Fed Keeps Key Interest Rate Unchanged -- Stays At 3.5% to 3.75%

The Fed announced it had held its key interest steady today in a range between 3.5%-3.75% after three consecutive interest rate cuts. The Fed said: “Available indicators suggest that economic activity has been expanding at a solid pace..Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated…Uncertainty about the economic outlook remains elevated.” Chairman Powell said the Fed is "well positioned" to address economic challenges and has not made any decisions about upcoming meetings -- he did not commit to a timeline for future cuts. As in recent meetings, there were dissents: Governors Miran and Waller, Trump appointees, voted against the hold and advocated another quarter-point cut. Miran’s term expires this Saturday; Waller has interviewed for the Fed Chairman's job, vacant when Chairman Powell’s term expires in May. https://www.nytimes.com/live/2026/01/28/business/federal-reserve-interest-rates?smid=nytcore-ios-share

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Believe it or not, there are only three days left in January. It has been a busy month at IBANYS!

•  In Albany, we’ve already seen the Governor deliver her State of the State address, and present her proposed state budget for FY 2026-27. Joint legislative budget hearings will now begin as they work toward the April 1 budget deadline. Once it is finalized, the legislative committees will turn full attention to the myriad issues on the table – including many impacting community banks.  As we head into another year of legislative initiatives, negotiations and education, we have new legislative counsel in Beth Garvey of Greenberg Traurig and look forward to working with her on behalf of community banks. We need the support and engagement of our community bankers across the state in our government relations efforts. Your feedback, voice and support are vital to the success of our agenda.  

•  In Washington, a number of important legislative and regulatory issues continue to be debated, including crypto/digital assets/stablecoin, deposit insurance reform, a key proposed community bank legislative package from House Financial Services Chairman Hill, the Durbin-Marshall credit card competition Act amendment, credit union taxation and more.

. . .We have the latest developments from Albany and Washington in today’s Newsletter -- please review!

• We held our first board meeting of 2026 with Chairman Mark Lavarnway (Watertown Savings Bank) presiding. . .AND, we've been preparing to roll out our new CRM via Jumbl to make the distribution of information more efficient and comprehensive and provide online meeting registration. "Onboarding" will commence very soon -- watch your email!

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Equally important are IBANYS' 2026 meetings and conferences. We need the support of our member banks, Preferred Partners, Associate Members, Sponsors and Board Members! These educational programs feature subject matter experts speaking on topics that matter to your bank. Please take a moment to review the meetings and conferences listed below.

PLEASE SAVE THESE IMPORTANT DATES AND SHARE THEM WITH YOUR SENIOR MANAGEMENT TEAMS & DIRECTORS

• Virtual Director’s Meeting — March 3^rd, 2026: Bank Directors update from subject matter experts on what to look for in 2026. The landscape of community banking and the changes that may be ahead for financial institutions. (see below for detailed agenda and registration information)

• Virtual Spring Conference, April 14-15. Pay One Price for each bank and all employees are welcome to participate.

• 50^th Annual Convention & Trade Show at Resorts World Catskills in Monticello, New York June 8-10, 2026 – a New Date & Location, but still our same Premier Event. Mark Your Calendars. And please share the news with your officers and management teams!

• 2026 Executive Leadership Symposium October 5-7, 2026 at 1000 Harbor Hotel in Clayton, New York.

Stay tuned! As future meeting agendas are finalized details and registration information will be shared via email, on IBANYS website (ibanys.net/meetings-schedule) and in our Updates and e-newsletters.

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·       New York community Bankers: Register for this year’s ICBA Capital Summit May 4-7 in Washington, D.C. – AND then sign-up for IBANYS’ meetings “on the hill” with key members of New York’s congressional delegation. It’s your chance to engage face-to-face with federal congressional and regulatory policymakers, share your bank’s story, discuss our issues and priorities, and amplify the voice of community banking. Help shape the future of our industry. Learn more and register. . . .And, watch for updates on IBANYS’ N.Y. congressional meetings. . .email your interest in joining our congressional meetings to Johnw@ibanys.net and Steve Rice at Stever@ibanys.net.

2026 IBANYS MEETINGS

Stay tuned! As meeting agendas are finalized, details and registration information will be shared via email, the IBANYS website (ibanys.net/meetings-schedule), and in upcoming e-newsletters.

IBANYS FEBRUARY WEBINARS

ASSOCIATE & PREFERRED PARTNERS

Dean Stockford, President & CEO

126 Western Avenue, Suite 2, #124

Augusta ME 04330

(207) 458-8559

dstockford@mandm.consulting

https://mandm.consulting/

THE WEEK OF JANUARY 26, 2026

The Municipal Market Monitor is a weekly overview covering key themes of the general municipal market. The update includes the AAA yield curve, municipal to treasuries ratio, fund flows, expected issuance volume and Piper Sandler’s weekly calendar, along with brief commentary, designed to provide issuers and investors insight into current market conditions.

May 17-22, 2026

Barret Graduate School

Our three year graduate program. Annual one-week residency session.

Barret Graduate School Curriculum in Brief

One week per year for three years • 130+ hours of core classroom study • Nine on-campus case studies• Eight home study problems.

Over the three year graduate program, participants will have access to 200+ hours of training.

ICBA Information

ALBANY UPDATE

• Here is the 2026 New York State Legislative Session Calendar. 

Legislative & Governor's Office Items

• State Budget Director Washington discussed the Governor’s proposed budget for FY 2026-27, saying there are no plans to dip into the state’s $14.6 billion in savings that he called a "lockbox." Governor Hochul proposed a $260 billion state budget that utilizes Wall Street bonuses to offset federal cuts. It does not increase income taxes but increases state operating spending by almost 6%.

• NYS Senate Finance Committee Chair Krueger and Assembly Ways and Means Committee Chair Pretlow announced the joint legislative hearing schedule on the State Fiscal Year (SFY) 2026-27 Executive Budget Proposal. https://www.nysenate.gov/newsroom/press-releases/2026/liz-krueger/legislature-announces-2026-joint-legislative-budget. The hearings will focus on programmatic areas of the Budget Proposal to provide the appropriate legislative committees with public input. Hearings began January 27 and conclude February 26. The respective state agency or department heads will begin testimony each day, followed by witnesses who have requested to testify on that area of the budget. See link below for hearings schedule. https://www.nysenate.gov/newsroom/press-releases/2026/liz-krueger/legislature-announces-2026-joint-legislative-budget. 

• State Senate Finance Chair Liz Krueger expects an on-time budget for the first time in Gov. Hochul’s tenure as governor.

• Budget Director Washington noted over the last two years, the state collected $17 billion more in tax revenue than expected – largely from high-income earners, stock market bonuses, and surging investment in semiconductor and artificial intelligence technology. He said: 1) The money helped the state recover from an economic downturn caused by new tariffs and federal trade fights; 2) The job market is currently in a “no hire, no fire” freeze, but cautioned the state’s good luck probably won’t last; 3) The state’s books are balanced this year but gaps between spending and revenue could hit $12.5 billion by 2030. https://www.news10.com/capitol/blake-washington-budget-lockbox/

• A handful of fights await Gov. Hochul in state budget talks. Gothamist. Meanwhile, Assembly Speaker Heastie (D-Bronx) on whether he will push for a tax increase: “. . .Do we have enough money to pay for it? And if we don’t, we have to figure out a way to pay for it. It’s premature to say what we’re going to do on revenue.”  Meanwhile, Gov. Hochul “will spend the next 10 weeks pushing back on calls to put a tax increase on the rich, even as her election-year budget lacks some of the fights of recent years. . . And there will be other battles.” Will the State Budget be a Big Fight?

• Business leaders aren’t too keen on Hochul’s pitch to tax nicotine pouches at the same rate as tobacco products.

• Heading into a new legislative session and budget negotiations, Assembly Speaker Heastie (D-Bronx) has hired Alana Sivin as his new Counsel, elevating her to one of the most powerful behind-the-scenes politicos in Albany. Read more here.

Regulatory Items

• The New York State Department of Financial Services recently became aware of phishing emails “purporting to come from DFS personnel urging regulated entities to open files, make payments, and/or claims to share a file that is missing to prompt further engagement.”https://www.dfs.ny.gov/industry_guidance/industry_letters/20260122_cybersecurity_threat_alert. DFS urges closely reviewing email header information, including the address used to transmit the email. Legitimate DFS emails will be sent only from [@]dfs.ny.gov or [@]public.govdelivery.com. At least some of the phishing messages were sent from [@]myportal.dfs.ny.gov.cazepost.com. Emails from this domain are not legitimate. If you receive unexpected communications from DFS requesting immediate payment, to open an attachment, or to enter account credentials, confirm the legitimacy of the email before taking action. Do not use contacts or links provided in these communications -- directly reach out to DFS via your primary point of contact or the DFS Consumer Assistance Unit.

• A report from NYS Comptroller DiNapoli found that New York farms are under threat due to a reduction of assistance programs and impacts of federal immigration policy on the agricultural workforce. DiNapoli warned: “There is real concern in rural New York about federal cuts, tariffs and labor shortages. New York’s farms are a vital part of the state’s economy and our local food supply,” DiNapoli in a statement. https://spectrumlocalnews.com/nys/capital-region/news/2026/01/27/new-york-farms-threatened-by-federal-policies--state-comptroller-finds

Political & Demographic News

• New York State is projected to lose two seats in Congress if the state's rate of population growth doesn't improve, according to new data released Tuesday by the U.S. Census Bureau. The state’s population only grew by 1,008 people over the 12-year period that ended in July. New York’s number of congressional seats peaked at 45 in the 1940s and has declined each decade since. It currently holds 26 seats. https://www.msn.com/en-us/news/us/new-york-could-lose-2-seats-in-congress-based-on-latest-population-data/ar-AA1V7qYO?ocid=BingNewsVerp&cvid=a3a2cfcb3519415cb2b27a99c1000155&cvpid=f3fb139912e44748e5cb60f4a68387ce&ei=8

• Republicans appealed a judge’s decision to throw out the lines of New York City’s only GOP-controlled House seat, a case that could have national reverberations in the fight for control of Congress, The Associated Press reports.

• Gov. Hochul is expected to name her Lt. Gov. running mate next week when she is officially selected by state Democratic Party delegates. Hochul’s list of potential running mates reportedly includes NYS Secretary of State Walter Mosley; NYS Dormitory President Robert Rodriguez; Brooklyn D.A. Eric Gonzalez, and Brooklyn Assemblyman Brian Cunningham. https://nystateofpolitics.com/state-of-politics/new-york/politics/2026/01/27/hochul-s-running-mate-going-down-to-wire

• Victories last November resulted ion a number of openings in the NYS Legislature. The Governor has called special elections for Feb. 3 to fill two in the State Senate and two in the Assembly. https://www.cityandstateny.com/politics/2026/01/frozen-four-guide-special-elections/410920/

• Housing prices have gone up in New York for 29 months in a row, according to the New York State Association of Realtors Data gathered in December 2025 showed closed and pending home sales increased compared to the same time a year earlier, while new listings fell slightly. https://cnycentral.com/news/local/new-york-state-home-prices-climb-for-29-months-in-a-row-report-finds. More people are moving out of New York state than moving in, according to the Journal News.

• Three metro areas in Upstate New York were among the top 100 nationwide for growth in new listings of homes for sale in December. To see details on new listings in metro areas across New York, click here to open it in a new window.

FEDERAL UPDATE

• For your convenience, here's the 2026 Combined Calendar showing when the U.S. House, Senate or both chambers are in session.

• ICBA updated its “Advocacy in Action” government relations dashboard for the first quarter with the latest community banking advocacy successes and priorities. The resource spotlights hot-button community banking advocacy issues, such as ACRE Act implementation, Bank Secrecy Act relief, challenges to the 1071 rule, deposit   insurance reform, and more. Read about ICBA’s advocacy.

Congressional Items

• In a message to community bankers said after the Senate Banking Committee postponed its markup of digital assets market structure legislation, ICBA remains closely engaged Hill to ensure community bank perspectives are fully understood as the debate develops. An ICBA analysis of industry research found allowing payment stablecoins to earn yield or rewards could reduce community bank lending by $850 billion due to a $1.3 trillion reduction in deposits. ICBA noted: “We are making sure these impacts are clearly part of the conversation as we continue to call for lawmakers to explicitly bar crypto exchanges, affiliates, and other intermediaries from paying interest or yield on payment stablecoin holdings.” 

• ICBA said the ability for crypto exchanges to pay yield on payment stablecoins has become a lightning rod due in no small part to ICBA’s grassroots, media, and advertising campaign on this legislation, including a recent CoinDesk op-ed from ICBA Digital Assets Subcommittee Chairman Kevin Paintner. On Credit Card Issues:  ICBA continues to actively oppose efforts to advance a cap on credit card interest rates and legislation to establish new credit card routing mandates.

• Two pro-community bank bills supported by ICBA were advanced by the House Financial Services Committee during a markup: 1) The Financial Reporting Threshold Modernization Act (H.R. 1799) that would raise the currency transaction reporting and Suspicious Activity Reporting thresholds. 2) The Community Bank Regulatory Tailoring Act (H.R. 7056) that would raise certain monetary thresholds for community bank regulatory requirements. ICBA had encouraged Committee members to advance the bills, saying they would promote reform of our financial regulatory system and strengthen community banks to better serve their local communities. Ranking Member Waters (D-CA) offered an ICBA-opposed amendment to H.R. 7056 that would have imposed a 10% rate cap on credit cards, but it was ruled non-germane and withdrawn.

• Rep Barr (R-KY, Chairman of the Subcommittee on Financial Institutions and Monetary Policy) said H.R.7056 is a “straightforward bill another in a long line of bipartisan legislation in this Congress that modernizes the outdated statutory thresholds imposing needless and disproportionate burdens on our community banks...”

• ICBA and other sent a letter to Congress reiterating strong opposition to the Credit Card Competition Act (Durbin-Marshall bill) or any other expansion of the Durbin amendment. The Credit Card Competition Act (S. 3623; H.R. 7035) would require certain financial institutions to offer merchants at least two networks to process credit cards, at least one of which cannot be owned by Visa or Mastercard—allowing merchants to process credit card transactions based solely on which network offers them the lowest cost. Read ICBA’s letter to Congress and joint press release. ICBA and others urged Congress to reject the CCCA legislation in any form, as it would harm consumers, small businesses, and community financial institutions and give a windfall to corporate megastores.

• The Senate’s main focus to close out January is to wrap up funding the government before the Jan. 30 deadline, but the already tight window to pass the remaining six of the 12 annual appropriations measures is now even shorter after postponement the first votes of the week to Tuesday. https://rollcall.com/2026/01/23/wrap-up-one-chamber-down-one-to-go-plus-snow/

Regulatory Items

• American Banker (subscription required) reports state regulators are "game to take up the challenge laid down by the Federal Reserve." Last fall the Fed issued guidance that would shuffle bank-supervision roles, putting more of the onus on state regulators. It would make state bank examiners the primary boots on the ground and make bank exams faster, but could cause some issues to go overlooked. Officials from several states who viewed the new landscape as a positive are reportedly ready to embrace the change. https://www.americanbanker.com/news/state-regulators-optimistic-about-shift-in-bank-supervision

• The FDIC approved ICBA-opposed applications from Ford and General Motors to establish industrial loan companies. The proposed business models for Ford Credit Bank and GM Financial Bank focus on providing automotive financing products nationwide, primarily through the purchase of retail installment sales contracts. Funding will primarily consist of savings accounts and time deposits via the banks’ websites and mobile applications. In a national news release, ICBA expressed serious concern with the approvals, citing the systemic risk posed to the banking system by allowing financial institutions to receive federal deposit insurance while avoiding full regulatory oversight. Read ICBA’s white paper detailing why policymakers should close the ILC loophole. ICBA also told the FDIC it has a statutory duty to reject ILC applications that pose undue risks to the Deposit Insurance Fund and don’t serve the convenience and needs of their community. 

• In a new blog post ICBA said as policymakers reexamine housing-finance policy and how to improve housing affordability, building on the success of the Federal Home Loan Banks should be a top priority. ICBA noted FHLBs have been an integral part of helping community banks serve the needs of Main Street for over 90 years, supporting community development projects and access to liquidity. ICBA  cited Urban Institute research showing: 1) FHLB advances are strongly associated with higher lending across local financial institutions, expanding total lending by up to $97.3 billion a year; 2) FHLBs generate up to $21.4 billion in annual economic value by reducing the risk of systemic crises.

• ICBA’s Support of FHLBs: 1) ICBA in 2024 outlined for the Federal Reserve the critical importance of the FHLBs as reliable and efficient sources of liquidity for community banks, and strongly opposed any efforts to undermine or devalue FHLBs or to steer banks away from FHLB advances; 2) An Independent Banker article urged the agencies not to fix what isn’t broken with the FHLBs, saying any attempts to block community banks’ access to funding will cause more harm than good; 3) In an American Banker op-ed (subscription required), ICBA said any regulatory crackdown on the FHLBs threatens the housing finance system at a time of high prices and limited supply. 

• The FDIC board approved amendments to its Guidelines for Appeals of Material Supervisory Determinations, which includes replacing its Supervision Appeals Review Committee with the Office of Supervisory Appeals (OSA). ICBA said it preferred a Federal Financial Institutions Examination Council appeals office, but supported the proposed enhancements and urged the FDIC to ensure reviewers have significant community banking experience.

• The FDIC approved a final rule to amend regulations governing the display of the FDIC official digital sign and non-deposit signage. The FDIC said the final rule: 1) Provides additional flexibility with respect to the official digital sign; 2) Streamlines signage requirements for digital deposit-taking channels; 3) Streamlines signage on ATMs and like devices; 4) Goes into effect 30 days after publication in the Federal Register with an April 1, 2027, compliance date. ICBA Education offers the FDIC Signage and Advertisement Requirements Policy 

• ICBA said it supports favorable provisions of IRS guidance regarding the ACRE tax exclusion for interest earned on agricultural real estate loans. Read ICBA’s letter to the IRS.

• ICBA applauded the OCC’s efforts to reform the licensing process for community banks. Read ICBA’s  comment letter.

• ICBA and others sent a letter to the National Economic Council proposing several administrative actions that could help lower the costs of homeownership while preserving safety and soundness for market participants. The suggestions could be taken without congressional action. 

• President Trump issued an executive order to restrict private equity firms’ ability to purchase single-family homes. It directs the FHFA and other agencies to block large institutional investors from receiving government support when buying single-family homes that could otherwise be purchased by an individual owner-occupant. 

• “American Banker” (subscription required) reports “banks wanted deregulation, and got it, but Treasury Secretary Bessent indicated the White House thinks they should drop credit card interest rates to 10% in return. . .” Bessent tells banks deregulation makes up for 10% rate cap.