July 15, 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.
The President's Message:
IBANYS News and Updates
By John Witkowski, President & CEO

Lots of activity in Albany and Washington, as the NYS State Legislature and Congress continue to respond to issues related to the pandemic and its impact on the economy. IBANYS continues to be engaged in both our state and national capital:
 
  • In Albany, the Assembly Banks Committee reported a bill (A.10532A, Bichotte) to the Codes Committee and Senate Banks Committee Chairman Sanders introduced a companion bill in his chamber. The legislation involves forbearance of residential and commercial investment property mortgage payments. IBANYS is opposing the legislation and working with the Legislature and the NYS DFS.
 
  • In Washington, the debate and negotiations continue on the next legislative package to address the pandemic. IBANYS is co-signing a letter to congressional leadership with a list of recommendations we would like to see included -- the list was developed by community banks.
 
More on both these developments can be found under our Albany and Washington sections in today's newsletter.
 
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Community Bank PPP Share Continues Climb
Community banks continue to lead the way in helping small businesses through the Protection Program.
 
  • Lenders under $10 billion in assets have made some 2.52 million PPP loans worth more than $229 billion through both rounds of funding, according to SBA data through July 10.
 
  • Lenders from $10 billion to $50 billion in assets have made more than 740,000 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. There is more than $132 billion in remaining PPP funds.
 
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As New York community bankers continue to reopen their lobbies and branches (with safeguards in place to keep their staff and clients safe and healthy as we adjust to the “new normal”) and while others take a more guarded approach, IBANYS continues to gather and disseminate to banks information on reopening and operational 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 .

IBANYS Welcomes our newest Associate Member - Candor Pay
Candor Pay is a merchant service provider offering competitive rates and relationship based, high quality and honest service.

Danielle Gizzo, President
914-557-8940
danielle@candorpayment.com

WEBINARS 
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IBANYS Preferred Partners & Associate Members
Navigating The New Credit Cycle
COVID-19 Loans and Emerging Credit Risk
by: David Ruffin, Principal, IntelliCredit
The COVID-19 virus has brought on the advent of a new and likely treacherous credit cycle. Fortunately, the financial industry has much more capital, more liquidity and better risk management systems than when our previous economic crisis began. Nevertheless, this current sea change will not exempt banks and credit unions from potentially serious economic, operational and credit risks. 

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
Legislature Session To Reconvene July 20--More Forbearance Legislation On Agenda
The New York State Legislature will reconvene next week for a rare summer session in this year where the legislative calendar has been upended by COVID-19. Since July 1, 178 bills have been introduced or amended. It appears next week's agenda will include additional forbearance legislation. Yesterday, the Assembly Banks Committee reported a bill (A.10532A, Bichotte) to the Assembly Codes Committee that would address forbearance of residential and commercial investment property mortgage payments. Senate Banks Committee Chairman Sanders has now introduced a companion bill in that chamber. IBANYS is opposing the legislation and working with the Legislature and the NYS DFS.
 
IBANYS Working With DFS On Mortgage Forbearance "FAQ" Document
IBANYS is working with the New York State Department of Financial Services (DFS) on our request that the Department develop and make available to community banks a DFS "FAQ" document on the mortgage forbearance issue. We expect the document to be finalized and released soon.
 
Assembly Banks Chairman Wins His Primary
NYS Assembly Banks Committee Chairman Tom Abinanti (D-Westchester) has won his primary and will be the Democratic candidate for re-election in November. Abinanti trailed after the "in-person" vote on election day but overcame that deficit once absentee ballots were counted.
 
DiNapoli: Property Tax Increases Limited To 1.56% Due To Pandemic Cash Crunch
State Comptroller DiNapoli said property tax increases will be limited to a 1.56% increase for local governments in New York amid a pandemic-induced cash crunch. The cap limits property tax levy increases to 2% or the rate of inflation, whichever is lower. There are narrow exemptions for some growth and local governments can override it. Local governments are facing limited revenue options as the pandemic has ground the economy to a virtual halt for much of the year so far, freezing sales tax revenue and potentially slashing state aid by up to 20%. 
 
As Local Governments Face 'Profound' Fiscal Challenges
A report from Comptroller DiNapoli said local governments are facing a "profound" fiscal reckoning from the economic crisis created by the pandemic, with the typical county government losing millions of dollars in revenue. "Without substantial help from the federal government, many local governments will likely be forced to make painful cuts to services, even if they have no additional costs for providing new services related to COVID-19."
 
Governor's Executive Order Extended Some Executive Orders Through August 5
Governor Cuomo's Executive Order No. 202.48, which "Continues Temporary Suspension And Modification Of Laws Relating To The Disaster Emergency. " It extends, through August 5, a number of executive orders issued by the Governor March 7. However, it does not include any executive orders that have already been separately addressed and superseded by statute, such as the Mortgage Forbearance laws under Chapters 112 and 126 of the Laws of 2020.
Washington Update
Focus On Next Economic Stimulus Package
With the Senate set to  begin debating  the next economic stimulus package next week, IBANYS joins ICBA in calling on community bankers to use ICBA's  Be Heard grassroots action center  to weigh in with recommendations. The custom message encourages Congress to advance a more straightforward approach to Paycheck Protection Program loan forgiveness as well as capital, accounting, and tax relief. Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza are scheduled to testify before the House Small Business Committee  this Friday  on the federal pandemic response. ICBA last week released  talking points  and a  sample letter  to borrowers about the agencies' release of information about individual PPP loans. ICBA also offers a sample press release and op-ed on PPP efforts on its  Tell Your Story toolkit .
 
IBANYS has co-signed a letter written by ICBA to be sent to Senate Majority Leader McConnell, Senate Minority Leader Schumer, Speaker Pelosi, and House Minority Leader McCarthy on behalf of community banks, urging Congress to include a list of recommendations community banks would like to see in the next legislative package to create relief for American small businesses impacted by COVID-19 and the millions of people they employ. The recommendations were developed in consultation with community bankers from across the country representing rural, suburban, and urban markets. 
 
The recommendations include:
  • Simplified Forms and Procedures for Paycheck Protection Program Loan Forgiveness (strong support for S. 4117),
  • SBA Purchase of Residual PPP Loans at Par,
  • Preserving Expense Deduction for PPP Borrowers,
  • Enacting Bank Capital and Accounting Relief measures,
  • Liability Protection for businesses from COVID-19 related lawsuits,
  • Support Agricultural Lending,
  • Expanding Employee Retention Tax Credit,
  • Industrial Loan Company Moratorium,
  • Mortgage Lending
  • Support for Local Regions,
  • Financial Assistance to the Farm Sector, and
  • Enhancing USDA Guaranteed Lending Programs.
 
 
Schumer: Undo The SALT deduction In Next Relief Package
Senate Minority Leader Schumer called for undoing the cap on the state and local tax (SALT) deduction in the next coronavirus relief package. Democrats and Republicans are expected to start negotiations on another relief bill in the near future. 
 
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ICBA Seeking ILC Grassroots Outreach
ICBA continues calling on community bankers to  urge their senators  to co-sponsor legislation to close the industrial loan company loophole. The  customizable message  on ICBA's Be Heard grassroots action center notes that ILCs pose a significant risk to the financial system and should be regulated like other banking institutions. The Eliminating Corporate Shadow Banking Act (S. 2839) would subject ILCs to the Bank Holding Company Act.
ICBA recently  called on  the FDIC to deny Rakuten Bank America’s resubmitted ILC application and  urged the agency  to strengthen its proposal to enhance oversight of ILC parent companies.
 
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.
Additional Information
News Release | NR 2020-92 July 15, 2020

News Release | NR 2020-91 July 15, 2020
 
WASHINGTON—The Office of the Comptroller of the Currency (OCC) has renewed the charter of its Minority Depository Institutions Advisory Committee (MDIAC), which advises the agency on issues and opportunities facing minority depository institutions.
 
“The Minority Depository Institutions Advisory Committee provides the OCC with important insight on the issues affecting minority depository institutions and their customers,” said Acting Comptroller of the Currency Brian Brooks. “We appreciate the continued work of these committee members and their perspectives on the challenges affecting their institutions and the communities they serve.”
 
The MDIAC provides advice to the Comptroller of the Currency about minority depository institutions, their current condition, potential regulatory changes that may promote their health and viability, and other issues affecting these institutions. The committee includes officers and directors of minority depository institutions of all types, sizes, operating strategies, and geographic areas, as well as from other depository institutions committed to supporting minority depository institutions.

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