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In This Issue: 
  • Latest Updates From Albany & Washington, D.C.
  • 2018 Meeting News
  • New Feature: Spotlight Member Bank
  • Follow IBANYS On Facebook, Twitter, LinkedIn and Instagram!



Message From the President
John Witkowski, President & CEO
As February heads toward March, IBANYS is engaged on a number of different fronts on behalf of New York community banks.
  • We are actively monitoring events and developments in Albany, as the Governor, the Division of Budget, the State Comptroller and the New York State Legislature continue to move through the 2018-19 State Budget process. The Governor has made his 30-day amendments to his budget proposal, the Legislature has held a number of budget hearings and now will begin to issue its own projections and spending plans with the April 1 deadline on the horizon.Taxes are a key component, but we also are watching for any indications of provisions that could impact our industry and membership. In addition, there is some non-budget activity we are closely monitoring. We discuss these issues below.
  • In Washington, the focus remains firmly fixed on community bank regulatory relief. The bipartisan legislation (S.2155) has been passed by the Senate Banking Committee, and could come to a vote in the full Senate as soon as next week (or, may be delayed until mid-March). IBANYS has launched a grassroots effort directed at Senator Schumer, the Democratic Leader of the Senate, to inform him how important S.2155 is to New York's community banks -- and why we are counting on him to support it and help pave the way for its passage without amendments that could jeopardize its bipartisan support. Our Board of Directors also wrote to the Senator on this issue as well. Click here to read the letter.  Meanwhile, on February 28, Federal Reserve Chairman Jay Powell will make his first semiannual report to members of the House and Senate. We'll be reporting on that next week.
  • We also are in the midst of finalizing our spring 2018 IBANYS meetings: Programs designed for community bank compliance officers, human resources officers, directors, and senior management teams, as well as a gathering in Washington to meet with our New York Congressional Delegation. These meetings provide important information and networking opportunities. Today's newsletter has more information on upcoming dates and locations. We hope you'll join us! 
  • Finally, today's IBANYS Newsletter is the first to reflect our new, updated look. We hope you like it, and find it more reader-friendly and easier to navigate. Let us know your thoughts.
IBANYS is YOUR association. Make it work for you!

Follow IBANYS On Social Media!
Have you found and followed IBANYS on social media yet? Connecting couldn't be simpler:

 

Facebook: @ibanys1 | Twitter: @ibanys1 | 

Instagram: @ibanys1 | LinkedIn: IBANYS 

2018 Meetings

IBANYS' 2018 Meetings
 
Regional   Compliance Conferences: 
March 20 (Rochester/Pittsford)  and March 21 (Troy). . .presentations by OCC, NYS DFS, industry experts and a peer bankers panel discussion.
 Click here 
for program details and to register. 

CEO Forums: 
March 26 (Albany), March 27 (Syracuse), March 28 (Rochester/Buffalo market). . . Please  CLICK HERE for program, and  CLICK HERE to register. 
 
 
The 2018 ICBA Capital Summit: 
In Washington, DC Sunday, April 8 - Wednesday, April 11. "Hill visits" with the New York congressional delegation will be Tuesday, April 10 & Wednesday, April 11.

Regional Directors Conferences:
April 10 (Rochester/Pittsford) and April 11 (Troy).

Our Human Resources Conferences will take place April  24 (Rochester/Pittsford) & 
 April 25 (Troy)

Member banks: Share this information with your senior management teams, officers, directors, compliance, security and human resources  officers. Preferred providers, associate members and business show exhibitors: Now is the time to plan to attend, participate, sponsor/exhibit.  Contact Linda Gregware: Lindag@Ibanys.net 
IBANYS Webinars

IBANYS' webinars provide timely, informative sessions on important topics and issues of interest for community bankers. They are valuable not only for their content, but for their convenience. Participants can take part from the comfort and privacy of their offices, without leaving the bank. Upcoming offerings include presentations on 2018 credit analysis and underwriting, IRAs, consumer debt, compliance, new accounts, call reports, programs for directors, marketing, and cyber security. Take a look at the schedule of all upcoming IBANYS webinars by clicking here.
Government Relations
Albany
2018-19 Budget Process Continues

State budget discussions and deliberations continue to be the main focus of activity in Albany. The Governor has made his 30-day amendments, and now the State Senate and Assembly will issue their "Revenue Forecasts and Economic Reports" by the end of February (February 28). They will then produce a consensus report March 1. Both chambers of the Legislature then release their own respective one-house budgets on March 14. That's when the final negotiations will take place with the Governor's office, with an April 1 deadline.  At a Manhattan news conference, Governor Cuomo's top GOP challenger, State Senate Deputy Majority Leader John DeFrancisco (R-Syracuse) strongly criticized Cuomo's budget proposal  to address changes to the federal tax law (including the loss of deductions) by implementing changes to the state tax code. He termed the proposal to create 2,287 charitable organizations for taxpayers to fund government services-designed to circumvent the new $10,000 limit on state and local tax deductions- "legally dubious." The Governor has also recommended a voluntary payroll tax as a substitute for the state income tax. DeFrancisco said the real solution is for New York to cut taxes and spending, and vowed he would run government more effectively, cut Medicaid and slash education bureaucracy. "Taxes and spending are too...high," DeFrancisco said.

New Yorkers Second-Highest in Paying Taxes

Meanwhile, a new study by  the financial news site "24/7 Wall Street" found that New Yorkers on average paid 12.7 percent of their income in state and local taxes - a larger percentage than residents of any other state. New York was the fourth-wealthiest state in the nation, with an average per-capita income of $59,563 - but its tax collections (averaging $2,208 per resident) were the second-highest per capita in the country. Gov. Cuomo's office dismissed the study as outdated and said it failed to account for tax cuts implemented in New York since 2012. The analysis reviewed state and local tax burdens for the 2012 fiscal year and reviewed property tax collections for fiscal year 2014, state income tax collections for fiscal year 2015 and personal income data for 2016.

The Study's New York Profile:
  • Taxes paid as percentage. of income: 12.7% (highest)
  • Income per capita: $59,563 (4th highest)
  • Income tax collections per capita: $2,208 (2nd highest)
  • Property tax collections per capita: $2,581 (5th highest)
General sales tax collections per capita: $662 (14th lowest)


Molinaro Reconsidering Governor Run

Dutchess Country Executive Marc Molinaro is reportedly reconsidering his decision not to run for Governor this year. The former Assemblyman said he is being urged to get into the race, particularly after the recent withdrawal by Assemblyman GOP Leader Brian Kolb. Other Republicans seeking the nomination are former Erie County Executive Joel Giambra and Joseph Holland, former housing commissioner during the Pataki administration. Governor Cuomo faces a primary challenge from former Hudson Valley State Senator Terry Gipson.


Non-Budget Legislative Activity

Meanwhile, there has been some non-budget activity. For example, both the State Senate and Assembly have now passed  A. 8938 (Zebrowski)/ S.7294 (Hamilton), a chapter amendment to the recently signed legislation to create an online lending task force. The newly amended bill does away with the legislative task force, and authorizes and directs the NYS Department of Financial Services (DFS) to study and issue a public report on the topic on or before July 1, 2018. The amended bill awaits the Governor's signature. 

Government Relations
Washington D.C.
OCC's Otting, Senate Banking Committee's Toomey to Address ICBA Capital Summit
. . .Plus, Meetings With New York Lawmakers

Comptroller of the Currency Joseph Otting  will speak at the 2018 ICBA Capital Summit, which will take place April 8-11 in Washington, D.C. Comptroller Otting joins U.S. Sen. Patrick Toomey  (R-PA.), who chairs the Senate Banking Committee's Subcommittee on Financial Institutions and Consumer Protection. New York community bankers who are planning to attend the Summit:  IBANYS will be scheduling meetings "on the hill" with members of the New York congressional delegation.  Watch this space for details, and contact John Witkowski (Johnw@IBANYS.net) or Steve Rice ( Stever@IBANYS.net)  with questions.  Don't miss this once-a-year opportunity to advocate for community bank policies and positions with our federal lawmakers.

S.2155 Moving Toward Senate Vote: Please Support IBANYS' Grassroots Outreach to Senator Schumer

The bipartisan Senate regulatory relief bill (S.2155) , crafted   by Senate Banking Chairman Mike Crapo (R-ID) and supported by 12 mostly moderate Senate Democrats and 12 Republicans --  may be brought to the floor of the Senate for a vote by Majority Leader Senator Mitch McConnell (R-KY) as early as next week.  However, the timing may be delayed into March due to other pressing Senate business.  Including Democratic support, the bill reportedly may already have the 60 votes needed to pass the Senate. The challenge before the Senate is to pass the legislation without any changes that could risk the bipartisan support it currently enjoys -- and then, to work to obtain House passage of the bill as is. IBANYS is conducting a grassroots outreach effort with Senator Schumer (D-New York, Senate Democratic Leader) to seek his support and his agreement to allow his Democratic colleagues to vote for the legislation. Senator Gillibrand (New York's junior U.S. Senator) opposes the bill. 

  • Read IBANYS' letter to Senator Schumer: click here
  • Read talking points in support of the bill: click here
  • Contact information for Senator Schumer's district offices: click here

ICBA Asks Senate Finance Chairman Hatch to Hold Hearing on Credit Unions Tax Exemption

ICBA has asked Senate Finance Committee Chairman Orrin Hatch (R-UT) to hold a hearing on the credit union industry's tax exemption. ICBA noted that modern credit unions have failed in every aspect of their public mission and pose a threat to the American tax base. "The credit union tax subsidy is the elephant in the room," ICBA wrote. "It is widely understood but rarely acknowledged that the tax exemption has outlived its purpose. Now is the time to have that discussion."  Senator Hatch, who is not seeking reelection, had previously written to to the National Credit Union Administration expressing concern that credit unions may be operating beyond their tax-exempt purpose. He commented that the credit union tax exemption is valued at approximately $2.9 billion this year, and cited several of the NCUA's actions (strongly opposed by both ICBA and IBANYS) pertaining to rules on field of membership, commercial lending, and alternative capital.

Banking News
February 27 Webinar
Municipal Market Update: "Strategies for Tax Reform & Credit"

ICBA Securities and its exclusively endorsed broker/dealer, Vining Sparks, will present this one-hour webinar on February 27 --  the first of the 2018 webinar series. The municipal bondsector continues to be a significant portion of community bank portfolios and year after year one of the better performing asset classes. Significant weightings in tax-free bonds can produce high tax-equivalent yields at a reasonable corresponding price risk.  The credit performance of the bank-qualified sector remains sound; however, investors must understand issuer credit dynamics and overall credit themes. The municipal market had an interesting 2017 as tax reform was the main driver/topic of the year and came to fruition in December with tax reform being enacted. This webinar will comment on how this affects the municipal market with an emphasis on community bank portfolios. It will also provide an update on the current state of the municipal market, of course highlighting the Bank Qualified market. Lastly, we will provide commentary on the outlook of State, Local Governments and water/sewer systems. 

Speakers will include: 
  • SVP Dennis Porcaro (municipal credit analyst in Vining Sparks' Strategic Solutions Group.
  • VP Justin Sparks (Vining Sparks trader specializing on the municipal market)
  • SVP Dan Stimpson, CPA (member of the Strategic Solutions group). 
You'll learn:
  • The current state of the market for tax-free municipal investments
  • Tax reform and the impact on the tax-exempt municipal bond market
  • 2018 outlook for state, local government and water and sewer sectors in the municipal market

Sign Up Now. . .Program Nearly Sold Out!

The Barrett Graduate School of Banking offers outstanding, innovative curriculum and an ICBA-endorsed superb faculty that includes nationally known speakers in the industry. The program's one-week resident session means bank employees spend less time away from job and family.  The curriculum includes:
  • One week per year for three years
  • 128 hours of classroom study
  • Nine on-campus case studies
  • Eight home study problems.
Barrett has more than 40 years of existence (It was formerly known as the Mid South School of Banking.) Attendees come from over 20 states.
Click here for additional information.

"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. 

Lake Shore Savings Bank has 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, there were an estimated 161,000 new cases, and more than 26,000 fatalities due to the disease. Support IBANYS' "Cure the Blue" campaign to help New Yorkers participate to promote prostate cancer awareness and research.


Spotlight Bank of the Week

Saratoga National Bank and Trust Company, celebrating its 30th anniversary in 2018, is a one-stop shop for all banking needs. This community bank provides a full suite of financial services across the Capital Region- including checking and savings, cash management, commercial insurance, small business loans, group health, retirement plans and more.

Recognized as one of the strongest financial institutions in the nation, Saratoga National Bank has been designated as a 5-star Superior bank by BauerFinancial, Inc. for 35 consecutive quarters. The Bank was also recently named the "Top Small Community Lender" by the U.S. Small Business Adminstration for the Capital Region for the fourth consecutive year. 

Saratoga National Bank employees combine the highest level of financial expertise with first-hand knowledge of their own communities to offer personal attention, smart banking options and competitive rates. Local management and decision-making are just some of the key elements that differentiate Saratoga National Bank from other financial institutions.

Saratoga National Bank is continuing to expand in the Capital Region. Most recently, the Bank opened its 10th location at 251 State Street in Schenectady.

Serving the organizations that make the region a great place to live and work has always been an important part of the company culture. The Bank is committed to investing in the community and proudly supports dozens of not-for-profits through sponsorships, volunteerism, donations and education.

For more information, please visit www.saratoganational.com.
Industry Trends & Updates
Small Business Confidence Up Following Tax Reform

The CNBC/SurveyMonkey "Q1 Small Business Confidence Index found that small-business confidence is surging in 2018, as optimism rises among small-business owners about the newly enacted tax-reform package. The Index showed an increase of five points, from 57 to 62, a record high and the largest quarter-to-quarter move since they began measuring last year. This is the first survey since President Trump signed the Tax Cuts and Jobs Act into law in December.
  • Forty-six percent of those surveyed say tax policy changes will have a positive effect, up from 38 percent in the fourth quarter.
  • The number of those saying tax policy changes will have a negative impact fell sharply, from 36 percent in the fourth quarter to 23 percent in the most recent survey.
  • Half of small-business owners are now expecting to see tax cuts in 2018.
  • Finding skilled labor remains a concern. Recent National Federation of Small Businesses (NFIB) data found the quality of labor is now the top issue; hiring is challenging, and more businesses are raising wages to retain current workers. 

New Poll Surveys Registered Voters on Their Paychecks Under the Federal Tax Reforms

A new poll by Politico/Morning Consult  surveyed registered voters as to whether they have seen an increase in their paychecks under the federal tax reforms.
  • 25 percent  say they are seeing more money in their paychecks 
  • 51 percent say they are not 
Among employed voters (in the private and public sectors and those self-employed)
          • 37 percent have noticed an increase
          • 53 percent have not 
Who reported seeing an uptick, by political registration?
  • 32 percent of self-identified Republicans  
  • 21 percent of Democrats 
  • 22 percent of independents 


Housing Starts Are Up- And So Are Building Permits

New home construction increased to a more-than one-year high in January, helped by a rebound in the building of single-family housing units. Building permits are also up to theirhighest level since 2007. The U.S. Commerce Department said housing starts jumped 9.7 percent to a seasonally adjusted annual rate of 1.326 million units, the highest level since October 2016.  Building permits surged 7.4 percent to a rate of 1.396 million units in January, their highest level since June 2007. Single-family homebuilding, the largest share of the housing market, increased 3.7 percent to a rate of 877,000 units in January. Single-family home construction rose in the Northeast. Starts for the multi-family housing segment surged 23.7 percent to a rate of 449,000 units in January, and permits are up as well.

However, U.S. home sales unexpectedly declined for the second straight month in January, as a shortage of houses pushed up prices and kept first-time buyers out of the market. The National Association of Realtors reports that existing home sales dropped 3.2 percent to a seasonally adjusted annual rate of 5.38 million units. The median house price increased 5.8 percent from a year ago to $240,500 in January. That was the 71st consecutive month of year-on-year price gains. 


Title Insurers Ask Court To Strike Down New DFS Regulations

The New York State Land Title Association Inc., the Great American Title Agency Inc. and Venture Title Agency filed an Article 78 petition with the Manhattan Supreme Court asking it to strike down newly enacted New York State Department of Financial Services (DFS) regulations. The petition says the new regulations "wreak havoc on title insurance corporations, title insurance agents, and title closers across the state of New York." The plaintiffs further say the regulations "will result in company closures, layoffs and reduced services for consumers, hitting small businesses hardest. DFS must be stopped before more companies are forced to close or lay off employees and consumers are harmed across the state."

IBANYS Endorsed Services

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.


Health & Wellness

My Wellness Resource & TELADOC

The health and wellness landscape continues to evolve. "My Wellness Resource" can be a nice addition to your existing benefit package. 

Teladoc can save your banks time and money, and provide real value to your employees as this testimonial from a New York community bank CEO proves:
HERE'S WHAT YOUR FELLOW NEW YORK
COMMUNITY BANKER SAYS. . .
"I wanted to let you know that some of our employees and I have been using "Teladoc" and it is one of the best things we have done for the bank. We all love it: We are saving time, avoiding waiting in an urgent care center or a doctor's waiting room for non-emergency related illnesses . . .and it is easy to use and convenient. Once you use it, you are hooked! This was a great find! Would recommend it to all banks."

Mario Martinez 
Chairman & CEO
Catskill Hudson Bank

Contact Alan Justin: (716) 907-5500. 


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 

IBANYS Spotlight Is On...
Luse Gorman, PC


The law firm of Luse Gorman was founded in 1993 as a specialty law firm dedicated to representing financial institutions, with a particular emphasis on community banks with respect to corporate, regulatory, securities and employee benefits/executive compensation matters. 

Their clients include both federal and state chartered institutions. The firm has grown into the largest community financial institution law firm in the nation. Much of their practice focuses on transactional matters. They advise financial institutions on mergers and acquisitions and a broad range of capital raising transactions, including common stock and preferred stock offerings, subordinated debt offerings, mutual-to-stock conversions, and mutual holding company reorganizations. They are routinely ranked as one of the top law firms nationally for merger and acquisition transactions by community financial institutions, and as one of the top law firms nationally in total capital raising transactions by financial institutions. They also provide a range of other services to community financial institutions, including advising clients on matters such as SEC and public company reporting and disclosure, shareholder relations, executive compensation and employee benefits matters, taxation, corporate governance, regulatory enforcement and compliance, holding company reorganizations, de novo bank formations and charter conversions.Their expertise is enhanced by the number of their seasoned partners, most with more than 20 years of experience in advising community financial institutions. Many have held senior positions at the federal banking agencies or the SEC. 

For more information, contact Jeff Cardone, Partner 

Phone: (202) 274-2033,   Email:  jcardone@luselaw.com, Website:  www.luselaw.com


Did You Know?

. . .That  ten years ago, there were only 70 credit unions in the United States with assets of more than $1 billion. Today, there are 284. The largest credit union now has assets of over $80 billion. In just the last four years, the total assets of federally insured credit unions have grown by nearly $70 billion, and membership has grown by more than 10 million.
 
 
 
New York community banks play a key role in our state and local economies. Help spread the good news among our customers, business, elected leaders and the media!



John J. Witkowski
President & Chief Executive Officer

Stephen W. Rice
Director of Government Relations & Communications

Linda Gregware
Director of Administration & Membership Services

William Y. Crowell III
Legislative Counsel

Natalie Rowan
Marketing & Social Media Assistant
Connect With Us!



  
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