IBANYS' Government Relations Committee met by conference call this morning to hear updates on federal and state activity.
Alan Keller of ICBA discussed the pending "Hensarling regulatory relief" proposals, to be proposed by House Financial Services Chairman Hensarling (R-Texas). This would reportedly include the so-called "off-ramp" approach allowing banks to be exempt from certain requirements if they opt to maintain specified capital levels. The details of his approach are still not clear. It may be attached to or included in an appropriations bill.
Alan next discussed the issue of the new federal overtime rules proscribed by the U.S. Department of Labor. They effectively double, to $47,000, the salary threshold under which employees are eligible for overtime pay. This would result in a burden to banks that must pay such overtime, as well as a paperwork and man-hour burden just in tracking employee hours. The rules also do not take into account any regional or geographic adjustments, but rather simply impose one national level. There is legislation in both the House and Senate to nullify the rules, which would take effect later this year. ICBA is opposed to the new rules.
IBANYS Legislative Counsel Bill Crowell discussed the issue of foreclosure, including bank responsibility in cases involving abandoned or vacant properties, including those the bank does not yet have ownership of. There is an effort by Senator Klein and others to address these issues by assigning responsibility to the banks, and it would be helpful if IBANYS can contribute suggestions to help resolve the problems, and not just oppose on principal (which we do.)
After considerable discussion, the basic approach the bankers on the call favored includes three pillars:
- urge an expedited foreclosure process and make it available both to banks and municipalities;
- incentivize municipalities to exercise this option by providing funds (perhaps from state funds received in bank settlements);
- work to develop alliances with organizations representing municipalities (e.g.m Association of Towns, Association of Counties, Conference of Mayors, etc.) to support such a recommendation.
On other issues, Bill noted the State Charter Advisory Board of the Department of Financial Services is scheduled to expire October 3. The consensus was that the Board should be continued, as out provides a forum for discussion and communication that otherwise does not exist since the merger of the Banking and Insurance Departments into the DFS eliminated the former State Banking Board.
Bill also reported that legislation to extend the State Banking Development District Program and to define consummation of a mortgage loan in language developed by IBANYS are moving forward.
Session is approaching the end, so legislative activity will be "fast and furious" and the G.R. Committee will be on stand-by as circumstances dictate.
Stephen W. Rice
Director of Government Relations & Communications
Independent Bankers Association of New York State