June 2, 2021
IBANYS Weekly E-Newsletter
  • Visit our website at www.ibanys.net to review our daily updates on COVID-19.
The President's Message
By John Witkowski, President & CEO
Today is June 2. With the NYS Legislature scheduled to adjourn a week from tomorrow -- Thursday, June 10. This means there are just 6 scheduled session days remaining, counting today.

As you know, there is legislation pending to allow credit unions access to municipal deposits. IBANYS continues to oppose legislation to further help tax-exempt credit unions which are not subject to any CRA mandates or requirements, while doing harm to taxpaying community banks that reinvest in their local municipalities, small businesses and consumers. The legislation is currently in the Senate Finance and Assembly Ways & Means Committees. In the Albany section of today's newsletter we have the latest update on where things stand, what we're doing and what may lie ahead in the coming days.

We are working with the committee and legislative leadership and key staff to explain our concerns and opposition (copies of the legislation and our Memo in Opposition are attached.)On Tuesday, we held a very productive Zoom meeting with Assembly Banks Chairman Victor Pichardo (D-Bronx), the bill's sponsor in the Assembly. We will keep you fully informed as this process continues to unfold and may ask that you help in grassroots "call to arms" if the legislation heads for the floor vote. Stay tuned.

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ICBA’s “Independent Banker” magazine announced its third annual  list of “40 Under 40: Emerging Community Bank Leaders.” https://independentbanker.org/2021/06/40-under-40-2021s-emerging-community-bank-leaders/  It highlights young community bankers who stepped up to help their banks navigate a chaotic year. . . They delivered economic relief, introduced new technology, kept their communities close when they had to be distanced., and most importantly, they found opportunities to lead when their banks and their customers most needed them. 

IBANYS congratulates two New York community bankers (and IBANYS members!) who made the list:

  • Under the “Leaders and Mentors" category: Tracey Kearns, 35, Assistant vice president, 1st National Bank of Scotia, Scotia, N.Y. Tracey developed new orientation programs and coordinated online training for bank employees, and rallied coworkers to support Schenectady Street Soldiers, which provides hot meals and essential items to those experiencing homelessness

  • Under the "Innovators" category: Grace Pace, 29, Vice president and digital engineer, Quontic Bank in New York City. Grace is “on a mission” to innovate and build strong programs to ensure the process is seamless and secure for customers. Although often the youngest in the room, Grace carries herself as a leader with a proven track record. She was part of the team that launched Quontic’s Bitcoin Rewards Checking account, the first of its kind.

Congratulations to these outstanding emerging community bank leaders!

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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!
DFS Climate Control Survey

On October 29, 2020, the New York State Department of Financial Services (DFS) issued an Industry Letter relating to the financial risks from climate change. The Industry Letter outlined expectations for New York regulated financial institutions to start integrating the financial risks from climate change into their governance frameworks, risk management processes and business strategies, and to start developing their approach to climate-related financial risk disclosure. Developing supervisory practices, as well as guidance and best practices, require continued engagement with your institutions.

As a step towards this goal, DFS is requesting your institutions to complete a voluntary and anonymous (with the option to share your institution’s name) survey by July 16, 2021 to allow DFS better understand the current state of the industry regarding financial risks from climate change.

The survey covers four areas: (A) institutional profile, (B) the impact of climate change on your institution’s business, (C) your institution’s current initiatives and expected progress on managing the financial risks from climate change, and (D) how DFS can support you. The questions are intended to assist DFS in understanding your current thinking and processes relating to the financial risks from climate change.

Please direct any questions or comments on the survey or any supplemental materials you would like to share related to the survey to Dr. Yue (Nina) Chen, Director of Sustainability and Climate Initiatives, at climate@dfs.ny.gov.

Thank you very much for your cooperation!

How to Maximize Your PPP Relationships
Community banks have the unique opportunity to expand and strengthen your relationships with your small business PPP loan account holders. Discover how to boost engagement with your PPP relationships using six key strategies and a free, downloadable cross-sell letter template.

Our Story — A rich history of service and growth.
More than 147 years ago, we began serving our very first client…and we are proud to say they are still with us today. Our history is deeply rooted in our check program offering, which today has taken on a modernized approach that adds value for both our clients and their digital-first consumers.

While it remains an important part of our business, we have evolved our product portfolio over the years to include high-performance solutions that drive engagement and help our clients deliver superior customer experiences, ultimately influencing positive bottom-line results.

A look back in time shows how we have held true to our company values and to our goal of meeting the ever-changing needs of our clients and their customers through expansion of our business and a commitment to exceptional service. Today, our mission is to deliver success for those that we serve by enabling meaningful engagement with those that they serve. It is essentially what we have been doing for the last 147+ years and what we plan to do for another 147.

For us, it’s all about you. You can count on us today the same way our very first client has since 1874.

We’re ready to help your institution perform better
The Kafafian Group is a finance, strategy, and operations consulting firm that specializes in performance measurement, profitability outsourcing, strategic and business planning, regulatory assistance, profit and process improvement, and investment banking advisory services for the financial industry.
We are seasoned industry professionals dedicated to helping banks perform better by delivering meaningful management information and analysis, identifying operating efficiencies and evaluating strategic alternatives. We offer a wide range of advisory services to help you develop winning strategies, and provide reliable information to make smart and informed decisions
Over the past 30 years, we have worked with over 500 financial institutions in over 40 states ranging in asset size from $16 million to over $100 billion.

News from ICBA
2021 Crowe Compensation and Benefit Survey
Is your bank’s compensation and benefits staying competitive in a post-pandemic environment? Participating banks receive a significant discount on the published report. Deadline is June 4.

Kevin Smith, CFA
Vining Sparks' Investment Product Strategies
Kevin has been with Vining Sparks since 2008 and currently serves as Director of Investment Product Strategies. He focuses on providing timely capital market solutions and delivering valuable tools and services to internal and external stakeholders. A graduate of Christian Brothers University in Memphis, TN, Kevin earned his degree in Finance and a minor in History. He holds the Chartered Financial Analyst (CFA) designation and is a member of the CFA institute.
ICBA Securities and its exclusively-endorsed broker/dealer, Vining Sparks, will present a webinar for the state associations that endorse ICBA Securities, as well as other community banks. This is the fifth in the 2021 webinar series. 
Agency backed mortgage investments are a meaningful allocation in many depository portfolios. The past 12-months has been interesting, to say the least, for mortgage investors. Fed intervention in the market continues while economic data largely paints a positive, but complicated, picture. Home prices rose sharply while mortgage rates declined drastically and still remain near all-time lows. With these points in mind, this webinar will cover current market trends, mortgage rates, prepayment expectations, and a look at relative value.
What you will learn:
  • Current market trends and expectations 
  • The importance of solid prepayment assumptions
  • Relative value in the mortgage market
  • Resources available to help you manage current and prospective positions

This webinar will last approximately one hour.
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

Latest On Credit Union/Municipal Deposits Legislation

Legislation currently in the Senate Finance and Assembly Ways & Means Committees would allow credit unions access to municipal deposits. IBANYS is working with the chairs of the Senate and Assembly banks Committees, other committees and legislative leadership and staff to explain why this legislation would be harmful not only to New York's community banks, but to the municipalities, small businesses and consumers we serve. We informed them that we oppose legislation to further help tax-exempt credit unions, which are not subject to any CRA mandates or requirements, while doing harm to taxpaying community banks which are subject to CRA mandates and which reinvest municipal deposits in their communities. Muni deposits played a big part in how community banks were able to lead the way in making PPP loans across the state, saving thousands of jobs and keeping local small businesses open during the pandemic.

Yesterday, IBANYS held a very productive Zoom meeting with Assembly Banks Chairman Victor Pichardo (D-Bronx), the bill's sponsor in the Assembly. Among the points we raised were:

  • This legislation does not subject credit unions to the regulatory/CRA mandates and oversight that are required of banks, nor does it provide any way to monitor and/or track credit unions’ municipal deposits activity. (Banks' activity is  monitored and tracked under CRA.)

  • The credit unions’ position is they would use municipal deposits to serve unbanked, underbanked and minority communities if they gain access to municipal deposits. Yet, when they were granted access to the State Business Development District Program two years ago, they did not use the program to accomplish those stated goals.

  • Community banks reinvest the funds to reinvest in local municipalities, small businesses and local initiatives. During the pandemic, community banks were able to move quickly to access the Paycheck Protection Program (PPP) to protect thousands of local jobs and keep local small businesses open across the state – without having to delay making the loans until federal funding was available.

  • Community banks nationally made over 60% of all PPP loans, and 70% of PPP loans to minority-and women-owned small businesses. Comparatively, credit unions’ participation in the PPP lending program was negligible, to the point of being nearly non-existent.

  • Losing municipal deposits to tax-exempt credit unions could pose a serious safety and soundness issue for community banks, many of which have up to 25% to 30% of their core deposits in municipal deposits. 

(Unlike credit unions, thrifts and mutuals are taxpaying institutions and are subject to CRA requirements, and IBANYS strongly believes they should be included in the legislation.) IBANYS will keep you fully informed as this process continues to unfold.

Meanwhile, other bills still in the legislative process would seek to establish a state/public bank (IBANYS' Memo in Opposition), and allow credit unions into the State Linked Deposit Program allow credit unions to participate in the State Linked Deposits Program, (Read IBANYS' Memo in Opposition here).

. . .Unlike previous legislative sessions, we cannot rely upon a firewall of support from a GOP-controlled Senate, or assistance/ opposition from the Governor (since the Democratic supermajorities in both chambers can override a veto.) If and when these bills reach the floors of the full Senate and Assembly for votes, we may need your help in launching a grassroots effort opposing them. Stay tuned. Here is the NYS Assembly Directory: https://nyassembly.gov/mem/search/. . . and, here is the NYS Senate Directory: https://www.nysenate.gov/registration/nojs/form/start/find-my-senator


  • IBANYS has written a Memorandum in Support of S.7090 (Thomas) A.7924 (Pichardo), which would extend the State Charter Advisory Board for an additional five years. The State Charter Advisory Board was part of the Financial Services Law which was enacted in 2011, when the former Banking Department and Insurance Department were merged to form the Department of Financial Services. It was established to focus on the importance of the benefits of the dual charter system. It provides a continuing focus on the importance of the state charter by providing state chartered banks with an opportunity to directly connect with the Superintendent and DFS staff on issues of concern. This has proved a positive forum for discussion of maintaining  and expanding the value of the state charter, provided an opportunity for interaction to avoid unnecessary regulatory issues and enabled the Superintendent to discuss regulatory changes prior to implementation.

  • The state's application for rental assistance opened Tuesday. The State will provide $3.5 billion in assistance for renters and small businesses experiencing financial hardship as a result of the COVID-19 pandemic. Applications for the program began June 1 for eligible New Yorkers behind on their rent and who have suffered financial hardship due to COVID-19. The New York State Emergency Rental Assistance Program will provide assistance with up to 12 months of past-due rent, three months of prospective rental assistance and 12 months of utility arrears payments to eligible New Yorkers, regardless of immigration status.

  • Governor Cuomo reiterated that New Yorkers are entitled to a paid sick day if they need a day to recover after getting the COVID-19 vaccine.The New York State Department of Labor is issuing guidance to all employers that any necessary recovery period from the COVID-19 vaccine is covered by New York's Paid Sick Leave Law. This builds on legislation granting public and private employees time off to receive the COVID-19 vaccine. https://www.governor.ny.gov
Washington Update

  • It's time to overhaul the revamp, according to Acting Comptroller of the Currency Michael Hsu regarding his plans to tackle the Community Reinvestment Act. "I think my role as acting comptroller is to address things that can't wait, and I think this is one of them." Morning Consult asked Hsu more about his comments last month about banks becoming too complacent, especially in light of the Archegos Capital Management meltdown. Read his thoughts on that and other details from the interview here. Separately, Acting Comptroller Hsu said there's interest among regulatory agencies in coordinating regulation relating to cryptocurrency. Hsu said the goals of an interagency group including officials from the OCC, the Fed and the FDIC is to "put some ideas in front of the agencies to consider," rather than make policy.

  • The Paycheck Protection Program closed to new loan applications more than a year and several iterations after the emergency program was enacted. In a call last Friday, SBA officials said they expected PPP funds to be exhausted before yesterday’s deadline, though the agency is withholding some funds to accommodate loans with remaining hold codes that need resolution. SBA has until June 30 to complete processing loan approvals. The SBA expects to soon issue procedural guidance on when and how lenders can ask the agency to purchase loans pursuant to its guarantee. Claims will be submitted through the lender platform. The SBA is also working to further streamline and expedite the processing of forgiveness requests with a goal to process all requests within 30 days of receipt, according to the officials. Additional PPP information is available on ICBA's PPP Resources page.

  • ICBA is encouraging community bankers to call on Congress to hold hearings on credit union acquisitions of taxpaying community banks. (IBANYS urged members of the New York Congressional Delegation to support this effort during our recent grassroots calls.) ICBA’s Be Heard grassroots action center makes it easy for community bankers to contact their members of Congress.  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

  • ICBA and other groups today are urging House members to oppose a Senate-passed resolution to repeal the OCC’s “true lender” rule. In a joint letter to the House ahead of a staff briefing on the issue, the groups said repealing the OCC rule would create significant legal impediments to creating a more robust framework for providing safe and affordable credit. Instead, the OCC should be allowed to modify the rule, they said. The OCC rule, which ICBA supported in a comment letter last year, 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 Senate resolution, which the Senate passed by a 52-47 vote earlier this month, would repeal the rule under the Congressional Review Act, which allows lawmakers to invalidate federal rules and limits agencies’ ability to issue a similar rule in the future. 

  • The FDIC issued the lists of institutions scheduled for Community Reinvestment Act exams during the third quarter and fourth quarter 2021. The schedules are based on the best available information and are subject to change.