October 2, 2019

In This Issue: 
Welcome Fall
Message From The President

By John Witkowski, President & CEO

Together, We Are Stronger.

That statement rings true, and its relevance to our New York community banking industry was demonstrated anew during the 2019 state legislative session when we were faced with a major challenge. Legislation in the New York State Senate and Assembly would have allowed tax-exempt credit unions -- which are not subject to any community reinvestment (CRA) mandates -- to enter the municipal deposits business. 

The bills would have placed credit unions in direct competition with community banks, who pay our fair share of taxes and reinvest heavily in our local communities under CRA. 

How we responded tells a great deal about how we, at IBANYS, strive to represent the interests of community banks. As the only state trade association solely committed to representing independent community banks, IBANYS:
  • Met with the two legislative Banks Committee Chairmen and their senior staff;
  • Testified before a Joint Assembly Hearing on the subject;
  • Conducted in-depth research, and developed new proactive policy positions and realistic alternative solutions.
We accomplished this through the united efforts of our officers (led by Chairman Tom Amell of Pioneer Bank), our member banks, our expert consultants (both former longtime community bank senior officials) and our government relations staff.

The result? The legislation was held in committee in both the Senate and Assembly, and the Legislature will re-examine the subject -- and, our proposed alternatives -- in 2020. That's not to say we are "home free" on this issue. . .but, it is proof positive that by coming together and working hand-in-hand, we can achieve far more than any one of us could do alone. It is a perfect example of the very purpose of a member-driven trade association.

When IBANYS was founded in the late summer of 1974, it was to be the voice of New York's community banks. . .to ensure that they were represented at the table in the halls of government, where larger, more powerful financial institutions often commanded the stage.

45 years later, it's still what we are about. . .and it always will be.

As always, thanks for everything you do to advance community banking in New York State!


IBANYS Well Represented On List Of 
"50 Most Powerful People In New York Finance"

-- Witkowski, Fisher, O'Connor, Tryniski Are Honored 

"City & State New York" has published its inaugural list of the 50 leaders driving the banking and investment industry in New York State -- and IBANYS was well represented on the list. The "Finance Power 50" list looks at who has the most influence on the political process. City & State publishes a weekly magazine covering politics and government in New York City and  New York State that is distributed to New York State legislators, county executives, municipalities, the New York Congressional delegation, New York City Council members and others leaders in New York business and government. City & State also publishes on their website and sends out a free First Read daily email. 

John Witkowski, 
President & CEO Independent Bankers Association of New York State 
"As President and CEO of the Independent Bankers Association of New York State for the past five years, John Witkowski speaks for more than 60 independent community banks across the state. The former National Football League quarterback went into banking after football, serving as executive vice president and retail banking executive at Five Star Bank. In his current role, he's worked on reducing regulations on community banks and deploying technology already in use at larger banks."

Bob Fisher, 
President & CEO of Tioga State Bank
"Robert Fisher is a fifth-generation community banker who has helped his Spencer, New York-based institution expand to more than a dozen locations upstate. Active in the Independent Bankers Association of New York State, he also serves as vice chairman of the Independent Community Bankers of America. An ROTC scholarship student at the University of Notre Dame, Fisher's stint in the Air Force included service in the first Gulf War."

Kevin O'Connor, 
President & CEO, Bridgehampton National Bank 
"Kevin O'Connor could teach seminars on how to handle job interviews. After applying for the chief financial officer position at what's now called BNB Bank, he was offered the CEO job instead. President and CEO of the fast-growing community bank since 2008, O'Connor's BNB Bank operates 45 branches in Long Island and the greater New York City metropolitan area. A Brooklyn native, O'Connor had been treasurer at North Fork Bank, where he spent 20 years."

Mark Tryniski, 
President & CEO, Community Bank System
"President and CEO of Community Bank System since 2006, Mark Tryniski joined the commercial bank, based in DeWitt, a suburb of Syracuse, three years earlier. Previously a partner in the Syracuse office of PricewaterhouseCoopers, Tryniski spent 18 years working with U.S. Securities and Exchange Commission registrants in banking and other industries. He's active in the New York Bankers Association, the New York Business Development Corp. and SUNY Oswego, where he earned a bachelor's degree."

Follow IBANYS On Social Media!

 Connect With Us Today!

 Facebook: @ibanys1 | Twitter: @ibanys1

Instagram: @ibanys1 | LinkedIn: @ibanys

  • IBANYS 2020 Annual Convention will be held June 15-17, 2020 - Turning Stone Resort and Casino - Save the Date - Mark your calendar.
  • Watch for our announcements regarding our 2020 Meetings, Conferences & Seminars Calendar. . .Coming Soon!
  • Have an idea for one of our meetings? Want to see a meeting or forum on a different subject? We want to hear from you! 
    Contact Linda Gregware or John Witkowski with your thoughts and/or comments


IBANYS Education/WebinarsWebinars

Have you reviewed our 2019 Webinar Calendar? The Independent Bankers Association of New York State (IBANYS) partners with CBWN to bring you more than 150 webinars each year covering compliance, lending, regulations, security, operations, new accounts, collections, fraud, security and other topics. Even better, each time you purchase a webinar, you support IBANYS, because a portion of your registration comes directly to us. Thank you!  

You can view the 2019 Webinar Schedule here or by category here. In addition, CBWN has made some recent updates to provide better service to its consumers. Unfortunately, some changes may have caused you to miss important webinar announcements. Please read the IBANYS letter to view the updates and ensure that you do not miss another webinar.

CBWN and IBANYS thank you for your continued support of the education in the community banking industry. 

Purchase Webinars Individually or Purchase the Series to Save 10%!

View or Purchase the Webinar

Stay-up-to-date with our webinar features by following us on Facebook, Twitter, Instagram, and LinkedIn! You can also follow the hashtag #WebinarWednesday on Instagram/Twitter!

Government Relations


The New York State Legislature will return to Albany in January for the 2020 session. 

DFS Is The First State Banking Regulator To Join 
"Network For Greening The Financial System"

Superintendent  Lacewell
On Tuesday, the New York State Deparntment of Financial Services (DFS) has joined an international coalition of bank supervisors with a goal of driving the financial industry to address climate change. DFS  Superintendent Linda Lacewell said the Department is the first state banking regulator in the U.S. to join the coalition, called the Network for Greening the Financial System (NGFS).  "As the federal government continues to deny climate change and rolls back important regulations designed to sustain our planet for future generations, New York is once again leading the way to contribute solutions to a real and growing problem," Lacewell said. The coalition first convened last year and has nearly 50 members, including central banks, supervisors and international organizations committed to develop a set of best practices for institutions to follow, globally, to support an environmentally sustainable economy. DFS also joined the "Sustainable Insurance Forum," an international network of insurance supervisors with a focus similar to the NGFS. DFS said it joined the groups in part because of the financial impact of climate change, noting extreme weather events often result in large amounts of damages, and also come with risk to the U.S. financial system.

Federal Court Rules Against  SALT Cap Suit; New York May Appeal

A federal judge in Manhattan tossed a lawsuit by New York, Connecticut, Maryland and New Jersey that alleged the SALT cap was an unconstitutional intrusion on states' rights. The ruling upheld a key provision of the federal government's 2017 tax law. The Judge  reaffirmed the cap was part of Congress's "broad powers" to write and pass tax legislation under the Constitution. Governor Cuomo left open the possibility of an appeal, stating: "There is no doubt in my mind that President Trump's unfair tax policy targets New York and other blue states by funding tax cuts for corporations and the rich on the backs of New Yorkers. New York is already the largest 'donor state' in the nation - paying the federal government $36 billion more than we get back every year. The SALT cap takes this gross imbalance and supercharges it, costing New Yorkers another $15 billion each year. The bottom line is this policy is unprecedented, unlawful, punitive and politically motivated - and it must be stopped. We disagree with the court's decision and are evaluating all options including appeal."

IBANYS' Plan of Action for 2020

IBANYS is preparing for the 2020 state legislative session that begins in January, developing positions and policies and encouraging member banks to meet with their local legislators to continue informing them about community banks, our priorities and the vital role we play in New York State. Please email us your ideas, thoughts and comments on issues you want to see on the 2020 IBANYS legislative agenda.

Washington, D.C.WashingtonGR

Frank Hughes Succeeds John Vogel 
As FDIC New York Regional Director

The FDIC  has  announced  the appointment of John Vogel as Deputy Director of Operations and Chief of Staff in the Division of Risk Management Supervision. The appointment took effect September 16. Mr. Vogel served as Assistant Regional Director in New York, subsequently served as Deputy Regional Director for Risk Management, was Regional Director since 2012. Succeeding John Vogel as the FDIC New York Regional Director is Frank Hughes, who served as Deputy Regional Director for the New York Region since 2018, after serving as Assistant Regional Director beginning in 2014. Mr. Hughes began his FDIC career as a bank examiner in 1989, and has 30 years of industry experience, including 24 with the FDIC. Before coming to the FDIC's New York region, he held a number of positions in its Kansas City region. He also served as President and Board member of a community bank in Kansas City, Missouri, and was a Senior Examiner with the Fedral Housing Finance Agency.

FHFA Orders Nation's FHLBanks to Begin Transition from LIBOR

The Federal Housing Finance Agency instructed the nation's Federal Home Loan Banks to begin transitioning away from the London Interbank Offered Rate, or LIBOR. Effective December 31, 2019, all FHLBanks in the country are required by the FHFA to stop purchasing investments in assets tied to LIBOR with a contractual maturity beyond Dec. 31, 2021. 

House Approves Safe Banking Act -- Future Senate Action Unclear

The U.S. House of Representatives passed the SAFE Banking Act  this week, which was strongly supportned by IBANYS and ICBA. Every member of the New York Congressional Delegation voted in favor of the bill, which would allow financial institutions to serve cannabis and related businesses in states where cannabis is legal without any federal regulatory penalties. Governor Cuomo supported passage. The future of the U.S. Senate companion bill is unclear. Senate Banking Committee Chairman  Crapo (R-ID) indicated he wants to bring it to a vote.

ICBA Supports FHFA's & Treasury's P lan T
Recapitalize Fannie & Freddie
ICBA strongly supports a plan by the Federal Housing Finance Agency (FHFA) and Treasury Department  to begin recapitalizing Fannie Mae and Freddie Mac, noting that a llowing the GSEs to retain a combined $45 billion in earnings is a crucial step in winding down their conservatorship and ending the net-worth sweep of their earnings. ICBA President & CEO Rebeca Romero Rainey said:  "These long-time community bank priorities-as detailed in ICBA's Principles for GSE Reform white paper-are required by the Housing and Economic Recovery Act to protect taxpayers and increase stability in the housing market," ICBA President and CEO said.

New York Community Banks: Take Action!

IBANYS joins ICBA in asking IBANYS members  to urge their local Members of Congress to advance legislation that will help community continue to serve military bases and rural communities. ICBA's "Be Heard" grassroots action center ( www.icba.org) can provide important information to help you: 
  • Urge lawmakers to include language in a defense bill extendin gto on-base banks the "rent-free" benefits credit unions enjoy,
  • Support legislation that would exempt from taxable income interest on loans secured by agricultural real estate, and
  • Thank members of the House who voted to pass ICBA-advocated legislation to establish a cannabis-banking safe harbor.

FDIC's Plan On Assessment Credits

ICBA supports the FDIC's proposal to suspend community bank credits to deposit-insurance assessments only if the Deposit Insurance Fund reserve ratio falls below 1.35%, rather than 1.38%. ICBA also supports the FDIC's idea of fully remitting any remaining credits after eight quarterly assessment periods. The FDIC recently announced that approximately $764 million in assessment credits are headed to community banks with assets under $10 billion.

Rep. Chris Collins Resigns From Congress --
Special Election Likely

Rep. Chris Collins (R-Western New York) resigned from Congress less than halfway through his fourth term, and changed his plea to guilty of federal charges tied to an insider trading scheme. Governor Cuomo appears likely to schedule a special election to fill the vacancy in the 27th Congressional District sooner than later, noting: "Western New York deserves a seat. We have a lot going on in western New York - a lot of good things going on. I would be inclined to fill the vacancy sooner rather than later." Potential GOP candidates include State Senators Robert Ortt and Chris Jacobs, State Assemblyman Stephen Hawley, attorney Beth Parlato, Erie County Comptroller Stefan Mychajliw and Medal of Honor recipient David Bellavia. Several potential Democratic candidates are interested, including Nate McMurray, who narrowly lost to Collins in 2018 in the heavily Republican district. . . Meanwhile,  former GOP Rep. Claudia Tenney yesterday formally announced she's running for the seat she lost a year ago to Democrat Anthony Brindisi, D-Central NY.  At least three other Republicans are also interested in running.  The 22nd Congressional District is likely to be considered a key battleground for both parties. 

Other Federal Activity:
  • The Senate approved stopgap funding legislation to avoid a federal government shutdown in three days. The bill, which funds the federal government through November 21, includes an extension of the National Flood Insurance Program and the Export-Import Bank.
  • The U.S. Labor Department issued its final rule on overtime pay, revising the 2016 rule issued by the Obama Administration. The new rule, which takes effect on January 1, 2020, establishes the salary level at which a worker could be exempted from federal overtime and minimum wage requirements: $684 per week/ $35,568 annually. 
  • Federal regulators issued an   ICBA-and IBANYS-supported final rule  to raise  the threshold for residential real estate transactions requiring an appraisal from $250,000 to $400,000. It's the first increase since 1994. The agencies estimate the rule will raise the number of exempt transactions from 56%to 72%.  The rule allows bankers to use a property evaluation in lieu of a full appraisal, expanding on a provision of the S. 2155 law focused on banks in rural markets. The agencies noted the change will provide regulatory relief without posing a threat to the safety and soundness of financial institutions, given price appreciation over the past 25 years.  ICBA  had  advocated further increasing the threshold to $500,000 and indexing it for inflation, and will continue working with policymakers on this issue.
  • The Federal Housing Finance Agency (FHFA) Director Calabria announced the Agency plans to prohibit Fannie Mae and Freddie Mac from giving volume-discounts to lenders on guarantee fees.  The Director indicated the decision is intended to help level the mortgage market playing field.

Industry Trends & Updates

Community Bank Survey Identifies Biggest 
Profitability, Lending Challenges

According to a poll of 571 community banks conducted by  the Federal Reserve, the Conference of State Bank Supervisors and the FDIC, f unding costs and loan demand will have the biggest influence on small-bank profits in the coming year.  The results, were presented as part of the annual community banking research and policy conference hosted by the three organizations. Among the findings:
  • Cost of funds was cited as the biggest influence on profitability over the next year, with 35% of bankers agreeing. 
  • 32% cited loan demand; only 4% said regulatory costs would be the biggest driver. 
  • Nearly 23% said core deposit growth was their biggest challenge
  • 16.4% cited regulation
  • 15.4% cited competition 
  • Almost 92% of bankers said competition for core deposits was an important or very important factor in building their deposit base. 
  • Only 2% said they had an online-only division to gather deposits or loans, but another 17% were considering it or planning to launch one. 
  • Approximately 33% said local area depopulation was an important or very important factor in their ability to grow core deposits. 
On the lending side:
  • Residential mortgage and small-dollar consumer lending saw greater out-of-market competition. About a quarter of community banks reported that their greatest source of competition for mortgages was institutions with no physical presence in their market. 
  • Nearly one in five said the same for small-dollar loans, compared to just 14% for ag loans and 4% for commercial real estate and small business loans.

Fed Governor Bowman: Community Banks Stronger, More Resilient

Federal Reserve Governor Michelle Bowman told the conference the community banking sector emerged from the decade following the Wall Street financial crisis stronger and more resilient. Bowman said acquisition data show that many small, locally focused community banks are performing well, challenging the notion that small scale and limited geographic reach are disadvantages.  Bowman, who last month was confirmed for a full term in the Fed's community banking seat, also discussed tiered regulations, credit union acquisitions of community banks, and the ongoing dearth in de novo bank formation.

As part of its "Trust Through Transparency" campaign, the  FDIC is holding listening sessions"throughout the nation, with the New York Region event scheduled for Wednesday, November 13 (8:30 am to 12:30 pm) at the FDIC Regional Office in the Empire State Building, 350 Fifth Avenue, New York, New York 10118.

Visit https://fdic.gov/news/news/financial/2019/fil19052.pdf to read about the session and for a link to register for the New York session.  Or, contact the FDIC Conference Planning Manager : (703) 516-5664,  vejames@fdic.gov.

ICBA Webinar October 17 On Faster Payments:
Is It Time for Real-Time?
ICBA will host a   complimentary webinar on Thursday, October 17 at 3 p.m. on the Federal Reserve's recent decision to get involved in real-time paymentsFedNow will operate alongside the private sector Real Time Payments (RTP) service by The Clearing House.  This session will provide will offer an overview of both services and pose strategic question for your bank to decide which service to offer and when to offer them. The webinar will provide 1 CPE Credit.  Presenter  Cary Whaley of ICBA will discuss:
  • How RTP works 
  • FedNow
  • How RTP can improve the customer experience 
  • What ICBA has done to continue the momentum on this issue 
  • Expectations moving forward
  • What bankers should consider and plan for
For more information, or to register, call 800-422-7285

The Economy: By The Numbers
  • New York State has one of the highest average student loan debt in the United States, according to "The Student Debt and the Class of 2018" report by the Institute for College Access & Success. The average student loan debt in New York for the Class of 2018 is $31,127. New York ranked 15th in the nation among states with the highest student loan debt, and approximately 59% of New York college students graduated with debt in 2018. 
  • The U.S. manufacturing Purchasing Managers' Index from the Institute for Supply Management came in at 47.8% in September, the lowest since June 2009, marking the second consecutive month of contraction. Any figure below 50% signals a contraction. The new export orders index was only 41%, the lowest level since March 2009, down from the August reading of 43.3%, ISM data showed.
  • The private sector created more jobs than expected in September but the pace slowed, according to a report Wednesday from ADP and Moody's Analytics.
    Companies hired 135,000 more workers in the month, more than the 125,000 that economists surveyed by Dow Jones had expected, but that was a drop from the 157,000 in August -- which  itself saw a sharp downward revision from the initially reported 195,000.  September's gain was the slowest since June and brought the 2019 monthly average down to 145,000, a steep decline from the 214,000 for the same time period last year.
  • U.S. consumer spending barely rose in August, as the U.S. Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, edged up 0.1% last month. Data for July was also revised slightly down. On a year-over-year basis, consumer spending was up 1.4% in the second quarter.
Banking NewsBankingNews
Elmira Savings Bank Adds Two New Directors

Elmira Savings Bank President & CEO Thomas M. Carr , who currently serves as IBANYS' Treasurer,  recently announced two new members have joined the bank's board of directors:  Jodi J. Edger , and  Thomas J. Gough. Elmira Savings Bank,  a New York State chartered bank  with $620 million in total assets, is celebrating 150 years of serving the Southern Tier. The bank operates six branches in Chemung County, three offices in Tompkins County, two branches in Steuben County, one branch each in Cayuga County and Schuyler County, and a loan center in Broome County.

Keep The Door Open For Your Small Business Customers

Excelsior Growth Fund (EGF) is NYBDC's nonprofit Community Development Financial Institution and IBANYS' exclusive online lending partner. Join the growing number of banks that work with EGF to offer their customers an affordable and responsible option when they do not qualify for traditional financing. EGF offers loans up to $500,000 with a convenient, digital process. Loans under $100,000 are disbursed within 5 business days.

 EGF's experienced team can work hand-in-hand with yours to develop a customized process to make referring seamless. To learn more about offering your customers a second look through EGF contact Bryan Doxford, SVP, at bryan.doxford@excelsiorgrowthfund.org at at (212) 430-4512.

IBANYS Spotlight Is On...

Owned and managed by community bankers for community bankers, ACBB/Compliance Anchor has been serving financial institutions since 1983. They provide correspondent services to over 300 shareholder banks in addition to many non-shareholder banks. From our full product and service lineup to banking expertise with a personal touch, we help our customers meet the needs of their communities. ACBB can satisfy the correspondent needs of community banks of all sizes, including regional financial institutions.

In today's ever-changing compliance environment, it can take significant resources to stay on top of current regulations. Compliance Anchor offers you a lifeline with education and resources to see you through the compliance storm.

For more details, contact Nancy Lake: (717) 441-4507, nlake@acbb.com. Or, visit the website at www.acbb.com/compliance. Or, email  questions@acbb.com.

IBANYS Endorsed Services
IBANYS identifies offers products and services that provide value to your banks, companies, employees communities. These brief summaries provide links for information. Please contact IBANYS President John Witkowski with questions.

Health & Wellness

My Wellness Resource & TELADOC

The health and wellness landscape continues to evolve. "My Wellness Resource" can be a nice addition to your existing benefit package. 

Teladoc can save your banks time and money, and provide real value to your employees as this testimonial from a New York community bank CEO proves:
"I wanted to let you know that some of our employees and I have been using "Teladoc" and it is one of the best things we have done for the bank. We all love it: We are saving time, avoiding waiting in an urgent care center or a doctor's waiting room for non-emergency related illnesses . . .and it is easy to use and convenient. Once you use it, you are hooked! This was a great find! Would recommend it to all banks."

Mario Martinez 
Chairman & CEO
Catskill Hudson Bank

Contact Alan Justin: (716) 907-5500. 

"Cure the Blue" Helps Banking Industry Battle Prostate Cancer!

The "Cure the Blue" program sponsored by the Buffalo Bills Alumni Foundation allows New Yorkers to participate in one of the most comprehensive efforts to help promote prostate cancer awareness and research in the United States.  Lake Shore Savings Bank has provided prostate cancer literature and Cure the Blue information at all eleven of its branches and their headquarters in Dunkirk. The bank also offered Cure the Blue ceramic lapel ribbon pins for a $5.00 donations to Cure the Blue to all their customers. "We fully understand the severity of this disease and the devastating effect it can have on families" said Lake Shore Savings Bank President and CEO Dan Reininga. "Our support of the Buffalo Bills Alumni Foundation's "Cure the Blue" initiative is something that we are taking very seriously and are proud to support." Buffalo Bills Wall of Famer and Alumni Foundation President Booker Edgerson, a two time prostate cancer survivor, said the bank has been a tremendous longtime supporter, noting: "They have really stepped up to the plate with their unwavering support of our Cure the Blue initiative." 

IBANYS urges all of our member banks, associate members and allies to join the effort. Cure the Blue" raises funds and awareness regarding prostate cancer in New York State. Visit  curetheblue.com  to get involved! Of all new cancer cases in the nation, prostate cancer represents 9.6%. In 2017, there were an estimated 161,000 new cases, and more than 26,000 fatalities due to the disease. Support IBANYS' "Cure the Blue" campaign to help New Yorkers participate to promote prostate cancer awareness and research.

Secure, Enhanced Internet Presence

The .bank program by fTLD operates trusted, verified, more secure, easily-identifiable internet locations for financial companies and  customers. www.icba.org 

Did You Know?

. . .That in the United States, it is believed that checks were first used in 1681 when cash-strapped businessmen in Boston mortgaged their land to a "fund", against which they could write checks? The first printed checks are traced to 1762 and British banker Lawrence Childs.

. . .Did you also know it wasn't until 1978 that Congress passed the "Revenue Act of 1978," which included a provision that gave employees a tax-free way to defer compensation from bonuses or stock options? The law went into effect on January 1, 1980. Today, 401(k) plans hold more than $4.8 trillion in assets.

. . .Now you know. 

New York community banks play a key role in our state and local economies. Help spread the good news among our customers, business, elected leaders and the media!

John J. Witkowski
President & Chief Executive Officer

Stephen W. Rice
Director of Government Relations & Communications

Linda Gregware
Director of Administration & Membership Services

William Y. Crowell III
Legislative Counsel