March 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

To: New York Community Banks: ANNOUNCING IBANYS' "ALL BANKS ON DECK" VIRTUAL MEETING ON APRIL 19-20 (8:45 a.m. - 3:00 p.m. each day) The agenda, speakers bios and registration forms for this "Pay One Price" meeting are in the brochure in today's newsletter. Please take a moment to review the information!
 
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FED UPDATE:

The Federal Reserve this afternoon "ramped up" its expectations for economic growth, and indicated there are no expected interest rate hikes through 2023. The policymaking Federal Open Market Committee also voted to keep short-term borrowing rates steady near zero, while continuing an asset purchase program in which the central bank buys at least $120 billion of bonds a month.

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As we approach the state budget deadline in Albany (the April 1 deadline is now just two weeks away), the budget negotiations process is playing out against a very unusual and unprecedented backdrop. Today's newsletter provide the latest updates in today's "Albany" section.

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Washington continues to address key issues involving pandemic relief, economic recovery, PPP implementation and confirming President Biden's nominees. IBANYS is preparing for a grassroots push April 27 during the 2021 ICBA Virtual Capital Summit. See the Washington section of today's newsletter for more information. To keep up with the speakers, session info and agenda, visit the 2021 ICBA Capital Summit information portal. . .and again, Click here to learn more & register


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The current round of the Paycheck Protection Program is successfully reaching smaller borrowers, according to recent data from the SBA. The SBA said 94% of PPP loans in the latest round are less than $250,000, totaling 52% of loan volume. Further, 92% of PPP loans worth 50% of loan volume are going to businesses with 20 or fewer employees. Community banks are once again performing extremely well:

The data also show that banks and savings and loans under $50 billion in assets account for 60% of PPP lending in the current round. ICBA supports bipartisan legislation to extend the PPP by allowing borrowers to apply for loans through May 31 and giving the SBA until June 30 to consider applications. ICBA is also calling on community bankers to urge their members of Congress to make needed changes to the PPP if it is extended to ensure applicants are not left stranded.

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We hope you are all staying safe, and we thank you for all you do every day for your customers, your communities and our industry . . .and, of course, for IBANYS!
IBANYS Welcomes our newest member bank
 Carthage Savings and Loan Association
Carthage Savings was founded in 1888, making the Association the longest running "Hometown Bank" in Jefferson and Lewis Counties.
 
Carthage Savings is a customer owned "Mutual" association. We answer to our customers, not stockholders. We are here to serve our customers with no conflicting profitability pressures. A "Mutual" is similar to a Credit Union with the exception that we pay income taxes, which aid our schools and allows the government to provide essential services to the communities we serve.
 
We manage over $200,000,000 in assets with a $170,000,000 loan portfolio primarily funded with local deposits. Our Association has four full-service offices. We are well capitalized by all regulatory standards and by nearly all standards, we are considered one of the strongest and safest banks in the country. 
 
Carthage Savings continues to make every attempt to provide the highest quality service to our members at the lowest possible cost. Our mission "To Provide Quality Financial Services that Exceed our Members' Expectations while Enhancing the Communities We Serve" is a promise we have lived up to for over 130 years. We are dedicated to being a part of the North Country's future prosperity. Carthage Savings is continuously researching and implementing new and innovative banking products to offer our customers, while keeping safety and security foremost in mind.
 
There are many reasons to make Carthage Savings your financial partner…these are just a few of the fundamental issues that make our 130+ year history a successful partnership with our communities. Add great service from people who truly care about the future of Northern New York and you will also discover what makes Carthage Savings different from other financial institutions. 
 
The Association's Board, Management, and Staff are proud of our history and look forward to building customer relationships. Please contact us and we would be happy to tell you more.

IBANYS 2021 Virtual Education Meetings
Mark Your Calendars & Save These dates
  • 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 (Tentative times)

COMPLETE BROCHURE AND MEETING DETAILS COMING SOON!!
We hope you join us for this amazing event. Here are some of the topics our speakers will discuss....more speakers and topics are being added.

  • ICBA Update
  • Compete to Win — Digital Strategies for Community Banking
  • Syncing Portfolio Analytics, Stress Testing, and Loan Review: The Exponential Power of the Three Combined
  • State of the Housing Market and the FHLBNY’s new Mortgage Asset Program (MAP)
  • Faster Payments
  • Continued Evolution of a Bank’s Investment Portfolio
  • Digital Marketing Strategies You Can Take to the Bank
  • Building High Performance Teams in an Agile Virtual World
  • Bank Cybersecurity: Looking Back to Look Forward
  • Cares Act Section 4013 Update
Event Platform: ZOOM Live Webinar (registration is required)
  • How to register: Each bank and supporting company of IBANYS will pay ONE REGISTRATION FEE. All employees of that bank/company may attend any and all sessions.
  • Each person must be registered (first & last name and email are required for each registrant).
  • A unique registration link will be sent to each registrant.
  • You may attend the entire event or select sessions.
  • You log in five minutes prior to the start of your session.
MEET THE SPEAKERS
Compete to Win—Digital Strategies for Community Banking
Norm thrives on accelerating innovation in financial technology. As General Manager of Bottomline’s Digital Banking and Business Solutions, Norm has proven that a deep understanding of banking and financial institution needs, regulatory trends, global market dynamics and technology capabilities are critical to driving market-changing innovation, winning and delighting customers. Norm brings an extraordinarily deep and rich understanding of the banking industry to Bottomline, with over 20 years’ experience working for and/or with some of the world’s largest banks, including Royal Bank of Scotland, Bank of America and Fleet Financial.
Norm DeLuca, Managing Director
Bottomline Technology
David Ruffin
Principal, IntelliCredit™, a division of QwickRate 
Syncing Portfolio Analytics, Stress Testing & Loan Review: The Exponential Power of the Three Combined
David’s extensive experience in the financial industry includes a long and pronounced emphasis on credit risk in a variety of roles that range from bank lender and senior credit officer to co-founder of the successful Credit Risk Management, LLC consultancy and professor at several banking schools. A prolific publisher of credit-focused articles, he is a frequent speaker at trade association forums, where he shares insights gained helping lending institutions evaluate credit risk—in both its traditional, transactional form as well as the risk associated with portfolios based on a more emergent macro strategy. David is an expert in assessing all aspects of the credit process and culture. Over the course of decades, he has led teams providing thousands of loan reviews and performed hundreds of due diligence engagements focused on M&A and capital raising. Most recently he headed the DHG-Credit Risk Management division at the Dixon Hughes Goodman accounting firm. David holds a B.A. from the University of North Carolina-Chapel Hill, a M.S. from East Carolina University and multiple degrees from the American Bankers Association’s graduate lending schools.
ASSOCIATE MEMBERS & PREFERRED PARTNERS
We encourage you to visit their websites to see what services they offer to help all Community Banks.
Thank you to our Associate and Preferred Partners who have either just joined IBANYS or renewed their membership for 2021
How Marketing Technology Accelerates Your Lifecycle Marketing Strategies
It's no secret that it is typically much easier and costs less to cross-sell existing account holders new products and services than it is to acquire brand new relationships. How can bank marketers automatically activate marketing tactics at every stage of the consumer journey? Find out how investing in the right marketing technology empowers bank marketers to easily implement an automated lifecycle marketing strategy to strengthen the retention and extend the lifetime value of profitable customers.

News from ICBA
2021 ICBA Capital Summit - Virtual
April 27, 2021
Join ICBA and fellow community bankers as we advocate for change in these areas through our Plan for Prosperity legislative platform. By coming together and espousing the community bank message, we will make change happen for our business, our customers and our communities.
 
While the last year was unexpected and unprecedented to say the least, community banks continued to show up and support their communities as they have before. This year is the start of a new Congress, and new and incumbent members of Congress need to hear about the importance of our industry directly from community bankers like you.
Community banks invest in and support their communities in good times and bad. Community banks build more resilient communities, and the COVID-19 pandemic demonstrated this positive economic impact firsthand as community banks once again rose to the challenge—saving tens of thousands of local small businesses and jobs across the nation.
 
Join us for the 2021 ICBA Capital Summit, the preeminent annual event to advocate for our industry and your community.
 
To keep up with the speakers, session info and agenda, visit the 2021 ICBA Capital Summit information portal.

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?

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. 
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

The state budget negotiations are intensifying with both the Legislature and Governor -- amid the dual crises involving the Governor including a possible impeachment process and an investigation by the State Attorney General.
  • The Senate and Assembly this week each passed their own versions of their "one-house" budget bills -- both calling for spending plans exceeding $200 billion. The next step is for the Legislature and Governor to agree on a finalized budget deal.

  • The Governor’s budget director has agreed the state will collect $2.5 billion more in taxes over the next two years than the was estimated less than two months ago. 

  • Tax receipts are far higher than once projected: high-income earners, who pay the vast majority of income taxes, have kept their jobs and the financial sector is reporting near-record profits.

  • New York has received more than $9 billion in federal money from the previous aid bills, according to NYS Comptroller DiNapoli, and President Biden's recently enacted "American Rescue Plan" will likely send $12.6 billion in general aid to the state, $3 billion for Medicaid and provide more than $12 billion for education, most of which would be sent to local districts.


The Legislature is viewed as being in a stronger negotiating position due to the Governor's political crises, the Assembly's having established an impeachment panel and the State Attorney General's ongoing investligation. There is significant support for legislative priorities, including higher taxes on the wealthy. Both the Senate and Assembly are proposing increasing personal income tax rates for the next three years and creating two new tax brackets.
  • For single filers who earn more than $1 million, but less than $5 million, and couples who earn more than $2 million, but less than $10 million, income tax rates would increase from 8.82% to 9.85%.
  • For single filers making more than $5 million, but less than $25 million, and couples who make more than $10 million or less than $50 million, income tax rate would be 10.85%.
  • For single filers earning more than $25 million, and for couples earning more than $50 million, income tax rate would be 11.85%. This is considerably higher than Governor Cuomo’s increased tax proposal, and if adopted, this would make New York’s personal income tax rate the highest in the country.
  • The Legislature is also proposing a 1% surcharge on income from capital gains for those who earn more than $1 million annually.

Meanwhile, Comptroller DiNapoli said New York's tax revenue continues to lag behind last year's final month prior to the start of the COVID-19 pandemic, but the amount of money the state is bringing in is higher than initial estimates -- a potential sign New York's economy is not as badly off as once initially feared and that the state's financial picture may be showing signs of improvement. 
  • New York's unemployment rate was still above 8% in January;
  • The February tax collection reported on Monday continued to show signs that economic activity had not fully recovered in the 12 months since the crisis began.
  • Sales tax revenue, too, was lower last month than a year ago. 
  • All told, DiNapoli said the state took in $758.4 million more than initially estimated, as personal income tax grew primarily to lower refunds. He concluded:
“There is reason to be cautiously optimistic with better-than-forecasted tax revenues from February and the passing of significant additional federal assistance. . .While these resources will be helpful in the state’s ongoing recovery effort, it is important to use them responsibly and think long-term, as challenges remain.”

Latest State Legislative Activity

Here are the committee agendas for this week and bill activity for last week. Please let us know if you have any questions.

Legislation permitting credit unions to participate in the Linked Deposit Program was reported by the NYS Assembly Economic Development Committee to the Assembly Ways & Means Committee with no negative votes. IBANYS is monitoring this issue closely and will be prepared to offer our opposition, as we have successfully done in previous years.

Here is the most recent legislative activity in Albany (both committee agendas and bill activity) for the current week: See here and here

Earlier legislative activity
See here and also here click here. . . here . . . here. . . here. . . here

Other previous legislative activity 

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

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State lawmakers are close to reaching an agreement on legalizing adult use cannabis in New York, but a familiar hurdle to its final passage remains: Reconciling the concerns raised by some Democratic lawmakers over traffic safety. Read More

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Over the past five weeks, New York City housing courts have seen a nearly 1,000-percent increase in the number of tenants submitting newly created documents that allow them to delay eviction proceedings, state data shows. Just under 24,000 households across New York City have submitted ‘hardship declaration’ forms that were instituted by the state last December, according to the Office of Court Administration. In most cases, renters who complete the simple form indicating that they have faced financial hardship due to the COVID-19 pandemic will postpone their eviction proceedings until at least May 1. 
Washington Update

April 27 is the 2021 ICBA Virtual Capital Summit. We urge you to participate -- and, to join in IBANYS' grassroots push in virtual "congressional visits" with members of our New York Congressional Delegation. In the face of the pandemic, New York community banks once again demonstrated our positive economic impact, saving thousands of local small businesses and jobs throughout our state. Our New York Representatives need to hear about the importance of our New York community banking industry -- FROM YOU. Click here to learn more & register. . .then, let us know which congressional office "visits" you would like to join.


The U.S. Senate voted 81-17 to confirm Isabel Guzman as the next SBA administrator. Guzman previously served as director of the California Office of the Small Business Advocate. 


ICBA: Two-tiered deadline will ensure SBA clears PPP loans on hold
ICBA thanked policymakers for introducing The PPP Extension Act of 2021, which pushes the application deadline until May 31 and creates a second deadline of June 30 for the Small Business Administration to clear the thousands of Paycheck Protection Program loan applications in process.
Background: Under current law, any application not approved by March 31—even if it was submitted prior to that date—cannot receive PPP funds.

ICBA Position: Congress should quickly move to advance this legislation before the March 31 deadline and use the additional time to address PPP issues related to first-draw increase eligibility, second draws, farm partnerships, Schedule C borrowers, and the Save Our Stages program. 


SBA updates PPP guidance
The Small Business Administration on Friday updated its frequently asked questions as well as its guidance concerning how to calculate revenue reduction and maximum loan amounts for first- and second-draw Paycheck Protection Program loans. Notably, FAQ 66 outlines how lenders can help Schedule C filers who had already submitted a loan application to use gross income instead to calculate their loan amount. Also, FAQ 17 for first-draw PPP loans and FAQ 19 for second-draw PPP loansclarifies that farm partnerships may not use gross income to determine loan amount. Qualified joined ventures as defined by the IRS (generally married couples that file jointly, both materially participate in the business and each elect not to be treated as a partnership) can apply as Schedule F borrowers using gross income. However, only one spouse in a qualified joint venture may submit a PPP loan application on behalf of the qualified joint venture.

To help pay for follow-up to the COVID-19 relief bill, the President is reportedly making plans to institute the country's first significant federal tax hike since 1993, with a suite of tax increases under consideration by the White House such as: raising the corporate tax rate to 28% percent from 21%; implementing a higher capital-gains tax on those earning at least $1 million per year; scaling back tax preferences for pass-through businesses; enacting a higher income tax rate on those earning more than $400,000 annually; and broadening the reach of the estate tax. 

The FDIC’s Office of Minority and Women Inclusion encouraged all FDIC-supervised institutions with 100 or more employees to submit voluntary self-assessments of their diversity policies and practices. The window for submissions for the 2020 reporting period is open until June 30.

ICBA has updated its frequently asked questions to include new information on the third round of payments on the PPP and EIP News page. The IRS also issued FAQs for consumers that cover EIP amounts, eligibility and payment status. The Bureau of Fiscal Service also offers a summary of the recent and expected actions around this new round of payments. The IRS’ Get My Payment tool, which lets consumers check the status of their EIPs, is expected to be active starting today.

ICBA also offers a summary of the American Rescue Plan Act, including provisions on the EIPs, supplemental unemployment insurance, aid to state and local governments, and more.

ICBA's 2021 community banking agenda (in an open letter to Congress) urges 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

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IBANYS received the following three documents providing important information from the SBA, and we wanted to share it with you (see below and attached):

I. Below please find web links to the recently updated PPP documents:
 
Frequently Asked Questions - Click here:  PPP-FAQs-3.12.21.pdf
How to Calculate First Draw Loans – Click here: How to Calculate First Draw PPP Loan Amounts
How to Calculate Second Draw Loans – Click here: How to Calculate Second Draw FAQs-3.12.21.pdf

II. Please find attached SBA Procedural Notice 5000-806780 “Guidance on 7(a) and 504 Loans with Monthly Installments in Excess of $9,000. ”
 
The purpose of this Notice to provide supplemental guidance to Lenders with 7(a) loans sold into SBA pools in the Secondary Market and to CDCs with 504 loans in debenture pools.

Valerie Shoudy, Lender Relations Specialist        

Grace Conners, Lender Relations Specialist
U.S. Small Business Administration
224 Harrison St., Suite 506 | Syracuse, NY 13202

II. WASHINGTON – The U.S. Small Business Administration announced extended deferment periods for all disaster loans, including the COVID-19 Economic Injury Disaster Loan (EIDL) program, until 2022.
 
  • All SBA disaster loans made in calendar year 2020, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 24-months from the date of the note.
  • All SBA disaster loans made in calendar year 2021, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 18-months from the date of the note.
 
Existing SBA disaster loans approved prior to 2020 in regular servicing status as of March 1, 2020, received an automatic deferment of principal and interest payments through December 31, 2020. This initial deferment period was subsequently extended through March 31, 2021. An additional 12-month deferment of principal and interest payments will be automatically granted to these borrowers. Borrowers will resume their regular payment schedule with the payment immediately preceding March 31, 2022, unless the borrower voluntarily continues to make payments while on deferment. It is important to note that the interest will continue to accrue on the outstanding balance of the loan throughout the duration of the deferment. 
 
“Small Businesses, private nonprofits and agricultural enterprises, including those self-employed individuals, contractors and gig workers, continue to navigate a very difficult economic environment due to the continued impacts of the Coronavirus COVID-19 pandemic, as well as historic Severe Winter Storms in 2020,” SBA Acting Administrator Tami Perrillo said.
 
“The COVID-19 EIDL program has assisted over 3.7 million of small businesses, including non-profit organizations, sole proprietors and independent contractors, from a wide array of industries and business sectors, through this challenging time,” continued Perrillo. 
 
SBA continues to strive to make available all previously approved Coronavirus Pandemic stimulus funding and administer the new targeted programs related to provisions in the 2020 Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Economic Aid Act) as quickly as possible. 
 
“The American people and the nation’s Small Business owners need our tireless effort and dedication to get this essential funding to those in great need, and SBA will not rest until we implement President Biden’s “American Rescue Plan” and it’s additional targeted programs and funds allocated for America’s small business and nonprofit communities,” said SBA Senior Advisor Michael Roth.
 
COVID-19 EIDL loans are offered at very affordable terms, with a 3.75% interest rate for small businesses and 2.75% interest rate for nonprofit organizations, a 30-year maturity. Interest continues to accrue during the deferment period and borrowers may make full or partial payments if they choose.
 
In mid-February 2021, SBA reached a milestone in the success of the COVID-19 EIDL program, by approving over $200 billion in emergency funding in low-interest loans, providing working capital funds to small businesses, non-profits and agricultural businesses to survive the severe impacts of this catastrophic and historic period within the entire United States of America and its territories. SBA continues to approve over $500 million each week for the COVID-19 EIDL program. 
 
Questions on SBA COVID-19 EIDL and disaster loan payments can be answered by email at DisasterCustomerService@sba.gov or by calling SBA’s Customer Service Center at 1-800-659-2955 (TTY: 1-800-877-8339).