What is going on with the weather in upstate NY? 85 degrees on Sunday at 7pm and by 9pm the temp dropped to 48!!! Crazy!

But not much crazier than the uphill climb community banks face in NYS and at the federal level because of a few failed banks weeks back. ICBA is working hard (along with IBANYS) in having community banks

excluded from an FDIC special assessment, amending the rule 1071, stopping SBA from doing their own 7a loans, opposing the public/state bank in NY and many other bills. (More info in our Government Relations section below).

Please consider joining your fellow bankers and Associate Members, (Luse Gorman and The Bonadio Group) at the ICBA Capital Summit in Washington DC from May14-17 to meet our representatives. We need to educate them on the issues that impact community banks and have them help our industry.  Please got to www.icba.org.

IBANYS Annual Convention – Community Banks- The Heartbeat of our Communities will be held June12-14 at The Turning Stone Resort and Casino, just outside of Syracuse. Great event with great speakers on timely topics. Visit www.ibanys.net for details and registration forms.

•  ** Please get involved by donating an item to our NYSIBPAC auction on June 13^th. Details are in the brochure (pg. 11)

Thank you to all the banks that joined our Mid-Year Virtual Meeting – “Community Banks – Committed to our Communities”. We had over 200 attendees registered and the speakers shared great information on the economy,  working with fintech companies, innovation and technology, Pursuit, balance sheet management, etc. It was an informative few days!

Please see below for details on other meetings.

Thank you for your support of IBANYS!

IBANYS MEETINGS

REGISTRATION IS OPEN!!!

IBANYS' ANNUAL CONVENTION, "The Heartbeat of All Communities" is being held at the Turning Stone Resort and Casino from June 12-14.

We have a few exciting days of networking, education and entertainment planned for our participants. The agenda is jam packed with great subject matter experts on a variety of topics that impact community banks today.

There are 30 exhibitor spaces available at the Tradeshow (there are only 6 spaces left) and we anticipate that all the booths will be filled. Reserve your booth today, they are sold on a first-come-first serve basis.

Jack Hopkins, ICBA Chairman Elect will address the attendees on Monday evening and Gary Hoy, President Appointment University will close out the meeting on Wednesday.

Join us Tuesday evening after dinner as Dueling Pianos, “presented by Dueling Pianos International entertains us with a fun, interactive battle of the “ivories”. 

PAC Auction - Please consider donating an item for this event, (see page 11) of the enclosed brochure for suggested items. This is an important part of our convention and provides a perfect opportunity to showcase items from your region, while supporting an essential committee that focuses and advocates for community banks in NYS legislative affairs. The PAC auction takes place on Tuesday evening during our cocktail reception which is held on the Trade Show floor. Items are placed in exhibitor booths to be viewed and bid on.

This is an outstanding opportunity to get our bankers, preferred partners, associate members and sponsors together. We are excited to share with you, that the response to date, has been fantastic!

Attached, is the convention brochure, containing everything you need to know about our signature event of the year including registrations forms, program agenda, hotel booking, and dress attire. PLEASE REGISTER FOR THE ANNUAL CONVENTION BY COMPLETING THE APPROPRIATE REGISTRATION form (Attendee or exhibitor) and email (lindag@ibanys.net) or mail to Linda Gregware, 194 Washington Ave., Suite 420, Albany, NY 12210.

Reserve your overnight accommodations today and register as early as possible – the room block is filling up fast!! See page 6 for room block information.

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 SPEAKERS

Tim Klatt, Director of Retail Strategies, LaMacchia Group



With a background in Geography and Geographic Information Systems (GIS), Tim began his career 15 years ago with MapInfo Corp, consulting for Home Depot as well as national restaurant chains such as Burger King, KFC, Taco Bell, and Pollo Tropical. In addition to Director of Retail Strategies Tim is also the Head of Vivalociti at La Macchia Group, where he leverages data to integrate technology and showcase personalized branded messaging to financial clients. Since joining La Macchia Group, Tim has exponentially expanded his breadth of expertise, becoming a leader in the financial industry, participating in industry colloquiums, focus groups, and round tables.

Heather Archer Eastep, Partner, Hunton Andrews Kurth

Heather Archer Eastep's practice focuses on the corporate and regulatory representation of commercial banks, thrifts, holding companies, and

other financial institutions. She advises clients on a broad variety of bank regulatory and securities compliance matters, including SEC reporting and

compliance (including Sarbanes-Oxley Act), blue sky issues, Bank Secrecy Act and anti-money laundering compliance, response to formal and informal administrative actions, Regulation O, transactions with affiliates and other general compliance matters.

Al Crawford

Co-Founder, Chairman, and CEO of

BHG Financial

As Co-Founder, Chairman, and CEO of BHG Financial, Al Crawford is responsible for overseeing all facets of the company and its operations. Under Al’s leadership since 2001, BHG Financial has become one of the largest and most successful fintechs in the United States.

Starting the business with only $25,000, BHG Financial has funded more than $14 billion in

financial solutions to date. The company’s lending division, BHG Money, provides business and personal loan solutions and credit cards to people across all industries.

In addition, Al has facilitated the creation of the largest community bank network in the country. Comprised of 1,500+ banks, the BHG Bank Network was built to support financial institutions by offering a suite of innovative services, such as digital lending, risk management services, and a state-of-the-art loan delivery platform, the BHG Loan Hub.

Al’s dedication to meeting the needs of his clients has led to a rarity in the financial industry: the creation of a full family of brands. Ranging from

business, consumer, and SBA 7(a) loans to credit cards, collection services, risk management services, and point-of-sale financing, BHG Financial’s comprehensive solution suite touches consumers, businesses, and financial

institutions nationwide.

Since 2020, BHG Financial (then Bankers Healthcare Group) has expanded into the ABS market, completing six monumental transactions. Backed by a mix of commercial and consumer loans, the last two transactions received a “AAA(sf)” rating from Kroll, demonstrating the quality of the company’s loan products, performance history, and the transaction’s structure.

Al earned his bachelor’s degree from Gettysburg College. He has held licenses as both a commodities broker (Series 3) and a stockbroker (Series 7).

CONVENTION SPONSORS

Luncheon - Wednesday

Dinner Wine - Monday

Dinner Wine Tuesday

Join Wolf & Company and Shield Compliance for an Executive Forum on Cannabis Banking in New York City on May 4, 2023. This one-day event is for executive leaders at financial institutions in the Northeast who are either considering or currently developing a cannabis banking program. Industry experts will cover regulatory requirements, legal considerations, compliance and risk management, financial modeling, lending, and cannabis banking best practices. Association members receive a $100 discount by using promo code IBANYS at registration.

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 2023 legislative session in Albany continues to be dominated by 2023 - 24 state budget negotiations between Governor Hochul and legislative leadership, nearly three weeks after the April 1 "deadline" to enact the estimated $230 billion spending plan. Since then, the Governor and Legislature have approved three extensions to keep thestate government funded, and it appears likely another may well be necessary.

Legislative Update

• Here are the latest legislative introductions in Albany from March 21-April 14, as well as committee agendas for this week. There was no bill activity last week. As always, these will be posted on our website under the Advocacy/Legislative Updates Tabs.

Budget Update

• NYS Assembly Speaker Heastie (D-Bronx) said legislative leaders and Gov. Hochul are not close to reaching a state budget deal.] Heastie: "We could be within reach but we're not close. We're going to keep working today and tomorrow (Wednesday) and see where it goes." A number of legislators said it was unlikely a budget deal can be reached by Thursday. The Muslim religious holiday Eid Al-Fitr, observed Thursday and Friday, will delay talks, meaning negotiations will likely continue into next week. Differences remain over housing, bail reform and other issues, e.g., on charter schools and energy issues.

• Compromises on proposed changes to the state's bail laws and housing started to take shape, but no final agreement was reached in yesterday’s meeting. The three-day budget extender passed this week expires at 4:00 p.m. Thursday. State Comptroller DiNapoli gave the Legislature and Governor Hochul until then to approve the next budget extension. 

• Gov. Hochul's proposed Housing Compact in her budget faces pushback from Democratic lawmakers, who want incentives to expand housing, such as the housing access voucher program included in the Senate and Assembly's one-house budgets. Read More, The State Senate is largely on board with one of the key tenets of Hochul’s housing plan, but the Assembly is standing in the way of a final deal. Hochul was reportedly backing off a key piece of her ambitious housing plan that would have forced local governments to meet production targets or force the state to take over, Gothamist reports. However, she refused to accept incentives as a meaningful way to address the issue. https://enewspaper.nydailynews.com/infinity/article_share.aspx?guid=aaf00e17-4ce9-4f19-940c-c34f9368d667.

• Some state legislators are “fed up” with the late budget process that has stretched on even longer than last year’s and have introduced legislation to withhold the governor’s salary until a budget deal is reached.

State Regulatory Update

• On Monday, NYS Superintendent of Financial Services Harris announced DFS has adopted a final regulation establishing how companies holding a DFS-issued Bitlicense will be assessed for costs of their supervision and examination. The reg effectuates a provision that gives DFS new authority to collect supervisory costs from licensed virtual currency businesses, similar to other licensees regulated by DFS. The virtual currency regulatory framework is modeled after full-scope banking supervision, requiring companies to meet rigorous standards for capitalization, cybersecurity protection, and anti-money laundering protocols, among other requirements. To read the regulation, visit https://www.dfs.ny.gov/.

Political Perspective



•  A new report by State Comptroller DiNapoli's office contained good news for state finances: New York took in $2.9 billion more than initially expected in tax revenue for the fiscal year that ended April 1. However, the state received $9.5 billion less than the previous year. Read More.

• The state Senate voted 40-19 to confirm Rowan Wilson to lead the Court of Appeals yesterday. In a party-line vote, the chamber made history by electing Wilson as the first Black chief judge in state history. 

For community banks, the federal landscape continues to feature the aftermath of the recent SVB and Signature Bnk failures and the response. However, other issues involving the SBA, CFPB, the farm bill and digital currency are also prominent.

ICBA Updates & Actions:

I. Aftermath Of Recent Bank Failures

• The FDIC does not expect losses from recent bank failures to materially affect the restoration of the Deposit Insurance Fund. Policymakers continued to signal support for a risk-based special assessment. In its semiannual update on the DIF Restoration Plan, the FDIC said: 1) The recent failures of Silicon Valley Bank and Signature Bank of New York are unlikely to have a material effect on the projected timeline for reaching the DIF’s statutory minimum reserve ratio of 1.35%. 2) The bank failures are expected to result in losses of approximately $22.5 billion, of which $19.2 billion is attributable to the protection of uninsured depositors under the federal Systemic Risk Exception. 3) Federal law requires that any losses to the DIF related to this action be repaid by a special assessment on banks. 4) Only the remaining $3.3 billion in losses will directly affect the DIF balance and are not expected to have a material effect on the projected timeline for reaching the statutory minimum by the deadline of Sept. 30, 2028. 5) Staff recommends no changes to the Amended Restoration Plan.

• During Tuesday’s FDIC board meeting, board member and CFPB Director Chopra said deposit insurance premiums should be based on risk and special assessments following the recent failures should target the kinds of institutions that benefit from the Systemic Risk Exception. FDIC Chairman Martin Gruenberg last month told Congress his agency is considering tailoring the special assessment. The White House separately urged the agency to exempt community banks. 

• ICBA is urging the FDIC to exempt community banks from any special assessment to recover DIF losses caused by the recent failures, including in a recent national news release and letter to the FDIC that was covered by Politico’s Morning Money. ICBA has said since the immediate aftermath of the failures that 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 a new series of video Q&As on banklocally.org, ICBA President and CEO Rebeca Romero Rainey answers commonly asked consumer banking questions while differentiating community banks’ relationship-based business model. She discusses interest rates, unrealized losses, deposit insurance, how community banks reinvest locally, and more. The series follows the recent launch of the ICBA National Campaign to elevate community banking with America’s consumers. It features an ICBA member toolkit with numerous turnkey assets—including social media resources, online display banners, and media relations tools—to help community banks reach new customers and raise awareness of banking locally.

 II. CFPB 1071 Rule

• ICBA and 44 state community banking associations called on the House of Representatives to approve a resolution to nullify the Consumer Financial Protection Bureau’s 1071 final rule. In a new joint letter, the groups said the 1071 rule exempts only the lowest-volume small-business lenders, sets a high threshold for covered small businesses, and requires the collection of eight additional data points not required by statute—creating new layers of regulatory burden that will disrupt lending and reduce access to credit. Meanwhile, ICBA continues calling on community bankers to use ICBA’s Be Heard grassroots action center to urge their lawmakers to pass H.J.Res.50, which would provide for congressional disapproval of the 1071 rule and dictate that it has no force or effect. ICBA recently published a  summary of the rule that details its scope of coverage, key definitions, compliance dates, collection and reporting procedures, and more.

 III. Farm Bill

• ICBA is asking community bankers to  urge their members of Congress  to include six key principles in this year’s farm bill.  Community bankers can use ICBA’s  Be Heard grassroots action center to contact their lawmakers on ICBA principles such as providing ample funding, maintaining a strong crop insurance program, and enhancing USDA guaranteed loan programs.  ICBA laid out its six principles in  letters  to the House and Senate agriculture committees earlier this year.

IV. SBA 7(a) Program

• ICBA expressed strong opposition to the SBA final rule that undermines its 7(a) loan program. The SBA rule lifts the moratorium on the number of non-federally regulated institutions, including nonbank fintech companies, that can make loans under the 7(a) program.  In a national news release, ICBA said the final rule would unintentionally harm the very borrowers the SBA is trying to aid, noting ICBA’s opposition in a recent comment letter to the SBA and joint letters to the agency and Congress. ICBA also cited a recent joint letter from members of Congress, who told the SBA that the rule establishes broad and sweeping changes that do not reflect congressional input or authorization. ICBA President & CEO Romero Rainey said the SBA should instead focus on maximizing the community bank partnerships that have expanded lending in underserved areas: “ICBA will continue working to address this troubling final rule to ensure the SBA 7(a) program continues to support small businesses in local communities while preserving safeguards against fraud and abuse.”

V. Central Bank Digital Currency

• Federal Reserve Governor Bowman said it is difficult to imagine a world in which the benefits of a retail central bank digital currency outweigh the unintended consequences. Bowman said: 1) Improving the speed of payments can be accomplished without the introduction of a CBDC, including via the pending FedNow Service. 2) A U.S. CBDC is unlikely to reach the 4.5% of the U.S. population that is not banked, so policymakers should consider other means to improve financial inclusion, such as advancing financial literacy. 3) Adopting a CBDC risks cannibalizing rather than complementing the U.S. banking system. 4) There are potential use cases for a wholesale, rather than retail, CBDC to facilitate interbank transactions. ICBA opposes the creation of a U.S. CBDC, arguing that it would disintermediate community banks and pose privacy risks without improving on superior payment alternatives, such as FedNow. ICBA also offers frequently asked questions community bankers can use to answer customer queries about FedNow and help differentiate it from CBDCs as misinformation circulates online.

 Federal Regulatory Update

• SEC Chairman Gensler emphasized the connection between the cryptocurrency market and the recent banking crisis in testimony on Capitol Hill. He seeks more resources to police crypto firms whose business model, he says, is "noncompliance."  Read story →

• Two New York community bankers and IBANYS members have been named to the OCC’s Minority Depository Institutions Advisory Committee (MDIAC). IBANYS board member Carlos Naudon (President & CEO, Ponce Financial Group and Ponce Bank in the Bronx) who chairs ICBA’s Minority Bank Advisory Council), and Michael Pugh (President & CEO, Carver Bank in New York.)