Another busy week for community banks in defending our position as the most stable and strongest provider of services for small business and consumers. IBANYS is proud to advocate for all of you at the state and federal level.

We are also proud to be associated with the best partners that work with community banks. Over the next few weeks and months IBANYS will hold a series of educational events for our banks and their employees that will cover many of the current issues we are facing today.

April 17 /18 -IBANYS Spring meeting - virtual 2-day meeting for all bank employees. (Registration link)

June 12-14 - IBANYS ANNUAL CONVENTION- The Turning Stone Resort and Casino. (Sponsor, exhibitor registration link) (Attendee only registration link)

June 21 - 50 Years in Banking with Jack Hubbard at The Turning Stone Resort and Casino - (more details to come)

We continue to fight for community banks. If you have any questions or comments, please contact me.

John

ICBA op-ed: Recent large bank closures show community bank difference

Depositors and policymakers must distinguish large, risky banks from community banks to respond appropriately to recent banking industry developments, ICBA President and CEO Rebeca Romero Rainey wrote in a new op-ed.

Differentiating Community Banks: In The Hill, Romero Rainey said Silicon Valley Bank and Signature Bank of New York were at particular risk due to deposit concentrations and lack of risk management. By contrast, local community banks operate under an entirely different business model, she said.

Policy Exemptions: Romero Rainey also said policymakers should ensure any response to these closures does not affect community banks, by exempting community banks from a Deposit Insurance Fund special assessment and from any new regulatory burdens. “Small lenders shouldn’t have to pay for the mistakes of banks that are orders of magnitude larger with markedly different risk profiles,” she wrote.

Key Policy View: As Romero Rainey wrote in a weekend alert to community bankers, ICBA’s key policy message is policymakers should not rewrite the deposit insurance system on the fly to pick winners and losers in the banking system. “If policymakers decide to provide unlimited deposit insurance to some institutions, they cannot leave others out—certainly not the community banks that have, as always, operated on a safe and sound basis,” she said.

Additional Press Coverage: ICBA’s efforts to differentiate community banks from larger entities continued making headlines with new coverage in the Financial Times, Forbes, Fox Business, Politico Morning Money, and the Washington Examiner.

Ongoing ICBA Efforts: ICBA will continue educating the public about the stability of the community banking industry while opposing any efforts to rope community banks into the policy response to recent bank closures.

READ MORE

**********

The Cybersecurity and Infrastructure Security Agency (CISA) and other federal agencies warned consumers to be aware of potential scams following recent bank failures. In a recent alert, CISA encouraged consumers to be wary of requests for money or sensitive personal information, emails with bank-related subject matter, and social media pleas, texts, or door-to-door solicitations relating to any failed bank. IBANYS encourages New York community banks to take advantage of additional resources are available on ICBA's Cyber and Data Security resource center.

**********

ICBA announced the election of its 2023-24 ICBA Executive Committee including Derek Williams of Century Bank & Trust in Milledgeville, Georgia, who was elected ICBA chairman. The Executive Committee includes former IBANYS Chairman and current IBANYS Director Bob Fisher (Chairman, President & CEO of Tioga State Bank in Spencer, N.Y.) as Past Chairman. 

MEMBER BANKS

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

Rashida Holmes | SVP Partnerships & Outreach

Ncontracts | ncontracts.com | 888-370-5552

Rashida.Holmes@ncontracts.com | 202-460-2686

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.

The Bond Academy is designed to provide community bank professionals with basic knowledge needed to help plan and create effective fixed income investment portfolios.

The customized curriculum was developed to deepen and reinforce the understanding of basic fixed income investment products and portfolio management principles, while also demonstrating how a portfolio can complement the rest of a bank’s balance sheet.

In learning the essentials of fixed income investing, bond pricing, valuation, and selection will be covered extensively.

Who Should Attend?

The Bond Academy is ideal for financial professionals interested in deepening their knowledge of fixed income asset classes and basic investment strategies. CEOs, CFOs, investment managers, directors, as well as new directors serving on investment or asset-liability committees will also find this coursework beneficial.

You Will Learn:

• Bond basics, including bond pricing, duration, and price volatility
• Bond types, including agencies, municipals, mortgage securities, and floating rate instruments
• The composition of a high performing portfolio
• How to understand the rate market: yield curves, spreads, monetary policy
• How economic data affects the bond market
• The impact of interest rate risk on portfolio management
• Portfolio strategies of laddering, barbells, riding the yield curve
• Day-to-day portfolio management techniques
• Evaluating investment portfolio performance

Schedule:

Monday – 4/17

Sessions: 8:00 am - 5:00 pm – Cocktail reception immediately following.

Tuesday – 4/18

Sessions: 8:00 am - 12:00 pm

Detailed Agenda to follow.

Hotel Information:

Embassy Suites by Hilton

1022 South Shady Grove Road | Memphis, TN

Book Your Room

Costs/Person:

Members: $595

Nonmembers: $695

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

CPE Credit:

Earn up to 12 credits

Prerequisites:

Basic knowledge and understanding of the financial markets.

Additional Information:

– Field of Study: Specialized Knowledge, Economics

– Advanced Preparation: None

– Program Level: Intermediate

– Delivery Method: Group-Live

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.

For more information regarding individual site administrative policies such as complaints and refunds (if applicable), please contact Hugh Shackelford at (901) 762-5312. No advanced preparation is required for this course. Potential for up to 12 hours credit may be awarded for verified attendance at this group-live seminar. The course level for the Bond Academy is intermediate.

Legislative Update

• Here are the newest bill introductions from March 6th-17th, as well as updated legislative activity and committee agendas for this week. (Please note: Since the original committee agenda list was compiled, A.3246 (Hunter) – which would allow credit unions to accept and secure deposits from municipal corporations – was taken off the agenda for today's Assembly Banks Committee meeting.) These updates will be posted on IBANYS’ website under the Advocacy/Legislative Updates tab. Legislation (A05053) to empower DFS to regulate the manner of processing debit & credit transactions & to regulate charges for NSF & overdraft is on the Assembly Banking Committee agenda. Also, legislation (A05519) to require licensure by DFS for providers of income access services (payday lenders) (banks exempted).  

• The debate continues over who will pay for the ongoing damage caused by climate change. One answer appears to be the Climate Change Superfund Act, sponsored by State Senate Finance Committee Chair Liz Krueger (D-Manh.) and Assemblyman Jeffrey Dinowitz (D-Bronx) and included in the Senate’s one-house budget bill but not in the Assembly’s. The Business Council of New York State prefers Gov. Hochul’s "Cap & Invest" proposal to pay for the climate transition. Read More

Latest State Budget Updates

• In a continuing stalemate, State Lawmakers and Gov. Kathy Hochul are at odds over whether to raise taxes on the wealthy in this year’s budget.

• Expanding housing in New York by 800,000 units over the next 10 years is a key plank in Gov. Hochul's $227 billion budget proposal. Her “New York Housing Compact” plan has two key elements: 1) The state’s ability to override local zoning, and 2) A tax break for New York City developers. Neither one is in the Senate’s or Assembly’s one-house legislative budgets. Senate Majority Leader Stewart-Cousins (D-Yonkers) says negotiating housing outside of the budget a possibility.  Read More. Legislative Republicans oppose the measures as an overreach in suburban communities. Democrats want to go even further than Hochul's proposals. Read More

• The interest group “Housing Justice for All” is sending mailers to 32,000 voters across New York in support of the Good Cause Eviction bill, which would provide more protections to tenants. https://www.politico.com/newsletters/new-york-playbook/2023/03/21/the-people-vs-trump-00088038?nname=new-york-playbook&nid=0000014f-1646-d88f-a1cf-5f46b74f0000&nrid=00000152-f737-dcf0-a7d7-f73fb7700001&nlid=630317

• State Senate Majority Leader Andrea Stewart-Cousins joined “Inside City Hall” Tuesday to talk about issues such as housing, and taxes.

• Gov. Hochul’s budget negotiations might have needed a lifeline after the Senate and Assembly one-house budget bills rejected much of her top agenda items. A New York Times report says former NYC mayor Michael Bloomberg is putting $5 million into an ad campaign and targeted mailers in lawmakers’ districts to bolster Gov. Hochul’s budget proposals. 

• While the state budget is due at midnight on April 1, the state government doesn’t shut down if a budget is not passed on time -- legislators and the governor typically meet to decide on a temporary “continuing resolution” to "keep the lights on." While budgets have mostly been on time or “timely” in recent years, that wasn’t always the case. Prior to Gov. Andrew Cuomo making on-time budgets a priority, the state sometimes would go months without an approved state budget. https://spectrumlocalnews.com/nys/central-ny/politics/2023/03/16/new-york-legislature-veteran-lays-out-path-to-a-state-budget

• Among the impacts on New York community banks in the Governor's budget proposal are DFS regulations on overdraft & NSF, increasing the Linked Deposit Program’s statutory cap from $2 to $6 million, amending the distribution of surplus proceeds in tax enforcement proceedings, and indexing the minimum wage to inflation. The proposed Linked Deposit Program increases include lifetime allowance and maximum loan amount -- both currently at $2 million. If included in the final budget the maximums will increase to $6 million. More information can be found HERE and in the budget briefing book  HERE . . .A full set of 2024 Executive Budget documents can be found  HERE.

• The Governor has issued the 30-day amendments-- largely minor technical corrections – to her proposed $227 billion proposed state budget. Subsequently, the State Senate’s and Assembly’s one-house budget bills excluded many of Gov. Hochul’s top priorities and included progressive policy proposals that she had ignored.

Political Perspective

• In a letter to State Senate Majority Leader Stewart-Cousins (D-Yonkers) and Assembly Speaker Heastie (D-Bronx), a coalition of organizations supporting public banking in New York State pointed to the recent failures of Silicon Valley Bank and Signature Bank as an impetus for the passage of legislation to achieve their objective. Their letter stated: "The New York Public Banking Act creates a safe and appropriate regulatory framework for public banks – financial institutions created by local governments and chartered to serve the public interest. Passing the bill this session will demonstrate the legislature’s commitment to addressing inequities in our financial system and economy while helping to promote stability in New York’s banking sector."

• New York State is the least affordable of the 50 states in which to retire, according to WalletHub’s  “2023 Best States to Retire.” It compared all 50 states across three main categories: affordability, quality of life and health care. New York ranked 10th in the quality-of-life category and 16th in health care, but ranked 50th for affordability -- likely due to having the second-highest adjusted cost of living and the third-highest tax rate. 

• The Fed today raised its key interest rate by 0.25%, continuing on its crusade against inflation, while warning that recent instability in the banking sector could weigh on the economy. In announcing their ninth consecutive rate hike — which increases the benchmark federal funds rate to a range of 4.75% to 5% — Fed officials said in a statement that the “U.S. banking system is sound and resilient.” However, after a series of historic collapses and rescues of lenders in the U.S. and overseas, they warned that “recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation.” 

• ICBA continues to distinguish community banks from larger and riskier financial institutions among policymakers and the news media in the wake of recent large bank failures, ICBA President and CEO Rebeca Romero Rainey said in a weekend alert to community bankers.  Romero Rainey cited her recent appearance on Fox News, in which she reiterated community banks shouldn’t have to pay any special assessment to the Deposit Insurance Fund to cover uninsured deposits at Silicon Valley Bank and Signature Bank. Further, ICBA’s denunciation of Treasury Secretary Yellen’s statement that uninsured deposits will be protected only at systemically risky institutions has been covered in Politico Morning Money and elsewhere.

• The FDIC extended the bidding process for Silicon Valley Bridge Bank in Santa Clara, Calif. The FDIC said: 1) There has been substantial interest from multiple parties. 2) The FDIC and bidders need more time to explore all options. The agency will allow parties to submit separate bids for Silicon Valley Bridge Bank, N.A., and its subsidiary Silicon Valley Private Bank. 3)  Qualified banks will be able to submit whole-bank bids or bids on the deposits or assets of the institutions. 4) Bank and nonbank financial firms will be permitted to bid on the asset portfolios. 5) It is seeking bids on Silicon Valley Private Bank by 8 p.m. (Eastern time) tomorrow, March 22, and on Silicon Valley Bridge Bank by 8 p.m. this Friday, March 24.

• The Fed reported that banks used its new Bank Term Funding Program for $11.94 billion through last Wednesday.  The Fed is now including BTFP data in its weekly  H.4.1 statistical release  on factors affecting reserve balances. The program launched March 13 following recent bank closures.  The BTFP offers loans of up to one year to eligible depository institutions pledging as collateral U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets, which will be valued at par.  Program resources available on the  Fed’s Discount Window site  include a term sheet, standard template email, collateral pledge instructions, and answers to FAQs. 

• President Biden called on Congress to authorize tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing.  In a fact sheet, Biden urged Congress to expand the FDIC’s authority to:  1) Claw back compensation from executives at failed banks.  2) Bar executives from holding jobs in the banking industry when their banks enter receivership.  3) Fine executives of failed banks. Meanwhile, three congressional Democrats crossed the aisle in 2018 to weaken Dodd-Frank bank regulations, which progressives blame for two market-shaking bank failures. And now, three other House Democrats are backing a bid to roll back the Dodd-Frank rollback.

• The House Financial Services Committee said  it will hold a hearing next week on the federal regulatory response to the failures of Silicon Valley Bank and Signature Bank. Scheduled for next Wednesday, March 29, the hearing will feature testimony from FDIC Chairman Martin Gruenberg and Federal Reserve Vice Chair for Supervision Michael Bar.

• Senator Elizabeth Warren (D-MA) doesn't think multibillion-dollar banks should get an increase in federal deposit insurance without tighter regulation, saying she would tie the two together. "The big banks cannot have it both ways. They can't say they want the government to backstop them and they don't want any additional regulation." Warren said she is not as concerned about smaller banks, which she called "financially sound and frankly, fairly stiffly regulated. It's these multibillion-dollar banks that both pose the threat and got away with regulation that was far too weak." https://finance.yahoo.com/news/warren-seeks-tie-higher-fdic-223512811.html?mkt_tok=ODUwLVRBQS01MTEAAAGKqDQ8nHkpIzsglS8Js2uABkNeS8ZmgI1UCzU4cas463m8DAOV4Ln-Xe1av4BNOjHOyJUFLoSL_CMSZ0QNJxZEhs-61vjddwhlktm1yS4FYwgh

• ICBA urged the Financial Crimes Enforcement Network to modify its proposed form for collecting beneficial ownership information from reporting companies.  Such companies subject to FinCEN’s September 2022 final rule must report identifying information about their beneficial owners, the company applicant, and the entity itself directly to FinCEN. In a comment letter, ICBA said: 1) It opposes the requirement that banks collect beneficial ownership information, or BOI, but supports ensuring banks have access to this information collected by FinCEN. 2) While bank access to BOI would enhance their customer due diligence process, FinCEN’s proposed form for collecting such information is problematic. 3) FinCEN’s proposed form would allow reporting companies to skip providing required information in 29 places on the form, including for reporting full legal names, birthdays, and addresses, allowing companies to evade reporting requirements. 4) FinCEN should remove all 29 “check if you are not able to obtain” references from the reporting form. 5) Requiring financial institutions to collect all required BOI without exception while allowing reporting companies to skip these requirements would be wholly prejudicial. 6) FinCEN should not require banks to “chase down” missing BOI to assist FinCEN in fulfilling its CTA obligations. In previous letters to FinCEN on beneficial ownership reporting and the agency’s broader Bank Secrecy Act review, ICBA called on the agency to withdraw bank beneficial ownership collection and verification requirements now that it is required to collect this information directly from reporting companies.

Community Banks Advocacy & Priorities Update

• U.S. Senate Banking Committee Chairman Sherrod Brown (D-OH) and U.S. House Subcommittee on Financial Institutions Chairman Andy Barr (R-KY) will speak at the 2023 ICBA Capital Summit, scheduled for May 14-17 in Washington, D.C.  With community banking advocacy urgent amid the ongoing policy response to the recent failures of Silicon Valley Bank and Signature Bank of New York, the ICBA Capital Summit will bring together community bankers from across the country to advocate for the industry in person. IBANYS will be coordinating “hill visits” with key members of the New York congressional delegation for Tuesday, May 16.   Learn more and register.

• ICBA’s Independent Banker” podcast includes the community banking industry’s top advocacy priorities for 2023, as well as recent advocacy successes, the 2023 outlook, and the importance of community banker grassroots advocacy. New York community bankers can advocate for top industry policy priorities in direct messages to their congressional representatives – addressing regulatory oversight, climate risk rules, credit card routing mandates, the Small Business Administration’s 7(a) program, crypto oversight, and other key issues.  Use ICBA’s Be Heard grassroots action center to directly contact their members of Congress with policies that will support economic growth in local communities.