May 12, 2021
IBANYS Weekly E-Newsletter
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The President's Message
By John Witkowski, President & CEO
The 2021 session of the New York State Legislature is scheduled to adjourn June 10. With just these few weeks left in the session, we still have some very important issues/bills we need to oppose on behalf of New York community banks, to ensure that our voices are heard. We are in a difficult situation, as the Governor no longer has veto power (Senate and Assembly Democrats now hold "supermajorities" that can override any veto), so these bills can be passed without any opposition or help from the Governors' office.

The most important is bill S.1762-A/A.5782, to create a state/public bank. This would have a big impact on community banks as access to municipal deposits would dry up. In our Albany section of today's newsletter, we provide details on this legislation, and we include our Memo in Opposition. We urge you to contact your local State Senators and Members of Assembly to express your opposition to this legislation. Here is IBANYS' Memo in Opposition.

Please read the memo, and then contact me with any questions.

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Many of you recently participated in IBANYS' conference calls with members of the New York congressional delegation and our U.S. Senators. We described community banks' vital role as "the economic first responders" during the pandemic, providing essential support for small businesses, homeowners, consumers and their local communities in general. We also discussed several federal issues with them. Here is a link to the issues we discussed: with details on some of those priorities.

  • We encourage you all to follow up these discussions by emailing or calling those we met with. Please use this list to make your contacts:

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You are also invited to join the New York State Department of Financial Services’ webinar series for banking institutions on the physical risks related to climate change in New York and the Northeast. The first webinar will cover several climate-related physical changes that are likely to occur in the region such as flooding, extreme precipitation, snowfall, extreme temperature, and drought. The second webinar will focus on coastal risks, such as sea level rise, hurricanes, and coastal storms. The webinars will be led by Mark Lowery, the Assistant Director of the New York State Department of Environmental Conservation’s Office of Climate Change.

Session 1: Overview of Physical Risks from Climate Change in New York and the Northeast – May 24, 2021, 1 - 2pm

Please register here with Password ClimChg052421

Session 2: Coastal Risks from Climate Change in New York and the Northeast – May 26, 2021, 1 - 1:45pm

Please register here with Password ClimChg052621
With any questions, please contact Yue (Nina) Chen, Ph.D.
Director of Sustainability and Climate Initiatives 
New York State Department of Financial Services
One State Street Plaza, New York, NY 10004+1511
Cell: 518-530-3475 |

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One last note: The FDIC has published its 2021 Risk Review, a comprehensive summary of emerging risks in the U.S. banking system. The 2021 Risk Report summarizes conditions in the U.S. economy, financial markets, and banking sector, and presents key credit and market risks to banks. Click on the link above to review the review. The FDIC has also appointed Zunera Mazhar Deputy Director of the Office of Innovation. Mazhar will guide the FDIC’s work to promote the adoption of innovative technologies within the agency and across the financial services sector.

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As always, thank you for all you do every day for your customers, your communities and our industry. . . and, of course, for our industry and IBANYS!
Having the privilege to meet the Loan Review & Stress Testing needs of over 100+ Institutions, CEIS Review is uniquely positioned to gain insights on market activity covering several geographical areas, portfolio profile types, and regulatory agencies’ concerns.
After reviewing and analyzing the results of CEIS engagements over a quarterly period, we identify emerging trends among commercial loan portfolio behaviors, as well as any heightened concerns from regulatory agencies.

Covered in This Release:

  • More notable Bank examiner concerns in 2021
  • Modest to moderate increase in criticized & classified loan levels
  • An emphasis on adhering to the documented credit policy
  • Loan and lease analysis by state
Genesis PPG helps you simplify and streamline your payroll process so you can spend more time running your company. With Genesis PPG, you get the flexibility and control of a powerful enterprise payroll system combined with personal service from experienced, local professionals who know you and your business.

Genesis PPG is also a leading provider of merchant services sponsored by Wells Fargo Bank and powered by First Data, the world’s largest processor of Visa, MasterCard, Discover, and Amex. Our company is constructed of highly experienced sales, customer service, and technical support staff. We offer a wide variety or payment solutions and product such as credit card processing, gift card processing, check conversions, cash advances, and e-commerce gateways. Our goal is to offer the best service and support for our clients at the lowest possible cost.

Our company history.

At the turn of the century, several former bank regulators recognized the need for a technology solution that would enable banks across the country to connect, working together to offer services that were otherwise too difficult or too costly for each to offer individually — a network that would benefit all.By asking the simple (yet powerful) question — What can we do to help community banks be more competitive? — the founders of IntraFi created the spark that started this journey.

Since its founding, IntraFi’s services have helped banks to attract billions of dollars in deposits from thousands of businesses, nonprofits, government entities, and individuals. Billions of dollars have been channeled back into communities through local lending initiatives. Local lending initiatives have financed businesses, infrastructure improvements, municipal services, education, and other important activities. Such activities have created jobs and fueled economic growth across communities throughout the nation.
Prior to 2003, many large-dollar depositors, such as public entities, institutional investors, and nonprofits, were reluctant to deposit their cash at small banks because those deposits were only eligible for $100,000 of FDIC coverage; they feared losing money if their bank failed. In effect, small banks were often penalized for their size on the mistaken belief that small automatically meant risky.

This all changed with the launch of the first “reciprocal deposit” placement service — CDARS® — in 2003 with just 50 banks. Later, another such service called ICS®, the Insured Cash Sweep® service, launched in 2010. These two services, along with Insured Network Deposits® (launched in 2006) and Insured Overnight Funding® (launched in 2019), have changed the way financial institutions manage their balance sheets and access funding of all types and durations.

Today, IntraFi Network is home to the largest banking network of its kind and is a trusted partner —one chosen by more than 3,000 financial institutions over the years. Membership has grown significantly — the network now encompasses 50% of all banks in the U.S. (96% of which are community banks), 71% of all Community Development Financial Institutions (institutions that serve the nation’s most underserved communities), and 57% of minority-owned banks.

Moving forward, IntraFi will continue to focus on innovation and bringing new ideas to help meet the evolving demands of the banking industry. The all-weather technology solutions we develop will continue to help banks of all kinds to meet their needs — no matter the environment.

Read more about the company’s long-standing commitment to banks, the advantages it can offer, and its uniqueness compared to other service providers.
News from ICBA
Munis for the many
Taxable municipal bonds have appeal for nearly all community banks.
By Jim Reber
I have some good news for community bank portfolio managers who have grown weary of some or all of the following conditions that have persisted since 2020:
  • declining portfolio returns
  • erratic cash flows
  • call option exposure
  • paltry yield spreads

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. 
Subscription Tokens
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How does it work:
Tokens can be used to purchase live or recorded webinars anytime, with no expiration! Tokens for both live and recorded webinars are available for an additional fee. (What’s the difference? Click here for the full description.)
Once you have your Subscription Token code, you can immediately register for webinars by using the code at checkout! (Subscription tokens not applicable for full series registrations, or other specials.)
Albany Update
Legislative Activity

The New York State Legislature is scheduled to adjourn its 2021 session on or about June 10, and in the few weeks remaining a number of key issues with the potential for significant impact on New York community banks remain unresolved. IBNYS is actively making our position known to the leadership and members of the Senate and Assembly -- and we need you to contact your local legislators to do so too.

  • New York State Senate Banks Chairman James Sanders wants to change how municipalities do their banking under his “New York Public Banking Act” (S1762A/A5782). IBANYS is strongly opposed to this legislation. Here is our Memo in Opposition. We need your help in reaching out to your local state senators and Members of Assembly to express your opposition. This legislation ( would amend the banking law, the state finance law and the general municipal law to establish the ‘New York public banking Act’." It is intended to lay down the regulatory framework for municipalities to create local public banks, to extend and expand access to communities of color in the post-COVID-19 economy. IBANYS has discussed with Chairman Sanders the possibility of using alternative and existing methods -- such as existing “tools” like MDIs, CDFIs, the NYS Business Development District/BDD Program and others -- more effectively to achieve the bill's objectives, without creating an additional layer of unfair competition for community banks. 

  • Chairman Sanders also has introduced legislation (S.670) that would allow credit unions, savings banks, savings and loans associations and federal savings associations to accept and secure deposits from municipal corporations. Read IBANYS' Memo in Opposition here.

  • Another bill introduced by Chairman Sanders (S.191 (Sanders) would allow credit unions to participate in the State's Linked Deposit Program. Read the legislation here. IBANYS is opposing this legislation, as we have successfully done in previous years. Read our Memo in Opposition. Read IBANYS' Memo in Opposition here.

We need your help in reaching out to your local state senators representatives and opposing these bills. Here is the NYS Assembly Directory: . . . here is the NYS Senate Directory:

We are in a difficult situation, as the Governor no longer has veto power (both the Senate and Assembly Democrats have "supermajorities" that can override his veto), so these bills can be passed without any opposition or help from the Governors' office. Together, let's make the voices of New York's community banks heard in Albany.

Most Recent Legislative Activity: Here is the latest committee activity and here is the latest legislative activity for the current period:

Please also see earlier committee agendas and bill activity here. . .here.
Washington Update

  • IBANYS' grassroots "congressional calls" with key and new members of our New York Congressional Delegation was a success. See list. New York community banks discussed our positive economic impact, saving thousands of local small businesses and jobs throughout our state. We told telling our stories of how New York community banks stepped up and provided vital assistance to their local small businesses and consumers -- literally savings thousands of jobs, keeping businesses open, helping home owners keep their homes through mortgage forbearance and other means, and much more. We met with key New York Representatives on the Financial Services, Small Business, Ways & Means and Agriculture Committees and their top staff, and with Senator Schumer's and Gillibrand's offices and reviewed our the top federal issues and priorities. Now, it's time to follow-up with these offices. Use this directory list to contact we met with and continue your discussions.

  • The U.S. Senate voted to repeal the OCC’s “true lender” rule last night by a 52-47 margin. The ICBA-supported OCC rule creates a standard to determine when a bank is the “true lender” when partnering with a third party. Under the rule, banks are deemed true lenders if they fund the loan or are named as the lender in the loan agreement on the origination date. The House still has to vote on this resolution to repeal if “true lender” is to be changed. ICBA and other groups recently told Congress  they oppose legislative efforts to repeal the OCC’s “true lender” rule.

  • ICBA's Mutual Council and America’s Mutual Banks urged the OCC to suspend the sale of Brainerd Savings and Loan Association assets to Wings Financial Credit Union until all freedom of information requests have been considered, writing: “Without careful consideration by the OCC of the pending transaction, which is expected to close by May 31, this transaction would have extremely negative consequences for the future of all federally chartered mutual banking organizations, their depositors, and the communities they serve.” 

  • ICBA voiced its opposition to an Administration proposal, which would impose new bank IRS reporting requirements on customer bank accounts, in a joint letter to the Senate Finance Committee ahead this week's hearing. President Biden’s $1.8 trillion American Families Plan proposes that financial institutions report to the IRS on bank account flows of customers related to investments and business activity, according to statements from the White House a and Treasury Department. ICBA Position: Community banks already conduct substantial reporting. Any new reporting requirements would impose cost and complexity without a justifiable benefit. ICBA called for a cost-benefit analysis before adopting new requirements, which could carry privacy and fairness implications for account holders. READ ICBA LETTER

  • ICBA wrote to the National Credit Union Administration to express its concerns regarding an advanced notice of proposed rulemaking, which would simplify risk-based capital requirements for complex credit unions with assets of $500 million or more. Background: The ANPR seeks to provide two alternatives to the adoption of risk-based capital requirements.Alternative one introduces a simple leverage ratio with capital buffers in stages for credit unions that engage in more risky activities, including certain asset concentrations and carrying mortgage servicing rights. Alternative two seeks to adopt the community bank leverage ratio currently available for certain community banks without full adoption of Basel III. ICBA Position: The NCUA should, at minimum, implement the risk-based capital framework for complex credit unions before allowing simple alternatives, which community banks have had to comply with for years. The alternative allowing for a simple leverage ratio with additional buffers is akin to the current risk-based net worth ratio, which if adopted would essentially bring complex credit unions back to a net worth calculation and avoid risk-based capital entirely, ICBA wrote.

  • ICBA is encouraging community bankers to call on Congress to hold hearings on credit union acquisitions of taxpaying community banks. Taking Action: ICBA’s Be Heard grassroots action center makes it easy for community bankers to contact their members of Congress. New Acquisition: ICBA last week renewed its call for policymakers to investigate credit union acquisitions of community banks following the purchase of a $1.6 billion community bank in Jonesboro, Ga., by a Florida credit union with more than $10 billion in assets. ICBA Advocacy: ICBA continued its call for Congress to hold hearings on this trend and to request a GAO study on the evolution of the credit union industry and National Credit Union Administration supervision. Next: Community bankers can continue the campaign against the credit union tax exemption at this month’s ICBA Capital Summit, which is set to livestream April 27 with remarks from top policymakers and virtual meetings with congressional offices. CONTACT CONGRESS

  • A recent op-ed follows last week’s American Banker op-ed from ICBA President and CEO Rebeca Romero Rainey urging Congress to hold hearings and request a GAO study on the evolution of the credit union industry.  Community bankers can use ICBA’s Be Heard grassroots center to urge Congress to hold hearings on credit union acquisitions and National Credit Union Administration oversight. Contact your local Representatives and make your voice heard!

  • CFPB proposal targets COVID-impacted mortgages . . .ICBA thanked the Consumer Financial Protection Bureau for its proposed rule, which frees small servicers from additional regulatory burden as they work with COVID-affected borrowers to evaluate their loss mitigation options to avoid foreclosures when possible. Background: The proposal extends the temporary COVID-19 emergency pre-foreclosure period until Dec 31, 2021 and would permit mortgage servicers to offer certain loan modifications to impacted borrowers. The bureau is also weighing whether there are instances in which a proposed restriction may be waived, provided the servicer has completed a proper loss mitigation review and concluded they are ineligible for a non-foreclosure option. More: ICBA urged the bureau to coordinate its requirements with other agencies and not to become overly prescriptive with servicer requirements, which could raise servicing costs and negatively impact borrowers. ICBA also asked for an exclusion to the requirements for abandoned properties and where it is likely that that an extended foreclosure moratorium could result in the degradation of a property’s value.

  • The USDA announced the appointment of Kate Waters as press secretary in the Office of Communications. Eddie Shimkus and Laura Driscoll were named legislative advisors in the Office of Congressional Relations, and Jon Hurst was named special assistant in the Office of the Deputy Secretary.