July 22, 2020
IBANYS Weekly E-Newsletter
  • Visit our website at www.ibanys.net to review all our daily updates on COVID-19 beginning on March 16.
The President's Message:
IBANYS News and Updates
By John Witkowski, President & CEO

As we continue to re-open NYS, we see the better part of our country is in a state of unrest. NYS state has now closed off travel from 31 states or you have a 2 week quarantine once you deplane at any NYS airport. Legislation, regulation, politics, are all over the place and everyone has an opinion. We are in different times (and the change has been quick) so at IBANYS we are adapting to the change by creating and hosting a “Virtual” Convention this fall.
The 2020 IBANYS “Virtual” Annual Convention is tentatively scheduled for Wednesday, September 30 – Friday October 2, 2020.
We are working on the agenda and have confirmed several of the speakers. The sponsors for this event have been very generous. If you would like to be a sponsor, please contact me at johnw@ibanys.net or 518-436-4646 for details. Banks register for one price and the event will be open for all bank employees. Look for more details as we move into August.
IBANYS continues to maintain open communication and providing information to help our community banks and their customers.
Stay safe and healthy and and look for more information to come to arrive in your email! 

As New York community bankers continue to reopen their lobbies and branches (with safeguards in place to keep their staff and clients safe and healthy as we adjust to the “new normal”) and while others take a more guarded approach, IBANYS continues to gather and disseminate to banks information on reopening and operational strategies and updates from the regulatory agencies and other resources.
If you have information you would like to share or have a comment about the newsletter, please email me at johnw@ibanys.net .

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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IBANYS Preferred Partners & Associate Members
The NextGen Scholarship is Back!
The LEAD FWD Summit is Sept. 21-22 and offered in virtual format
Due to the success of last year's NextGen scholarship program, we are excited to announce that ICBA is once again offering this exciting scholarship opportunity for our state association friends.
With the ICBA 2020 NextGen Scholarship you have an opportunity to award one community banker from your membership a fully-paid scholarship to ICBA's virtual leadership conference, the 2020 LEAD FWD Summit (Sept. 21-22).
This is your scholarship to award to a deserving community banker in your state! We’re thrilled to assist you in further engaging the future of our industry and we’re delighted to partner on this NextGen Scholarship opportunity. For more details, including how to participate, please refer to this informational brief and our ICBA State and Regional Partner web page where you will find customizable promotional tools and assets.  
Best Community Banks to Work For nominations due
Nominations for Independent Banker magazine's second annual Best Community Banks to Work For awards are due this Friday, July 24. The December issue will celebrate community banks that go above and beyond to create a fulfilling work environment for employees. Submit nominations.

Ready to run
After a lag, prepayments are primed to take off.
By Jim Reber
If you are inclined to read bond analysts’ research reports, eventually you’ll chance upon some commentary that addresses the performance of mortgage securities. To many of the uninitiated, which I pointedly state do not include community bankers, mortgage-backed securities (MBS) are an abstract collection of investments that have long maturities and a volatile series of principal paydowns. They seem to require a lot of effort and are only marginally tethered to the housing finance market in general. Read full article below.

Albany Update
Legislature In Session
The State Legislature is back in session, attempting to address a wide range of bills that have been stalled for months during the ongoing COVID-19 pandemic. What will not be decided: How New York will manage its massive shortfall in tax revenue, a result of coronavirus-induced shutdowns and the economic damage suffered from the pandemic. June tax receipts were down 17% from the previous year and the statewide unemployment rate is at least 14%, with New York City set to bleed a half million or more jobs.
The Legislature may consider additional forbearance legislation, including A.10532A, Bichotte that would address forbearance of residential and commercial investment property mortgage payments. IBANYS is opposing the legislation and working with the Legislature and the NYS DFS.
Bill Would Limit Businesses Coronavirus Liability
Legislation has been introduced by Republican State Senator Daphne Jordan that would limit the civil liability for businesses and workers who unknowingly spread the coronavirus. The bill comes amid a broader debate on the federal level. 
IBANYS Working With DFS On Mortgage Forbearance "FAQ" Document
IBANYS has asked the NYS Department of Financial Services to develop and provide a "FAQ" document on the mortgage forbearance issue. DFS has indicated that the document will be finalized and released soon.
Washington Update
Congress Turns Focus To Next Economic Stimulus Package
IBANYS and ICBA are urging community bankers to use ICBA's  Be Heard grassroots action center  to weigh in with recommendations. We are encouraging Congress to advance a more straightforward approach to PPP loan forgiveness, capital, accounting, and tax relief. ICBA also offers a sample press release and op-ed on PPP efforts on its  Tell Your Story toolkit . IBANYS has co-signed a letter written by ICBA to congressional leadership with the following list of recommendations that community banks want included in the next legislative package.
  • Simplified Forms and Procedures for Paycheck Protection Program Loan Forgiveness (strong support for S. 4117),
  • SBA Purchase of Residual PPP Loans at Par,
  • Preserving Expense Deduction for PPP Borrowers,
  • Enacting Bank Capital and Accounting Relief measures,
  • Liability Protection for businesses from COVID-19 related lawsuits,
  • Support Agricultural Lending,
  • Expanding Employee Retention Tax Credit,
  • Industrial Loan Company Moratorium,
  • Mortgage Lending
  • Support for Local Regions,
  • Financial Assistance to the Farm Sector, and
  • Enhancing USDA Guaranteed Lending Programs.
Meanwhile, Rep. Stefanik(R-North Country) urged Senate Majority Leader McConnell to back aid to New York's state government as well as the local governments that have been financially battered by the coronavirus pandemic.
House Action On Beneficial Ownership
The House voted 336-71 to include ICBA-advocated "beneficial ownership" disclosure relief in the 2021 National Defense Authorization Act. ICBA and other groups this week  called on House leaders to approve the amendment to create a secure registry at the Financial Crimes Enforcement Network and require certain small businesses to disclose their beneficial owners when they are formed or there is a change in ownership structure. ICBA has long sought to relieve community banks of collecting this information as part of broader reforms outlined in its BSA/AML reform white paper. ICBA-advocated legislation to institute the reforms—the Corporate Transparency Act (H.R. 2513)—passed the House in October.

Fed Nominees Approved By Committee
The Senate Banking Committee approved the nominations of Judy Shelton and Christopher Waller to be members of the Federal Reserve Board. Judy Shelton, who has argued in favor of the gold standard and questioned the central bank's political independence, was approved by a 13-12 party line vote, while Christopher Waller, a St. Louis Fed economist, was approved by an 18-7 vote. The committee votes advance the nominations to the full Senate.

ICBA Seeking ILC Grassroots Outreach
ICBA continues calling on community bankers to  urge their senators  to co-sponsor legislation to close the industrial loan company loophole. The  customizable message  on ICBA's Be Heard grassroots action center notes that ILCs pose a significant risk to the financial system and should be regulated like other banking institutions. The Eliminating Corporate Shadow Banking Act (S. 2839) would subject ILCs to the Bank Holding Company Act.
ICBA recently  called on  the FDIC to deny Rakuten Bank America’s resubmitted ILC application and  urged the agency  to strengthen its proposal to enhance oversight of ILC parent companies.
Through its  "Wake Up" campaign , ICBA will continue encouraging policymakers to open their eyes to the risky practices, costly tax subsidies, and irresponsibly lax oversight of tax-exempt credit unions.
Additional Information
News Release | NR 2020-98 July 22, 2020
WASHINGTON—The Office of the Comptroller of the Currency (OCC) today published a letter clarifying national banks' and federal savings associations' authority to provide cryptocurrency custody services for customers.

National and state banks and thrifts have long provided safekeeping and custody services, including both physical objects and electronic assets. The OCC has specifically recognized the importance of digital assets and the authority for banks to provide safekeeping for such assets since 1998. In the letter published today, the OCC concludes that providing cryptocurrency custody services, including holding unique cryptographic keys associated with cryptocurrency, is a modern form of traditional bank activities related to custody services. Crypto custody services may extend beyond passively holding "keys."

"From safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers today," said Acting Comptroller of the Currency Brian P. Brooks. "This opinion clarifies that banks can continue satisfying their customers' needs for safeguarding their most valuable assets, which today for tens of millions of Americans includes cryptocurrency."

The OCC also recognizes that, as the financial markets are increasingly digitized, the need will increase for banks and other service providers to leverage new technology and innovative ways to serve their customers' needs. By doing so, banks can continue to fulfill the financial intermediation function they have historically played in providing payment, lending, and deposit services.

Today's opinion applies to national banks and federal savings associations of all sizes and is consistent with a number of states which have already authorized state banks or trust companies to provide similar functions.

Media Contact
Bryan Hubbard
(202) 649-6870

Related Link


News Release | NR 2020-97 July 20, 2020
Bulletin | OCC 2020-70 July 20, 2020
On July 20, 2020, the Office of the Comptroller of the Currency (OCC) signed a proposed rule to determine when, in the context of a partnership between a national bank or federal savings association (bank) and a third party, the bank makes a loan and is the "true lender." Under this proposal, a bank makes a loan and is the "true lender" if, as of the date of origination, the bank (1) is named as the lender in the loan agreement or (2) funds the loan. The proposed rule would provide certainty about key aspects of the legal framework that applies to loans made as part of banks’ relationships with third parties. The deadline for comments on the proposed rule is September 3, 2020.
Note for Community Banks
The proposed rule would apply to community banks.
Banks’ lending relationships with third parties, such as marketplace lenders, can be effective tools to facilitate access to affordable credit. However, these relationships have been subject to increasing uncertainty about the legal framework that applies to loans made as part of these relationships. This uncertainty may make banks and third parties less willing to enter into relationships, limit competition, and chill the innovation that these partnerships enable—all of which may restrict access to affordable credit. 
The proposed rule would resolve this uncertainty by specifying that a bank makes a loan when, as of the date of origination, the bank (1) is named as the lender in the loan agreement or (2) funds the loan.
Further Information
Please contact Andra Shuster, Senior Counsel, Karen McSweeney, Special Counsel, Alison MacDonald, Special Counsel, or Priscilla Benner, Senior Attorney, Chief Counsel’s Office, (202) 649-5490.
Jonathan V. Gould
Senior Deputy Comptroller and Chief Counsel
Related Link