October 21, 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.

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The President's Message By John Witkowski, President & CEO   Congress is in the home stretch before leaving Washington for the election. Treasury Secretary Mnuchin and House Speaker Pelosi have been trying for more than 90 days to negotiate an agreement on the next coronavirus package that would have the support of the House, the Senate and the administration. Our Washington section provides updated details. An important note: IBANYS is joining with ICBA to urge all New York community bankers to contact their local Members of Congress regarding the deduction of Economic Injury Disaster Loan (EIDL) advances from PPP loan forgiveness -- and, to encourage their local small business owners to do the same. While borrowers may receive up to a $10,000 EIDL advance, those funds will be deducted from PPP loan forgiveness, leaving some borrowers with a substantial unforgiven balance that must be repaid. Please visit ICBA's "Be Heard" grassroots action center (www.icba.org)to reach out to Congress today on this important issue. Governor Cuomo this week extended the eviction moratorium for commercial tenants through Jan. 1, aligning the extension deadline with the protections for residential tenants and homeowners. We have more details in the Albany section of today's newsletter. PPP webinar available for download. Community bankers can download a recording of yesterday's complimentary ICBA webinar on the PPP and other key issues. During the webinar, ICBA staff experts discuss streamlined PPP forgiveness procedures, ICBA advocacy on EIDL advances, and more. ICBA separately released a summary of recent PPP guidance on simplified forgiveness processes, EIDL guidance, and an extended deferral period for borrower payments. Download the webinar. ********** Please watch for IBANYS' dues renewal notices soon -- outlining our 2020 activities, our 2021 objectives and our fiscal and financial update.

WEBINARS

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.  Click for full list of webinars

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IBANYS Preferred Partners & Associate Members

Barret Crisis Leadership Virtual Training Take your bank to the next level, Crisis Leadership gives you the tools to help your institution in creating a culture equipped to handle ANY crisis.... be it biological, economic, or weather related.   Click here to learn more & register

FedNow Pilot Program In recent weeks, several questions were raised about the FedNow Pilot Program. Please see the release below issued today by the Federal Reserve.   There are links in the release that provide additional information. Please note, the deadline to submit the Expression of Interest Form is November 16th. Read more here

Promontory Interfinancial Network is now IntraFi Network   New name, same great company   We are delighted to announce that we are changing our company name from Promontory Interfinancial Network to IntraFi NetworkSM.   We chose IntraFi Network because it describes what we do while still emphasizing our most differentiating characteristic: the network and all that can be accomplished within it. Think same great company, same great network, fewer syllables. As part of our rebranding effort, we’re also anchoring all of our existing products under the IntraFiSM corporate brand. The products themselves will work as they always have. Only the names will change. The alphabet soup of corporate acronyms and long names (e.g., CDARS®, ICS®, IND®, and Insured Overnight Funding®) will be consolidated into two main groups: IntraFi FundingSM and IntraFiSM Network DepositsSM. Additionally, Promnet Repo® will be IntraFi RepoSM.  The implementation of new logos and text references will occur over a long transition period. Our email addresses will remain the same – at least for now; we will let you know, with plenty of notice, when a switchover to @intrafi.com email addresses occurs. Our phone numbers, our mailing addresses, and our headquarters location in Arlington, VA will not change. You can read more about these changes at intrafi.com/lp/promontory-network-is-now-intrafi-network/.

Albany Update

Governor Cuomo has extended the eviction moratorium for commercial tenants through Jan. 1, which aligns the extension deadline with the protections for residential tenants and homeowners. The measure extends protections already in place for commercial tenants and mortgagors in recognition of the financial toll the pandemic has taken on business owners, including retail establishments and restaurants. The Governor first announced a State moratorium on residential and commercial evictions on March 20 for a period of 90 days to ensure no tenant was evicted during the height of the public health emergency. The commercial eviction and foreclosure moratorium was extended through August 20, September 20 and October 20 by Executive Order. The Governor signed the Tenant Safe Harbor Act on June 30 which became effective immediately and extended the eviction moratorium for tenants until the Emergency expires. Read the Governor's Executive Order Here . . . State Comptroller DiNapoli reported the state's tax receipts are nearly $3 billion off from where they were this time last year, as the pandemic's toll on the state budget continues. New York is seeking billions of dollars in aid from the federal government to cover a mutli-year budget shortfall. Tax revenues in September reached $8.8 billion or $922.3 million higher than projections by the governor's budget office. However, sales tax revenue last month was down by $88 million compared to last year, a decrease of 5.4 percent. That's the lowest monthly drop since the fiscal year started on April 1. DiNapoli noted: “COVID-19 had a significant negative effect on the first half of the state’s fiscal year. . .Washington must get its act together and help states and local governments weather this economic storm. The state Division of the Budget’s mid-year Financial Plan update and the official start of next year’s budget process in early November will provide a clearer picture for policymakers as they prepare to address our budget shortfall.” With Election Day less than two weeks away, the next legislative session would seemingly have to reconvene as a "lame-duck" post-election session. IBANYS expects the Legislature to consider additional forbearance legislation for residential investment properties and commercial retail space mortgage payments. IBANYS opposes the legislation, and is working with the Legislature and the NYS DFS. To access the legislation, and IBANYS' Memo in Opposition: Click here to read the legislation. Click here to read IBANYS Memo in Opposition. The major focus of the Legislature will be on the state's financial and fiscal situation. Governor Cuomo continues to hope for eventual federal assistance, but the Legislature may explore other options to raise revenue, including eliminating the rebates the state currently provides on stock transfers; enacting higher income taxes on those with more than $1 million in annual income, and creating a new tax on super wealthy people with more than $1 billion in assets. There is also talk of the “pied-à-terre” property tax surcharge on qualifying non-primary residences within the state. https://www.natlawreview.com/article/covid-19-real-estate-revival-new-york-pied-terre-tax;

Washington Update

Treasury Secretary Mnuchin and House Speaker Pelosi continued to talk in efforts to reach agreement on another coronavirus package in advance of Election Day. However, a number of key components remain unresolved, including liability protections for businesses, funding for state and local governments, language on health care spending and COVID-19 testing provisions. President Trump urged negotiators to "go big or go home," but also expressed his doubts of reaching a deal. Senate Majority Leader McConnell advised the White House not to strike a deal with Speaker Pelosi before Election Day, cautioning against reaching an agreement that most Republicas cannot accept. The Senate may yet take up a "narrow" package to provide about $500 billion for hospitals, schools, and an extension of enhanced unemployment insurance benefits and PPP funding. That is very unlikely to pass in the House.   IBANYS is joining with ICBA to urge all New York community bankers to contact their local Members of Congress regarding the deduction of Economic Injury Disaster Loan (EIDL) advances from PPP loan forgiveness -- and, to encourage their local small business owners to do the same. While borrowers may receive up to a $10,000 EIDL advance, those funds will be deducted from PPP loan forgiveness, leaving some borrowers with a substantial unforgiven balance that must be repaid. Visit ICBA's "Be Heard" grassroots action center (www.icba.org)to reach out to Congress today on this important issue.   ICBA released a summary of recent Paycheck Protection Program guidance, including a simplified forgiveness process and guidelines on Economic Injury Disaster Loan advances.The document details the simplified Form 3508S application and instructions for borrowers with PPP loans of $50,000 or less; An SBA update to its frequently asked questions on the extended deferral period for borrower payments on PPP loans, and SBA's announcement that lenders can now see if the agency will deduct an EIDL advance from final forgiveness payments. ICBA continues to offer aguide on SBA lien requirementsrelated to EIDLs and additional information on the federal pandemic response on its COVID-19 frequently asked questions. ACCESS ICBA SUMMARY   ICBA and IBANYS have urged policymakers to advance the economic recovery despite the stalled negotiations, noting bipartisan "Paycheck Protection Small Business Forgiveness Act (H.R. 7777/S. 4117) to simplify PPP loan forgiveness will help small businesses dedicate more of their resources to paying workers and supporting local economies. ICBA (and IBANYS) have urged Congress to pass legislation to simplify forgiveness for loans of $150,000 or less. (The SBA recently announced a simplified process for loans of $50,000 or less.) Community bankers are urged to call their members of Congress and enlist the support of small-business contacts on behalf of a standalone PPP forgiveness reform bill. ICBA's "Be Heard" grassroots action center includes call alerts for small-business owners and community bankers on behalf of legislation to forgive PPP loans of $150,000 or less. COMMUNITY BANK ALERT; SMALL-BUSINESS ALERT   The FDIC issued an interim rule adjusting regulatory asset thresholds for community banks to mitigate costs from their sizable Paycheck Protection Program lending. The interim final rule allows community banks to use their 2019 asset sizes for 2021 auditing and reporting requirements under Part 363. It will help up to 290 community banks avoid new regulatory costs caused by PPP lending—including 156 that have crossed the $500 million asset threshold, 107 at $1 billion, and 27 at $3 billion. As ICBA said in letters to Congress and federal regulators since August, the surge of PPP loans has swelled the balance sheets of community banks, inadvertently subjecting them to additional supervision, regulations, and costs.   IBANYS has previously urged New York Congressional Delegation To Support PPP Changes. As the stalemate between Congress and the Trump administration regarding the next coronavirus legislative package continues, IBANYS has written to the New York Congressional Delegation (and shared the letter with members of the NYS Legislature as an FYI) urging support of a number of important changes ICBA has suggested be made to the Paycheck Protection Program. Read IBANYS' letter to Congress. Read IBANYS letter

Additional Information

News Release 2020-137 | October 20, 2020 Agencies Finalize Rule to Reduce the Impact of Large Bank Failures   Joint Release Board of Governors of the Federal Reserve System Federal Deposit Insurance Corporation Office of the Comptroller of the Currency   The federal bank regulatory agencies today finalized a rule to limit the interconnectedness and reduce the impact from failure of the largest banking organizations. The final rule is substantially similar to the proposal announced last year and complements other measures that the agencies have taken to limit interconnectedness among the largest banking organizations.   U.S. global systemically important bank holding companies, or GSIBs, as well as U.S. intermediate holding companies of foreign GSIBs, are required to issue debt with certain features under the Federal Reserve Board’s “total loss-absorbing capacity,” or TLAC, rule. That debt could be used to recapitalize the holding company during bankruptcy or resolution if it were to fail.   To discourage the largest banking organizations from purchasing TLAC debt, the final rule prescribes a more stringent regulatory capital treatment for holdings of TLAC debt. The regulatory capital treatment in the final rule will help to reduce the interconnectedness between the largest banking organizations and, if a GSIB were to fail, reduce the impact on the U.S. financial system from that failure.   This rulemaking also includes a revision to the Federal Reserve Board’s TLAC requirements that will require GSIBs to report publicly their outstanding TLAC debt.   The final rule is effective on April 1, 2021.   Related Link Final Rule (PDF)