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  • Cordray To Step Down From CFPB
  • Sign Up Now For IBANYS Committees
  • IBANYS 2018 Meeting Dates -- Mark Your Calendars
  • Latest From Albany & Washington
  • Industry Trends & Updates
  • New Analysis By ICBA Securities' Jim Reber
  • Have you visited our newly updated website at www.ibanys.net yet?

Your IBANYS Team: 
Working Together To Make 2017 A Great Year 
For New York C ommun ity Banks !


In This Issue

Quick Links


Have You Contributed to NYSIBPAC This Year?
If not...now is the time! We need your help in this statewide election year to support candidates and committees who understand community banks' needs.  Can we count on you?
CLICK HERE
for our 2017 PAC contribution form. Help support IBANYS' political action efforts in New York State.

Partner

This Week's "Quotes To Remember" About Community Banks
 
Acting Comptroller of the Currency Keith Noreika: Lawmakers should reduce "duplication and redundancy" in the federal banking laws (which)  cost community banks more, especially when they have to comply with rules from multiple regulators.

FDIC Chairman Martin Gruenberg:  "In terms of reducing the regulatory burden, the biggest bang for the buck is to reduce the burden on smaller financial institutions." 

Federal Reserve Governor Jerome Powell (since nominated to be the next Fed Chairman: Congress should consider exempting smaller firms   from the so-called Volcker Rule...and suggests increasing the $50 billion   asset threshold set in the 2010 law   so it would only apply to the largest banks.




It's time to sign up to serve on IBANYS' 2018 committees.   The lifeblood of our efforts, they are responsible for: 
  • Helping develop legislative and regulatory policy positions
  • Designing educational programs 
  • Providing  important peer networking and dialogue opportunities and 
  • Reviewing and recommending new, innovative products and services for community banks. 
Sign your bank up to serve on our IBANYS:
  • Government Relations Committee 
  • CFO/Senior Management Peer Group Committee
  • Compliance Peer Group Committee
  • Security Committee and, our new 
  • HR and Operations Committee all need your active involvement. 
We encourage Presidents & CEOs to serve  -- but also welcome designated representatives to serve on their behalf if that works best.  Now is the time to get involved , and play a vital role in making sure IBANYS is everything your bank wants and needs us to be on your behalf.  Tell us which committees your bank wants to serve on, and who will be your representatives on each. . .
Email Linda Gregware or John Witkowski (Lindag@IBANYS.net, Johnw@IBANYS.net) or call us at (518) 436-4646.


IBANYS Sets Dates For 2018 
Meetings & Conferences
IBANYS has finalized dates and locations for our 2018 meetings and conferences. New York community bankers: Please Click here to view the full 2018 IBANYS Meetings Calendar. Then, mark your calendars, and share this calendar with your senior management team, directors, and key officers and personnel. IBANYS preferred providers, associate members, sponsors and business show exhibitors: Please hold these dates and plan to participate in another great year of IBANYS programs!

IBANYS member banks: Please also watch for IBANYS 2018-19 member bank dues notices, which will be sent out in the near future.

GOVERNMENT RELATIONS

ALBANY

Budget Deficit Concerns Grow
The Governor's  midyear financial report has lowered revenue estimates by $850 million for the current budget year, and the next two years, and noted next year's projected deficit is now at $4.4 billion if spending growth continues unchecked.
The governor's budget office report said the "disappointing tax collections" are "at odds with key economic indicators, which signal an improving economy," and speculates anticipation of the federal tax overhaul might be affecting taxpayer behavior. Wealthier taxpayers might be holding back on cashing in investments, waiting to see if Congress makes changes to the tax code that could result in more advantageous tax rates.  State Comptroller Tom DiNapoli, in his  midyear budget report , also finds revenues are down about $700 million lower than expected, and said New York faces a "triple threat" of the projected budget gap, weaker personal income tax collections, and cuts to federal programs. A n analysis by E.J. McMahon of the Empire Center concluded: "2018 is going to be the Governor's and the Legislature's most challenging budget cycle since 2011... If the adjusted revenue estimates are correct, the fiscal 2019 budget can still be balanced without tax hikes if Cuomo holds spending growth to about 0.5%, or about $500 million. With rising fixed costs in other areas, (e.g., pensions, health benefits and other "general state charges,") this would require a freeze or reductions in most programs." 

Meanwhile, President Trump's Budget Director Mick Mulvaney responded to Gov. Cuomo's theory that cutting the deduction could result in wealthier taxpayers departing the state, leaving remaining New Yorkers to pay higher taxes: "Whose fault is that? Is it the federal government's fault that New York taxes are so high that they're driving people out of the state? I don't think it's up to the federal government to save New York from its bad decisions."

Cuomo Senior Staff Changes
Gov. Cuomo's administration is reshuffling some senior staff heading into 2018. Maria Comella, who has served as his chief of staff since last April, will reportedly leave for the private sector. Meanwhile, the Governor is planning to bring back Linda Lacewell, a former prosecutor who has served Cuomo since he was attorney general, in an as yet unspecified role. 


WASHINGTON, D.C.

Senate Has Bipartisan Agreement On Community Bank Reg Relief
A bipartisan agreement was announced this week by a coalition of 18 senators, led by Senate Banking Committee Chairman Mike Crapo (R-ID) and Committee Democrats Joe Donnelly (IN), Heidi Heitkamp (ND), Jon Tester (MT.) and Mark Warner (VA). It would significantly advance regulatory relief efforts for community banks by expanding exemptions for Home Mortgage Disclosure Act reporting and escrow requirements, providing"qualified mortgage" status for portfolio mortgage loans at most community banks, simplifying capital rules, and reducing burdens affecting larger community banks. T he ICBA-and IBANYS-advocated " Plan for Prosperity"  provisions would go a long way to help community banks of all sizes and charters, but the Senate agreement still must clear additional hurdles before it can become law. ICBA will continue working with members of Congress and the administration to expand on these measures, and IBANYS will continue to urge New York community bankers to make their voices heard in Washington.

This week, the House Financial Services Committee scheduled a mark up of 22 regulatory relief bills, including the ICBA-supported Protecting Consumers' Access to Credit Act of 2017 (H.R. 3299). It would restore the "valid-when-made" doctrine and overturn the Madden v. Midland Funding case. That ruling decided that state usury laws apply to debt purchased from a national bank.  

 Tax Reform Debate Continues
Tax reform debate continues in Washington, as the Senate has tweaked its bill to make changes. 
Read ICBA's brief on latest tax reform provisions and impact on community banks.  The amended Senate bill would slightly cut individual tax rates for multiple brackets and set seven different rates. Those changes, and nearly doubling of the standard  deduction, would expire after 2025; the reduced corporate tax rate, down to 20% from 35%, would be permanent.  The child tax credit would rise from $1,000 to $2,000. It would start to phase out at $500,000 in household income. The change would also sunset after 2025. T he plan would also repeal the Obamacare individual mandate that  requires most Americans to have health insurance or pay a penalty. The president had urged such an insertion. In the House Ways and Means Committee Chairman Kevin Brady (R-TX) said House Republicans would not accept a provision in the  Senate tax-overhaul bill that would eliminate the deduction for state and local taxes. The House version would still allow individuals to deduct property taxes up to $10,000. The House is expected to pass its tax measure this week and hopes to send the legislation to the Senate by Nov. 23. 

ICBA continues urging Subchapter S banks to weigh in with Congress to protect the Subchapter S model. Community bankers can use ICBA's " Be Heard grassroots action center" at www.icba.org  to tell Congress to ensure that the proposed 25% rate for S corporation community bank business income is applied fairly. The custom letter urges lawmakers not to undermine the policy via restrictive formulas (or "guardrails") that would apply the 25% rate to only a small percentage of banks' income and tax the remainder at higher, individual rates.

Rep. Elise Stefanik (R-North Country) intends to vote "no" this week on GOP bill to overhaul the tax code, becoming the fourth New York Republican to split with the GOP on the measure. She opposes the elimination of federal deductions for state and income and sales taxes, and a plan to cap the amount homeowners can deduct in property taxes at $10,000 per year. Also planning to vote no: Reps. Peter King and Lee Zeldin (both R-LI) and Dan Donovan (R-SI). Reps. Tom Reed (R-Southern Tier/WNY) and Chris Collins (R-WNY) plan to vote yes, while Reps. Claudia Tenney (R-CNY), John Faso (R-Hudson Valley) and John Katko (R-CNY) have not yet announced their positions.
 
CFPB's Cordray To Step Down This Month
Consumer Financial Protection Bureau Director Richard Cordray announced today he will step down before the end of this month. " Together we have made a real and lasting difference that has improved people's lives, notably: $12 billion in Cordray testifies relief recovered for nearly 30 million consumers; stronger safeguards against irresponsible mortgage practices that caused the financial crisis and hurt millions of Americans; giving people a voice by handling over 1.3 million complaints that led to problems getting fixed for vast numbers of individuals, and creating new ways to bring financial education to the public so that people can take more control over their economic lives." Cordray is confident the CFPB will "continue to move forward, nurture this institution we have built together, and maintain its essential value to the American public. And I trust that new leadership will see that value also and work to preserve it - perhaps in different ways than before, but desiring, as I have done, to serve in ways that benefit and strengthen our economy and our country." 

In Other News:
  • The Senate Banking Committee confirmation hearing for President Trump's nominee for Federal Reserve Chairman, Jerome Powell, will be held November 28.
  • The House voted 237-189 to reform and reauthorize the National Flood Insurance Program (NFIP) for five years. Passage of the "21st Century Flood Reform Act" (H.R. 2874) sends the debate to the Senate, with the NFIP's current reauthorization scheduled to expire Dec. 8. The reforms would help put the NFIP back on a sound financial footing, but a provision that exempts commercial properties from the mandatory purchase requirement remains problematic. ICBA is concerned the change would unnecessarily put community banks at risk relative to larger banks as they try to compete for commercial and small-business loans where the property is in a flood hazard area. ICBA will continue work with both the House and Senate to address its concerns, and IBANYS will continue to work closely to represent the interests of new York community banks on these issues. 
  
Ready and Waiting:
Rate Risk Profiles Are Prepped For 
More Fed Action
In his latest analysis, Jim Reber (President & CEO, ICBA Securities) notes that the  Federal Open Market Committee (FOMC) of the Federal Reserve is telling us to get ready for three more hikes in 2018. Jim says if they're good at their word, we'll be looking at overnight rates approaching 2% by the end of the year. It's been a full decade since we've seen those levels. . .and adds,  maybe it's time to check out the interest rate risk profile of a typical community bank to see how that's shaping up.   Click here to read the full article.

Quarterly Compliance Webinar
Thursday, November 30
CSI will host its next complimentary Quarterly Compliance Update Webinar on Thursday, November 30. Click here for registration Link
Speakers will include:
  • Keith Monson, chief risk officer, CSI
  • Ryan Rasske, senior vice president of risk and compliance, American Bankers Association (ABA)
You'll hear an executive summary of FinCEN's final rule, and how -- under the Bank Secrecy Act (BSA) -- it will affect your financial institution. Translation: You'll need to make some changes, including adjustments to your customer due diligence and risk-rating practices, in order to be compliant with the new rule by May 11, 2018.
Save Your Spot to:
  • Review FinCEN's final rule and a helpful timeline for implementation
  • Discuss beneficial ownership requirements
  • Develop new risk-based procedures for conducting ongoing customer due diligence
  • Examine the latest regulatory updates from this quarter
For details, contact Pam Farnsworth:  (800) 545-4274  X: 16053, Pam.Farnsworth@csiweb.com.

El-Erian Being Considered 
For Fed Vice Chair?
The White House is reportedly considering economist Mohamed El-Erian, former chief executive of Pacific Investment Management Co. and former deputy director of the International Monetary Fund, as one of several potential candidates for Federal Reserve Vice Chairman. The Fed's seven-member Board of Governors currently has three vacancies, including the seat for the vice chairman, after Stanley Fischer recently announced his retirement. 

Search Underway For Next New York 
Fed President
With Federal Reserve Bank of New York President William Dudley planning to retire, the search for his successor is underway. Brookings Vice Chair Glenn Hutchins, a private equity investor, and  Sara Horowitz, head of the NY Fed Board of Directors, will co-chair the search committee, and the national executive search firm Spencer Stuart and Bridge Partners has been hired. The process  is expected to take six- to- nine- months. A very preliminary list of some of the names being mentioned as potential candidates:
  • Peter Blair Henry, NYU Stern School of Business, expert in international finance, emerging markets and international debt. 
  • Peter Fisher, former Treasury undersecretary for domestic finance in the Bush administration, headed fixed income at BlackRock, 14 years at NY Fed
  • Sandie O'Connor, JPMorgan chief of regulatory affairs 
  • Seth Carpenter, UBS chief economist, assistant Treasury secretary/financial markets in the Obama administration, 15 years at Fed
  • Brian Sack, D.E. Shaw chief economist, former head of the open market operations at the NY Fed.
  • Robert Kaplan, Dallas Fed President.
  • Lael Brainard, current Fed Governor.
  • Simon Potter, current head open market operations at the NY Fed.
  • Krishna Guha, Evercore ISI, former EVP at the NY Fed.
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  • The U.S. Labor Department's Consumer Price Index edged up 0.1% last month after jumping 0.5%  in September. That lowered the year-on-year increase in the CPI to 2.0% from 2.2% in September. 
  • Total mortgage application volume rose by 3.1% for the week, according to the Mortgage Bankers Association. Volume was 8.5% below a year ago. Refinance volume jumped 6% for the week, the highest level in a month, but is down 24% from a year ago. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $424,100 or less remained unchanged last week at 4.18%, with points increasing to 0.40 from 0.38, including the origination fee, for 80 percent loan-to-value ratio loans. Mortgage applications to purchase a home were up just 0.4%. Purchase volume is 17%  higher than the same week one year ago. 


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. 

"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. September was National Prostate Cancer Awareness Month, and Lake Shore Savings Bank 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, estimates are there will be 161,360 new cases, and that more than 26,000 people will die of the disease. Support IBANYS' "Cure the Blue" campaign to help New Yorkers participate to promote prostate cancer awareness and research.

Health & Wellness 
The health and wellness landscape continues to evolve. "My Wellness Resource" can be a nice addition to your existing benefit package.  
C ontact Alan Justin: (716) 907-5500. They also offer  a unique program providing a $500 reba
te on any new Fiat, Chrysler, Dodge, Jeep, Ram or Hyundai vehicle. It may only be offered though individual banks, not through IBANYS itself. If your bank and employees might be interested, drop us a line and we will forward it to Alan Justin, who will reach out to you. I
f you are not currently participating in the My Wellness Resource program, we encourage you to take a fair & objective look at the program!

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

Online Lending
Excelsior Growth Fund (EGF) is NYBDC's nonprofit Community Development Financial Institution and IBANYS' exclusive online lending partner. Visit 


. . .Accume Partners
Accume Partners has a long history of providing internal audit, regulatory compliance and risk management services to banks and financial institutions. As the level of regulatory and business complexity has surged, so has the need for specialized knowledge and focus. We have organized our firm to achieve that goal providing our clients with deep knowledge, expertise and approaches in the following areas:
  • Internal Audit
  • Regulatory Compliance
  • Enterprise Risk Management
  • Technology Risk Management & Cybersecurity Solutions
  • Operations and Process Improvement
Through these key areas of focus,we are able to stay in front of change, bring balanced perspectives and the specialized knowledge demanded by today's banks and financial institutions.

 
. . .That t he New York State Division of the Budget officially came into existence on January 1, 1927 following two constitutional reforms that laid the foundation for a "strong executive" form of government?  In 1925, the State Constitution was amended to consolidate executive branch agencies and to subject the heads of many of those agencies to the appointive authority of the Governor. In 1927, the Constitution was again amended to give the Governor responsibility for submitting an annual, comprehensive and balanced plan of revenues and expenditures and prohibit the Legislature from acting on other spending measures before acting on the Executive Budget.  These reforms made the Governor the chief architect of the State's budget, accountable for the development and administration of the legislatively-approved budget, and led to the evolution of a strong centralized Budget Division. In January 1928, Governor Alfred E. Smith submitted the first budget prepared under the current Executive Budget process.


 

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

 

Click here for quotes from Governor Cuomo and former DFS Superintendent Lawsky extolling the performance and value of New York community banks.

Click here for the full NYS Study on community banking.

Click here to read IBANYS President & CEO John Witkowski's comments on the new tax changes and benefits for New York community banks as approved in the 2014-15 State Budget.

 

Click here for IBANYS' letter to the Editor of Consumer Reports Magazine correcting failure to mention community banks as an alternative to using "big banks."

_________________________________

John J. Witkowski
President and Chief Executive Officer
 
Stephen W. Rice
Director of Government Relations and Communications

Linda Gregware
Director of Administration and Membership Services 

William Y. Crowell, III
Legislative Counsel  


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