July 1, 2020
IBANYS Weekly E-Newsletter
  • Visit our website at www.ibanys.net to review all our daily updates on COVID-19 beginning on March 16.
IBANYS would like to wish everyone a safe and heathly 4th of July.
The President's Message:
IBANYS News and Updates
By John Witkowski, President & CEO

This weekend, we celebrate Independence Day in America. As we continue to grapple with the ongoing pandemic and its consequences, it will admittedly be a different kind of July 4 than we are accustomed
to as many may choose to forego the larger gatherings, fireworks displays and public events we have traditionally enjoyed. Yet in a real sense, it is perhaps more important than ever that we take time to honor the meaning and importance of the day, and share what we can.

Independence Day has been an official federal holiday in the United States since 1941, but its tradition of observances and celebrations dates to the 18th century and to the time of the American Revolution.
However you will be celebrating, we wish you all a safe, happy and healthy Fourth, as we hopefully prepare for a second half of 2020 that can be closer to some semblance of normalcy.


Many New York community bankers have begun reopening their lobbies and branches with safeguards in place to keep their staff and clients safe and healthy as we adjust to the “new normal”. . . Others are taking a more guarded approach, maintaining the operational practices and policies established when the pandemic hit. IBANYS will continue to gather and provide banks information on reopening strategies and updates from the regulatory agencies and other resources.

If you have information you would like to share or have a comment about the newsletter, please email me at johnw@ibanys.net .

Build revenue-generating portfolios with BHG – Virtual Webinar July 22 nd at 9 a.m.

IBANYS is excited to have Bankers Healthcare Group join us to discuss how they’re helping community banks build revenue-generating portfolios through medical and professional loans.
Since the COVID-19 outbreak, the lending market has seen a significant amount of disruption. At a time when banks would have been focused on loan volume and building their income streams, many shifted their attention to the Paycheck Protection Program (PPP) to support local business owners.
Albert Crawford, BHG’s Founding Partner and CEO will break down how banks are reaping the benefits of partnering with BHG to grow their loan portfolios with top-tier borrowers. Link to register: https://calendly.com/bhgbanks/ibanys-bhg-webinar?month=2020-07
Tompkins Bank of Castile Helps More Than 700
Pandemic-Affected Local Businesses
$120 million in Paycheck Protection Program funding approved
BATAVIA, NY – More than 700 companies throughout Western NY were able to access approximately $120 million under the SBA’s Paycheck Protection Program facilitated by Tompkins Bank of Castile.
 “Keeping with our longstanding commitment to the community, we were happy to do our part to support local businesses, especially during this time of need,” said President and CEO, John McKenna. “We’re thankful that our efforts were able to protect more than 7,000 local jobs.”
Essential bank staff aimed to get ahead of the rush by working extended hours—mostly remotely—to reassure customers, explain the PPP program, and process the loans as quickly as possible. Local businesses are using the loans to keep employees on their payrolls, as well as cover other operating costs including interest, rent and utility costs. The customers were very appreciative of the support.
“We’re grateful for Tompkins for keeping us updated on this process and supporting us along the way,” said one small business owner. “I really appreciate the information they have been able to provide, and I feel very confident with Tompkins at the helm.”
The COVID-19 pandemic required Tompkins to restrict its services to drive-up, ATM, phone, mobile and internet banking. During this time, the staff worked diligently to educate customers about its electronic services.
 “As an essential business, we’ve been fortunate to stay open and accessible to our customers when they need us most,” said McKenna. “We believe in the power of our local people working together to help our communities grow and thrive; That’s why we’ll continue to do everything possible to support our friends and neighbors as we work together to recover.”
Ballston Spa National Bank Hosts Drive-Thru Food Pantry
BALLSTON SPA, N.Y. — Ballston Spa National Bank, in conjunction with the Regional Food Bank of Northeastern New York and Adirondack Community College, will be hosting a fourth contactless drive-thru food pantry 10 a.m. Monday, June 29 at the SUNY Adirondack Community College — Wilton Campus located at 696 Saratoga Road in Gansevoort.

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. 
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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.)
IBANYS Preferred Partners & Associate Members
COCC Sends Special Rebate to Core Clients
In these extraordinary times, COCC is proud to announce we are sending service fee rebate checks totaling approximately $1.9 million to all of our clients to our show appreciation for their dedication and service to their communities. COCC’s Board of Directors approved this rebate at its monthly Board meeting in April 2020. This rebate, which will be distributed among COCC’s core clients, represents approximately 20% of COCC’s fiscal year-end earnings in 2020. Read full press realease below.

ICBA and The American College of Financial Services are offering a new  “20 in 2020” scholarship  for veterans and their families seeking careers as community bankers.
Recipients will receive full scholarships to complete coursework and earn The American College Wealth Management Certified Professional designation. The year-long coursework includes instruction in goal identification, risk management, and investment management plans. Applications are due July 31, and winners will be notified by Sept. 1. 
Ready to run
After a lag, prepayments are primed to take off.
By Jim Reber
If you are inclined to read bond analysts’ research reports, eventually you’ll chance upon some commentary that addresses the performance of mortgage securities. To many of the uninitiated, which I pointedly state do not include community bankers, mortgage-backed securities (MBS) are an abstract collection of investments that have long maturities and a volatile series of principal paydowns. They seem to require a lot of effort and are only marginally tethered to the housing finance market in general. Read full article below.

Albany Update
Governor Cuomo Signs Eviction Prevention Legislation
Legislation to extend measures to prevent tenants from being evicted for nonpayment of rent during this period of coronavirus-related restrictions  was signed into law by Governor Cuomo Tuesday evening. "The Tenant Safe Harbor Act," prohibits evictions of eligible tenants if any part of the county is still shut down by government as a result of Covid-19. The bill extends eviction protection to tenants by allowing them to use Covid-related financial hardship as a defense in eviction proceedings. While the bill does not specify the criteria for determining hardship, it instructs the court to examine a tenant’s income history, liquid assets and government assistance such as food stamps and unemployment benefits. The bill does not waive rents, but buys time for tenants to stay in their homes.


DFS Alerts State-Regulated Banks Of New CRA Responsibilities
The New York State Department of Financial Services (DFS) alerted New York regulated banking institutions of their responsibilities under  enacted amendments  to New York State’s Community Reinvestment Act (CRA) with respect to minority- and women-owned businesses, and of opportunities to receive CRA credit for activities undertaken in response to the COVID-19 pandemic.
  • DFS issued a new Industry Letter alerting New York banking institutions that the Department will make changes to its CRA examination process in response to amendments to the New York CRA that require banking institutions to support minority- and women-owned businesses, consistent with safe and sound operation of the banking institutions. The amendments require DFS to consider banking institutions’ record of performance in helping to meet the credit needs of minority-and women-owned businesses and banking institutions’ participation in technical assistance programs for small businesses and minority- and women-owned businesses. 

  • DFS also issued a new separate Industry Letter today that describes circumstances in which banking institutions may receive CRA credit for activities undertaken in response to the COVID-19 pandemic. The DFS Industry Letter is consistent with the federal regulators' response concerning CRA credit considerations for activities related to the COVID-19 pandemic. 


New York's High Unemployment "Could Be A Long-Term Problem"
Analyst EJ McMahon, President of the Empire Center, noted that New York is facing historic unemployment due to the pandemic -- something that could shape up to be a long-term problem. "I don't think anybody is seriously looking at a v-shaped recovery where everything by the end of this year is back to normal. I think it's going to be quite a while." New York's unemployment rate in May stood at 14.5%, down from 15% in April, but the pace of returning jobs as businesses reopen indicate a return of low unemployment is unlikely -- and the high jobless rate could last into 2021.
Washington Update
Senate Extends PPP Deadline To August 8
The U.S. Senate yesterday by unanimous consent passed legislation to extend the Paycheck Protection Program application deadline until Aug. 8, and sent the bill to the House hours before the SBA stopped accepting PPP applications. The bill must be approved by the House and signed by the president to take effect. The  SBA  has approved $520.6 billion in PPP loans through Tuesday evening, but the program has roughly $130 billion in remaining funds. The Senate bill also would decouple the PPP reauthorization from the SBA's 7(a) program to avoid shutting it down when the PPP expires. The Senate likely extended the PPP into August to give Congress time to pass the next economic relief package currently being negotiated and debated. IBANYS joins ICBA in continuing to urge community bankers to use ICBA's  Be Heard grassroots action center  to provide Congress with comprehensive policy recommendations as Congress considers the next relief package.

  • Community bank Paycheck Protection Program loans continued to climb ahead of today's deadline for borrower applications, according to an SBA summary of loan approvals through June 27. Lenders under $10 billion in assets have made some 2.43 million PPP loans worth nearly $229 billion through both rounds of funding. Lenders from $10 billion to $50 billion in assets made more than 730,000 loans worth more than $100 billion. Combined, the two asset classes account for more than 66 percent of approved loans and more than 63 percent of the approved dollar amount.
Treasury, Fed Testify At House Financial Services Hearing
At yesterday's House Financial Services Committee hearing, Federal Reserve Chairman Powell and Treasury Secretary Mnuchin promised to consider more economic relief. Mnuchin noted he wants further aid to be "targeted to certain industries that have been especially hard hit by the pandemic." Powell said some economic measures have rebounded more quickly than expected, such as spending and hiring, but warned the increase in business activity leads to more human interaction and "presents new challenges" such as "the need to keep the virus in check."

ICBA Focuses On ILC Loophole In Comments To FDIC, Congress
ICBA urged the FDIC to deny Rakuten Bank America’s resubmitted federal deposit insurance application and urged Congress to permanently close the industrial loan company loophole. In a  comment letter , ICBA said the application would allow the "the Amazon of Japan's" subsidiary to skirt regulatory oversight and violate U.S. policy separating banking and commerce: "Like other ILC applications, Rakuten Bank America is applying as an ILC rather than a commercial bank so its parent companies may avoid the legal restrictions of the Bank Holding Company Act." ICBA said the global reach of Rakuten's commercial activities—which include an online marketing business and its own professional baseball team—pose risks to the FDIC's Deposit Insurance Fund and the financial system more broadly. 

  • In a comprehensive white paper released last year, ICBA detailed the transformation of the ILC charter into the fashionable charter of choice for financial firms seeking to benefit from the federal safety net while avoiding oversight.

U.S. Supreme Court Won't Review NCUA's Field Of Membership Rules For Credit Unions
T he U.S. Supreme Court declined to review the National Credit Union Administration's field-of-membership rules, ending an ICBA-supported legal challenge going back several years. In a  statement , ICBA President and CEO Rebeca Romero Rainey said the decision not to review a rule that could have a discriminatory impact on urban communities is another reminder of the need to "Wake Up" to the realities of tax-exempt credit unions.
  • The NCUA rule significantly expands the service areas in which community credit unions can do business. Among its provisions, the rule would allow credit unions to include suburbs of metropolitan areas in their fields of membership while cutting out their urban cores. It would also define entire states and major metro centers as rural districts.
  • An August 2019 U.S Court of Appeals decision largely upheld the NCUA's rules, citing the "Chevron doctrine" that grants considerable rulemaking discretion to regulatory agencies. However, that court also found that the provision on urban cores could have a discriminatory impact on lower-income and minority residents, permitting the NCUA to issue a new proposal to address its concerns.
  • ICBA and state banking associations filed a friend-of-the-court brief in April asking the Supreme Court to review the appeals court's decision. ICBA previously called onthe NCUA to withdraw and redraft its updated proposal on urban cores, arguing that it does not adequately address discrimination concerns.
Through its  "Wake Up" campaign , ICBA will continue encouraging policymakers to open their eyes to the risky practices, costly tax subsidies, and irresponsibly lax oversight of tax-exempt credit unions.

FHFA: Fannie, Freddie To Allow Forbearance Extensions On Multifamily Properties
The  Federal Housing Finance Agency  said Fannie Mae and Freddie Mac are allowing mortgage servicers to extend existing forbearance agreements for multifamily property for up to three months. The extension provides up to six months in total forbearance, during which landlords must suspend all evictions for renters unable to pay rent.
Additional Information
Bulletin | OCC 2020-65 June 29, 2020
Bulletin | OCC 2020-67 July 1, 2020

Read Summary here. Summary


Washington, D.C. (June 29, 2020)—Independent Community Bankers of America® (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on today's Supreme Court decision not to review the National Credit Union Administration's field-of-membership rules.
"Today's Supreme Court decision not to review a National Credit Union Administration rule that could have a discriminatory impact on urban communities is another reminder that Washington and Americans nationwide need to 'Wake Up' to the realities of tax-exempt credit unions.
"While the courts have granted considerable rulemaking discretion to the NCUA under the 'Chevron doctrine,' the agency's flawed plan would allow taxpayer-subsidized credit unions to include wealthy suburbs of metropolitan areas in their fields of membership while cutting out their urban cores. Meanwhile, it would drastically enlarge credit unions’ geographic reach by defining entire states and major metro centers as rural districts.
"The NCUA has yet to address redlining concerns with its rule, which is just the latest example of the credit union industry's captive regulator bowing to the growth-obsessed financial firms it is charged with regulating at the expense of local communities.
"Through its 'Wake Up' campaign , ICBA will continue encouraging policymakers to open their eyes to the risky practices, costly tax subsidies, and irresponsibly lax oversight of tax-exempt credit unions and how far credit unions have strayed from the original purpose underlying their tax exemption."