• Planning Underway For 2018 Compliance Conferences
  • IBANYS' 2018 Meeting Dates -- Mark Your Calendars
  • Next Fed Chair: "Tailor" Regs To Help Small Banks
  • ICBA's Class Action Lawsuit Gainst Equifax
  • Updates From Albany & Washington
  • Latest Industry Trends & Developments
  • Sign Up NOW For IBANYS' 2018 Committees
  • Have you visited our newly updated website at www.ibanys.net yet?

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

In This Issue

Quick Links

Have You Contributed to NYSIBPAC This Year?
If not...now is the time! We need your help in this statewide election year to support candidates and committees who understand community banks' needs.  Can we count on you?
for our 2017 PAC contribution form. Help support IBANYS' political action efforts in New York State.


Federal Reserve Governor Jerome Powell, nominee for Federal Reserve Chairman, during today's Senate Banking Committee confirmation hearing: "Tailoring of regulations is one of our most fundamental responsibilities. We want regulations to be the most intense, the most stringent for the very largest, most complex institutions and want it to decrease in intensity and stringency as we move down through the regional banks and the community banks. This is something we strive to achieve. We're taking a fresh look at that now." 

. . .2018 Planning Well Underway 

December brings holiday celebrations, a reminder of winter. . .and the need to finalize IBANYS' plans for 2018. That includes the programming for our
2018 meetings and conferences. Click here to see our 2018 calendar. New York community bankers: Please review the calendar, save the dates, and share with your senior management team, directors, and key officers. IBANYS preferred providers, associate members, sponsors and business show exhibitors: Please hold these dates and plan to participate in another great year of IBANYS programs! 

We continued our planning process this week with a conference call with IBANYS Compliance Peer Group/Committee to identify and discuss chief areas of concern, and design our upcoming Regional Compliance Conferences on March 20 - 21 in Rochester and the Capital District. A number of issues and topics were reviewed, including the new HMDA rules, CRA, risk management, ERM, vendor management, cyber and data information security, Bank Secrecy Act/ Anti-Money Laundering (BSA/AML), and presentations by and interactive discussions with senior officials from the FDIC, OCC and NYS Department of Financial Services on their views on these and other "hot-button" compliance issues and concerns for 2018 and beyond. We'll also examine how possible regulatory changes at the federal level could impact the state regulatory environment and community banks in general. 

We'll soon hold similar planning sessions with our CFO/Senior Management Peer Group  to plan our Bank Executive Symposium (previously the CFO/Senior Management Conference) on May 7-9 in Watkins Glen, and with our Government Relations Committee regarding priority issues and policy objectives for the 2018 NYS Leguslative Session.

Is your bank signed up to serve on IBANYS' 2018 committees?   They are essential to our success, and responsible for h elping to review and develop legislative and regulatory policy positions,
designing educational programs, p roviding important peer networking and dialogue opportunities and  reviewing and recommending new, innovative products and services for community banks.  Sign your bank up today to serve on these IBANYS Committees:
  • Government Relations Committee 
  • CFO/Senior Management Peer Group Committee
  • Compliance Peer Group Committee
  • Security Committee and 
  • Our new HR and Operations Committee 
Tell us which committees your bank wants to serve on, and who will be your representatives on each. Email Linda Gregware or John Witkowski (Lindag@IBANYS.net, Johnw@IBANYS.net) or call us at (518) 436-4646.

One last reminder for IBANYS member banks: Please watch for your IBANYS 2018-19 member bank dues notices, which will be sent out in the near future. 

As always, we appreciate your participation and support!
- John Witkowski



Advisory On DFS Anti-Money 
Laundering Rule
The New York Department of Financial Services (DFS) recently issued frequently asked questions (FAQs) relating to its new anti-money laundering (AML) rule (Part 504). It took effect January 1, 2017 and requires submission of the first annual certification of compliance to the DFS by April 15, 2018. The FAQs are the first and only formal guidance issued to the banking industry regarding the new regulation. Click here to read an advisory on this rule from the law firm of Arnold & Porter Kaye Scholer LLP.

Cuomo Talks 2018-19 Budget. . .
Governor Cuomo this week discussed the state budget and acknowledged it could be difficult document to put together this year. As it currently stands, t he state budget deficit could be as high as $4.6 billion based on an estimate by the State Comptroller's office, and could grow higher by the April 1 deadline for approving the budget.  "You'll get different estimates of what the economy is going to do because they're all looking into a crystal ball let's be honest," Cuomo said. "But there's no doubt the state will have a deficit."  If spending stays capped at 2% (as it has been during previous Cuomo budget proposals), the deficit shrinks to $1.7 billion.  "The budget is not going to be an easy budget and we're going to have find additional savings in the budget...That's clear, no matter whose numbers you use. I'm also confident we can get it done."

. . .And Criticizes Senate GOP Tax Reform Plan
Governor Cuomo blasted the U.S. Senate GOP's tax reform plan saying it would be harmful to new York State.   ". . .in their attempt to save legislative face, they should heed the old adage: 'do no harm.' This tax reform plan hurts the country's poor, working and middle-class families and will have a devastatingly negative economic impact on the twelve states targeted by Washington."  Cuomo has opposed the push to end deductions of state and local taxes, a move that would impact high-tax states like New York, and criticized the Senate plan to end the individual mandate that Americans must purchase health insurance under the Affordable Care Act.

NYS Senate Democrats, IDC 
Ready  To Reunite?
The reunification of NYS Senate Democrats and the Independent Democratic Conference (IDC) may have grown more possible yesterday.  Sen. Jeffrey Klein, leader of the eight-member IDC, said his members are ready to accept a potential unity deal proposed by party leaders. The IDC, formed in 2011, is currently aligned with Senate Republicans in a majority leadership coalition.  Klein's announcement followed discussions that a progressive agenda would be part of any agreement. He cited  bills to strengthen abortion laws, enact a state DREAM Act, create a public campaign finance system, and adopt a single-payer health care program--which m ainline Senate Democrats have already pushed those items. The IDC and mainline Democrats have also committed to working together to win special elections for two Senate seats currently held by Democrats that will open up in January, with special elections likely to be held in April. If Republicans win even one of those seats, Democrats could not take the majority even if there is reunification. No deal would take effect until after the budget process, so the current GOP-IDC majority coalition will be in charge at least until then, and some insiders  warn there are still potential roadblocks.  Governor Cuomo urged both sides  to "stop their intramural disputes and unify because we have real issues." 


OMB Director Mulvaney Now Acting 
CFPB Director
A federal judge yesterday rejected a lawsuit from Consumer Financial Protection Bureau (CFPB) Deputy Director Leandra English claiming that she, not President Trump's appointee Mick Mulvaney (who is Director of the Office of Management & Budget), is the rightful acting CFPB director following the resignation of Richard Cordray. The judge declined to grant English a restraining order to bar Mulvaney from serving as acting director. Cordray had named English, previously chief of staff, as deputy director when he stepped down last Friday. 

Treasury's Plans For Dodd-Frank Provision
The Trump administration reportedly does not plan to recommend stripping regulators of their power to seize and unwind a failing financial firm in a crisis.  The Treasury Department, in a coming report on the Dodd-Frank provision (known as orderly liquidation authority), purportedly plans to propose changes to the policy without eliminating scrapping it entirely.

Latest On Tax Reform In D.C.
A new poll by Morning Consult/Politico found the House-passed tax reform proposal to limit deductions for state and local taxes (SALT) is increasingly unpopular with voters. In a survey of 1,994 registered voters, 44% said a potential final tax overhaul bill should not include the SALT provision. MeanwhileThe Senate Budget Committee approved the chamber's tax reform bill, sending it to the Senate floor. Senate leaders are considering changes to persuade GOP members who have not yet committed. The bill will fail if more than two GOP members vote against it.  Among changes reportedly being considered:
  • a possible "fiscal trigger" that would raise taxes if the bill did not deliver the promised amount of economic growth
  • alligning the Senate bill's treatment of State and Local Taxes (SALT) deductions with the House bill, which allows people to deduct up to $10,000 in state and local property taxes but repeals deductions for income or sales taxes); 
  • supporting the bipartisan supported passing the bipartisan Alexander-Murray Obamacare stabilization bill if the tax bill passes
Subchapter S community banks can weigh in with Congress via ICBA's Be Heard grassroots action center. An ICBA informational brief on tax reform offers community bankers the latest on the state of play and spotlights key provisions. 
Click here to access the site.

Chair Yellen's Final Update?
In likely her final address to Congress as Federal Reserve Chair, Janet Yellen urged adoption of policies to get U.S. economic growth out of its "disappointingly slow" post-recession pattern. Chair  Yellen delivered generally positive reviews to economic performance, but cautioned there are structural factors that should be addressed, including  an aging population that has translated to slower labor force growth as well as the "unusually sluggish" productivity growth. (Despite her comments about the slow growth, Yellen noted the economy "appears to have stepped up" in recent days.) Chair Yellen stated the Fed has begun normalizing the highly accommodative measures it took to boost the economy, has approved four interest rate hikes since December 2015 and begun to reduce its $4.5 trillion balance sheet. She commented that "gradual increases" in the Fed's benchmark rate will be appropriate as the economy continues to recover.

FHFA Increases Conforming Loan Limits
The Federal Housing Finance Agency increased the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2018. The limit for one-unit properties will rise to $453,100, an increase from $424,100 in most of the country. 


ICBA Files Class Action Lawsuit Against Equifax On Behalf Of Community Banks
ICBA filed a class-action lawsuit on behalf of community banks against Equifax Inc. following its recent breach of 145.5 million consumer records and 209,000 payment cards. Bank of Zachary, La., and First State Bank in Barboursville, W.Va., joined ICBA in this suit. The breach has had a  negative impact on the community banking industry and the local customers and communities it serves. ICBA is asking the U.S. District Court for the Northern District of Georgia to require Equifax to compensate affected institutions and to improve its security consistent with federal requirements and industry standards. For details,  review ICBA's press release. ICBA also posted documents at  www.icba.org/srp In a message to community bankers, ICBA President and CEO Cam Fine wrote that the breach will cause long-term damages as community banks implement protections to limit the risk of identity theft and fraud. Fine noted that the breach was the result of Equifax failing to heed warnings from security experts to properly secure its U.S. website.  ICBA has previously called on the credit bureau to immediately notify affected customers and card issuers, and provide ICBA with ongoing briefings regarding the breach's extent. ICBA also released tips for community bankers on how to respond to the Equifax breach and a customizable letter for community banks to inform customers about the breach. ICBA's  lawsuit takes its response to the next level by demanding remedial action. ICBA believes Equifax needs to be held accountable for this massive and preventable catastrophic event to ensure the long-term security of community banks and the friends, neighbors and customers we serve.
  • ICBA will host an audio conference at 2 p.m. (Eastern time) this Friday, Dec. 1, for community banks interested in learning more about ICBA's suit and their litigation options. Registration may be done online or by phone at 888-869-1189.
Update On Recent ATM Hackings
Diebold Nixdorf and some of our sister states' community bank trade associations have provided information regarding recent hackings of ATMs.  While Diebold was the most recent target, other ATMs could obviously be targeted in the future.  Among the items to highlight
  • Attacks have been limited to non-branch machines but have include drive-up island terminals. 
  • Most, if not all, ATM manufacturers ship new machines with a common top-hat key. For example all Diebold units use the same key for entry into the upper portion of the ATM.  There are client reasons for this, serviceability, operational efficiency, etc. 
  • Top-Hats of ATMs are not typically monitored by third party networks and transaction processors. 
  • These attacks took hours to complete as the units can only dispense 50 notes at a time, in some cases we've seen the perpetrators take up to 4-5 hours. 
  • The attackers were dressed to appear to be valid servicers of the ATMs. 
  • Authorities have reportedly apprehended four of the perpetrators in Utah and Colorado.
We are advised there are a number of  technical initiatives underway to address and prevent these kinds of attacks.  In the meantime, banks might consider taking steps to physically control access to the upper compartment of their ATMs, and alarm them to alert to possible compromise.

Quarterly Compliance Webinar
TOMORROW: Thursday, November 30
CSI will host its next complimentary Quarterly Compliance Update Webinar on Thursday, November 30. Click here for registration Link
Speakers will include:
  • Keith Monson, chief risk officer, CSI
  • Ryan Rasske, senior vice president of risk and compliance, American Bankers Association (ABA)
You'll hear an executive summary of FinCEN's final rule, and how -- under the Bank Secrecy Act (BSA) -- it will affect your financial institution. Translation: You'll need to make some changes, including adjustments to your customer due diligence and risk-rating practices, in order to be compliant with the new rule by May 11, 2018.
Save Your Spot to:
  • Review FinCEN's final rule and a helpful timeline for implementation
  • Discuss beneficial ownership requirements
  • Develop new risk-based procedures for conducting ongoing customer due diligence
  • Examine the latest regulatory updates from this quarter
For details, contact Pam Farnsworth:  (800) 545-4274  X: 16053, Pam.Farnsworth@csiweb.com.

Mortgage Update: Re-Fis Down, Newly 
Built Homes Up
According to the Mortgage Bankers Association, total mortgage applications fell 3.1% for the week, which accounted for the Thanksgiving holiday.
Applications to refinance a home loan led the way down, falling 8% for the week, settling at their lowest level since January, and were down 18% percent from a year ago.   Mortgage applications to purchase a home rose nearly 2% last week and were 6% higher than a year ago. While sales of existing homes have been suffering due to a lack of supply, sales of newly built homes have climbed for the second straight month. 

IBANYS identifies offers products and services that provide value to your banks, companies, employees communities. These brief summaries provide links for information. Please contact IBANYS President John Witkowski with questions. 

"Cure The Blue" Helps Banking Industry
Battle Prostate Cancer!
The "Cure the Blue" program sponsored by the Buffalo Bills Alumni Foundation allows New Yorkers to participate in one of the most comprehensive efforts to help promote prostate cancer awareness and research in the United States. September was National Prostate Cancer Awareness Month, and Lake Shore Savings Bank provided prostate cancer literature and Cure the Blue information at all eleven of its branches and their headquarters in Dunkirk. The bank also offered Cure the Blue ceramic lapel ribbon pins for a $5.00 donations to Cure the Blue to all their customers.  "We fully understand the severity of this disease and the devastating effect it can have on families" said Lake Shore Savings Bank President and CEO Dan Reininga. "Our support of the Buffalo Bills Alumni Foundation's "Cure the Blue" initiative is something that we are taking very seriously and are proud to support." Buffalo Bills Wall of Famer and Alumni Foundation President Booker Edgerson, a two time prostate cancer survivor, said the bank has been a tremendous longtime supporter, noting: "They have really stepped up to the plate with their unwavering support of our Cure the Blue initiative." IBANYS urges all of our member banks, associate members and allies to join the effort. Cure the Blue" raises funds and awareness regarding prostate cancer in New York State. Visit curetheblue.com to get involved! Of all new cancer cases in the nation, prostate cancer represents 9.6%. In 2017, estimates are there will be 161,360 new cases, and that more than 26,000 people will die of the disease. Support IBANYS' "Cure the Blue" campaign to help New Yorkers participate to promote prostate cancer awareness and research.

Health & Wellness 
The health and wellness landscape continues to evolve. "My Wellness Resource" can be a nice addition to your existing benefit package.  
C ontact Alan Justin: (716) 907-5500. They also offer  a unique program providing a $500 reba
te on any new Fiat, Chrysler, Dodge, Jeep, Ram or Hyundai vehicle. It may only be offered though individual banks, not through IBANYS itself. If your bank and employees might be interested, drop us a line and we will forward it to Alan Justin, who will reach out to you. I
f you are not currently participating in the My Wellness Resource program, we encourage you to take a fair & objective look at the program!

Secure, Enhanced Internet Presence
The .bank program by fTLD operates trusted, verified, more secure, easily-identifiable internet locations for financial companies and 
customers.  www.icba.org

Online Lending
Excelsior Growth Fund (EGF) is NYBDC's nonprofit Community Development Financial Institution and IBANYS' exclusive online lending partner. Visit 

. . .Arnold & Porter Kaye Scholer
Arnold & Porter Kaye Scholer is a 1,000+ lawyer firm with sophisticated litigation and transactional capabilities, renowned regulatory experience and market-leading multidisciplinary practices in the life sciences and financial services industries. Client-driven and industry focused, their lawyers practice across more than 30 practice areas, including bankruptcy, corporate finance, intellectual property, litigation, real estate and tax, to help clients with complex needs stay ahead of the global market, anticipate opportunities and address issues that impact the very value of their businesses. Their global reach, experience and deep knowledge allow them to work across geographic, cultural, technological and ideological borders, to offer clients forward-looking, results-oriented solutions that resolve their US, international and cross-border legal needs. For more information, c ontact :   Kevin   Toomey, Esq. at 

. . .That according to  the  ATM Industry Association (ATMIA) there are now close to 3.5 million ATMs installed worldwide? Chemical Bank installed the first ATM in the U.S. on September 2, 1969 at its branch in Rockville Centre, New York in Nassau County, Long Island.


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 former 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