July 5, 2018

In This Issue: 
Message From the President

John Witkowski, President & CEO
Reciprocal Deposits Can Help Community Banks Compete:
Here's How Promontory & IBANYS Can Assist ReciprocalDep

Dear New York Community Bankers,

The recent Wall Street Journal headline couldn't be clearer: "The Biggest Banks Are Gobbling Up Deposits." Competition is expected to tighten, especially for retail deposits. Rates are expected to rise. 

Yes, you have your challenges, but I BANYS is here to help.  IBANYS worked hard to get the community bank regulatory relief bill, the Economic Growth, Regulatory Relief, and Consumer Protection Act, passed and signed into law. Now that it is, most reciprocal deposits will no longer be treated by regulators as brokered.

Reciprocal deposits are deposits that a bank receives through a deposit placement network in return for placing a matching amount of deposits at other network banks. Now is the time to:
  • use reciprocal deposits to lock in more low-cost funding and to build more large-dollar relationships. 
  • to grow in profitability and in size.
In effect, reciprocal deposits enable you to get to keep your customer's entire deposit on your bank's books, fending off the competition for them from New York City, North Carolina, a nonbank institution down the street, or on the Internet.

One of IBANYS' key partners, Promontory Interfinancial Network, LLC, is the largest provider, and invented reciprocal deposits sixteen years ago. Today, roughly half of the banks in the country are members of Promontory Network.  Promontory Network offers informational webinars on CDARS and ICS. You can register for these webinars by following the link here. You can also learn more about these webinars by visiting www.promnetwork.com or contacting Kevin Hamilton at (866) 776-6426 ext. 3329 or at khamilton@promnetwork.com.

Try reciprocal deposits. They are at work for thousands of banks around the country. 
They can work for you. 

-- John

P.S. IBANYS is putting the final touches on our 2018 Annual Convention & Trade Show that will take place September 25 - 27 in Albany at the Hilton Albany.  Hotel information is now available and more information will be released soon! We do have one bit of news: New York State Financial Services Superintendent Maria Vullo -- the industry's top state regulator -- will address our conference Wednesday, September 26.

As always, thank you for your support of IBANYS and all you do or community banking.

Remember: IBANYS is YOUR association. Make it work for you!

- John
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2018 Meetings

                                                      2018 IBANYS Annual ConventionConvention

            September 25-27, 2018
                         Hilton Albany
                      40 Lodge Street
                    Albany, NY 12207

                    Hotel Information
A block of rooms has been reserved at the Hilton Albany. Reservations can be made by the following: 

Arrival Date:
 September 25, 2018
Departure Date:  September 27, 2018

           Price of Rooms & Exclusive Deals                    Refer to Group Code:  1IBANY

                      Web:  Click Here                                             Phone:   1-866-691-1183

*More Convention information will be released soon, so watch your emails, Facebook, Twitter, Instagram,& LinkedIn!

Member banks:   Share this information  with your senior management teams, officers, directors, compliance, security and human resources officers.  Preferred providers, associate members and business show exhibitors:  Now is the time to plan to attend, participate, sponsor/exhibit.  Contact Linda Gregware:   lindag@ibanys.net  

Convention Update: DFS Superintendent Vullo To Speak 

New York State Department of Financial Services Superintendent Maria Vullo will address IBANYS' Annual Convention as our luncheon speaker on Wednesday, September 26. The Banking Division of DFS supervises -- through chartering, licensing, registering, and examining safety & soundness, among other actions -- nearly 1,900 banking and other financial institutions with assets of more than $2.9 trillion. The division is composed of the following groups: Foreign & Wholesale Banks, Community Banks & Regional Banks, Licensed Financial Services, and Mortgage Banking.

IBANYS Wraps Up A Busy & Productive First Half Of 2018 Programs

The first six months of 2018 have been among our busiest in memory. We have held educational programs for a wide array of officers, directors and employees of New York community banks. Working with our peer groups, executive committee, and our board and staff, we have designed, developed and held a number of important programs and conferences that have addressed key strategic and operational issues and concerns impacting our banks.
We have welcomed input from our membership as to what topics and issues they want to hear about, and have assembled - in each instance - outstanding groups of speakers, presenters and panelists to provide their expertise and insight.
From February through June, we held regional conferences for our member banks' Human Resources Officers, Compliance Officers, and Security Officers. We held two-day programs for our Lending officers and for the senior executives of our member banks (IBANYS' Banking Executive Symposium, formerly known as our CFO/Senior Executive Conference).
We also hosted CEO Forums to provide informal roundtable discussions for our CEOs to address an agenda they themselves requested.
In addition, we also held our Directors Conference to continue to keep the board members of our member banks fully informed and up-to-date on the responsibilities, opportunities and strategic options they need to know to provide the guidance and leadership their institutions require going forward.
That's a full plate, and our New York community banks responded. In terms of their attendance, participation and feedback, the first half of 2018 was a major success. 
However, there is no rest for the weary, and IBANYS has not slowed down as we prepare for the fall and our signature event of our Association calendar year: Our 2018 Annual Convention & Trade Show, scheduled for September 25 - 27 in our state capital of Albany, New York.

New Feature!
Spotlight Bank of the Week

Spotlight Bank of the Week is a new feature that we have added to our website and e-newsletter. It is an opportunity to promote anything about your organization, such as fun facts, organization news, special events, etc. The Spotlight Bank of the Week will be featured on our homepage slider, e-newsletter, and our social media platforms for one week. So don't miss out on this exceptional opportunity to showcase your bank to thousands of people!

To apply, just fill out our registration form and email it to Natalie Rowan at natalier@ibanys.net.

IBANYS Education/Webinars
IBANYS Webinars

Are you participating in IBANYS' webinars? Your peers are! They provide timely, important information on subjects of interest to New York community bankers. They are valuable not only for their content, but for their convenience. Take part from the comfort and privacy of your office, without leaving the bank.  Our  Webinar Series  offers many topics in the following categories:
  • Audit & Accounting
  • Collections
  • Compliance
  • Directors
  • Frontline & New Accounts
  • Human Resources
  • Information Technology
  • IRA
  • Lending
  • Operations
  • Security & Fraud
  • Senior Management
We are always adding more programs based on needs and requests of our members,
who drive our focus!  Take a look at the various series of webinars we offer by clicking each of the links below.



What the New Law Means for Banks
Thanks to the newly signed regulatory relief bill, most reciprocal deposits are no longer brokered. This comes as banks face intense and increasing competition for deposits.

Join Us for a Webinar
Join Promontory Interfinancial Network-- the nation's leading provider and inventor of reciprocal deposit placement services-- for a free webinar that outlines key provisions of the new law and the impact ICS®, or Insured Cash Sweep®, and CDARS® can have on banks' balance sheets. The webinar will also cover how banks can use ICS and CDARS to capitalize on the opportunities at hand; presenters will discuss cost-effective ways to use the services to attract high-value relationships (even as deposit competition intensifies) and to lock-in more low-cost funding (even as interest rates continue to rise.) This webinar is a "must" for decision-makers at banks of all sizes, especially for community banks that utilize collateralized deposits and/or listing services.

Choose a date and time that works for you!

Government Relations

The 2018 NYS Legislative Session "By The Numbers"
new york state capitol
The New York State Legislature adjourned its regular 2018 session on June 20. According to an analysis by the New York Public Interest Research Group: 
  • The State Senate passed 1,542 bills during the legislative session.
  • The State Assembly passed 11,112 bills.
  • 640 bills were passed in both chambers, which is up nearly six percent from 2017, but is only the fifth most during Gov. Cuomo's eight years in office. 
While there is a possibility the Governor could call a special session at some point later this year to address a specific limited agenda, it is not anticipated that any banking-related legislation would be included.The 2019 legislative session will convene next January.

Meanwhile, according to the National Conference of State Legislators, women currently hold 28 percent of the 213 total seats in the New York State Legislature (there are 150 seats in the Assembly and 63 in the State Senate). That ranks New York 19th highest in the country. Vermont and Arizona rank highest at 40 percent, while Wyoming is lowest at 11 percent. , women currently make up just over a quarter of all state legislative seats in the United States. Of the 7,383 state legislators nationally, 1,876 are women (1.144 Democrats and 705 Republicans). 

Other News From Albany:
State Comptroller: State Not Prepared To Deal With Looming Budget Gaps"DiNapoli

NYS Comptroller Thomas DiNapoli
New York State Comptroller Thomas DiNapoli released  his analysis of the 2018-19 state budget that was negotiated by the Legislature and Gov. Cuomo earlier this year.  The Comptroller said the enacted budget financial plan projects that spending will outpace revenues over the next three years. With potential cumulative gaps totaling $17.9 billion, and that the state is so far not prepared to handle it. DiNapoli noted: "The state ended the last year with the largest General Fund balance in recent years, but continues to face real fiscal challenges. New York's growing out-year gaps, shrinking debt capacity and the lingering threat of federal funding cuts cloud the horizon. Yet, there are no plans to add to our reserves, leaving the state with little cushion in the event of an economic downturn."

Washington, D.C.
Senate Passes Farm BillFarmBill

The U.S. Senate passed its version of the farm bill: H.R. 2, the "Agriculture and Nutrition Act of 2018" with bipartisan support. The vote was 86-11, with Senators Schumer and Gillibrand voting for the bill. Earlier in June, the House passed its version. The House and Senate will begin conference committee negotiations when they return to Washington from this week's congressional recess.  The current bill expires Sept. 30.  ICBA is reviewing both bills and will continue weighing in with Congress. A  new farm bill will provide producers and community banks greater certainty to plan their businesses over the next five years. ICBA  has urged Congress to maintain commodity price protections and a strong crop insurance program, support the bill's guaranteed farm loan limit increase, and opposes new Farm Credit System lending powers -- and IBANYS has advocated for those positions in meetings with members of our New York congressional delegation.

Message To Treasury: Don't Expand Postal Banking ServicesPostal 

ICBA has called on the Treasury Department's special task force on postal reform to recommend prohibiting an expansion of banking services at the U.S. Postal Service. The request follows an ICBA-supported letter to Treasury from House Financial Services Committee Vice Chairman Patrick McHenry (R-N.C.) noting that Congress in 2006 barred the Postal Service from offering new, non-postal services. ICBA said financial services are best provided in a competitive, private, and free marketplace so they can openly and efficiently benefit customers. They also cited the Postal Service's $5.6 billion net loss in fiscal 2016, $121 billion in unfunded liabilities, and massive 2014 data breach affecting nearly 1 million customers, concluding: "The Postal Service's inability to manage its own primary business of selling postage and delivering mail suggests it is ill-equipped to handle any banking function."

Busy July For Senate Banking Committee

Kathy Kraninger (left) & Jerome Powell (right)

The Senate Banking Committee will hold a hearing July 19 to hear from Kathy Kraninger, President Trump's nominee to head the Bureau of Consumer Financial Protection (formerly the CFPB). Kraninger, who is currently the Office of Management and Budget's program associate director for general government, would replace acting director Mick Mulvaney (who is also OMB Director) if confirmed by the Senate. There will also be a Committee hearing July 12 on credit bureaus, and Federal Reserve Chairman Jerome Powell delivers his semiannual report to the Committee on July 17. 

New Leadership Likely In Two Key Banking Committees

Regardless of who wins control of the House and Senate in November's midterm election, there could well be a changing of the guard in the chairmanship of  the House Financial Services Committee and Senate Banking Committee when the new Congress begins in 2019. The Financial Services Committee will definitely have see new leadership. Chairman Jeb Hensarling (R-TX) is not seeking reelection. If the GOP retains control, numerous Republicans will be in the mix for the position. If Democrats win the House, the chair's gavel would likely go to Rep. Maxine Waters, (D-CA), the Ranking Democrat. In the Senate, even if the  GOP keeps the majority, the Senate Banking Committee could also see new leadership as current Chairman Mike Crapo, R-ID) may pursue chairmanship of the Senate Finance Committee now led by the retiring Sen. Orrin Hatch (R-UT). Among the leading contenders would be Sen. Pat Toomey (R-PA). If the Democrats take the Senate, current Ranking Member Sherrod Brown (D-OH) may be next in line if he wins reelection.

Last Congressional Race Now Finalized
In the 23rd Congressional District (Western NY), the only cliffhanger race from last week's congressional primaries ended. Max Della Pia has conceded the Democratic primary to Tracy Mitrano,  a retired university administrator, attorney and cyber security specialist who  also has the Working Families Party line. She will face Rep. Tom Reed, who has held the seat since 2010 and serves on the powerful House Ways & Means Committee.

View the full summary
of all New York primary results. 

Industry Trends & Updates
SBA, Independent Study Differ On Small Business 
Investment, Employment

Small Business Administration Chief Linda McMahon said this week that small businesses in the U.S. are investing and filing once-vacant jobs as a result of President  Trump's tax
Small Business Administration Chief Linda McMahon
cuts. Her comments came despite a report by human resources firm Paychex that found a decline in hiring last month, and  that annual wage growth for small business employees moderated. Paychex added that in June that t he Small Business Jobs Index decreased 0.2 percent, while the pace of annual wage growth fell to 2.47 percent, or 64 cents an hour.  "Despite the tightening labor market conditions, we're seeing only modest levels of wage growth," said Martin Mucci, Paychex president and CEO. "With the unemployment rate at historic lows, we'd expect to see accelerating wages in this type of employment market."

DFS Encourages New York Banks to Provide Banking Services for 
Regulated Medical Marijuana and Industrial Hemp BusinessesDFSMedMar

Governor Cuomo announced further action to support the development of medical marijuana and industrial hemp businesses in New York. He directed the State Department
Governor Cuomo
of Financial Services (DFS) to provide 
guidance to support the safe and sound provision of banking services for these businesses. The DFS guidance, issued this week, advised New York's chartered institutions that it will not impose any regulatory action on any New York State chartered bank or credit union for establishing a banking relationship with a medical marijuana-related business that operates a compliant business in New York, as long as the New York State chartered bank or credit union complies with the requirements of: 
  • The 2014 Financial Crimes Enforcement Network guidance;
  • The guidance and priorities set forth in the Department of Justice's 2013 memorandum from Deputy Attorney General James M. Cole; and 
  • Is subject to the institution's own evaluation of the risks associated with offering products and services and its ability and systems to effectively manage those risks - as all DFS-regulated institutions do with regard to all their banking relationships. 
DFS Superintendent Maria T. Vullo
DFS Superintendent Maria T. Vullo said:  "DFS stands ready to work with our chartered institutions to assist them in moving forward towards helping New York's medical marijuana and industrial hemp businesses operate in a safe and sound manner. New York's financial institutions should provide banking services to these legal businesses, in accordance with established principles and procedures, including customer due diligence and transaction monitoring. In this way, New York's businesses can operate more effectively under the law to serve New Yorkers." Lt. Governor Kathy Hochul added: "We're cutting the red tape and removing regulatory barriers to support businesses in the legal cannabis industry. Today's action to encourage banking relationships will go a long way to assist this emerging sector of our economy." Read the press release.

Mortgage Applications Drop, Led By Re-Financings

The Mortgage Bankers Association of America (MBA) reported that total mortgage application volume last week decreased 0.5 percent on a seasonally adjusted basis compared with the previous week.  Volume was 13.5 percent lower than the same week one year ago.  Applications to refinance a home mortgage fell 2 percent for the week and were 28 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 37.2 percent of total applications from 37.6 percent the previous week. Mortgage applications to purchase a home rose 1 percent for the week but were 1.4 percent lower than the same week one year ago. The only gains were in FHA purchase applications. FHA loans are government-insured and offer lower down payment options to buyers with weaker credit scores.

It's Nomination Season For FHLBNY Board Seats:
Deadline Is July 31
The Federal Home Loan Bank of New York (FHLBNY) is soliciting nominations for candidates to serve on its Board of Directors for terms commencing January 1, 2019. Five Directorships are up for election this year: 
  • One seat representing the FHLBNY's New York members 
  • Two representing the FHLBNY's New Jersey members 
  • Two Independent Directorships representing the whole District. 

The FHLBNY's official Certificate of Nomination was sent to members June 29, 2018. 

  • Eligible stockholders may use the Certificate to nominate one person for each of their respective state's open Member Directorships. 
  • Individuals interested in being nominated for the two open Independent Directorships must first submit an Independent Director Application Form to the FHLBNY. 

All Certificates of Nomination and Independent Director Application Forms are due at the FHLBNY by 5:00 p.m. ET on July 31, 2018. For details on the election and a list of key election dates, visit http://www.fhlbny.com/corporate-governance

Banking News
Online Lending

Excelsior Growth Fund (EGF) is NYBDC's nonprofit Community Development Financial Institution and IBANYS' exclusive online lending partner. Their  mission is to help businesses in New York, New Jersey and Pennsylvania grow by providing small business loans and advisory services. As a nonprofit organization and a U.S. Treasury-certified Community Development Financial Institution  (CDFI) , they're a responsible lender you can trust. Their  products are affordable and flexible, and their advisory services can help you reach your business goals. Their signature product, the EGF SmartLoan™, provides up to $100,000 through a streamlined online platform.  Loans are approved in 1-2 days and funded in a week.  For more details, please visit: http://excelsiorgrowthfund.org/egf_smartloan/ 

Spotlight Bank of the Week

James Cook, First President of BSNB
n 1839, along with being the County seat, the community of Ballston Spa boasted 10 well-known hotels, multiple mills and factories, a courthouse and prison, numerous stores and mechanics' shops, three churches, a school, a library and two printing offices. All this presented a great need for a community bank in Ballston Spa, which prompted James Cook and 12 additional well-regarded members of the community to pursue the creation of The Ballston Spa Bank. The first organizational meeting was held on December 8, 1838 and the bank officially opened its doors to customers on May 15, 1839.
Original Office, 87 Front Street, Ballston Spa, NY
Through the Civil War, two world wars, the Great Depression and more, the bank, now known as Ballston Spa National Bank, or BSNB, has been a stalwart in the community, helping thousands of businesses and individuals reach their financial goals. The institution's ability to remain viable and strong through the ups and downs has helped everyone from companies and professionals reach greater success, to allowing individuals to see their dreams of home ownership or other aspirations come to fruition.
Corporate Plaza, 2011
Today, BSNB strives to develop strong relationships with customers by providing customized solutions and exceptional service and support.  Whether at one of thirteen convenient branch locations or at a client's home or office, we spend the time to better understand needs and to make the experience an easy one. As a community based bank, decisions are made locally by bankers who live and work in the many towns and cities that comprise the greater Capital Region of New York state. Likewise, the deposits that we safeguard and help grow are reinvested in this area to help strengthen the local economy and community. 
Annual Community Service Day
And while we prefer doing business face to face, we also offer customers a number of automated delivery channels and services to make busy lives run smoothly.  Whether searching for information on our website, or utilizing online banking or cash management services, we know customers find these and other solutions convenient and valuable.
In addition to our customer service commitment, BSNB is also focused on giving back and strengthening local communities
Annual Community Service Day
through our Volunteers in Action Program, Community Service Day, and through financial contributions by the company and the BSNB Charitable Foundation.  Through these efforts, we strive to make a positive difference each and every day.
To learn more about BSNB, please visit www.bsnb.com. To become part of BSNB's online community, please follow us on www.facebook.com/YourBSNBwww.twitter.com/BSNB, or www.linkedin.com/company/ballston-spa-national-bank

IBANYS Spotlight Is On...


Accounting Firm/Consultant/Technology Services: Risk Management Services, Bank Audit & Tax. Wolf & Company, an IBANYS preferred partner, provides advisory and risk management services to clients. Expertise includes IT risk assessments, customer information privacy reviews, application and network security reviews, internet intrusion studies, war dialing and social engineering. The firm's Regulatory Compliance group guides clients through the myriad of federal and state banking statutes from an operational and legal perspective. 

For more information, contact:

Gerald R. Gagne, Director, Risk Management Services

IBANYS Endorsed Services
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.

Health & Wellness

My Wellness Resource & TELADOC

The health and wellness landscape continues to evolve. "My Wellness Resource" can be a nice addition to your existing benefit package. 

Teladoc can save your banks time and money, and provide real value to your employees as this testimonial from a New York community bank CEO proves:
"I wanted to let you know that some of our employees and I have been using "Teladoc" and it is one of the best things we have done for the bank. We all love it: We are saving time, avoiding waiting in an urgent care center or a doctor's waiting room for non-emergency related illnesses . . .and it is easy to use and convenient. Once you use it, you are hooked! This was a great find! Would recommend it to all banks."

Mario Martinez 
Chairman & CEO
Catskill Hudson Bank

Contact Alan Justin: (716) 907-5500. 

"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.  Lake Shore Savings Bank has 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, there were an estimated 161,000 new cases, and more than 26,000 fatalities due to the disease. Support IBANYS' "Cure the Blue" campaign to help New Yorkers participate to promote prostate cancer awareness and research.

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 

Did You Know?

 . . . That  in 1974, when IBANYS was established, the banking industry was regulated  
at the state level, by: 
  • The New York State Banking Department (which merged with the State Insurance Department to create the Department of Financial Services (DFS)
. . .and, at the federal level, by: 
  • The Federal Reserve
  • The FDIC
  • The OCC
  • The Federal Home Loan Bank Board (which was replaced by the Office of Thrift Supervision in 1989, and merged into the OCC in 2011)
Quiz: Do you know what FIRREA stood for? How about FDICIA? Do you know the year each was in the news?

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

John J. Witkowski
President & Chief Executive Officer

Stephen W. Rice
Director of Government Relations & Communications

Linda Gregware
Director of Administration & Membership Services

William Y. Crowell III
Legislative Counsel

Natalie Rowan
Marketing & Social Media Assistant