August 10, 2022
IBANYS Weekly E-Newsletter
Have you registered yet for IBANYS' Executive Bank Symposium -- September 12- 14 in beautiful, charming, historic Lake George, NY? It's open to all C-level, Sr. Management and Bank Boards and all IBANYS associate and preferred providers. This event is all new — new agenda, new format, new
location! Join us in the beautiful Adirondacks for three interactive discussions on the economy by Marty Mosby, Managing Director, Bank Advisory & Strategic Services, Stifel.  We'll also enjoy golf; a tour of Fort William Henry; a trip aboard the Island of Narrows Cruise on Lake George . . .or, just explore on your own.  We look forward to seeing you in Lake George. See below in today's newsletter for program details and registration information.
New York State has lost a congressional seat through reapportionment: The delegation will be 26 members starting next year, down from 27. As many as nine seats could be up for grabs between Democrats and Republicans in this midterm election year. . .and, there are several very contested primaries, and two August 23 special elections in the Hudson Valley and Western New York, that could offer a preview for November. “City & State” has reviewed at every congressional district in the state to preview both the primaries, and what could lie ahead for the general. The information is updated as of Aug. 8.
. . .Meanwhile, with Congress out for its August recess (although some legislative action continues) ICBA's updated  Meetings on Main Street” guide  can help community bankers host members of Congress this month.  ICBA’s guide  provides a step-by-step process for scheduling, conducting, and promoting in-district meetings with members of Congress, including community bank visits by lawmakers and staff.  ICBA also offers:  A recent  Independent Banker magazine  article on making lasting personal connections with lawmakers; A  “Public Opinion of Community Banks  dashboard featuring national and state-level polling data on local banking, and its third-quarter  Advocacy in Action”  government relations dashboard with updates on top advocacy priorities. Here's how to find your federal and state legislators to arrange discussions/meetings:
Three recent articles of note caught my attention: 1) “Big tech” is building a "passwordless" future, and some banks want to join in.  A vast majority of IT leaders at banks reportedly want to eliminate passwords for" something better and safer," and many tech vendors are moving in that direction already. . .however, this American Banker article notes  that may be easier said than done.   Read story → 2) As the industry manages high turnover, more companies are expressing dissatisfaction. Among firms that switch to a new bank, the previous bank’s lack of knowledge about their business is an increasingly common reason, according to a recent survey. Read story → 3) As the fintech marketplace expands, offering an array of services traditionally provided by physical banks, the role of community banks has remained key in providing for small businesses and individual customers within localized areas. “Community banks provide essential services to the SME marketplace. We take a look at their future within fintech." “Community banks also often provide lending facilities to those who may not qualify with big banks, based on the more standardized criteria used.”
The Alternative Reference Rates Committee released a survey seeking information on lender and borrower plans to remediate USD LIBOR loans.  The survey asks about steps already underway and plans going forward to move to new rates or to update fallback language prior to June 30, 2023.  The ARRC asks respondents to enter their responses into the spreadsheet and to submit by email to the ARRC secretariat by Sept. 7.
The CFPB scheduled two upcoming events to begin discussing the technical implementation of its Section 1071 small-business reporting requirements.  The agency will host a virtual session at 1:00 p.m.  Friday, Aug. 19, and an in-person session at 1:00 p.m. Thursday, Sept. 15,  at its Washington, D.C. headquarters.  Both will be targeted toward in-house technologists at financial institutions and their compliance vendors, and will focus on how the CFPB builds regulatory compliance technology systems, such as data submission platforms. The CFPB recently confirmed in a court filing that it plans to issue a final rule implementing Section 1071 requirements by March 31, 2023. 
Click here to download the detailed brochure and registration information.

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IBANYS Executive Bank Symposium - Sept. 12-14, 2022
This year's meeting will bring a new look to IBANYS Executive Bankers Symposium. New Venue in beautiful, historic, charming Lake George; New Format will have roundtable, interactive discussions on three important topics community banks face today: 1.) Economic Conditions, 2.) Strategy and 3.) Fintech. New Agenda has one topic each day for a 2.5 hour session starting Monday after lunch, Tuesday morning and Wednesday morning. Each session will be interactive with a roundtable discussion moderated by IBANYS. A great time to share your views, hear thoughts from your colleagues and fellow bankers and gain insight from our subject matter experts on each topic.

Attendees have time to explore beautiful Lake George on Tuesday afternoon on their own or join your colleagues with activities planned by IBANYS. It will be a great time.

All C-level suite, Senior Management and Bank Boards are encourage to attend.

Please join us as we “Wave” Goodbye to Summer & “Fall” Into Fall.
CECL Coffee Talk Q&A Session
August 12 at 10am ET
QwickRate® is hosting a monthly Q&A session on all things CECL. Join QwickRate President Shawn O’Brien and QwickAnalytics Director of Analytics Steve Huntington, along with special guest panelist Joshua Bowen, CPA, CGMA, CAMS, CITP of the Warren Averett accounting and consulting firm, on Friday, August 12 at 10am (Eastern). They’ll address the latest questions and concerns they're hearing, clarify misinformation, and then open things up for an audience Q&A. Any banker can attend, whether you use our CECLSolver tool (part of QwickAnalytics) or not. Save your spot.

Webinar Q2 Analysis: Perspectives and Concerns
August 16 at 2pm ET
We can never know for certain what's ahead. As challenges arise, will your bank be in a position of strength to meet them? Join QwickRate as they host a webinar reviewing Q2 analysis, trends and results for the nation’s community banks on Tuesday, August 16 at 2 pm (Eastern). QwickRate President Shawn O’Brien and IntelliCredit Principal David Ruffin will use QwickAnalytics® to share where your peers and competition performed well and where they struggled—so you can better assess your bank’s position today and prepare for the unknowns ahead. Register Now.
Financial Institutions Face Regularly –
Part One: Saving Money
By Les Anderson Chief Growth Officer engage fi (formerly CU Engage)
The one-on-one relationship between a financial institution and the consumer isn’t disappearing, but the connection has evolved. It is filled with digital capabilities and requires a careful balance of the right infrastructure to exceed consumer expectations and the institution’s financial security.

Join ICBA and community bankers at ICBA LIVE 2023 in Hawaii to think big, sharpen your competitive edge, network, and see what is just over the horizon for the community banking industry


  • The State Division of Budget is projecting billions of dollars in gaps -- an estimation that revenue from taxes will not be enough to meet spending expectations and an acknowledgement the state's economy is likely sailing into headwinds. Last April, Gov. Hochul and legislators had the rare luxury of a budget surplus to spend, boosted by federal aid and increased taxes on the wealthy. Now, with an economic downturn potentially looming, alarm bells are ringing. The Citizens Budget Commission noted: "It significantly changes the discussion because the financial plan was balanced over the next four years which was a great thing for the state. This changes that discussion. "

  • Some voters in New York's 23rd Congressional District will be voting in two congressional races on Aug. 23.   Read More

  • ICBA’s call for policymakers developing new crypto rules to prioritize national security protections made headlines in American Banker (subscription required).   The article cites   ICBA’s push   for policymakers to collaborate on a clear regulatory framework for digital assets that addresses the risks they pose to consumers and the financial system.  "Broader use of cryptocurrency, without accompanying regulation or oversight, allows financial crimes and threats to national security to proliferate," wrote ICBA’s Brian Laverdure.  "Therefore, protecting national security and implementing anti-crime measures should be primary drivers of cryptocurrency policymaking and regulation." Meanwhile, bank advocates say stark government scrutiny of bank forays into digital assets has been misplaced, and that if the Biden administration would like to see responsible innovation in crypto, the banking system could be the place to do it.   Read story →

  • ICBA’s concerns with Pentagon Federal Credit Union’s 2019 acquisition of Progressive Credit Union are coming to fruition, American Banker reported  (subscription required).  The report notes that ICBA President and CEO Rebeca Romero Rainey warned at the time that the “emergency” merger—which allowed PenFed an open charter to serve anyone in the U.S.—negated field-of-membership restrictions. Romero Rainey spotlighted the deal in a blog post and request for Congress to investigate.   Due in part to the merger, the $36.7 billion-asset PenFed reported record membership expansion during the first half of 2022—outpacing the rest of the credit union industry—and spent $65.3 million on marketing in 2021. Meanwhile, the $160 billion-asset Navy Federal spent $173.8 million on marketing last year.  ICBA continues pressing policymakers to investigate credit unions, testifying last month on their Community Reinvestment Act exemption and writing in a recent Medium op-ed that Congress should join states in pushing back against credit union overreach.  Community bankers can continue urging Congress to hold hearings on the credit union tax exemption using a customizable message to lawmakers on ICBA’s   Wake Up page   and its   Wake Up Messaging Playbook.

  • The House plans to vote on the Inflation Reduction Act on Friday, and some Democrats who previously said they wouldn't vote for the bill unless an increase on the $10,000 cap on state and local tax (SALT) deductions was included have now softened their stance. The "No SALT, no deal" caucus included Rep. Tom Suozzi (D-L.I.) Bloomberg. . .an analysis of the Act by the Congressional Joint Committee on Taxation indicates corporations will pay roughly $296 billion in additional taxes over the next decade, with about $222.2 billion of that total from the new 15% corporate minimum tax and $73.7 billion from the 1% excise tax on stock repurchases. Households earning less than $100,000 per year will likely see net tax cuts due to the extension of Affordable Care Act premium subsidies. Middle- and low-income households will see no additional change in taxes, and households with earnings of more than $500,000 may see taxes increase by 1% due to indirect effects from the new corporate tax measures.   Bloomberg

  • Consumers' expectations of future inflation fell across the long and short term in July, according to the latest figures from the Federal Reserve Bank of New York's monthly consumer survey. Consumers said they expect inflation to increase at a rate of 6.2% in the short run, down from a record high of 6.8% in June.  MarketWatch. The New York Fed also also reviewed an annual report on the $1.7 trillion in student debt in the United States, and noted that as credit scores increased and delinquent loans were marked as current under the 2020 policy, the share of student loans held by subprime borrowers fell to 26% in 2021, down from 36% in 2019. The Bank said the moratorium on federal student loan payments that was put into place in early 2020 led to improved credit scores for about 30 million people.  Bloomberg

  • Falling gasoline prices appear to be providing some inflation relief, and the broader inflation picture was more favorable in July than economists had expected.  The U.S. Bureau of Labor Statistics report showed inflation measured by the consumer price index is still elevated for both households and businesses, but falling gas prices could be helping to curb the recent surge -- they fell 7.7% in July. Other items with falling prices included used cars and trucks (down 0.4%) and airfares (down 7.8%).  However,  rents kept rising: Renters faced a 0.7% rise in costs. Core inflation, which excludes energy and food, rose only 0.3%, below what analysts expected.  The Labor Department reported that overall consumer prices are up 8.5% over the past year, compared to a 9.1% year-over-year reported in June.

  • Fed Governor Michelle Bowman supported continued 75-basis-point rate increases "until we see inflation declining in a consistent, meaningful and lasting way." Bowman said she would keep an open mind as bankers review upcoming inflation data, though she sees few indications that inflation has peaked and there is "significant risk" of high inflation lingering into next year.  CNBC

  •  ICBA continues advocating relief from CFPB regulations, including its 1071 plan, in which the bureau is proposing to nearly double the number of reporting data points required by Congress.  In a recent   American Banker op-ed,   ICBA President and CEO Rebeca Romero Rainey said that while Dodd-Frank directs the CFPB to implement new reporting rules, the bureau should exercise its authority to tailor its rulemaking to avoid restricting access to credit.

  • President Biden today will sign the $280 billion CHIPS bill intended to boost U.S. semiconductor production. The White House said chipmaker Micron Technology Inc. is set to announce a $40 billion plan to bolster domestic chip manufacturing, while Qualcomm Inc. and Global Foundries Inc.'s New York plant will undergo a $4.2 billion expansion.   The Associated Press

  • Some credit union news: 1) A Nebraska judge affirmed  a decision by the state’s banking department that restricts credit unions from acquiring community banks headquartered in the state. The decision upholds a Nebraska Department of Banking and Finance denial of an application by an Iowa credit union to acquire an Omaha community bank—another state-level setback for expansionist credit unions. 2) The Virginia State Corporation Commission has denied Virginia Credit Union Inc.’s application to expand its field of membership to include the Medical Society of Virginia. In that case, the agency said state law favors the establishment of a new credit union instead of adding a new group to an existing field of membership.  2) Colorado lawmakers voted to defeat legislation that would have allowed credit unions to hold municipal deposits and other public funds. 4) A new Mississippi law requires acquired bank assets to remain under the control of an FDIC-insured institution, a key obstacle for tax-exempt credit unions seeking to acquire banks in the state. Meanwhile, ICBA continues pressing policymakers to investigate credit unions,  testifying last month  on their CRA exemption and writing in a recent  Medium op-ed  that Congress should join states in pushing back against credit union overreach.  Community bankers can continue urging Congress to hold hearings on the credit union tax exemption using a customizable message to lawmakers on ICBA’s  Wake Up page  and its  Wake Up Messaging Playbook.

  • FDIC examiners plan to increase their focus on testing commercial real estate transactions during the upcoming examination cycle:  latest Supervisory Insights. In an article on the financial performance of banks with CRE concentrations, the FDIC said:  At year-end 2021, FDIC-supervised banks held almost $1.1 trillion in CRE loans, including $795.7 billion at community banks;  While lending concentrations are not inherently problematic, CRE loan concentrations add potential risk amid ongoing economic uncertainty; The FDIC's increased focus on CRE will include examiner tests of newer CRE credits, credits within stressed subcategories and geographies, and credits with payments vulnerable to rising rates and costs. Federal regulators last week  published  a separate request for comment on a proposed interagency policy statement on CRE loan accommodations and workouts. Comments are due by Oct. 3. 

  • President Biden signed two laws that extend the statute of limitations for fraud cases involving pandemic-relief programs. One of them would have a particular impact on Paycheck Protection Program loans made by nonbanks.  Read story →