IBANYS Weekly E-Newsletter | | |
I. This Friday, IBANYS (along with Bankers Cooperative Group and Nonstop Health) are hosting a 30 minute Zoom call on Healthcare funding for banks. Here are the details for registration.
"30-Minute Executive Briefing: A Better Healthcare Funding Strategy for Banks"
-- via Zoom, Friday, Sept. 25.
There is a better way to fund your employer-sponsored health plan. Join IBANYS, Bankers Cooperative Group and Nonstop Health for a 30-minute executive briefing this Friday, September 25 at 11:00 a.m. via Zoom. We will dive into a funding strategy that slashes fixed premiums and gives employees a $0-deductible experience—without the volatility of traditional self-insurance or the administrative burden of an HRA. Click here to register. The Agenda will include:
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What is alternative funding? Discover how modern strategies protect your bank's bottom line by ensuring your healthcare dollars are working harder for your team’s actual care and well-being—turning a traditional expense into a managed asset.
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The MERP (Medical Expense Reimbursement Plan): Think of a MERP as a financial bridge. You buy a significantly lower-premium plan and use the savings to cover the deductibles for your staff. Your employees pay $0 upfront out-of-pocket.
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Why banks? Community banks have the ideal profile for a MERP. We’ll show you how to recapture overpaid premiums to stabilize your year-over-year costs and deliver platinum-level benefits.
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Proof in the numbers: We’ll share a case study of a New York employer that reduced their total current healthcare spend by 6.49% while offering a $0-deductible plan.
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A quote: We’ll show you how to get a side-by-side comparison using your upcoming renewal or last year’s renewal data to see exactly how much your bank can save. Click here to register.
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II. IBANYS has announced a strategic partnership with KreditIQ, Inc. – a developer of an agentic AI platform for commercial loan underwriting. KreditIQ becomes an IBANYS associate member and preferred solutions partner and will work with us to bring governed agentic underwriting capability to member institutions through education programming, member briefings, and structured evaluation support. KreditIQ will streamline the commercial loan process for community banks, helping banks reduce the time spent reviewing loans while staying directly involved in the review. They can be a genuinely valuable tool for community banks throughout their loan decisioning process. Contact me (Johnw@ibanys.net) or KreditQ CEO Mike Persichini (mike@kreditiq.ai) with any questions.
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The Federal Reserve Bank of New York announced an election will be held to choose successors for the Class A and Class B director roles. The terms of those two current directors -- Class A director John H. Buhrmaster, Chairman and Chief Executive Officer of 1st National Bank of Scotia (an IBANYS board member and Past Chairman) and Class B director Arvind Krishna, Chairman, President and Chief Executive Officer of IBM -- will expire December 31, 2026. Both were elected by member banks in Group 3 (member banks with capital and surplus of $40 million or less) and their successors will also be chosen by this Group.
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The latest Independent Banker magazine details how ICBA helped to ensure the 21st Century ROAD to Housing Act included important community banks provisions. The article in the September Independent Banker notes that after the Senate stripped out House-passed community banking provisions, ICBA pushed back to ensure lawmakers included the policies in the final legislation, which became law in July. The magazine is available on the Independent Banker website and via the digital edition.
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The FDIC’s national rates and rate caps for savings accounts, interest checking accounts, money market accounts, and CDs have been updated and are available on the FDIC website.
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Treasury’s Office of Cybersecurity and Critical Infrastructure Protection issued an alert on artificial intelligence-related threats in an alert to financial institutions.
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When a Critical Vendor Goes Dark, Is Your FI Ready?
Author: Steve Fochler
When TruStage shut its network down in July after a cybersecurity incident, the outage became its clients' problem immediately. This article walks through how a vendor outage spreads financial, compliance, and operational risk across an institution, what to do while the vendor is still down to protect consumers and keep a defensible record, and the contract terms and tabletop work that should happen before the next one.
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When Your AI Can't Show Its Work, You Own That Lending Risk
Author: Rafael DeLeon
Lenders are running AI well past back-office compliance work — underwriting, pricing, fraud detection, origination. But under ECOA and Regulation B, "the model said so" isn't a reason you can give an applicant or defend to an examiner. This piece covers why "black box" AI is a lending liability, what changed with the April 2026 model risk guidance and the new GSE requirements, and what a defensible documentation standard actually has to include.
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How AI Could Reshape the Mortgage Market
Artificial intelligence is poised to transform the mortgage industry, from streamlining the refinancing process to changing how investors assess prepayment risk. In this article, Andrea F. Pringle, Senior Vice President at The Baker Group, explores how greater borrower efficiency could reshape the mortgage market—and what it may mean for MBS investors.
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2027 Tax Battle Looming
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The nonpartisan think tank Citizens Budget Commission (CBC) has released a new study that found New York State and its localities collected the most taxes per capita in the nation. The report, based on data collected in 2024, comes as a debate over raising taxes on wealthy people and large corporations is expected to dominate the legislative session in Albany next year, when the tax fight is expected to be more protracted as the left presses for more funding to help NYC Mayor Mamdani’s policy proposals, and bolster the state’s social services.The CBC report concluded: “Increasing its already nation-leading taxes will not make New York more competitive...It may well do the opposite, making it less attractive to some by further driving up New York’s high cost of living and doing business.”
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Regulatory Matters
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Gov. Hochul floated the possibility of exploring “AI kill switches” as New York prepares to begin registering major artificial intelligence developers this fall ahead of a state safety law taking effect Jan. 1. She said the state will look at additional ways to build on the RAISE Act including examining AI “kill switches.” The idea remains preliminary: “All options are on the table.” “No commitments at this time.” https://www.amny.com/politics/hochul-floats-ai-kill-switches-new-york-law/. Hochul said the state will research possible safeguards as it develops proposals for her next State of the State agenda (if she is reelected).
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Acting NYS DFS Superintendent Asrow spoke at a stablecoin event this month and highlighted the importance of collaboration in regulating stablecoins. DFS is responsible for regulating virtual currencies, and the state’s regulatory framework for stablecoins “has been regarded as a model for other jurisdictions, reflecting its commitment to advancing the digital asset space while ensuring consumer protection.”https://cryptonews.net/news/legal/33453519/
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Political & Economic Notes
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A new Siena Poll of likely New York State voters released today found Democratic Gov. Hochul leading her GOP challenger, Nassau County Executive Bruce Blakeman in the gubernatorial race by a margin of 50-41%. Siena pollster Steven Greenberg noted: “At this time four years ago, Hochul led Lee Zeldin 17 points,54-37%, before going on to win by six points.” Hochul’s favorability rating was 48-46%, and her job approval rating was 48-47%. Blakeman had a 35-34% favorability rating. The poll also found: 1) Democratic Attorney General Letitia James leading her GOP challenger Saritha Komatireddy by 52-39%; 2) Comptroller Tom DiNapoli leading Republican Joseph Hernandez 56-33%; 3) In the generic congressional ballot, Democrats lead Republicans by 51% to 40%; 4) Voters said the state is headed in the wrong direction, not the right track, 49-38%, while an even larger majority, 66-28%, said the country is headed in the wrong direction. 5) President Trump’s favorability rating was 34-63% and his job approval rating was at 35-62%. https://sri.siena.edu/2026/09/23/siena-poll-of-likely-new-york-state-voters-hochul-50-blakeman-41/
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An on-demand recording of last week’s third-quarter ICBA Community Bank Briefing webinar is now available. The quarterly session featured updates from ICBA President & CEO Rebeca Romero Rainey and members of ICBA’s Government Relations team, and highlighted the recent Clarity Act vote and other digital asset developments, as well as the congressional outlook, regulatory relief efforts, and more. Access the on-demand briefing.
Congressional News
The House is gone until post-election in mid-November. The Senate, as of now, is scheduled to remain in session through September.
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In a newly released interview, ICBA President and CEO Rebeca Romero Rainey shared the importance of getting digital assets legislation right to protect community lending. Appearing on 535 News, she said language in the Clarity Act would harm community bank lending, which is why ICBA has fought to ensure the bill includes a robust prohibition on stablecoin yield. She also discussed ICBA efforts to ensure community bank regulatory relief provisions were included in the recently enacted 21st Century ROAD to Housing Act and to raise awareness of credit union tax, regulatory, and reporting exemptions.
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Sen. Katie Britt (R-Ala.) introduced legislation to update asset-based thresholds in federal banking law. The Tailoring and Indexing Enhanced Regulations (TIER) Act would make a one-time adjustment to certain key statutory thresholds to reflect historical economic growth, then it would establish a process for periodically updating covered thresholds going forward. Britt said the TIER Act builds on the provisions included in the ICBA-supported Main Street Capital Access Act, which was passed by the House in July. https://www.icba.org/p/icba-community-bank-briefing-q3-2026
Regulatory Notes
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After the Clarity Act vote failed in the Senate, the SEC and CFTC issued rules to benefit crypto firms and software. The SEC’s “Innovation Exemption” exempts tokenized securities venues from the definition of “exchange” under the Exchange Act to facilitate on-chain trading of certain tokenized stocks. The CFTC issued a no-action position for the benefit of providers of passive software and will not take enforcement action against any such provider for failure to register as an introducing broker or associate. Read what SEC Chairman Paul Atkins said.
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The Starling Advisory Group, an independent group retained by the Federal Reserve, released a preliminary report regarding the 2023 failure of Silicon Valley Bank (SVB). It includes findings on the vulnerabilities at SVB that were (or ought to have been) known to Fed supervisors, unsubstantiated claims that social media fueled the run on the bank, and a culture of hesitancy across the Fed’s supervisory system. Fed Vice Chair/Supervision Michelle Bowman said the Fed’s supervisory staff should have known about SVB’s vulnerabilities as early as March 2022 but did not take prompt and decisive action. In May, the FDIC published a staff study of deposit flows at the three banks, including SVB, that failed in the spring of 2023.
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In a Wall Street Journal op-ed (subscription required), Fed Vice Chair/Supervision Bowman wrote that “CECL has failed community banks” and urging the Financial Accounting Standards Board to let smaller banks return to the incurred-loss method for loan-loss reserves. https://www.wsj.com/opinion/how-to-make-life-hard-for-small-banks-0a9c5a19. The CECL standard requires banks to reserve for a loan’s lifetime losses at origination rather than once losses become probable. Bowman said the standard’s costs are largely fixed regardless of bank size while banks that needed more reserves raised them by only 5% on average:
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The FDIC board proposed reforming the process by which it reviews merger transactions under the Bank Merger Act, including accounting for credit union member shares.
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The FDIC proposed a rule that says out-of-state, state-chartered banks can engage in interstate activities under the same standards that apply to national banks. Comments on the proposal must be received within 60 days of publication in the Federal Register. The FDIC proposal is a response to Illinois’ Interchange Fee Prohibition Act, which requires credit card companies to waive swipe fee collections on taxes and tips. The Illinois General Assembly in June voted to delay implementation of the law by a year. Read ICBA’s national news release on the Illinois law earlier this year.
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The Conference of State Bank Supervisors released a supervisory resource to support state examiners in assessing the use and risks of artificial intelligence at state-chartered banks and state-licensed nonbank financial institutions.
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The FDIC released the results of its annual survey of branch office deposits for all FDIC-insured institutions. It provides deposit totals for each of the more than 75,000 domestic offices operated by more than 4,200 FDIC-insured institutions, with data up to date as of June 30.
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