IBANYS Weekly E-Newsletter |
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Visit our website at www.ibanys.net to review our daily updates on COVID-19.
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The President's Message
By John Witkowski, President & CEO
Every day we seem to be getting closer to an end (whatever that may look like) to the pandemic. We hope everyone remains safe and healthy.
Todays newsletter covers many legislative topics that should be of interest to all community banks. Please take the time to review these topics and get involved with your comments, feedback and your voice.
As community banks we need to stick together and be heard by our representatives. Let them know the positive impact you have made in your communities over the last year and for many decades.
Take a few minutes to read this newsletter- there is great info on our business partners and the legislature issues that confront our industry.
ENJOY!
JOHN
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ICBA'S Capital Summit – Including IBANYS’ Virtual congressional visits – was held yesterday, and featured remarks by Senate Banking Chairman Sherrod Brown (D-OH) and Senator Joe Manchin (D-WV). It also included briefings by ICBA senior officials on the legislative and regulatory landscape in Washington, and on community banks' top priorities. We have more in today's Washington section.
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IBANYS is also coordinating conference call visits with key members of the New York congressional delegation and/or top staff on key federal issues. . .and, to discuss how New York's community banks provided essential help to local small businesses, consumers, customers and communities during the pandemic. IBANYS will be meeting virtually throughout the week with new/recently elected House members, and New Yorkers serving on such key committees as Financial Services, Small Business, Ways & Means and Agriculture. Here is a link to ICBA's 2021 Lobby Card: https://www.icba.org/newsroom/blogs/events-blogs/2021/04/01/capital-summit-spring-2021-lobby-priorities detailing the issues we are discussing.
- There continues to be a flurry of activity in both Washington and Albany on a host of different issues. . .from establishing a public bank, allowing credit unions to participate in the state linked deposit program, taxes, Covid 19 related guidelines and relief, a safe harbor for financial institutions that serve cannabis-related businesses in states where cannabis is legal, urging congressional review of the tax and regulatory treatment of credit unions and the Farm Credit System and much more. See today's Albany and Washington sections for details.
We hope you are all staying safe, and we thank you for all you do every day for your customers, your communities and our industry . . .and, of course, for IBANYS!
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ASSOCIATE MEMBERS & PREFERRED PARTNERS |
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NEW PRODUCT DEMO
A consumer lending platform for your bank
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Expand your lending capabilities with our new product: BHG Digital Lending. Join us on May 4th for an exclusive overview to see how your customers can apply for financing right from your website. With a fast, easy implementation, your bank can deliver more value to your customers and earn revenue without the risk.
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UPCOMING WEBINAR
Q1 Results: Light at the End of the Tunnel
Thursday, May 6 at 2:00pm – 2:45pm ET
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Vaccinations are accelerating and U.S. businesses are expressing more optimism about their near future. Should bankers follow suit? It’s too early to know COVID’s true impact on economic and customer conditions – but it’s not too soon to question what Q1 numbers say about the state of banking. Is that really light we see up ahead? If so, what’s to be done about loan provisions? Loan demand? Will net interest margin increase? Have we scheduled a loan review? Will we be ready for in-person exams? Join this webinar for the Q&A discussion every banker should hear at this critical point in the year. We’ll use QwickAnalytics to break down the numbers that show where the industry is now and where the tracks may be taking us in 2021.
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Below please find an article that has been created by Travelers. It features information on elevated ATM theft threats that community banks and financial institutions might face. It also includes steps they can take to help protect against such attacks.
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Serving clients is our fundamental purpose |
As a leading investment bank, we enable growth and success for our clients through deep sector expertise, candid advice and a differentiated, highly productive culture.
OUR VALUES
We create and implement superior financial solutions for our clients. Serving clients is our fundamental purpose. We earn our clients’ trust by delivering the best guidance and service. Great people working together as a team are our competitive advantage.
As we serve, we are committed to these core values:
- Always place our clients’ interests first.
- Conduct ourselves with integrity and treat others with respect.
- Work in partnership with our clients and each other.
- Maintain a high quality environment that attracts, retains and develops the best people.
- Contribute our talents and resources to serve the communities in which we live and work.
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OUR HISTORY
STRONG ROOTS
The roots of our firm reach back over two hundred years. Roosevelt & Son, our predecessor, was founded in 1797 as a hardware and plate glass merchandising company. It developed over time into a banking concern with the railroad and communications investments. By the early 1900s, Roosevelt & Son was a well known financial firm with a growing presence in the municipal securities market. Those municipal securities operations were moved into a separate corporate entity, Roosevelt & Weigold, following the separation of commercial and investment banking by the Glass-Steagall Act of 1933. Archibald Roosevelt (son of President Theodore Roosevelt) carried on that business during the late 1930s but suspended operations when he entered military service in World War II.
MODERN DAY FOUNDERS
Archibald Roosevelt restarted business operations with Edwin J. Cross and other associates when he returned to civilian life in 1946. Their vision for the firm was clear: they wanted Roosevelt & Cross to serve the municipal securities needs of both retail and institutional investors while emphasizing customer service, professionalism, and integrity.
THE FIRM TODAY
Today, the firm is a vibrant and forward-looking participant in the municipal securities market. We originate new bond and note issues for state and local governments and market those securities to a large volume of retail and institutional investors. Our investment banking, marketing, and underwriting skills are equal to the best in the industry. Most of our staff members have worked at the firm for decades and have built outstanding careers. Their loyalty to the firm is evidenced by the fact that most of our staff own an equity interest in Roosevelt & Cross.
ROOSEVELT & CROSS AT A GLANCE
- Entirely employee-owned and directed
- The firm is structured into underwriting, trading, sales, public finance, project finance, and research departments
- 100% of our firm’s capital is committed to municipal securities
- Top ranking municipal bond underwriter in New York, New Jersey, and New England
- Co-senior manager and co-manager on major issues throughout the country
- Consistently ranked #1 underwriter of education bonds in New York
- Leading underwriter of short-term financings in New York
- Quantitative expertise in structuring and executing complicated financial transactions
- Strong distribution capabilities across major and mid-size institutional accounts, professionally managed retail accounts, and high net worth individual accounts
- The main office is located in New York City with branch offices in Buffalo (N.Y.), West Hartford (C.T.), East Greenwich (R.I.), Boston (M.A.), and Warren (N.J.)
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Munis for the many
Taxable municipal bonds have appeal for nearly all community banks.
By Jim Reber
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I have some good news for community bank portfolio managers who have grown weary of some or all of the following conditions that have persisted since 2020:
- declining portfolio returns
- erratic cash flows
- call option exposure
- paltry yield spreads
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Greg Roll, CFA
Vining Sparks' Loan Trading Group
Greg Roll is a Senior Vice President in the Vining Sparks Loan Trading Group. Greg began working in the depository sector in 1994 managing the strategic planning function for a regional bank. Since 2000, Greg has been working in the capital markets helping financial institutions formulate balance sheet strategies that create optimal income and return for shareholders. Currently he is focused on loan trading strategies to enhance loan portfolio performance, while incorporating the institution’s asset/liability position, liquidity and capital constraints, funding profile, and current market expectations. Greg attended the University of Oklahoma and The University of Memphis, earning BBA and MBA degrees in finance. In addition, Greg has earned the CFA designation and is a member of the CFA institute.
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ICBA Securities and its exclusively-endorsed broker/dealer, Vining Sparks, will present a webinar for the state associations that endorse ICBA Securities, as well as other community banks. This is the fourth in the 2021 webinar series.
Active loan portfolio management continues to serve as a valuable tool to maximize profitability, manage interest rate risk, and to manage concentration and liquidity needs. While institutions historically used loan sales to manage desired liquidity levels on balance sheets, currently the driver of sales is managing capacity and concentration challenges within certain loan types. Some institutions address stagnant earnings and net interest margin pressures by investing in loans that may not be available through organic loan originations. The economic environment, coupled with shocks in loan demand and changing funding profiles created balance sheet challenges that active loan portfolio management can help to address. During this session we will discuss the options available to actively manage your institution's largest asset class and how it can help you achieve your institutional goals.
What you will learn:
- Industry update and the impacts of the current economic environment
- The benefits of buying and/or selling loans
- Important criteria for loan sellers and buyers to consider
- How to manage concentrations and/or gain strategic liquidity from loan sales
- Performance of loan participations during the pandemic
- Recent loan trading activity by community banks
This webinar will last approximately one hour.
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IBANYS Webinars
Are you participating in IBANYS webinars? Now is the time! IBANYS webinars provide timely, important information on subjects of interest to New York community bankers including human resources, business development, investment, compliance and security and much more. They are valuable not only for their content, but for their convenience and low-cost. Take part from the comfort and privacy of your office, without leaving the bank.
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Subscription Tokens
The More You Buy, The More You Save
How does it work:
Tokens can be used to purchase live or recorded webinars anytime, with no expiration! Tokens for both live and recorded webinars are available for an additional fee. (What’s the difference? Click here for the full description.)
Once you have your Subscription Token code, you can immediately register for webinars by using the code at checkout! (Subscription tokens not applicable for full series registrations, or other specials.)
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Legislative Activity
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S.1762-A (Sanders) https://legislation.nysenate.gov/pdf/bills/2021/S1762A: This bill would amend the banking law, the state finance law and the general municipal law, in relation to establishing the ‘New York public banking act’." It is intended to lay down the regulatory framework for municipalities to create local public banks, to extend and expand access to communities of color in the post-COVID-19 economy. IBANYS, a number of New York community banks and other financial institutions discussed our opposition to this bill with Chairman Sanders and his staff. The Chairman wants to expand banking services to unbanked or underbanked communities—particularly regarding homeownership and small business funding. IBANYS cautioned would create another layer of unfair competition to independent banks throughout the state, and that there are also insurance and other concerns. There are other methods to improving the described services to the aforementioned areas -- i.e., using such existing “tools” as MDIs, CDFIs, the NYS Business Development District/BDD Program and others more effectively. Chairman Sanders pledged there would be “no rush to judgement” and he will work with IBANYS and others to gather and share additional information and consider alternative solutions.
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Another bill introduced by the Chairman, (S.191 (Sanders) -- would allow credit unions to participate in the Linked Deposit Program -- is on the Senate floor. Read the legislation here. IBANYS is opposing this legislation, as we have successfully done in previous years. Read our Memo in Opposition.
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S 5923-A Thomas, Same as A 6617-A Weinstein -- Exempts COVID-19 stimulus relief for individuals and families with children from money judgments; provides that in services of notices, forms, and procedures for claims of exemptions that a restraining notice or notice of levy by execution issued against a bank account shall have language to inform the holder of such account that funds for COVID-19 stimulus relief for individuals and families with children are exempt and cannot be taken.
- The Laws of 2021 Chapters 1-49,52,56,61-101-- Banking:
§ 379-b. Service corporation owned by associations; authorized activities of such corporation; investment therein.
- A savings and loan association may invest in the stock, capital notes and debentures of a service corporation organized under the laws of this state for the sole activities set forth in subdivision two of this section, to the extent and upon such conditions as are or have been authorized by the superintendent of financial services, provided that all of the stock of such service corporation is, or is to be, owned by one or more savings and loan associations; and provided further, that no savings and loan association mamake any investment under this section if its aggregate outstanding investment thereby, determined as prescribed by the superintendent of financial services, would thereupon exceed three percentum of its assets.
- The activities of such service corporation, performed directly or through one or more wholly owned subsidiaries, shall consist of rendering such services to savings and loan associations and making such investments for itself and for savings and loan associations as are authorized services and investments for such associations under the provisions of this chapter as well as such activities as may be prescribed by general regulation of the superintendent of financial services.
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New York lawmakers last week gave final legislative approval of a bill to set minimum COVID-19 safety standards for workplaces throughout the state. If signed by the Governor, the "NY Hero Act"would set requirements for access to protective equipment, social distancing and time for handwashing. Business groups are mounting a push to make changes to the measure through amendments to make some of the new requirements less burdensome, including altering provisions that make it easier to file lawsuits against employers over working conditions. Read More
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Governor Cuomo called on New York Attorney General Letitia James Tuesday to conduct a legal review of the state's options to challenge the 2020 U.S. Census results.The U.S. Census Bureau reported Monday that New York will lose a seat in Congress in 2022 due to the state's population count — the tally fell short by 89 people, otherwise the state would have kept the seat. The Governor indicated the slim margin by which the state is expected to lose that seat could be the result of a mistake by the federal government,New York Now reports. Read more.
Other legislative activity:
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Here is the committee activity for the week of April 19.
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Here is bill activity for April 12 - 16
IBANYS is also reviewing the following bills:
- A1508 Dinowitz, S 760 Biaggi - bill for reverse financing co-op apartment unit loans for persons over 62 years of age (similar concept to reverse mortgage). A similar to this was vetoed by governor in 2019.
- A7175 Dinowitz/ S6362 Kavanagh – Extend to August 31, 2021the effectiveness of statutory limitations on eviction and foreclosures of residential and certain commercial tenants experiencing financial hardship. These were set to expire on May 1, 2021.
- A7127 Bronson/S5742 Kaplan – Bill expands protection to small businesses from 50 employees to 100 employees or up to 500 employees if the business was shut down for a 2 week period between May 15, 2020 and may 1, 2021. They can submit hardship declaration under covid 19 Emergency protect our small business act. This bill expands protections to more businesses that were impacted by Covid-19.
Earlier Activity:
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Bill introductions for March 8th through March 26th, as well as bill activity and committee agendas, are provided: See updates: and here and here
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A06617A prohibits bank set off and execution of judgments against emergency relief funds and is on the Assembly Codes agenda.
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S.2061/A.6281 would amend the State Banking Law (section 9-L) to prohibit a bank from imposing a fee on a non-customer of the bank when cashing a check drawn on an account of the bank. IBANYS is preparing a Memo in Opposition.
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Legislation permitting credit unions to participate in the Linked Deposit Program was reported by the NYS Assembly Economic Development Committee to the Assembly Ways & Means Committee with no negative votes.
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The right-leaning Empire Center for Public Policy and the left-leaning Fiscal Policy Institute are on opposite ends of the political spectrum, as well as on different sides of the tax debate. But there is one issue they both agree on: If New York state gets tax policy wrong, there will be a further exodus of taxpayers. Read More
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Earlier this session, the New York State Legislature passed and the Governor signed legislation that legalized recreational marijuana. Since these products are still federally illegal, many financial institutions are wary of accepting cannabis business clients. NYS Senate Majority Leader Andrea Stewart-Cousins says that will most likely have to be addressed at the federal level, State of Politics reports. The U.S. House has passed the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1996) that would establish a safe harbor for financial institutions that serve cannabis-related businesses in states where cannabis is legal. It now moves to the Senate (S.910). ICBA and IBANYS support this legislation. (See today's Washington section below for more details.)
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PRESS OFFICE
SBA Administrator Guzman Announces Application Opening for $28.6 Billion Restaurant Revitalization Fund
Fund prioritizes direct relief to women, veterans, and socially and economically disadvantaged individuals, and includes $9.5 billion in set-asides for smaller businesses
WASHINGTON - SBA Administrator Isabella Casillas Guzman today announced the U.S. Small Business Administration will begin registrations on Friday, April 30, 2021, at 9 a.m. EDT and open applications on Monday, May 3, 2021, at noon EDT for the Restaurant Revitalization Fund. The online application will remain open to any eligible establishment until all funds are exhausted.
“Restaurants are the core of our neighborhoods and propel economic activity on main streets across the nation. They are among the businesses that have been hardest hit and need support to survive this pandemic. We want restaurants to know that help is here,” said Administrator Guzman. “The SBA has focused on the marketplace realities of our food and beverage businesses in designing the Restaurant Revitalization Fund to meet businesses where they are. And we are committed to equity to ensure our smaller and underserved businesses, which have suffered the most, can access this critical relief, recover, and grow more resilient.”
Established under the American Rescue Plan, and signed into law by President Joe Biden on March 11, 2021, the Restaurant Revitalization Fund provides a total of $28.6 billion in direct relief funds to restaurants and other hard-hit food establishments that have experienced economic distress and significant operational losses due to the COVID-19 pandemic. This program will provide restaurants with funding equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location. Funds must be used for allowable expenses by March 11, 2023.
“Recognizing the great urgency to help restaurants keep their doors open – and with a clear mandate from Congress – the SBA worked at a breakneck speed and is excited to launch this program,” said Patrick Kelley, SBA Associate Administrator, Office of Capital Access. “From day one, we engaged with diverse stakeholders in the food industry community to make sure we built and delivered the program equitably, quickly, and efficiently.”
In preparation, the SBA recommends qualifying applicants familiarize themselves with the application process in advance to ensure a smooth and efficient application experience, specifically by:
Registering for an account in advance at restaurants.sba.gov starting Friday, April 30, 2021, at 9 a.m. EDT.
- Reviewing the official guidance, including program guide, frequently asked questions, and application sample.
- Preparing the required documentation.
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Working with a point-of-sale vendor or visiting restaurants.sba.gov to submit an application when the application portal opens. [Note: If an applicant is working with a point-of-sale vendor, they do not need to register beforehand on the site.]
Attending a live recorded virtual training webinar.
For the first 21 days that the program is open, the SBA will prioritize funding applications from businesses owned and controlled by women, veterans, and socially and economically disadvantaged individuals. All eligible applicants are encouraged to submit applications as soon as the portal opens. Following the 21 days, all eligible applications will be funded on a first-come, first-served basis.
Consistent with the legislation and the intent of Congress, the SBA continues to take steps to ensure the equitable distribution of relief, particularly for the smallest businesses, by creating a $9.5 billion set-aside: $5 billion for applicants with 2019 gross receipts of not more than $500,000; $4 billion is set aside for applicants with 2019 gross receipts from $500,001 to $1,500,000; and $500 million for applicants with 2019 gross receipts not more than $50,000.
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About the U.S. Small Business Administration
The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start and grow their businesses. It delivers services to people through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.
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Extension of Previous Guidance on Acceptable Signatures for Applications and Loan Documents in the 7(a) and 504 Business Loan Programs
The purpose of this SBA Procedural Notice 5000-808946 is to further extend the guidance set forth in SBA Procedural Notice 5000-20089, “Extension of Previous Guidance on Acceptable Signatures for Applications and Loan Documents in the 7(a) and 504 Business Loan Programs Through April 30, 2021”, effective January 28, 2021.
The guidance in SBA Procedural Notice 5000- 20089 is scheduled to expire on April 30, 2021, and SBA is extending it through July 31, 2021, due to the continued uncertainty of the ongoing Coronavirus Disease 2019 (COVID- 19) pandemic.
Valerie Shoudy, Lender Relations Specialist Grace Conners, Lender Relations Specialist
U.S. Small Business Administration
224 Harrison St., Suite 506 | Syracuse, NY 13202
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Yesterday was the 2021 ICBA Virtual Capital Summit, with important remarks by key congressional leaders like Banking Chairman Sherrod Brown (D-OH) and swing vote Senator Joe Manchin (D-WV). It also was the first day of IBANYS' grassroots push in our virtual "congressional visits" with key and new members of our New York Congressional Delegation. See list. In the face of the pandemic, New York community banks once again demonstrated our positive economic impact, saving thousands of local small businesses and jobs throughout our state. We're telling our stories of how New York community banks stepped up and provided vital assistance to their local small businesses and consumers -- literally savings thousands of jobs, keeping businesses open, helping home owners keep their homes through mortgage forbearance and other means, and much more. All this week, IBANYS members are holding discussions with key New York Representatives on the Financial Services, Small Business, Ways & Means and Agriculture Committees. . .and, informing new members of the delegation about the importance of community banks to the local, state and national economies. We're also discussing the top federal issues and priorities: 2021 Lobby Card. Click here to learn more & register.
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The Consumer Financial Protection Bureau issued a final rule formally delaying the mandatory compliance date of its recently modified general Qualified Mortgage final rule from July 1, 2021, to Oct. 1, 2022. Background: The QM rule replaces the 43 percent debt-to-income limit with an approach based on loan pricing. Under the CFPB’s newly announced delay, lenders will have the option of using the new rule or the DTI-based QM rule. GSE Patch: The "GSE patch," which exempts Fannie Mae and Freddie Mac mortgage loans from parts of the QM rule, will also remain in effect until the new compliance date unless the GSEs exit conservatorship before then. However, the bureau said the GSEs may be limited by recent revisions to their Preferred Stock Purchase Agreements. ICBA Position: In a comment letter, ICBA expressed support for the proposed delay and encouraged the bureau to reconsider using loan pricing to determine borrowers’ ability to repay. ICBA is also urging the FHFA and Treasury to delay and remove product and program restrictions included in the PSPA amendments, including the reference to the new QM final rule.
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The Biden administration released this fact sheet to give an overview of the $1.8 trillion American Family Plan. The White House is framing these two massive packages -- the American Jobs Plan and American Family Plan -- as “once-in-a-generation investments in our nation’s future,” with the cost being shouldered in by wealthy Americans who have done spectacularly well during the last 20 years. To pay for part of the spending package, the White House would use tax hikes on the wealthiest Americans, including raising the top personal income tax rate to 39.6% for the top 1% of earners and increasing the capital gains rate to 39.6% from 20% for those earning $1 million or more. The plan also calls for eliminating the carried interest tax break used by private equity and hedge fund managers, in addition to increased tax audits on high earners.
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The House voted 321-101 to pass ICBA-advocated legislation to establish a safe harbor for financial institutions that serve cannabis-related businesses in states where cannabis is legal. There were no negative votes among the new York House delegation. The bipartisan vote sends the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1996/S.910) to the Senate. The conflict between state and federal law has created legal uncertainty for banks and forced cannabis-related businesses to operate mostly in cash, presenting a public safety risk. This legislation would apply to states that have legalized cannabis for medical or recreational use (like New York.) In these states, federal regulators would not be permitted to take prejudicial action against banks solely for serving a cannabis-related business. As the first national banking trade group to support the SAFE Banking Act and to testify before Congress on its behalf, ICBA applauded the House vote and urged Senate passage. READ ICBA RELEASE
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Credit union hearing push intensifies. ICBA is encouraging community bankers to call on Congress to hold hearings on credit union acquisitions of taxpaying community banks. Taking Action: ICBA’s Be Heard grassroots action center makes it easy for community bankers to contact their members of Congress. New Acquisition: ICBA last week renewed its call for policymakers to investigate credit union acquisitions of community banks following the purchase of a $1.6 billion community bank in Jonesboro, Ga., by a Florida credit union with more than $10 billion in assets. ICBA Advocacy: ICBA continued its call for Congress to hold hearings on this trend and to request a GAO study on the evolution of the credit union industry and National Credit Union Administration supervision. Next: Community bankers can continue the campaign against the credit union tax exemption at this month’s ICBA Capital Summit, which is set to livestream April 27 with remarks from top policymakers and virtual meetings with congressional offices. CONTACT CONGRESS
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