June 10, 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
As we near the three-month mark of the novel coronavirus (COVID-19) pandemic, we have begun to witness positive developments.
  • The different regions of the state are moving through various phases of reopening their economies under the guidelines established by the Governor.
  • Community banks have played, and continue to play a crucial role helping to protect and assist their local small businesses -- and, all their local customers and communities -- and led the way in making Paycheck Protection Program (PPP) loans. (Here's the latest update on PPP lending from the White House, through June 6: SBA Paycheck Protection Program Loan Report Round 2

  • Consumers are increasingly optimistic about the future of the economy.
Clearly, there is still much work to do. New York Community bankers are strategizing how and when to reopen branches, and restore operations and services closer to their pre-pandemic "norms." Of course, "the new normal" will look and feel quite different from the "old normal," and with many options to consider there will be no "one size fits all" answers.
IBANYS will present opportunities and options for your consideration as you re-examine your bank's strategic vision for the future. We work with a number of companies that can help position the bank, provide direction on the future and/or implement products and services that can assist your bank and your clients. We'll have more to say about this in the near future -- and we hope to share some exciting opportunities following our next IBANYS Board of Directors Meeting scheduled for June 17.
In the interim, we continue to share information on products, services and various revenue opportunities. Please contact IBANYS if you have any specific questions about the companies in the newsletter.
. . . . .
This week, as the New York State Legislature reconvened to focus on a number of bills related to policing and criminal justice reforms, there was also some discussion about possible additional legislation for state-chartered-institutions related to mortgage foreclosure/forbearance for commercial and investment properties. However, a t  this point, the week's legislative agenda does not include any new banking bills -- for now. We are closely monitoring developments, as things can change very quickly. 
Meanwhile, the residential mortgage forbearance legislation for state chartered institutions passed in late May is currently on the Governor's desk awaiting action. Today's newsletter includes full updates on the latest from Albany.
In Washington, the Senate passed the House bill on PPP reforms, but there has still not been any meaningful negotiations on a "Phase Four" relief package.
There is an action alert urging community banks to comment on two recent credit union proposals, as we continue to support ICBA's "Wake Up" campaign. We have details on all those storylines in today's newsletter as well.
. . . . .
Tomorrow, IBANYS will hold another in our series of Executive Group Discussion Calls. (Previous calls have included the new Acting Comptroller of the Currency, Brian Brooks, and two other senior OCC officers, and top officials from the Small Business Administration and Federal Home Loan Bank of New York.) If you are not registered and would like to participate, please email John Witkowski or Linda Gregware or complete the registration form and email to lindag@ibanys.net. registration form 6-11-2020 (if you participated in May and would like to participate in June, you will need to re-register and a new link to join the meeting will be sent to you).
There are articles, webinars and additional information that you may find helpful and informative listed below under Preferred Partners & Associate Members additional COVID-19 Information .
All COVID-19 Updates from IBANYS can be found on our website: click here (March 16 - current)
News Release | NR 2020-77 June 8, 2020

Members of the public may submit written statements to the MSAAC by sending an e-mail to MSAAC@OCC.treas.gov . The OCC must receive written statements no later than 5:00 p.m. EDT on Monday, June 22, 2020.

Members of the public who plan to attend the meeting via webinar or require assistance should contact the OCC by 5:00 p.m. EDT on Monday, June 22, 2020, to inform the OCC of their desire to attend the meeting and to obtain information about participating in the webinar. Members of the public can contact the OCC by emailing MSAAC@occ.treas.gov or by calling (202) 649-5420. Attendees should provide their full name, email address, and organization, if any. Members of the public who are hearing impaired should call (202) 649-5597 (TTY) by 5:00 p.m. EDT Monday, June 22, 2020, to make necessary arrangements.
ICBA Pledges Multi-Year Commitment to
Community Bank Innovation

Partnership with The Venture Center extended through 2024

Washington, D.C. (June 8, 2020)—The Independent Community Bankers of America® (ICBA) today announced an additional three-year commitment to its ICBA ThinkTECH Accelerator program as part of a comprehensive mission-driven innovation strategy for the highly-complex and evolving markets in which community banks operate. Launched in 2018 , in partnership with The Venture Center and the state of Arkansas, the ICBA ThinkTECH Accelerator brings community banks and fintechs together to develop new technologies specifically for community banks and the customers they serve.

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. 
Subscription Tokens
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How does it work:
T okens can be used to purchase live or recorded webinars anytime,  with no expiration ! Tokens for both live and recorded webinars are available for an additional fee. (What’s the difference?  Click here for the full description.)
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.)
Other Revenue & Income Generating Programs Products and Services
PURIFY GLOBAL offers high level disinfection services, specializing in end-use fogging application on various types of surfaces for advanced decontamination. Our services ensure thorough disinfection for both high-contact and low-contact areas, effectively prevents recontamination, and sets to improve the quality of life for employees, patients, and the general population.
100% non-hazardous solution. EPA Approved.
Kills 100% of pathogens & microorganisms including, but not limited to... COVID-19, H1N1, SARS.
Works on ALL surfaces including flooring, window treatments, fabrics, carpets, furniture, wood, metal, plastic, etc....
Once applied, the solution takes just 10 minutes to dry. Room is then able to be re-occupied. It would be 100% to go in immediately after. The 10 minutes is drying time.
Here are just a few of the other clients we are working with.
  • Wegman's - All stores on a weekly basis
  •  Phillips Lytle - All offices (Buffalo, Rochester, Albany, and NYC)
  •  Niagara Wheatfield Central School District - Daily disinfect of over 600,000 sf
  • Ted's Hot Dogs - All WNY stores
  • Buffalo Medical Group

Mike Jackson
Office: (585) 510-2600    Mobile: (716) 579 0719
IBANYS Preferred Partners & Associate Members &
Additional COVID-19 Resources
Exiting a relatively benign economic environment many Bankers are now grappling with the task of reserving their portfolios', but with a plethora of variables regarding the COVID-19 Pandemic this article outlines options Bankers should consider when adjusting their reserves to ward against future losses.

Reflections of the PPP Program on the May Employment Data
As the Paycheck Protection Program Flexibility Act has just been signed and the loan forgiveness process of the program is about to start, the ADP national employment report for May 2020, that came out on June 3, and the May Employment Report from the Bureau of Labor Statistics, that came out on June 5, shed new light on the effectiveness of the PPP program.

Kicking the can
Congress and the Fed are on a spending spree.
By Jim Reber
If you ultra-busy community bankers have been able to catch some of our policymakers commenting on the waves of fiscal and monetary stimulus rushing toward the U.S. consumer, what you heard essentially translated into an elaborate game of Kick the Can. Please note that I said “elaborate” and not “elegant.”

Bank Stock Perfomance and M & A Update
The market crash in March 2020 brought an end to the longest U.S. expansion ever recorded. The Dow, S&P and NASDAQ plummeted35%, 31% and 24%, respectively, from year-end highs to levels not seen since 2016. After massive fiscal and monetary stimulus, lockdowns ending and promising treatments for coronavirus and hopes for a vaccine, markets have improved. The Dow, S&P and NASDAQ have increased 16%, 18% and 23%, respectively, from the end of March to May31.

The Office of the Comptroller of the Currency (“OCC”) recently issued a final rule clarifying that when a national bank or federal savings association transfers a loan, the interest rate permissible before the transfer continues to be permissible after transfer. The final rule applies to national banks and federal savings associations and is effective on August 3, 2020. The Federal Deposit Insurance Corporation previously issued a substantively similar proposed rule as to state banks and is likely to follow the OCC in issuing the rule in final.

Our Alert is available here .
Albany Update
Mortgage Forbearance Chapter Amendment Awaiting Governor's Action;
No New Banking Bills On Legislature's Agenda -- For Now
The Chapter Amendment legislation on residential mortgage forbearance, passed in late May, is now on Governor Cuomo's desk awaiting his signature. The Chapter Amendment is targeted only at state chartered banks. Federally chartered banks are not impacted. Mortgages currently receiving forbearance under the Governor's Executive Order 202.9, at the time of such forbearance, shall be considered as part of the requirement to provide forbearance under the new statute. At the end of the 180 days of forbearance provided, the borrower has an option to extend the forbearance for a second 180 day period if still in financial distress, as provided in the Chapter Amendment. 
While IBANYS opposed the initiative, the Chapter Amendment is an improvement over the original legislation. If a bank determines that it unable to offer a mortgagor relief based on concerns regarding sufficient capital and liquidity, it must notify DFS within 5 business days of making the determination. The bank must also notify the mortgagor, who may file a complaint with DFS. The Chapter Amendment clarified that forbearance applies to "monthly payments" due on the mortgage. It also prohibits the bank from charging additional interest or any late fees or penalties on the forborne payment. 
As this proposal worked its way through the legislative process, IBANYS issued a strong Memo in Opposition to the original legislation and continued to work with the Legislature, Governor's Office and NYS Department of Financial Services (DFS) throughout the process that eventually resulted in the Chapter Amendment.
IBANYS has drafted a letter to the Governor's office in support of the Chapter Amendment, which was obtained through the efforts of the Governor's office and the State Department of Financial Services. It amends the underlying bill that mandates state-chartered banks that hold residential mortgages in their portfolio to provide up to a year of forbearance to any mortgagor that demonstrates financial hardship.

  • There was also considerable discussion over the weekend of possible additional legislation (that would also only impact state-chartered institutions) regarding mortgage foreclosure/forbearance for commercial and investment properties. However, at this point, there are no new banking bills on the legislative agenda. IBANYS is closely monitoring the current legislative environment and other potential bills in the pipeline. We will keep you fully informed going forward.
Washington Update
Senate Passes House Version Of PPP Reform: "Paycheck Protection Program Flexibility Act"

The Senate approved the the "PPP Flexibility Act “ -- the legislation previously passed by the House to make changes to the Paycheck Protection Program. The SBA and Treasury will issue rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing these legislative amendments to the PPP, including:
  • Extending the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement...Borrowers who have already received PPP loans retain the option to use an eight-week covered period.
  • Lowering the requirements that 75 percent of a borrower’s loan proceeds must be used for payroll costs, and that 75 percent of the loan forgiveness amount must have been spent on payroll costs, during the 24-week loan forgiveness covered period to 60 percent for each of these requirements. If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.
  • Providing a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020, due to compliance with requirements or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to worker or customer safety requirements related to COVID–19.
  • Providing a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.
  • Increasing to five years the maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020.
  • Extending the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period).
  • In addition, the new rules will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.

ICBA Urges Comments On Two Proposed Credit Union Rules --
Visit icba.org And See The "Be Heard" Grassroots Action Center For Details.
The dominant issue in community banking these past months has of course been the Paycheck Protection Program and the economic impact of the coronavirus on your banks, customers, and communities. Community bankers have emerged as the champions of small businesses and their employees, which have all too unfortunately been blindsided by an abrupt shutdown caused by the COVID-19 pandemic.
As we continue our relentless focus on customers in need,  we must not let our guard down in continuing to urge Congress, the agencies, and the public to “wake up” to an overly-opportunistic credit union industry. Otherwise, we will emerge from this crisis with riskier and more emboldened credit unions all thanks to their captured, cheerleader regulator, the National Credit Union Administration (NCUA).
I appeal for your help in submitting comments to the NCUA on two recent proposed rules:

  • Subordinated debt. The NCUA has proposed to allow large credit unions to issue subordinated debt, which would fuel rapid growth and consolidation in an industry that is already growing too quickly. View ICBA's sample comment letter

  • Credit union-bank acquisitions. The NCUA has proposed a new rule on credit union acquisitions of other financial institutions. As you know, these acquisitions have become more frequent and are rapidly transforming the financial services market. They threaten to undermine the tax base in your states, which, following the economic shutdown, are more desperate than ever for revenues. The NCUA proposal would create more transparency and is a step in the right direction. Our objection is that it does not go far enough. We must not miss an opportunity to meaningfully regulate and curb acquisitions which abuse the credit union tax subsidy. View ICBA's sample comment letter

Follow the resource links above for suggested language, but as always, we encourage you to customize this language for greater impact. It is critical that community banks make a strong grassroots showing, in quantity and quality of letters, to influence the rules and set down a marker against further powers expansion. Thank you for all you do, community bankers! Your involvement and persistence is critical to our industry’s success.
-- ICBA President & CEO Rebeca Romero Rainey

. . .ICBA Also Urges Small Credit Unions To 'Wake Up'

Small credit unions should urge Congress to hold hearings on National Credit Union Administration efforts to benefit the largest and riskiest credit unions, ICBA Vice Chairman Brad Bolton wrote in a  new Medium op-ed . The president, CEO and senior lender at Community Spirit Bank in Red Bay, Ala., wrote that the NCUA's sudden change to its low-income methodology harm community banks and small credit unions alike. "Credit union executives might not be in the habit of listening to community bankers, but we have a long history of standing up to too-big-to-fail institutions—and the facts speak for themselves," Bolton wrote. "The NCUA is acting on behalf of a select handful of nationwide credit unions obsessed with increasing their assets by designating these entities as low-income institutions and thereby expanding their powers."

Regulators Seek Community Bank Feedback

Community bankers are encouraged to participate in a survey from state and federal regulators on a range of topics for research purposes. Survey results will be presented during the 21st Century Research and Policy Conference and used to inform policymakers and researchers about the opportunities and challenges facing community banks. Responses are due by July 15.
https://sri.cornell.edu/cb21/2020/survey.cfm?page=_main&firstLogin=true&CFID=1020380&CFTOKEN=ee9f6a1e3ae6ccb0-06766095-B682-7014-A6FC55746DAEE86. . . Take the survey.