February 15, 2019

 To: IBANYS Member CEOs

From:  Steve Rice, IBANYS Director of Government Relations & Communications

SUMMARY Of IBANYS' February 15, 2019 Government Relations Call

IBANYS' Government Relations Committee held a conference call Friday, February 15 to hear updates on the latest activities in Albany and Washington, D.C. 
Federal Issues:   
  • Amy Roberti, Vice President/Congressional Relations with ICBA, noted the House and Senate had approved the legislation to keep the federal government open and avoid a second shutdown, and that it included homeland security funding. Both chambers then recessed for a week. The President is expected to sign it today, and declare a national emergency to re-allocate funds from other departments (including DOD) to provide more money for border security through some type of fencing, wall and other measures. There may be pushback and challenges to this declaration in a lawsuit and/or other congressional action. 
  • Ms. Roberti reported that ICBA had testified at a subcommittee of the Financial Services Committee held a hearing on cannabis related businesses in support of providing a federal safe harbor for businesses engaged in such activities, but does not support legalization. There is a good chance the safe harbor approach will be supported by the Committee and perhaps the full House, but it appears unlikely to gain traction of support in the Senate Banking Committee. 
  • The agenda of the House Financial Services Committee, under Chairwoman Maxine Waters (D-CA) will likely include affordable housing, homelessness, regulatory oversight, large bank oversight, FinTech oversight, GSE reform, and a few "must do" measures such as reauthorizing the national flood insurance and the terrorism insurance programs.
  • The Senate Banking Committee agenda, under Chairman Mike Crapo (R-ID) will be addressing the nomination of Mark Calabria, chief economist to Vice President Pence, as the next Director of the Federal Housing Finance Agency (FHFA). He testified before the Committee and vowed to lead the agency and make it a "world class regulator" (he had been critical of it at times before his nomination). The Senate Committee will also address GSE reform. The administration also had indicated plans to do so as well. Chairman Crapo is also said to be increasingly focused on the privacy aspect of big data collection and security.
State Issues:
  • IBANYS President & CEO John Witkowski and Legislative Counsel Bill Crowell provided an update on their recent meeting with State Senator James Sanders (D-Queens), the new Chairman of the State Senate Banks Committee. He is a self-described "progressive" whose district does not include any significant community bank presence, but does have a strong credit union presence. He has been a credit union supporter during his time in the Senate. The Chairman's priorities include addressing the problem of unbanked and underbanked communities, and the lack of financial services in many areas. (Note: Federal Reserve Chairman Powell this week spoke at a forum in the Mississippi Delta region, coordinated by a credit union, and also expounded on these concerns.)  Chairman Sanders did indicate he recognized the importance of community banks, and expressed a desire to meet with and visit them to learn more about them. IBANYS will arrange these opportunities, and will also be scheduling a meeting with the Chairman of the Assembly Banks Committee, Assemblyman Ken Zebrowski (D-Rockland County).
  • Mr. Crowell discussed the very different environment in Albany with Democrats now in control of the full Legislature, including the State Senate. There has been a dramatic and significant change in direction. There will be very different legislation, including banking bills, than when there was a Republican Senate. The State Senate Banks Committee is now comprised of seven Democrats and four Republicans. Senate Democrats have been strongly supported by the credit union industry for many years. Many Senate Democrats represent downstate districts with a strong credit union presence, but not a strong community bank presence. In this changed environment, the reality is that IBANYS may need to adopt a different approach in some instances, (e.g. by attempting to limit or mitigate potential harm in some legislation, where in past we could just oppose in the Republican Senate.)
Mr. Crowell then discussed four bills forwarded to IBANYS by the Senate Democrats Majority Counsel Office seeking our comments and positions.
  • S.2106, Sanders would require banks to disclose negative consequences of establishing alternative payment schedule on a loan (e.g., due to renegotiation or default), providing a disclosure that the transaction could have a negative impact on their credit score. Mr. Crowell and the Committee agreed that IBANYS should suggest modifications to the bill, such as restricting the application to consumer mortgages and consumer loans, not commercial loans, and perhaps inserting the disclosure as an add-on. There is no companion bill in the Assembly. 
  • S.727, Montgomery would permit state and federal credit unions to participate in the State Business Development District Program. This legislation has passed the Assembly in previous years, but never the Senate. Mr. Crowell and the Committee feel that IBANYS would initially submit our same Memo in Opposition used in 2018. In essence, our opposition would be based on the fact that credit unions pay no income taxes to NYS, so why should they receive the benefits funded by taxpayer dollars.  (In the event the bill appears to be moving forward, IBANYS would, if necessary, seek to mitigate its damage and reach, and should seek to avoid setting a precedent for across the board credit union involvement on municipal deposits. There is no companion bill yet in the Assembly.
  • S.2109 Sanders/A.1826 Pichardo would require agents of licensed money transmitters to remit moneys to the licensee within the time frame provided in the contract between the agent and licensee. Mr. Crowell and the Committee agreed that IBANYS does not need to take a position on this bill.
  • S.2880 Sanders/A.4453 Miller would require banks and credit unions to have a notary public available during business hours. Mr. Crowell and the Committee felt this would be a burden on community banks. This should be a business decision by the bank to have notary publics available, but not mandated by law. Many community already have notaries available, but requiring one at each location/facility could be a challenge due to illness, staffing, etc. Also, some banks also have multiple limited services offices such as drive-up only. Mr. Crowell and the Committee agreed IBANYS will submit a Memo in Opposition.
The State Legislature and Congress are each now out on their February recess. IBANYS will notify the Committee of the next scheduled conference call.

Stephen W. Rice
Director of Government Relations & Communications