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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"Our flag does not fly because the wind moves it. It flies with the last breath of each soldier who died protecting it." -Unknown |
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The President's Message
By John Witkowski, President & CEO
Hope everyone is staying safe and healthy. We are just coming out of the restrictions surrounding the pandemic and I hope all of you will take advantage of it during this Memorial Day Weekend! Please be careful but enjoy your time with some family and friends!
Over the next two weeks there will be a bunch of activity in the State Senate and Assembly Banks (and, other) Committees that I hope everyone will pay attention to as it unfolds. IBANYS is working hard at leveling the playing field with the credit unions, but we feel as though we are “pushing a rock up hill” with our legislators. What you, as community banks, have done for your communities -- not just during the pandemic, but for decades (in fact, for some, over a century) -- is nothing short of amazing. We are telling your story to our political leaders so they understand that “community banks and your people” are what makes your community successful and strong!
-- John
Here's an update on where we stand as of today on credit union legislation mentioned above.
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The days remaining in the 2021 state legislative session are dwindling down to a precious few. There are just eight scheduled session days remaining before the scheduled adjournment on June 10. The major push in support of credit unions being allowed into the municipal deposits business is posing a major challenge in these closing weeks. As is always the case, the credit unions are looking to grow their business while getting away from their original purpose. Last week, both the NYS Senate and Assembly Banks Committees took up and subsequently moved legislation: The Senate Banks Committee referred S.670 (sponsored by Chairman Sanders), to the Senate Finance Committee for further consideration. The Assembly Banks Committee referred the Assembly companion bill ,A.07334 (sponsored by Chairman Pichardo), to the Assembly Ways & Means Committee. Here is the legislation.
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BANYS has circulated our Memo in Opposition to legislators and will hold further discussions next week with Assembly Banks Chairman Pichardo to fully explain our concerns with, and opposition to, this legislation. IBANYS continues to make our case with the relevant committees that these bills would further help tax-exempt credit unions -- which are not subject to the same regulatory/CRA mandates and oversight as banks are -- and further disadvantage taxpaying community banks and make the playing field even more unfair. Because of the huge supermajorities Democrats now hold in both chambers, our task in opposing these bills -- and others such as S.1762-A/A.5782, to create a state/public bank -- is more challenging than ever.
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We also are facing efforts on creating a state/public bank (IBANYS' Memo in Opposition), and S.191, to allow credit unions into the State Linked Deposit Program (Read IBANYS' Memo in Opposition here) Unlike previous legislative sessions, we cannot rely upon a firewall of support from a GOP-controlled Senate, or assistance/ opposition from the Governor, since any veto can now be overridden. If and when these bills reach the floors of the full Senate and Assembly for votes, we will need your help in reaching out to your local state representatives and urging them to vote no. Together, let's make the voices of New York's community banks heard in Albany. Here is the NYS Assembly Directory: https://nyassembly.gov/mem/search/. . . here is the NYS Senate Directory: https://www.nysenate.gov/registration/nojs/form/start/find-my-senator
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There was some interesting new data provided by the Mortgage Bankers Association's Forbearance and Call Volume Survey reported the total number of loans now in forbearance declined for the 12th consecutive week to 4.19%, as of May 16, 2021. The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 2.21%; Ginnie Mae loans in forbearance fell to 5.59%, and the forbearance share for portfolio loans and private-label securities remained stagnant at 8.26%. The percentage of loans in forbearance for independent mortgage bank servicers decreased by 4 basis points, to 4.38%, with the percentage of forbearances for depository servicers was stagnant at 4.35%. An MBA spokesman noted that although the overall share is declining, there was another increase in forbearance re-entries. Currently, 5.3% of loans in forbearance are homeowners who had cancelled forbearance but needed assistance again. Another 82.9% of plans are in an extension, while the remaining 11.8% are in the initial forbearance plan stage. Overall, the MBA estimates there are still approximately 2.1 million homeowners in some form of mortgage postponement.
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Many of you recently participated in IBANYS' conference calls with members of the New York congressional delegation and our U.S. Senators. We described community banks' vital role as "the economic first responders" during the pandemic, providing essential support for small businesses, homeowners, consumers and their local communities in general. We also discussed several federal issues with them. Here is a link to the issues we discussed: https://www.icba.org/newsroom/blogs/events-blogs/2021/04/01/capital-summit-spring-2021-lobby-priorities with details on some of those priorities.
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We encourage you all to follow up these discussions by emailing or calling those we met with. Please use this list to make your contacts:
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As always, thank you for all you do every day for your customers, your communities and our industry. . . and, of course, for our industry and IBANYS!
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ASSOCIATE MEMBERS & PREFERRED PARTNERS |
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Regulatory Response to Supply Chain Risk
Free Webinar - June 4 - 2:00 - 2:45 p.m.
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On April 27, 2021, the New York DFS released a report on how financial institutions responded to SolarWinds and their recommendations for addressing supply chain threats. Whether you are in the State of New York or not, this report will likely have an impact on your financial institution for both securing your environment and future regulatory compliance.
What we'll cover:
- Some of the response statistics and our thoughts
- The NYDFS recommendations for addressing supply chain attacks (including one that could have a major impact on your vendor management program)
- Additional controls and actionable takeaways that we recommend for mitigating supply chain risk
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The Crypto Tax Nightmare Facing New Traders
By Robert Farrington, Senior Contributor, Forbes
Everyone is talking about cryptocurrency these days, and it's easy to see why. After all, the value of Bitcoin (BTC) temporarily surpassed the $60,000 threshold earlier this year, and Ethereum (ETH) has quadrupled in value since the beginning of 2021. Of course, there are other cryptocurrencies currently making waves and helping at least some people rake in the cash, which continues creating hype among investors and everyone else.
But, there's one aspect of crypto investing that hardly anyone is talking about — the tax implications. This is partly because taxes are boring in general, but it's also because a lot of crypto investors have no idea what they're doing. And — for the record — the same problem is going to come into play this year regarding NFTs, or non-fungible tokens.
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SRM is currently serving over 200 financial institutions to reduce expenses, enhance revenue and maximize bottom line performance. Drawing on its extensive experience, market insight, and proprietary benchmarking database, SRM helps banks improve their bottom line, without sacrificing quality or valued vendor relationships.
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Luse Gorman was founded in 1993 as a specialty law firm dedicated to representing financial institutions, with a particular emphasis on community banks. Since then, we have grown into the largest community financial institution law firm in the nation. Much of our practice focuses on transactional matters. We advise financial institutions on mergers and acquisitions and a broad range of capital raising transactions, including common stock and preferred stock offerings, subordinated debt offerings, mutual-to-stock conversions, and mutual holding company reorganizations. We are routinely ranked as one of the top law firms nationally for merger and acquisition transactions by community financial institutions, and have been ranked number one in three of the last five years. Since 2000 we have completed more financial institutions merger and acquisition transactions than any other firm in the nation. We are also routinely ranked as one of the top law firms nationally in total capital raising transactions by financial institutions. Because of the significant number of transactions we complete for our clients each year, we offer an exceptional combination of knowledge and experience that we believe is unmatched by other law firms around the country.
In addition to our transactional practice, we provide a range of other services to community financial institutions, including advising clients on matters such as SEC and public company reporting and disclosure, shareholder relations, executive compensation and employee benefits matters, taxation, corporate governance, regulatory enforcement and compliance, holding company reorganizations, de novo bank formations and charter conversions.
Our expertise and ability to complete transactions expeditiously is enhanced by the number of seasoned partners we have, most of whom have over 20 years of experience in advising community financial institutions, and many of whom have held senior positions at the federal banking agencies or the SEC. Our location in Washington, D.C. also gives us proximity to the federal regulators who supervise our clients and review or approve transactions.
In addition to our representation of federally chartered institutions, a significant portion of our client base is comprised of state chartered institutions. In this regard, we routinely advise our clients on matters before the various state financial institution regulators and we are an active member and participant in almost every state banking association in the United States.
Along with state and nationally chartered community banks and their holding companies, we represent state and federally chartered savings institutions, credit unions and trust companies, as well as investment banks and private equity and venture capital firms that work with and invest in the financial services industry.
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Crypto Chronicles: Bitcoin 101 for Community Bankers |
By Brian Laverdure
The payments industry is abuzz with excitement as one topic continues capturing headlines, with profound implications for community banks: Bitcoin.
As the original digital currency, Bitcoin has steadily climbed from obscurity to reach a total market capitalization of over $1 trillion. The lofty valuations, however, often come with precipitous declines—it is not uncommon for Bitcoin’s value to rapidly plummet in a matter of hours.
With digital currencies reshaping the U.S. payments system that community banks and their customers depend on, what exactly is Bitcoin and where did it come from?
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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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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
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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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Governor Cuomo announced that New York’s $2.4 billion relief program to pay the back rent of tenants will begin accepting applications on June 1, bringing relief to worried real estate groups that had implored lawmakers to get the program under way, The City reports.
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Tenants and landlords who were financially affected by the COVID-19 pandemic will have access to billions of dollars in aid from New York under a program announced Tuesday by Gov. Andrew Cuomo. Read More
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As New York's economy continues to reopen, many businesses have found themselves struggling to find workers. One state senator is pushing a measure he thinks will get people back to work. Senator George Borrello (R-Jamestown) joined local small business owners in urging on Governor Cuomo to withdraw New York from the $300 weekly additional unemployment benefit provided by the federal government, which is in addition to what the state already pays out.
Other Albany Updates
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A new survey released by the Siena College Research Institute on Monday found a plurality of voters – 49% – in New York do not think Governor Cuomo should resign from office as he faces a barrage of controversies over the last five months, while 41% think he should resign. Last month, the same poll found 51% did not support Cuomo's resignation, while 37% did. The survey also found that NYS Attorney General Tish James did better than Governor Cuomo in a hypothetical gubernatorial matchup against an unnamed Republican opponent. Voters said they’d prefer James over an unnamed Republican by a margin of 46%-29%, while they preferred Governor Cuomo over an unnamed Republican by a margin of 48-38.
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The Siena poll also found that among the announced 2022 Republican gubernatorial candidates, Rep. Zeldin has a 20%-19% favorability rating, little changed from 18%-17% percent last month. Former Westchester County Executive Rob Astorino (Cuomo's 2014 opponent) has a 20%-15% favorability rating. (The poll was conducted prior to Andrew Giuliani’s announcement.) President Biden has a 62-34% favorability rating and a job performance rating is 53%-45% percent. Senator Schumer has a 50%-39% favorability. Senator Gillibrand’s favorability rating is 41%-32% percent, and Rep. Elise Stefanik, newly elected as part of House Republican leadership, has a 24-26 percent favorability rating.
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Dear Business Organization Partner:
As part of our Getting Back on Track Tour, The U.S. Small Business Administration (SBA) & Public Private Strategies Institute (PPSI) is providing an educational opportunity for you to learn more about the community navigator program. This session is intended for and open to all community-based organizations, chambers of commerce, business associations who share our mission of helping to reach every small business owner who needs help.
Please join us for a webinar hosted by the U.S. Small Business Administration and Public Private Strategies Institute to:
- Hear about what steps you can take to prepare your application and understand eligibility requirements
- Learn more about the program goals as it relates to outreach, education, and technical services to increase awareness and use of programs of the Small Business Administration (SBA)
- Have your questions answered by SBA Leadership
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ICBA is encouraging community bankers to call on Congress to hold hearings on credit union acquisitions of taxpaying community banks. (IBANYS urged members of the New York Congressional Delegation to support this effort during our recent grassroots calls.) ICBA’s Be Heard grassroots action center makes it easy for community bankers to contact their members of Congress. 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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ICBA and other groups today are urging House members to oppose a Senate-passed resolution to repeal the OCC’s “true lender” rule. In a joint letter to the House ahead of a staff briefing on the issue, the groups said repealing the OCC rule would create significant legal impediments to creating a more robust framework for providing safe and affordable credit. Instead, the OCC should be allowed to modify the rule, they said. The OCC rule, which ICBA supported in a comment letter last year, creates a standard to determine when a bank is the “true lender” when partnering with a third party. Under the rule, banks are deemed true lenders if they fund the loan or are named as the lender in the loan agreement on the origination date. The Senate resolution, which the Senate passed by a 52-47 vote earlier this month, would repeal the rule under the Congressional Review Act, which allows lawmakers to invalidate federal rules and limits agencies’ ability to issue a similar rule in the future.
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The Federal Reserve is reviewing rapidly changing customer practices and patterns in the use of financial services by consumers and businesses, Federal Reserve Vice Chair for Supervision Randal Quarles told Congress. In hissemiannual reportto the Senate Banking Committee, Quarles also cited the changing relationship between banks and their nonbank partners as ripe for further review—noting each of these changes predates the pandemic. Answering committee member questions, Quarles also commended community banks, saying the Paycheck Protection Program would have had difficulty working without them. He also touted the work of Community Development Financial Institutions and Minority Depository Institutions on Treasury’s Emergency Capital Investment Program. During the hearing, committee members sparred over whether banks should or should not have to account for climate risks and whether supervising for climate risks is within the Fed’s mandate. The committee is scheduled to meet again today for ahearingon Wall Street oversight featuring testimony from the heads of the largest U.S. financial firms. They are set to testify againtomorrowbefore the House Financial Services Committee.
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The ICBA board of directors met last week with Deputy Treasury Secretary Wally Adeyemo to discuss community banking advocacy priorities. ICBA community bankers and staff discussed issues such as cannabis banking, the administration’s tax reporting proposal, beneficial ownership reporting, fintechs and novel charters, climate change policy, and more. New York Community bankers can learn more about ICBA’s policy priorities on the Advocacy section of its website and contact policymakers via its Be Heard grassroots action center.
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