February 17, 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 

While Congress and the State Legislature are both technically out of session this week, the work continues at the committee level and behind the scenes on critical issues such as the next federal coronavirus relief/economic stimulus package and the New York State budget and tax issues. Moreover, we have seen new updates from the Small Business Administration (SBA), and a host of other information detailing federal and state issues of importance to New York community banks; these are discussed in detail in today's newsletter.

There are also several important meetings this week, next week and in early March that merit your attention. We also provide updates on these -- as well as other industry and association trends and developments we wanted to share with you.

Two Important Meetings For New York Community Banks:

TOMORROW -- February 18th from 10-11:30
  • The New York State Department of Financial Services is holding a webinar as part of its work to support the community and regional banking institutions in managing and mitigating the financial risks from climate change.  The webinar will cover the fundamentals of how climate change impacts the financial system, provide examples of how it could impact the community and regional banking institutions in New York, climate-related business opportunities, and an update on federal and state climate-related initiatives. Speakers will include Ray Dorado, DFS Senior Deputy Superintendent - Banking Division, and Yue (Nina) Chen, DFS Director of Sustainability and Climate Initiatives. Click here to register  

February 22, 11:00 a.m.
  • Invitation to Join Meeting With NYS Senate Banks Committee Chairman Sanders. Senator Sanders, as Chair of Banks, is organizing a meeting to hear from the banks' associations to get feedback on the state of affairs of and issues affecting your member banks during the pandemic, discuss legislation and/or programs that the Senate can implement to help your members survive and grow during these difficult times. This meeting is scheduled for February 22, 2021 at 11:00 AM.  Please note this meeting is also open to your member banks to talk directly with Senator Sanders." . . .To register for this meeting please email Linda Gregware at lindag@ibanys.netLinda will then email the link to join the meeting.

  • IBANYS' March 2 Virtual Bank Directors Conference (see below for additional information) is rapidly approaching . .and, our two-day virtual "All Banks On Deck": association wide conference in April. We also plan to participate(and hope you will as well) in ICBA's virtual convention, "ICBA Connect" March 9-10. Our own former IBANYS Chairman and current board member Bob Fisher (Tioga State Bank) -- a five-generation New York community banker -- will be elected ICBA Chairman for 2021-22! See additional details below.

  • The Small Business Administration has issued important new procedural notices -- we included them in today's newsletter under our "Washington" section.

Stay safe and healthy. . .and as always, thanks for all you do for New York community banking!

IBANYS 2021 Virtual Education Meetings
2021 Virtual Bank Directors Conference - Live Webinar
Tuesday, March 2, 2021
The role of a community bank director is one that is always changing and has never been more critical to the success of your bank. The 2021 IBANYS Virtual Directors Conference is an informative and engaging event designed to help you gain the tools essential to guide your bank’s growth and profitability and sustain its vision for the future. 

Mark Your Calendars & Save These dates -- More Information Coming Soon!!
  • Monday & Tuesday, April 19-20, 2021 - "All Banks On Deck" - Community Banks Mid-Year Conference - 8:30 a.m. - 2:00 p.m. each day

Watch your emails and the weekly newsletter for more information on these programs and additional dates to be added.
Rethinking Retention in Financial Services
Every business has one. A customer acquisition strategy deployed through sales and marketing
efforts. The ultimate goal? To continuously bring new customers into your business. The catch? It’s
costly, often inefficient and associated budgets are subject to cuts when businesses struggle.
But let’s be clear; not having a customer acquisition strategy isn’t an option, but it’s also not enough to support long-term growth.

2021 Stress Testing Scenarios from Federal Reserve: A review
Grigoris Karakoulas
On February 12, the Federal Reserve Board released the hypothetical scenarios for CCAR 2021:

Although the scenarios are intended for testing the resiliency of large banks, the top 19 banks this year, they can provide a basis for the stress testing programs in regional and community banks. Of course, in those cases the stress scenarios should be adapted to the geographical footprint and lending profile of the respective banks.

Commercial Lending Academy
March 22-26, 2021
Virtual Training

This intensive, week-long workshop is designed to provide immediate, tangible training for employees new to commercial lending and to improve skills of less-experienced commercial lenders.
  • Branch managers
  • Credit analysts
  • Personal and private bankers
  • Entry level lenders
  • Mid-level lenders needing a refresher course
  • Any employee assuming commercial lending responsibilities
  • Loan structuring
  • Loan packages and business writing skills
  • Loan policy concepts and risk ratings
  • Loan pricing concepts
  • Analyzing personal financial statements and tax returns
  • Introduction to business financial statements and tax returns
  • Real estate lending fundamentals
  • Business development and sales skills

  • 42 hours of instruction are scheduled.
  • Enrollment will be limited to ensure greater interaction with the instructor case leaders and peers.
Tuition is $1,195
Richard Hamm
President of Advantage Consulting and Training
  • Barret Graduate School of Banking
  • Graduate School of Banking at Wisconsin 
  • Pittsburgh RMA Commercial Lending School
  • BAI Graduate Schools of Banking
  • Published 20 articles in The RMA Journal
  • On the RMA Journal Editorial Advisory Board
  • ABA Commercial Lending Graduate School
  • Over 15 years as a Commercial Lender
  • Received MBA from the University of Alabama
  • Southwestern Graduate School of Banking
News from ICBA
ICBA is pleased to announce ICBA Connect to be held on March 9-10, 2021. Get ready for a virtual experience unlike anything you’ve seen before!
This event will bring together great minds from across the nation to celebrate and focus on community banks. Through diverse topics ranging from leadership and strategy, to innovation and inspiration, ICBA Connect will dive into the content that matters most today – all through the lens of community banks. Connect is a chance to discover how community banks are not only navigating the current landscape but leading the way for their communities.

Robert Fisher, President & CEO of Tioga Bank, former IBANYS Chairman and longtime IBANYS board member, is Chairman-Elect. We hope you will join IBANYS and attend virtually as we congratulate Bob, a fifth generation New York community banker.
Daniel Anderson is a Senior Vice President in the Investment Strategies Group at Vining Sparks. In his role he helps depositories with balance sheet management and investment portfolio strategies, as well as evaluation of interest rate risk exposure and strategies for managing liquidity. Daniel has more than ten years of experience working with community banks and credit unions, primarily in fixed income product areas and asset/liability management. Prior to joining Vining Sparks, Daniel was an Asset/Liability Analyst from 2010 to 2014 with another regional broker dealer. He began his career in bond accounting in 2008. Daniel attended the University of the South in Sewanee, TN. He graduated with a Bachelor of Arts in Economics in 2007. Daniel holds the Series 7, 63, and 66 licenses. 
ICBA Securities and its exclusively endorsed broker/dealer, Vining Sparks, will present a webinar on Positioning the Investment Portfolio for Performance exclusively for the state associations that endorse ICBA Securities, as well as other community banks. This is the first in the 2021 webinar series. 
The Covid-19 pandemic and the resulting economic fallout and actions by the Fed led to plunging market rates and a flood of liquidity into the financial system. Bank portfolio managers have been inundated with excess cash but find themselves with dramatically lower reinvestment yields. This year’s webinar series begins with a brief market update followed by a discussion of general portfolio management. It continues with recent bank portfolio trends and how best to position the bond portfolio going forward given the events of the past year and capital market expectations. 
For many community bankers, defending net interest margins is of utmost priority right now. We will discuss the cost of waiting to invest given today’s near-zero cash rate, and we will outline various approaches to help our audience protect margins while managing risk.

What you will learn:
  • Economic & market summary
  • The bond portfolio’s fit in a community bank balance sheet
  • Managing liquidity and interest rate risk
  • Characteristics of high performing investment portfolios
  • Interest rate risk profiles for community banks and portfolio needs
  • Cost of waiting analysis
  • Investment ideas based on current relative value opportunities
The webinar will last approximately 1 hour. 
Do’s, Don’ts, and Maybes
A set of simple rules to streamline portfolio management in 2021.
By Jim Reber
If my recent aggregate conversations with investment managers are an indication, there is still a lot of seat-of-the-pants decision making going on out there when it comes to portfolio strategies. And I hasten to add this is not a criticism; it’s merely an observation. Why should we expect anything else?

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
The More You Buy, The More You Save
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

  • New York’s on track to get $50 billion in a variety of federal relief from the next coronavirus stimulus package — enough to likely avert the steep state budget cuts threatened by Governor Cuomo -- according to House Speaker Pelosi. She broke down the specifics of the cash coming to New York for the state's Democratic House members. It would reportedly include $12.6 billion in budgetary bailouts for state governments, $10.6 billion for local governments and $8.8 billion for ‘New York Area Transit’ — most of which is for the Metropolitan Transportation Authority, according to a source close to the stimulus talks. 

  • New York faces a $15 billion budget gap this March, and state lawmakers and Governor Cuomo are debating how to close it. One lifeline could be a multi-billion-dollar aid package from Congress. Another could be increasing taxes on the rich. The Fiscal Policy Institute's chief economist Jonas Shaende reviewed options facing New York officials in the coming weeks, and how they include more than just a straight tax rate increase on upper income earners. Read More

  • The Legislature continues to review Governor Cuomo's Annual Budget Message, which presented two potential paths for this year’s financial plan: One which he says would result in stability and regrowth if the federal government fills the $15 billion budget gap he’s projecting, and another he says would result in tax increases and significant, longstanding debt if Washington provides only $6 billion. Alternative funding resources could include tax increases, perhaps on those making more than $5 million annually year (which Cuomo has previously resisted, but has now offered his own version "if necessary".) Other ‘revenue actions’ proposed included a new state and local sales tax on the vacation home rental industry. 

  • The Joint Legislative Hearing Schedule on the Governor's 2021-22 Executive Budget Proposal announced by Senate Finance Committee Chair Krueger and Assembly Ways and Means Committee Chair Weinstein. The hearings are being conducted virtually. Hearings on Economic Development and Taxes are scheduled for February 23.

IBANYS will monitor developments, and will keep you fully informed.

FOR IMMEDIATE RELEASE, February 09, 2021
CONTACT: public-affairs@dfs.ny.gov212-709-1690


New York Consumers Have New Protections Relating to Recurring Services and Relating to Inactive Accounts

New Consumer Protections Put The “Free” Back in “Free Trial”

The New York State Division of Consumer Protection and the New York State Department of Financial Services are issuing this alert to consumers regarding two new laws – one providing new protections when purchasing recurring services, and the other requiring notification by New York State regulated financial institutions prior to charging any account inactivity fees.

Under NY General Business Law, anyone selling automatic renewal programs or continuous services to New Yorkers must provide consumers an easy-to-use cancellation mechanism before the consumer pays for the service. Consumers who purchase these services online must also be allowed to terminate the agreement online at any time.

“Many consumers complain about companies billing their credit card after they call or go online to cancel their subscription. Some companies make it difficult to cancel or say they have cancelled service, but consumers continue to be billed,” said Secretary of State Rossana Rosado, who oversees the Division of Consumer Protection. “The new law empowers the Attorney General, on behalf of consumers, to go after companies that automatically renew and charge consumers without adequate notice.”
Under a new Banking Law[1], New York State regulated financial institutions that provide an account to a customer, must provide written notification of any pending charges to a customer thirty days prior to charging any fee based on account inactivity. The law allows such written notification to be sent electronically.

“We’re living in unprecedented times and consumers shouldn’t be penalized for simply not engaging in account transactions, which is exactly what account inactivity fees do, especially given that communities of color are disproportionally adversely affected by the pandemic and resulting economic crisis,” said Superintendent of Financial Services Linda A. Lacewell. “This new protection will ensure that New Yorkers, so many of whom are navigating economic uncertainties, aren’t caught off guard and penalized without notice for mere inactivity, and instead have the opportunity to avoid these unnecessary costs.”

“Automatic renewal” programs (subscription or purchasing agreements that are automatically renewed each term) or “continuous service” plans (subscription or purchasing agreements that continue until the consumer calls to cancel) must clearly state the cancellation terms to consumers before entering into the agreement. If consumers purchase the item online, those terms must be clearly stated near the purchase approval button. If consumers purchase over the phone, the terms must be read clearly before the consumer completes the purchase. These businesses must also provide a toll-free telephone number, email address or other cost-effective, timely, and easy-to-use option for consumers to cancel after agreeing to the contract.

In addition, if the original offer includes a free gift, the consumer can keep that free gift whether or not they cancel the service during the trial period or at a later date.
Consumers considering free offers should keep the following tips from the Federal Trade Commission in mind:
  • Do some research. Search the product and company name online with words like “review,” “complaint,” or “scam” to see what others are saying.
  • Find the terms and conditions for the offer. If you can't find them or can't understand exactly what you're agreeing to and when you’ll be charged — including what you’ll be charged for and the date by which you have to act to avoid a charge – don't sign up. 
  • Monitor your credit and debit card statements. If you’re charged for something you didn’t order, dispute those charges as soon as you spot them.

If it is believed a company is not following the new law when offering recurring services or free gifts, consumers should file a complaint with the Division of Consumer Protection at www.dos.ny.gov/consumerprotection.

If consumers are charged account inactivity fees without the required notice, they are encouraged to file a complaint with the Department of Financial Services at https://www.dfs.ny.gov/complaint.
The New York State Division of Consumer Protection provides voluntary mediation between a consumer and a business when a consumer has been unsuccessful at reaching a resolution on their own. The Consumer Assistance Helpline 1-800-697-1220 is available Monday to Friday from 8:30am to 4:30pm, excluding State Holidays, and consumer complaints can be filed at any time at www.dos.ny.gov/consumerprotection. The Division can also be reached via Twitter at @NYSConsumer or Facebook at www.facebook.com/nysconsumer.

[1] NY Banking Law §9-x*2. There is a separate/unrelated NY Banking §9-x that deals with mortgage forbearance.


FOR IMMEDIATE RELEASE, February 09, 2021
CONTACT: public-affairs@dfs.ny.gov, 212-709-1690


Additional DFS Action to Fully Integrate Climate Change Into All of Department’s Programs

The New York State Department of Financial of Financial Services (DFS) issued guidance alerting banking institutions subject to the New York Community Reinvestment Act (the “New York CRA”) that they may receive credit for financing activities that support the climate resiliency of low- and moderate-income (LMI), and underserved communities.

“Climate change is happening now and there is no time to waste in addressing its financial risks. At the same time, climate change disproportionally impacts disadvantaged communities, many of whose members are people of color. DFS is issuing today’s guidance to provide examples of climate resiliency activities that may qualify for credit under the existing New York CRA,” said Superintendent of Financial Services Linda A. Lacewell. “New York will continue to take nation-leading, innovative approaches that address climate-related financial risks, support the needs of underserved communities, and combat environmental and racial injustice.”

This is another step in DFS’ efforts to fully integrate climate change into all its programs. In 2019, the DFS became the first financial regulator in the United States to join the Network for Greening the Financial System, a coalition of central banks and supervisory authorities committed to managing environmental and climate risk management in the financial sector. DFS is also a member of the Sustainable Insurance Forum, an international network of insurance regulators.

In the past year, the Department has issued a Circular Letter to the insurance industry and an Industry Letter to the banking industry to set expectations and begin a dialogue as to how the Department can best support those industries’ efforts to manage the financial risks from climate change.
Although no one is spared from the impact of climate change, it disproportionally affects LMI communities, perpetuating social inequality. LMI households on average face a higher energy burden than other households, spending more on gas, electric, and heating fuel as a percentage of household income. According to a National Conference of State Legislatures report, if low-income housing were equally energy-efficient compared to the average U.S. home, energy costs paid by low-income households would decrease by one-third. Yet many LMI consumers face barriers to such improvements, including lack of access to financing for energy efficiency upgrades.

In addition, LMI communities tend to be more susceptible to flooding and heat waves, risks exacerbated by climate change. Compounding the problem, LMI communities tend to have fewer resources to recover from natural disasters which are now more frequent and severe due to climate change. Further, LMI communities tend to have higher percentages of minority populations, and therefore these effects of climate change are also disproportionately borne by people of color. This is both an environmental justice and social justice issue.

The federal and New York State Community Reinvestment Acts encourage banks to meet the credit needs of their communities, including LMI communities. The Department administers the New York CRA and its regulations. To evaluate a banking institution’s performance, the Department applies various tests, depending on the type and size of the institution. One way in which banks are evaluated under the New York CRA is the extent to which their activity serves community development. Banking institutions may be credited in their CRA examinations for activities that may help mitigate climate change risks and at the same time revitalize, stabilize, or otherwise serve a community development purpose in LMI and underserved rural middle-income communities.

In today’s Industry Letter, DFS provided examples of activities that reduce or prevent the emission of greenhouse gases that cause climate change (“climate mitigation”), and adapt to life in a changing climate (“climate adaptation”) (together with climate mitigation, “climate resiliency”), which in turn may mitigate risks from climate change and may qualify for credit under the New York CRA as a community development lending or qualified investments that revitalize or stabilize or otherwise serve as community development in these areas. These include the financing of:

  • renewable energy, energy-efficiency, and water conservation equipment or projects for affordable housing to reduce utility payments for LMI tenants, or for community facilities. Examples include installation of solar panels, geothermal heat pumps, and battery storage, improving building envelope insulation, and lighting, window and appliance upgrades;
  • community solar projects that provide energy to an affordable housing project or a community facility that has a community development purpose;
  • microgrid or battery storage projects in LMI areas with high flood and/or wind risk, thereby reducing risks of power loss due to flooding and high wind;
  • projects addressing flooding or sewer issues, or reducing stormwater runoffs such as new or rehabilitated sewer lines, levees, and storm drains that primarily benefit LMI geographies;
  • flood resilience activities for multifamily buildings offering affordable housing, such as building elevation and relocation and installation of sump pumps; and
  • installation of air conditioning in multifamily buildings offering affordable housing to reduce heat risks and utility costs for LMI residents.

The above list is not intended to be exhaustive. In addition to potential credit for community development lending, banking institutions’ activities may qualify for credit under the New York CRA under the lending test or as innovative investments for climate resiliency-promoting activities.
Washington Update


SBA has released Procedural Notice 5000-20095 ”Adjustment to Number of Months of Section 1112 Payments in the 7(a), 504 and Microloan Programs Due to Insufficiency of Funds”. A copy of the Notice is attached and noted below. For a link to SBA’s website location please Click Here. On January 19, 2021, SBA issued two Notices in which it set forth the number of months of Section 1112 payments that covered loans in the 7(a), 504 and Microloan Programs would receive under Section 1112(c)(1) of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), as amended by Section 325 of the Economic Aid. Please note this excludes loans under the Payroll Protection Program. SBA has determined that the $3.5 billion that was appropriated to carry out Section 325 of the Economic Aid Act is insufficient to make the payments for the periods authorized by Section 1112(c)(1) of the CARES Act, as amended by Section 325 of the Economic Aid Act. In accordance with Section 1112(c)(7)(B), SBA has developed a plan to proportionally reduce the number of months provided for each category of loans described in the Notice, while ensuring that all amounts made available for the Section 1112 payments are fully expended. Under the plan, SBA will make the Section 1112 payments as described in the Notice (Adjustment Plan). This Adjustment Plan is effective immediately and will be applied to the Section 1112 payments that SBA makes beginning with the payments made in February 2021. Please carefully review the Notice in full to gain the full understanding of the Adjustment Plan. Please note that except as provided in this Notice, all other guidance provided by SBA in SBA Procedural Notices 5000-20079 and 5000-20080 continues to apply.
Valerie Shoudy, Lender Relations Specialist        Grace Conners, Lender Relations Specialist
Valerie.Shoudy@sba.gov                                           Grace.Conners@sba.gov
U.S. Small Business Administration


SBA has released Procedural Notice 5000-20093 and Information Notice 5000-20094. Both are noted below with links to SBA’s website location. Please carefully review each Notice in full. Procedural Notice 5000-20093 – Establishing Maturities for 7(a) Loans to Receive Section 1112 Payments The purpose of this Notice is to address the standards that SBA expects 7(a) Lenders to apply in establishing the maturity of new 7(a) loans approved beginning on February 1, 2021 and through September 30, 2021. All 7(a) loan delivery methods (including SBA Express, Export Express, EWCP, Community Advantage Pilot, and Express Bridge Loan (EBL) Pilot) are covered by this Notice. (This Notice does not apply to Paycheck Protection Program Loans made under section 1102 of the CARES Act because the CARES Act excludes these loans from eligibility for section 1112 payments. Click here to read the entire notice.

Information Notice 5000-20094 – SAM Registration for ALL SBA Lending Entities. The purpose of this Notice is two-fold: To remind SBA Lenders of the requirement to complete SAM registration and obtain a unique entity identifier (CAGE Code Number). This requirement applies to the following entities that participate in SBA business loan programs:  
• 7(a) Lenders, including Paycheck Protection Program (PPP) Lenders
• Certified Development Companies (CDCs)
• Microloan Intermediaries . . .Further, to provide Lenders information on where to submit the unique identifier also known as CAGE Code Number. Click here to read the entire notice.
Valerie Shoudy, Lender Relations Specialist        Grace Conners, Lender Relations Specialist
Valerie.Shoudy@sba.gov                                           Grace.Conners@sba.gov


  • ICBA outlined its 2021 community banking agenda in an open letter to Congress, calling for a pragmatic agenda of regulatory relief and a more competitive landscape to promote a dynamic economy. IBANYS looks forward to continuing to work closely with ICBA on federal policies and priorities. READ ICBA RELEASE

  • ICBA urged federal regulators to hold the Community Bank Leverage Ratio at 8 percent for the remainder of 2021. Background: As required by the CARES Act, the agencies lowered the CBLR to 8 percent for 2020, exempting more community banks from risk-based capital requirements. In implementing the law, the regulators issued an interim final rule that will transition the CBLR to 8.5 percent in 2021 and to 9 percent in 2022. ICBA Position: Community banks' Paycheck Protection Program lending and Economic Impact Payment deposits have dramatically affected their capital levels and leverage ratios, justifying an extension of the 8 percent CBLR level. More: ICBA has also called on Congress to extend the CBLR level, among other relief, in the pandemic relief package before Congress.

  • ICBA is calling on community bankers to urge their members of Congress to make needed improvements to the Paycheck Protection Program. The custom grassroots alert on ICBA's Be Heard action center calls for relief from restrictions related to first-draw loan increases, second-draw eligibility, self-employed farmers and ranchers, and live-action venues. Contact Congress today.

  • The Biden administration extended the foreclosure moratorium and mortgage forbearance on certain loans through the end of June. The extension—which applies to FHA, VA, and USDA Rural Housing loans—also provides up to six months of additional mortgage payment forbearance to borrowers who entered forbearance on or before June 30, 2020. The FHFA last week said Fannie Mae and Freddie Mac will extend until March 31 the moratoriums on single-family foreclosures and real-estate-owned evictions for enterprise-backed mortgages.

(Summary: The administration's "American Rescue Plan" includes:)
  • Direct payments of $1,400 to most Americans, bringing the total relief to $2,000, including December’s $600 payments
  • Increasing the federal, per-week unemployment benefit to $400 and extending it through the end of September
  • Increasing the federal minimum wage to $15 per hour. (The President indicated he's willing to negotiate on his $15 minimum wage proposal, e.g., that lowering it to $12 or $13 per hour could have some upside or a longer phase-in period than the current proposal of five years is possible. He acknowledged it's "totally legitimate" for small business owners to be concerned, he does still support a $15 minimum wage.)
  • Extending the eviction and foreclosure moratoriums until the end of September
  • $350 billion in state and local government aid
  • $170 billion for K-12 schools and institutions of higher education
  • $50 billion toward Covid-19 testing
  • $20 billion toward a national vaccine program in partnership with states, localities and tribes
  • Making the Child Tax Credit fully refundable for the year and increasing the credit to $3,000 per child ($3,600 for a child under age 6)

  • Senator Gillibrand wants the next COVID-19 stimulus package to include $1.4 billion funding for programs meant to help older Americans, including aid for nutritional services and vaccinations. Read More