Your IBANYS Team: 
Working Together To Make 2017 A Great Year 
For New York C ommun ity Banks !
 
In This Issue

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January 11, 2016

GOVERNMENT RELATIONS

ALBANY

Governor Addresses Financial Industry Issues  In Regional State Of State Speeches

Gov. Cuomo will be in Onondaga and Albany counties today as he continues to deliver his six regional "State of the State" speeches. In earlier speeches this week, he  unveiled a comprehensive plan to "better protect senior citizens throughout New York from financial exploitation and foreclosure". The plan includes establishing an Elder Abuse Certification Program for banks located in New York State, amending the banking law to empower banks to place holds on potentially fraudulent transactions, and strengthening legislation that will protect senior homeowners with reverse mortgages.  He said a study was conducted in New York State in 2013 that found the statewide impact of financial exploitation to be at least $1.5 billion. The new plan includes:
  • Launching an Elder Abuse Certification Program to be designed by the State DFS and available for all banks in New York. It will include training bank employees on how to recognize the signs of financial abuse. Upon completion of this certification, banks may display their certificate so consumers are aware of the special services they offer.
  • Proposing new legislation to further empower banks to place holds on potentially fraudulent transactions in order to protect their consumers, and be immunized for doing so in good faith.
  • Reporting Abuse: Once potential fraud is identified and a transaction hold is applied, banks will be required to report to the appropriate state agencies to take action.
He noted ma ny New Yorkers over 62 utilize lending products known as reverse mortgages, without realizing payments are required for all taxes, insurance, and home maintenance, and as a result many face foreclosure. His plan would: 
  • Close Consumer Protection Loopholes by amending the Real Property Actions and Proceedings Law and Civil Practice Laws and Rules to include reverse mortgages, requiring the same consumer protections for all homeowners, regardless of the lending product they utilize. 
  • Launch Review of Regulations: The Governor will direct the DFS to revisit and revise any rules and regulations pertaining to reverse mortgages to help prevent future foreclosures and further protect New York homeowners.
The Governor also laid out a new proposal to further protect consumers from "egregious and deceptive behavior in the financial services industry" by empowering the DFS Superintendent to ban "certain bad actors" from the banking and insurance industries "for misconduct like that seen in the Wells Fargo scandal". Specifically, new legislation would add a section to New York's Financial Services Law disqualifying certain individuals from the banking or insurance industries if, after a hearing, the Superintendent finds "they have done something so severe as to have a direct bearing on their fitness or ability to continue participating in the industry".  The Governor noted, "New York is the financial center of the world and we have zero tolerance for those who seek to defraud customers and undermine the system."

New Banks Committee Chairs In 
NYS Senate & Assembly 

Both the State Senate and State Assembly have new Chairmen of their respective Banks Committees in 2017. In the Assembly, Ken Zebrowski (D-Rockland County) succeeds Annette Robinson, who did not seek reelection in 2016. Zebrowski was first elected to the Assembly in a 2007 special election. He is a former County legislator. The new Senate Chair is Jesse Hamilton (D-Brooklyn) , a new member of the  Independent Democratic Caucus.  He succeeds Senator Diane Savino (D- Brooklyn), who becomes vice chair of the Finance and the Codes Committees. Senator Hamilton, first elected in 2014, spent 28 years working in the New York City Department of Finance.  IBANYS will be seeking meetings with the two new Banks Committee Chairmen to discuss our legislative priorities and concerns. We will also fully inform them about the important role New York community banks play in strengthening and driving the local and state economies, providing essential housing, small business and consumer loans while re-investing in the state's local communities.

Senate Banks Chairman Hamilton Discusses 
Committees' 2017 Issues, Priorities

Senate Banks Chair Hamilton stated he plans for the committee to "focus on more economic inclusion, expanding access to financial services, combating redlining, and strengthening protections for New York families." He noted the Committee had "made inroads in protecting consumers from subprime auto loans and protecting homeowners from foreclosures," and further noted: " Access to capital has been a challenge I have heard repeatedly voiced by small business owners, especially minority and women owned business owners. Also, I have had constituents raise fairness in reverse mortgages with me. I know that some New York communities, like those I represent in Brooklyn, have inadequate access to affordable financial services. Perversely, low-income households, the families that can least afford it, tend to pay more for regular financial services that middle income and upper income households take for granted. We have to take a hard look at the heavy costs families are paying for routine services like sending money abroad. I plan to address these challenges and more as chair of the NYS Senate Banks Committee. We need financial services that meet the needs of all New Yorkers."

Comprehensive Advisory On Revised Proposal  On  DFS Cybersecurity Reg

In late December the State Department of Financial Services (DFS) issued a revised version of proposed regulations regarding cybersecurity requirements that would apply to financial services firms overseen by DFS. These rules will impact a wide range of financial services firms, including community banks. DFS first proposed cybersecurity regulations on September 13, 2016. The DFS is inviting comments on its Revised Proposal until January 27, 2017. IBANYS has scheduled a Government Relations call this Friday, January 13 to discuss the next steps we may take. ( Click here for IBANYS' original comment letter to DFS). 

The Revised Proposal is expected to become effective as of March 1, 2017. To read a comprehensive advisory on the revised DFS proposal by the law firm of Arnold & Porter, Kaye, Scholer,
visit www.apks.com , click on the "News & Perspectives" tab, then on the January 9, 2017 New York Department of Financial Services Revises Proposed Cybersecurity Regulations

WASHINGTON, D.C.

T wo More New Yorkers To Serve On 
House Financial Services Committee

U.S. House Republicans announced that two members of the New York Congressional Delegation have been newly appointed to serve on the House Financial Services Committee. Rep. Lee Zeldin (R-L.I.) and Rep. Claudia Tenney (R- Central NY) were added to the committee late last week. Rep. Tenney, a former member of the NYS Assembly and its Banks Committee, is newly elected to the House, succeeding former Rep. Richard Hanna, who retired. Rep. Zeldin was re-elected to his second term last November. Other New Yorkers on the Committee include Rep. Peter King (R-L.I.), Rep. Carolyn Maloney (D-Manhattan), Rep. Nydia Velazquez (D-Brooklyn) and Rep. Greg Meeks (D-Queens). Democrats have not yet announced their new appointees for the committee for 2017. The Committee is chaired by Rep. Jeb Hensarling (R-TX).

Meanwhile, House Ways & Means Committee Ranking Democrat announced the addition of Rep. Brian Higgins (D-Western New York) to the Committee.

ICBA's Updated 2017 "Plan For Prosperity Community Bank Regulatory Relief Agenda

ICBA this week has unveiled its enhanced "Plan for Prosperity" regulatory relief agenda for the 115th Congress. It outlines measures that policymakers can pass to eliminate the onerous regulatory burden on community banks that stifles lending and innovation. The pro-growth Plan, shared with both the Trump transition team and key congressional offices, "focuses on community bank access to capital, regulatory relief, mortgage reform, bank oversight and examination, tax relief, and agriculture and rural America." The plan builds on last year's installment, which advanced in both the House and Senate through more than 60 bills embodying nearly every provision of the plan. ICBA President Cam Fine noted  "Community banks are on the cutting edge of financial investment within their communitie-excessive regulation should not prevent them from powering small businesses that will innovate and create jobs at the local level and beyond. As the new Congress and administration start their work in Washington, ICBA will be here every step of the way to ensure that community banks have a seat at the table so real progress can be made for the betterment of communities nationwide." IBANYS strongly supports the plan, and will be in Washington, D.C. this spring to meet with members of the New York Congressional Delegation, advocate for the agenda and participate in ICBA's "Capital Summit" April 30-May 3, and are urging IBANYS members to join us. 
 
Click here to read the 2017 "Plan for Prosperity"

In Other News From Washington:
  • Sen. Sherrod Brown (D-OH), Ranking Democrat on the Senate Banking Committee, and former committee member Sen. Jeff Merkley (D-OR) said Monday the Office of the Comptroller of the Currency should not offer charters to financial technology firms.
  • The Department of Housing and Urban Development will bring charges against Bank of America and two of its employees alleging discrimination against Hispanic mortgage customers.
  • Rep. Peter Roskam (R-Ill.) will chair the House Ways and Means Subcommittee on Tax Policy. Congressional Republicans plan to pass comprehensive tax-overhaul legislation.
  • President-Elect Trump is reportedly considering Jim Donovan, a managing director of private wealth management at Goldman Sachs, as Treasury undersecretary of domestic financeIf chosen and confirmed, he would be the fourth senior appointee with ties to Goldman Sachs and would be responsible for coordinating policies on banking, capital markets and regulation, and managing the issuance of the country's debt.
  • Tomorrow, the Senate Banking, Housing and Urban Affairs Committee will hold a confirmation hearing on Thursday for Ben Carson, President-Elect Trump's nominee pick for HUD Secretary. Also, the Senate Commerce Committee will hold a confirmation hearing for Wilbur Ross, the nominee for Secretary of Commerce.
  • Some observers believe that the future of the Consumer Financial Protection Bureau (CFPB) is up in the air, as it faces a court challenge and an incoming administration that could "completely upend" the bureau. It is unclear who will be running the agency in the months to come, or what the overall bureau may look like.  Republicans want to overhaul Dodd-Frank, and the CFPB is fighting a legal battle over its status as an independent agency. Director Cordray's term does not expire until mid-2018. While some of President Obama's financial regulators have announced plans to step down after the change of administrations, Cordray currently plans to stay on unless the court ruling is enacted and allows for his replacement.. 
     
ASSOCIATION  NEWS

IBANYS Meetings Update: 
Planning Underway

IBANYS held a planning call for members of our CFO Peer Group late last week. The purpose was to begin planning for the June 7-9 CFO/Senior Management Conference at West Point. Among the topics identified and discussed for possible agenda segments were:
  • "NYS and National Economic Trends/Outlook" 
  • "The 2017 Federal & State Regulatory Environment/Outlook" 
  • The Federal Tax Landscape: 2017 & Beyond" 
  • Accounting Update: Best Practices For Community Banks" 
  • "Best Practices: Optimizing Net Interest Margins" (Strategies For Pricing Loans & Deposits") 
  • "Implementing CECL: Where Should Your Bank be Today?"
  • "Redefining Compensation: Trends & Strategies In The Post-Wells Fargo Environment"
  • "Capital Markets/Subordinate Debt: What Are The Options For Community Banks?"
  • "CRE Concentration: A Status Update"
  • New York Financial Performance  Marketplace: Evaluating Your Bank & Peers" 
  • Federal & State Regulatory Panel on "The 2017 Landscape"  (Zombie Properties, Cybersecurity, CRA, Safety & Soundness, Examinations)
  • "Managing Your Investment Portfolio: 
  • Luncheon Speaker: The New Legislative & Regulatory World In Washington, DC
We also previously held a planning call with our Compliance Peer Group to discuss our upcoming Regional Compliance Seminars  March 22 and 23 in Rochester and the Capital District -- as well as for inclusion during such other IBANYS educational meetings as Lending, Directors, CFO/Senior Management & Annual Convention. Preliminary discussion focused on:
  • Incentive compensation guidelines; 
  • HMDA; 
  • Private flood insurance; 
  • AML/BSA, and vendor & third-party oversight/management. 
  • Overall risk management 
Watch for news on specific program agendas and speakers soon. 
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PLAN YOUR 2017 CALENDARS NOW!

. . .Hold The Dates For These 
IBANYS Meetings:
(Share with colleagues) 

March 22, 2017 - Compliance Conference - Rochester

March 23, 2017 - Compliance Conference - Albany

April 11, 2017 - Directors Conference - Rochester

April 12 2017 - Directors Conference  - Albany 

April 30-May 3, 2017 - ICBA Capital Summit, Washington D.C. ( meetings "on hill" with New York Congressional Delegation)

May 9-10, 2017 - Lending Conference - Syracuse (tentative)

June 7-9, 2017 - CFO/Sr. Managment Conference - West Point, NY

September 25-27, 2017 - 43nd Annual Convention - Niagara Falls, NY  

October 24, 2017 - Security Conference - Rochester, 

October 25, 2017 - Security Conference - Albany

IBANYS Board of Directors Meetings:
IBANYS will hold meetings of our Board of Directorson the following dates:
  • March 2, 2017 
  • June 9, 2017
  • July 20, 2017 (conference call meeting)
  • October 19, 2017
To view details on our 2017 education calendar, visit  www.ibanys.net, click on education tab, then on upcoming meetings for full details.
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INDUSTRY INSIGHTS

2017 Wage Law Update

New York State increased the state minimum wage effective December 31, 2016. Last week, only days before the new law was set to go into effect, the New York State Department of Labor finalized its regulations and issued important guidance for businesses on how to comply with these new rules. In the regulations, New York State also increased the minimum salary requirements for exempt administrative and executive employees (who do not receive extra overtime pay for working more than 40 hours per week.) IBANYS will be reviewing and discussing the new Wage Law Update in our Friday, January 13 Government Relations call To read the full Update (by the law firm of Gallet, Dreyer & Berkley), click on the link below.

http://www.gdblaw.com/Significant-Wage-Law-Changes-2017 
  • The U.S. Bureau of Labor Statistics reported that the financial sector added 13,000 jobs in December, extending a streak of monthly employment gains that began in September 2013. 
  • Wells Fargo is raising the lowest hourly pay it provides U.S. workers to $13.50 from $12, becoming the latest big bank to announce similar plans.
  • The incoming Trump administration has two immediate vacancies on the Federal Reserve to fill. However, observers said it could depend on who those new Governors are may be the deciding factor on whether other current board members serve out their terms or create additional vacancies.
  • Federal Reserve Governor Jerome Powell urged Congress to rewrite the Volcker Rule that restricts proprietary trading, while urging "a high degree of vigilance" against the buildup of financial risks amid improving U.S. growth. "What the current law and rule do is effectively force you to look into the mind and heart of every trader on every trade to see what the intent is."
  • Consumer credit increased 8% in November according to the Federal Reserve. Revolving credit (including credit card spending) increased 13.5%. Non-revolving credit (including auto and student loans) increased 5.9%.
  • A new compensation plan from Wells Fargo & Co. ends pay incentives linked to sales goals and focuses on providing incentives for better customer service. The plan contains controls "to monitor bad behavior" in the wake of last year's cross-selling scandal.
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IBANYS MEMBER SERVICES & BENEFITS

IBANYS is working hard to continue providing important products and services  under our member services  initiative, with help from our new Innovation Committee, to benefit bankers  and  our associate members/ preferred providers. IBANYS initiatives can provide value and bottom line benefits to New York community banks. We hope you take full advantage of these exciting opportunities. 

New York Community Banks: 
Check Out This Health Care Option! 
It's approaching the time to sign up for health benefits for 2017. We suggest you take a look at our healthcare partner, My Wellness Resource" as an addition to your existing benefit package. The Teledoc program is an exciting new way to provide value to your institution and employees. It provides 24/7/365 access to a doctor through the convenience of phone or video consults. It is an affordable option for quality medical care.  Click here to read how high deductibles can lead to health care avoidance,  and here  to learn how this program can help you in planning your health care benefits package.  Community banks can take advantage of a low-cost, non-traditional program to help save time and money, and offer employees on demand health care. It's an exciting new way for community banks to provide additional health care benefits options, reduce cost and retain employees -- designed to improve productivity, decrease absenteeism and boost morale without straining your bottom line.   Contact Alan Justin, Managing Partner at (716) 907-5500 or call the IBANYS office at (518) 436-4646.  For more details on the benefits of the My Wellness Resource Card, visit: 

 Discover .BANK Toolkit & Digital Campaign. . .
IBANYS encourages New York community banks to take a look at  a digital campaign that fTLD has put together to raise the visibility of .BANK  in the marketplace.  ICBA asked us to pass along this opportunity for banks to join in with ICBA, ABA and the Financial Services Roundtable to promote .BANK. To view the campaign, view the toolkit and read nine different ads available for use, click on the link below, or cut and paste it into your browser. Click below:
E x celsior Growth Fund (EGF): 
IBANYS' Online Lending Partner
EGF is  a nonprofit Community Development Financial Institution formed by New York Business Development Corporation (NYBDC). EGF is endorsed by IBANYS as exclusive online lending 
partner for our 
members. EGF  provides innovative financial solutions and business advisory services to underserved small businesses in New York State through a fast, simple and secure online lending platform. Its core product is the EGF SmartLoan™, which features amounts up to $100,000, approvals within one-to-two days, and disbursements within one week. Importantly, interest rates a fraction of those typically offered by online lenders.  EGF offers banks a unique customer retention solution when a customer either does not qualify for a bank's loan offerings, or seeks the fast,  transparent process available through online lenders. To facilitate retention, EGF shares performance information on the referred loan portfolio on a quarterly basis and offers the opportunity for the bank to purchase referred loans at par at any time.  Additional details on the EGF SmartLoan, including eligibility criteria, are available at:
For details, or to make a referral, contact Bryan Doxford, Chief Lending Officer at Excelsior Growth Fund:  bryan.doxford@excelsiorgrowthfund.org or  (212) 430-4512.

We also joined the  "Cure the Blue" effort to raise funds and awareness regarding prostate cancer in New York State. We are partnering with the Buffalo Bills Alumni Foundation, and hope to see a number of IBANYS members participate. Please join us in supporting this worthwhile cause. Visit www.curetheblue.com to get involved!  
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IBANYS 2017 Webinars Designed 
For  New York Community Banks 
In 2017, New York's community banks will face an array of challenges -- and, opportunities! Bank officers, board members and employees must be sure they are fully informed and up-to-date on their responsibilities -- and, about their potential liabilities. Community bankers require the proper information and tools to effectively meet their responsibilities, execute their business and strategic plan, and prepare the bank for the future.  One important -- and convenient --way to do so is by regularly participating in  IBANYS' 2017 webinars. These presentations are specifically tailored to the needs of New York community banks. The programs are effective and cost-effective, and to participate couldn't be easier! Community bankers can do so directly from their own offices. Over the past few years, the number of New York community bankers participating in IBANYS' webinars has dramatically increased.  Is your bank among those who have benefited? If not, why not find out why so many of  your industry and association peers are taking advantage of these timely webinars? Take a moment to r eview our upcoming programs by clicking the link below:
https://financialedinc.com/a/ibanys/category/live


. . .The Bonadio Group
The Bonadio Group is a nationally ranked, top 40 CPA firm that brings an integrated world of resources to every client, large or small.  Founded in 1978 and led by active, engaged partners, The Bonadio Group has seven offices throughout New York State, and brings a passion and approach to their work that distinguishes them  in their field. It's a new world in banking and finance. Banks are under more scrutiny than ever. The Federal Reserve, the Consumer Financial Protection Bureau and others are determined to improve efficiency, in part by preventing and detecting fraud, waste and abuse. From banks, to mortgage and finance companies, to broker-dealers and credit unions, Bonadio understands the specialized services financial firms require. Of course, they offer impeccable financial statement audits. . .but their extensive offering covers every issue a financial institution faces, such as:
  • Risk management services, from IT audits to IT penetration testing
  • Loan reviews and fraud investigations
  • Bank and federal reserve regulatory filings
  • Sarbanes-Oxley compliance
  • Initial public offerings
  • Private placements memorandums
  • Mergers and acquisitions
The Bonadio team is best known for its combination of practicing to the highest standards and taking a proactive approach with banking industry clients. Between Bonadio and our Moore Stephens North America member firms, we currently provide services to hundreds of financial institutions-including SEC registrants-ranging in size from de novo status to $24 billion in total assets.

For details, contact Partner  Jamie L. Keiser, CPA :  (315) 422-7109, jkeiser@bonadio.com.  Or, visit the website at www.bonadio.com.


 
. . .That in 1974, the year that IBANYS was formed, the New York State Superintendent of Banks was Harry Albright, Jr. -- a close confidante of Governor Malcolm Wilson and his predecessor, Nelson Rockefeller, who was sworn in as Vice President of the U.S. under President Ford in December, 1973? 

Did you also know that the Chairman of the FDIC was Frank Wille (a former NYS Banking Superintendent); the Comptroller of the Currency was James Smith; the Federal Reserve Chairman was Arthur Burns, and the Secretary of Treasury was William Simon?




 


 
New York community banks play a key role in our state and local economies. Help spread the good news among your customers, business and elected leaders and media!

Click here for quotes from Governor Cuomo and DFS Superintendent Lawsky extolling the performance and value of New York community banks.

Click here for the full NYS Study on community banking.

Click here to read IBANYS President & CEO John Witkowski's comments on the new tax changes and benefits for New York community banks as approved in the 2014-15 State Budget.

 

Click here for IBANYS' letter to the Editor of Consumer Reports Magazine correcting failure to mention community banks as an alternative to using "big banks."

_________________________________

John J. Witkowski
President and Chief Executive Officer
 
Stephen W. Rice
Director of Government Relations and Communications

Linda Gregware
Director of Administration and Membership Services 

William Y. Crowell, III
Legislative Counsel