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Community bank advocacy successes at half-year mark

A new Main Street Matters blog post from ICBA President and CEO Rebeca Romero Rainey highlights the significant advocacy successes ICBA and community bankers have achieved halfway through 2025.

In the message to community bankers, Romero Rainey cites ICBA successes related to the confirmation of Michelle Bowman as the Federal Reserve’s vice chair for supervision, the Consumer Financial Protection Bureau’s delayed compliance of its 1071 small-business reporting rule, the bureau’s motion to vacate its 1033 rule on consumer data security and privacy, and President Donald Trump signing of a resolution to overturn the CFPB’s final rule limiting overdraft services.

Romero Rainey details what these wins mean for community banks while noting that ICBA continues working to advance other important issues, such as curbing mortgage trigger leads, bolstering rural lending, addressing check fraud, and revising the deposit insurance framework.

ACB worked closely with ICBA legislative staff on each of these successes.

Source: ICBA

Hill pledges to work with Fed’s Bowman to support community banks

House Financial Services Committee Chairman French Hill (R-Ark.) congratulated Michelle Bowman on being named Federal Reserve vice chair for supervision and said he looked forward to working with her on banking issues.

In his opening remarks during the Federal Reserve’s semi-annual monetary policy report hearing, Hill said: “Governor Bowman has been a tireless advocate for community banks, and this committee is eager to work with her on policies that enhance our banks to provide greater access to capital and services for our families and businesses across our land.”

In remarks outlining a fresh approach to the agency’s supervision and regulation following her confirmation as vice chair for supervision, Bowman announced plans for a conference on community bank issues later this year, with an emphasis on listening to community banker input on streamlining regulation and supervision.

Source: ICBA

Fed must right-size regulations

Senate Banking Committee Chairman Tim Scott (R-S.C.) said the Federal Reserve must right-size the regulatory framework to eliminate unnecessary burdens, especially for community banks.

In his opening remarks during a hearing featuring Fed Chairman Jerome Powell’s semiannual monetary policy report to Congress, Scott said the Fed should end politicization in bank supervision, increase transparency, and ensure future capital rules don’t choke off access to credit.

Powell said his regulatory agenda includes work on capital standards, the rating system, merger policy, stress testing, and updating the discount window technology.

Source: ICBA

Executive orders could affect community banks

The latest Independent Banker magazine spotlights how some of the more than 100 executive orders President Donald Trump has issued thus far this year could affect the nation’s community banks.

In the article, ICBA Vice President of Operational Risk and Cybersecurity Policy Anjelica Dortch writes that areas to watch include EOs on community development financial institutions, trade and tariffs, agency restructuring, and secure payments of benefits.

The magazine is available on the Independent Banker website and via the digital edition. Community bankers also can subscribe to Independent Banker’s newsletter to receive the magazine via email. 

Source: ICBA

Powell backs crypto activities

US banks have the Federal Reserve's support as they study the stablecoin space.

Federal Reserve Chairman Jerome Powell applauded Congress' recent progress on a stablecoin framework  and showed support for banks' involvement in digital assets in congressional hearings June 24 and 25.

"Our view is that banks get to decide who their customers are — that's not our decision," Powell told the House Financial Services Committee. "So banks are free to provide banking services to the crypto industry, to crypto companies, and banks are also free to conduct crypto activities, as long as they do so in a way that is protective of safety and soundness."

Powell also addressed reputational risk, which the Fed said is removing from exams, joining the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency (OCC).

The Fed's move followed Treasury Secretary Scott Bessent's remark in April that he had "previously asked each of the bank regulators to consider removing reputational risk as a basis for supervisory criticism." Powell said it was under consideration for a while.

"We just think it's the right thing to do," Powell said. "This is a problem that we came to understand as a problem over the course of the last couple of years and actually began considering what's going on here. We're hearing a lot of reports of debanking and that sort of thing and, over the course of really 2024, came to the view that this was a serious problem we need to address."

To make actual changes in supervision on reputational risk and other factors in the future, Powell said newly confirmed Vice Chair for Supervision Michelle Bowman will be able to engage well with examiners because of her experience in bank regulation and supervision.

Source: S&P Global Market Intelligence

Alternative collection of Tax ID Numbers

The Financial Crimes Enforcement Network (FinCEN) issued an order permitting banks to collect Tax Identification Number information from third parties rather than from bank customers.

Under the Customer Identification Program (CIP) rule, which was implemented in 2003 under the USA PATRIOT Act, banks are required to collect a full Tax Identification Number—generally a Social Security number—from U.S. customers prior to opening an account.

Issued in conjunction with the FDIC, OCC, and National Credit Union Administration, FinCEN’s new order authorizes alternative collection of Tax Identification Numbers for banks that otherwise comply with the CIP rule. The exemption is optional and does not change the underlying requirement that banks have risk-based CIP procedures that enable them to form a reasonable belief they know the true identity of each customer.

FinCEN Director Andrea Gacki said the new exemption is designed to reduce burdens for covered institutions by providing banks with greater flexibility in determining how to fulfill their regulatory obligations without presenting a heightened risk of money laundering, terrorist financing, or other illicit finance activity.

Source: ICBA

An article from SouthState Bank

Bank Tools For Predicting the Future

“Many bankers are struggling to analyze the current business environment and need help predicting the future. Community bankers are especially concerned about economic forecasts such as GDP, interest rates, inflation, consumer and business demand, and default rates".

In this article by Chris Nichols, Director of Capital markets at ACB associate member SouthState Bank, he discusses "five ways to apply psychological thinking in your community bank strategy and analysis for predicting the future".

Click here to learn more.

Source: SouthState Bank

CDFI Fund's future hinges on bipartisan support

Advocates of Community Development Financial Institutions (CDFIs) are trying to convince a bipartisan coalition in Congress to keep funding and staffing levels intact after President Donald Trump proposed cuts.

The federal CDFI Fund's $324 million appropriation for fiscal year 2025 is set to expire at the end of September, and Trump has proposed cutting $291 million from the fund in fiscal year 2026. Trump also issued an executive order in March calling for the fund to eliminate non-statutory functions and personnel, sparking fears of impending staff layoffs.

The industry's response to the order has been forceful, however, with letters of support for the CDFI Fund from the Conference of State Bank Supervisors, the National Association of State Credit Union Supervisors and 23 Senators, including Arkansas Senator John Boozman, and also including both members and non-members of the Senate CDFI caucus.

For now, the wave of support appears to have held any staffing cuts at bay, Jeannine Jacokes, CEO of the Community Development Bankers Association (CDBA), said in an interview. In late March, the Treasury Department issued a statement affirming that the CDFI fund and related programs are statutorily authorized. The statement also said that senior Treasury leadership has consistently expressed support for CDFIs, that the CDFI Fund is operating normally and that Treasury does not anticipate any disruptions.

"People in Treasury told us that they heard from offices all over the Hill," Jacokes said. "House and Senate, both Democrats and Republicans. ... The bipartisan support that CDFIs have built over many years seems to be holding strong."

Source: S&P Global Market Intelligence

Check fraud prevention flyers available to oder

Th ICBA is offering check fraud prevention flyers that community bankers can distribute to their customers.

Developed by ICBA and the U.S. Postal Inspection Service, the in-branch educational materials offer step-by-step instructions to help consumers safeguard their financial assets and respond if they experience check fraud. ICBA member banks can use this form to order copies of the flyer from ICBA.

ICBA in February announced the partnership, which also includes a customizable news release available on ICBA’s Marketing Resource Center. The ICBA website features additional community banker resources on fraud and scams, including guides on check fraud and a prevention tip sheet.

Source: ICBA

Agencies warn of Iranian cyber threat

The Cybersecurity and Infrastructure Security Agency and other agencies warned that Iranian cyber actors may target vulnerable U.S. networks.

The joint fact sheet details the need for increased vigilance for potential cyber activity against U.S. critical infrastructure by Iranian state-sponsored or affiliated threat actors.

The Department of Homeland Security last week said that because of ongoing conflict in Iran, low-level cyber-attacks against U.S. networks by pro-Iranian hackers are likely.

Source: CISA

Ultimate Guide for Bank Directors

The Ultimate Guide for Bank Directors provides bank directors with the knowledge and insight necessary to perform their fiduciary responsibilities conscientiously and effectively. Written by two former bank regulators, the guide is a concise reference for understanding complex banking rules and regulations governing the industry to support board members or bank executives who aspire to become a director.

Source: ICBA