military facilities—an effort designed to ensure interchange is germane to the defense bill. S. 4674 would require banks with over $100 billion in assets to offer merchants at least two networks to process credit cards, at least one of which cannot be owned by Visa or Mastercard. In a joint letter, ICBA and other groups said the amendments are nongermane and would rob military families of their credit card rewards, reduce the availability of safe credit, and undermine data security. Grassroots Action: With lawmakers seeking to advance the interchange bill through must-pass legislation, community bankers can use ICBA’s Be Heard grassroots action center and share its social media call to action on the bill to rally opposition in Congress. Consumer Campaign: Separately, the Electronic Payments Coalition—of which ICBA is a member—offers a “Hands Off My Rewards” campaign with resources encouraging consumers to weigh in against the legislation. Contact Congress.

• Regulatory restrictions are not the answer to addressing scammers that use Zelle and other peer-to-peer payments services, ICBA said following the release of a congressional report on P2P fraud. In a new report, Sen. Elizabeth Warren (D-Mass.) said fraud is “rampant” on Zelle. She called on the Consumer Financial Protection Bureau to strengthen Regulation E to require banks to reimburse customers duped into authorizing payments to scammers. In a national news release, ICBA said: 1) Community banks are outraged by increasingly sophisticated fraud and follow strict electronic funds transfer regulations. 2) While more than 99.9% of Zelle transactions have no reports of scams, Zelle and the largest banks can take measures to improve consumer awareness and fraud protections. 3) Regulatory restrictions will never keep up with the pace of evolving fraud and will only disrupt banking services. 4) Unlimited liability for P2P fraud under Reg E would have a disproportionate impact on community banks. Focus on Fraud: “Instead, policymakers should focus more on the fraudsters and work with P2P technology vendors to maximize consumer awareness of fraud schemes and implement safeguards, such as multifactor authentication, to reduce consumer approvals of fraudulent transactions without delaying consumer access to their funds,” ICBA President and CEO Rebeca Romero Rainey said. Background: The Reg E debate has grown amid the rising incidence of P2P fraud. During a virtual listening session last week, ICBA raised concerns with the CFPB’s potential expansion of Reg E to address the issue.

• Federal Reserve Governor Bowman said the increase in credit union acquisitions of taxpaying community banks indicates regulators should rethink how they evaluate bank mergers. Bowman said many credit unions have expanded their fields of membership “well beyond” traditional common bond requirements, and the increase in credit union acquisitions of community banks underscores rising credit union competition: “Credit unions today are much more likely to compete directly with traditional banks offering the full ‘cluster’ of banking products and services than they did in 1995 which supports the argument our analysis needs to give more weight to competition from credit unions. ”Community bankers: Urge Congress to hold hearings on the credit union tax exemption using a customizable message to lawmakers on ICBA’s Wake Up page and its Wake Up Messaging Playbook.

• FDIC Acting Chairman Gruenberg reiterated his recent remarks that community banks have an outsized role in lending during times of distress and providing equitable access to financial services. In a speech at the 2022 Community Banking Research Conference following similar remarks last week, Gruenberg cited research that has found: The relationship-lending model is particularly adept at providing credit to small businesses during downturns while extending credit at similar levels during credit booms; Primarily the presence of community banks, rather than bank presence more broadly, benefits lower- and -moderate-income communities. Minority depository institutions are associated with more credit to minority populations and minority homeownership. Relationship-lending banks were associated with more PPP loans. ICBA’s “Tell Your Story” Toolkit features custom marketing and communications resources on the benefits of community banking.

• ICBA continued its opposition to allowing nonbank lenders to access the Federal Home Loan Bank system during a listening session hosted by the Federal Housing Finance Agency last week. ICBA urged the agency to “do no harm” to the FHLBanks and to not permit non-depository institutions to access the system. The listening session follows the FHFA’s announcement it is conducting a comprehensive review of the FHLBanks. In a national news release responding to that announcement earlier this month, ICBA strongly opposed any efforts to: Compromise the system’s regional and cooperative structure; Permit non-depository entities to access FHLBank programs or services; Consolidate the system without the grassroots leadership of its member-owners.

• ICBA-opposed legislation to expand on the Durbin Amendment has been introduced in both the House and Senate. ICBA is urging community bankers to continue the grassroots campaign against the anti-consumer bill. Community bankers can continue using ICBA’s Be Heard grassroots action center to oppose the Credit Card Competition Act of 2022 (S. 4674/H.R. 8874). The bill would require banks with over $100 billion in assets to offer merchants at least two networks to process credit cards, at least one of which cannot be owned by Visa or Mastercard. As ICBA has said in a national news release, letters to the House and Senate, and a Main Street Matters blog post, the bill would force a costly overhaul of payments systems, restrict access to credit card services, end popular rewards programs, and put merchants in charge of credit card security—solely to benefit large retailers like Amazon and Walmart. Contact Congress.

• The Financial Crimes Enforcement Network issued a final rule establishing a beneficial ownership information reporting requirement. The rule will require most U.S. corporations, limited liability companies, and other entities to report to FinCEN information about their beneficial owners—those who ultimately own or control the company. The rule enacts provisions of the Corporate Transparency Act—passed as part of the Anti-Money Laundering Act—to strengthen national security and the integrity and transparency of the U.S. financial system. In letters to FinCEN on beneficial ownership reporting and the agency’s broader Bank Secrecy Act review, ICBA urged the agency to withdraw bank beneficial ownership collection and verification requirements now that it is required to collect this information directly from reporting companies.

• Several financial services organizations joined ICBA in expressing opposition to legislation that would create new credit card routing mandates that expand on Durbin Amendment interchange restrictions. In a joint letter to House leaders, ICBA and other groups said the Credit Card Competition Act of 2022 (H.R. 8874) would restrict low-cost banking services for consumers, pose security risks, disproportionately harm community banks, and prioritize big-box retailers’ profits. The legislation would require banks with over $100 billion in assets to offer merchants at least two networks to process credit cards, at least one of which cannot be owned by Visa or Mastercard. Reps. Peter Welch (D-Vt.) and Lance Gooden (R-Texas) last week introduced the House companion to Senate legislation sponsored by Sens. Roger Marshall (R-Kan.) and Dick Durbin (D-Ill.). ICBA is calling on community bankers to continue using its Be Heard grassroots action center to send custom messages to their lawmakers opposing the anti-consumer bill. ICBA has expressed strong opposition to the legislation in a national news release, letters to the House and Senate, and a Main Street Matters blog post.