• IBANYS led a contingent of New York community bankers to Washington this week for ICBA’s 2024 Capital Summit.  We heard from FDIC Chairman Martin Gruenberg, CFPB Director Rohit Chopra, and House Financial Services Committees Vice Chairman French Hill (R-AR). We spent all day Tuesday and early Wednesday up on the hill, meeting in the offices of 15 key members of the New York congressional delegation. We provide details in our Washington section of today’s newsletter below.

• I recently participated in a roundtable on Minority Depository Institutions (MDIs) which focused on ways to help meet the needs of unbanked and underbanked communities in New York State. We exchanged ideas and views with NYS Senate Banks Chairman James Sanders (D-Queens), NYS Comptroller Tom Dinapoli and other public officials financial industry leaders. Jill Sung, President & CEO, Abacus Federal Savings Bank, and IBANYS board member Carlos Naudon, President and CEO of Ponce Bank, MDI, CDFI also participated. Here’s a press release on the event, with quotes from participants. https://www.nysenate.gov/newsroom/press-releases/2024/james-sanders-jr/new-york-state-senator-james-sanders-jr-nyc

• IBANYS ANNUAL CONVENTION - 50TH ANNIVERSARY CELEBRATION - July 15-17th at The Turning Stone Resort and Casino - Registration is now open (see our brochure below). . . There are still exhibit booths and sponsorships available to support this event. 

• Regulators seized Republic First Bancorp (known as Republic Bank), a troubled Philadelphia lender, last week -- the first U.S. bank failure this year. It had about $6 billion and $4 billion in total assets and deposits, respectively, the FDIC said in a statement. It was closed by the Pennsylvania Department of Banking and Securities and the FDIC was appointed its receiver. “Substantially all” deposits will be assumed by Fulton Bank of Lancaster, Pa., and its 32 branches in Pennsylvania, New Jersey and New York reopened as Fulton Bank branches. The F.D.I.C. expects the cost to the Deposit Insurance Fund to be $667 million. A Janney Montgomery Scott bank analyst said Republic First’s failure was likely an isolated incident, and the overall banking sector is stable, noting: “I think small banks are in good shape,” Mr. Strickland said. “Some of the failures we saw last year were really banks with a certain specialization. I think there’s an importance of being diversified. https://www.nytimes.com/2024/04/26/business/republic-first-bank-failure.html

• Fed: No Changes In Rates. The Fed left interest rates unchanged today, signaled wariness about the recent pace of inflation and reiterated they need “greater confidence” inflation is coming down before reducing interest rates from 5.33%, where they have been since July. https://www.cnbc.com/2024/05/01/fed-rate-decision-may-2024-.html. However, Fed Chairman Powell also said the Fed’s next move is unlikely to be a hike, and the Federal Open Market Committee voted to ease the pace at which it is reducing bond holdings on the Fed’s balance sheet, which could be seen as an incremental easing of monetary policy. Here’s what changed in the new Fed statement. https://www.cnbc.com/2024/05/01/fed-decision-heres-what-changed-in-the-new-statement.html

IBANYS MEETINGS

IBANYS ANNUAL CONVENTION

July 15-17, 2024 – Turning Stone Resort & Casino

Have you heard? Registration is now open for IBANYS Annual Convention. Register today and join IBANYS at the Turning Stone Resort and Casino as we celebrate our 50^th Anniversary. 

Our signature event of the year offers a fantastic opportunity to network, meet the vendors on the exhibitor floor to learn about their services and products and an outstanding slate of speakers that will share their knowledge and expertise on an array of topics that are critical to keep your bank moving forward in these challenging times.

The attached brochure provides the detailed meeting agenda, registrations information and hotel information.

Click here for brochure

Meet the Convention Speakers

Scott Hildenbrand is a Managing Director, Chief Balance Sheet Strategist and Head of Piper Sandler Financial Strategies, working with financial institutions, corporate investors, and issuers on balance sheet strategy development, which includes interest rate risk management, investment portfolio strategy, retail and wholesale funding management, capital planning, budgeting, and stress testing.

Hildenbrand was elected to the board of directors of the Financial Managers Society in 2021. He also serves as treasurer on the board of directors for Liam’s Room, a non-profit organization that focuses on pediatric palliative care, a specialized approach to medical care for children with serious illnesses.

Hildenbrand holds a Master of Business Administration degree in finance from Loyola College in Maryland and a bachelor’s degree with a concentration in accounting and finance from Gettysburg College. He is a frequent speaker at industry conferences and seminars.



Scott will share his knowledge and expertise on “Anticipation and Authority: The Key to a Great Balance Sheet Strategy”.

IBANYS May Webinars

ICBA Affiliate Education Collaboration

In collaboration with ICBA’s education department, ICBA Education, certification programs, seminars, online training, and a host of resources are now available on our website, making it easier for you to find needed education. The new Affiliate Education Program will ensure that collectively, we put community banks in contact with the training tools necessary to grow bankers’ knowledge and skills.

Additionally, the program will also support IBANYS for every ICBA training course, seminar, event registration and resource purchased, ICBA will donate 10 percent of eligible purchases to IBANYS.



Let’s all win by increasing knowledge, improving efficiency, and investing in our employees while working together to uplift the industry we love—community banking!

Use This Code When Registering: NY-IBANYS

Cannabis Lending: Structuring Deals and Mitigating Risk

The Q2 Cannabis Bankers' Quarterly Webinar

Hosted by the American Cannabis Bankers Association and Shield Compliance

Tuesday, May 7, 2024 at 3:00pm ET

Register

Momentum around cannabis legalization is not only reshaping legal frameworks but is also fostering a more informed and open conversation about the opportunity for bankers across the country to establish new customer relationships with cannabis-related businesses and find new growth through low-cost deposits, non-interest income, and earning assets.

So, how can bankers tap into this growth opportunity? This free webinar hosted by the ACBA and Shield Compliance will focus on two hot topics in the industry today: Cannabis Lending and Cannabis Rescheduling.

• As bankers think about where their next tranche of earning assets will come from, they should consider lending to the cannabis industry. We’ll discuss considerations for lenders to ensure they’re structuring a good deal while understanding how to navigate state and federal laws in the event of business failure. 
• The rescheduling of cannabis from a Schedule I to Schedule III controlled substance would be the biggest change in federal drug policy in 70 years. It also opens many questions related to the taxation and regulation of cannabis businesses. We’ll explore these issues and how they could impact banking in this industry.

Register for this FREE webinar to gain valuable insights into banking this evolving industry. Sign up today

Your FREE registration includes:

• Entire organizational access to live event and playback
• Copy of the presentation materials
• Unlimited video playback with no expiration
• Attendance Certificate for Continuing Education

ALBANY UPDATE

LEGISLATIVE

• Latest From Albany. The New York State Senate and Assembly are still in recess until next Monday, May 6. Meanwhile, from last week, here are the most recent reports from Albany on the latest bill introductions and legislative activity. There are no committee meetings until the week of May 6th.

• What Didn’t Make Budget? What Might Still Be Alive? A number of proposals did not make it into the state budget: Some are unlikely to be considered again this session, but others may yet have a chance to pass. Here are some of the biggest issues left out of the budget.  The battle isn’t over for the NY HEAT Act or the Climate Change Superfund Act, though they didn’t make the budget cut. Meanwhile, the budget “pushes Democrats to the center” as key U.S. House races loom in the state. POLITICO. The budget is an intended course correction for Hochul and Democrats, focusing on rebutting two issues Republicans have seized on – the state’s lack of affordability and loosening of criminal justice laws, Politico New York reports.

REGULATORY

• DFS Alert. The NYS Department of Financial Services (DFS) reports targeted outreach by an entity claiming to solicit advertisements for a purported publication about the Department. DFS is in no way associated with Brooklands New Media Ltd., its publication, or any email solicitations related to it. Those contacted by this entity regarding DFS are encouraged not to respond to inquiries and should instead notify the Department. Attempts of this scheme should be immediately reported to DFS. Contact elizabeth.nochlin@dfs.ny.gov and martin.straw@dfs.ny.gov. The DFS website provides additional information about avoiding scams using the DFS name and information

BUDGET, TAXES, POLITICS

• DiNapoli On Budget, Taxes. State Comptroller DiNapoli commented on the enacted State Budget, and released a quarterly analysis of local sales tax collections which found that year-over-year growth in collections were being driven by New York City, while many regions of the State experiencing year-over-year declines. https://www.osc.ny.gov/press/releases/2024/04/state-comptroller-thomas-p-dinapoli-statement-passage-final-state-budget?utm_content=20240427&utm_medium=email&utm_source=weekly+news. According to a report released by DiNapoli, tax collections for State Fiscal Year 2023-24 totaled $106.4 billion – more than $2 billion higher than forecast by the State Division of the Budget, and exceeding projections by the Consensus Economic and Revenue Forecast Report. https://www.osc.ny.gov/press/releases/2024/04/dinapoli-state-tax-collections-outperform-budget-division-projections-2023-24?utm_content=20240420&utm_medium=email&utm_source=weekly+news

• And, More Tax Collections Up. New York local government sales tax collections increased 1.6%, totaling $5.6 billion, in the first quarter of 2024 compared to the same period last year. It is the lowest rate of growth in the first quarter since 2021, the comptroller added. Read More

• Municipalities Get More Money. Many New York state mayors are celebrating an increase in state funding for their municipalities in the state budget. Aid and Incentives for Municipalities (AIM) has a $50 million boost in unrestricted funding for cities, the first in 15 years. Read more.

• “The New Silicon Valley?” Saying she hopes it makes New York the next Silicon Valley, Gov. Hochul yesterday highlighted the state’s investment in artificial intelligence research that was approved in the state budget.

• Democrat Kennedy Wins Special House Election. On Tuesday, Democratic State Senator Tim Kennedy easily won the open Western New York House seat vacated earlier this year by Democrat Brian Higgins, and appears “a near lock” to win a full term in November since the seat is heavily Democratic. https://www.nytimes.com/2024/04/30/nyregion/timothy-kennedy-special-election.html?unlocked_article_code=1.ok0.gBke.PBHtLGTD8Tn9&smid=url-share. When Kennedy is seated the GOP’s House margin will effectively shrink to a single vote. House Democratic Leader Jeffries (D-Brooklyn) noted: “He brings a wealth of legislative experience from his time in the New York State Senate and has a record of delivering results. . .” Special elections in Wisconsin, Ohio, Colorado and California are expected to offer Republicans reinforcements, but not until this summer. https://nystateofpolitics.com/state-of-politics/new-york/news/2024/04/29/ny-26-special-election-result.

• NYS Leg Races To Watch. New York State Legislature has some key races to watch in 2024. Here are some of the challenges, swing districts and open seats to keep an eye on. https://empirereportnewyork.com/latest-news/#[link]526107

• Hochul Administration News. Pending confirmation by the State Senate, Gov. Hochul appointed former Assembly Member Walter Mosley as secretary of state. . .And she’s hired Sam Spokony as senior comms director.

• A Full, Productive Day On Capitol Hill. More than 20 New York community bank leaders joined IBANYS Chairman Steve Woodard (Alden State Bank), Past Chairs Mike Wimer (Cattaraugus County Bank), John Buhrmaster (1st national Bank of Scotia) and Bob Fisher (Tioga State Bank) joined IBANYS for a day-plus of meetings on capitol hill in the offices of Members of the New York congressional delegation, including those of Senate Majority Leader Schumer and Sen. Gillibrand; House Democratic Leader Jeffries (D-Brooklyn); House GOP Conference Chair Stefanik (R-North Country); and, Key members of the House Financial Services Committee, Small Business Committee, Agriculture Committee, Ways & Means Committee, Appropriations Committee and more. IBANYs discussed issues including: Credit Unions; The new farm bill & the ACRE Act; Reigning in regulatory overreach; Closing the Industrial Loan Company (ILC) Loophole; the Homebuyers Privacy Protection Act; the Credit Card Competition Act; the CBDC Anti-Surveillance State Act, and SAFE Harbor for Cannabis Banking the "SAFER/ SAFE Banking Act). Here's a link to our talking points. Community bankers are urged to send messages to their lawmakers on these key issues.

• In our discussions, we reminded Congress: Community banks play a vital role in our local, state and national economies and social fabric. We constitute 99% of all banks nationwide; have 50,000 locations across the country, employing nearly 700,000 Americans; represent the only physical banking presence in one in three counties; hold #3.8 T in loans, $4.8T in Deposits, have $5.8T in assets.. .and, create loans for consumers, small businesses and the agriculture community. Community banks in New York State and across the nation channel local deposits into the neighborhoods and communities we serve, spur job creation, foster innovation, and help fuel our customers' dreams.

. . . Help spread the news. Tell YOUR stories to YOUR local Members of Congress (and, NYS Legislature). Visit them in the district. Call them, write them, invite them to your banks. Help them understand: YOUR customers are THEIR constituents.

• FDIC & CFPB Discuss Issues. ICBA President and CEO Rebeca Romero Rainey discussed regulatory parity, banking industry consolidation, the value of community banks, and other pressing issues with FDIC Chairman Martin Gruenberg and CFPB Director Rohit Chopra at the Capital Summit.

• They're With Us. Recently released new polling data shows Americans support community banker views on the pressing issues we discussed in D.C. this week. 1) 70% say providing tax relief to lending institutions in rural communities — in line with the bipartisan Access to Credit for our Rural Economy (ACRE) Act — would help preserve family farms if these benefits are passed along to borrowers. 2) 69% of Americans support legislation to restrict credit reporting agencies from selling consumers’ contact information when they apply for a residential mortgage. 3) 66% of adults say allowing big merchants to pick card transaction networks that are the least costly to them — as laid out by the Credit Card Competition Act (S. 1838/H.R. 3881) — would lead them to choose less secure networks. 4) 68% of adults say credit union customers should have the same consumer protections that banks provide, such as those provided by the Community Reinvestment Act.

• Key Points From Financial Services Vice Chair. House Financial Services Committee Vice Chairman French Hill (R-AR) commended community bankers for their efforts to challenge misguided regulatory initiatives in support of local communities. In his comments, Vice Chairman Hill: 1) Thanked ICBA for supporting the Small LENDER Act, which would expand community bank and small-business exemptions from the Consumer Financial Protection Bureau’s 1071 data collection and reporting rule. 2) Rejected the CFPB’s characterization of overdraft and credit card late fees as “junk fees,” noting that they instead provide a service that consumers demand. 3) Said Congress opposes the formation of a U.S. central bank digital currency.

• ICBA released its legislative and regulatory policy objectives ahead of this week’s Capital Summit. The policy resolutions are based on the principles of: 1) Promoting a balanced and competitive financial services landscape for American consumers and businesses; 2) Advocating common-sense and appropriately tailored laws and regulations for community banks; 3) Championing fair and equitable access to the financial system; 4) Advancing responsible innovation, and 5) Protecting the safety and soundness of the financial system. Read the resolutions. Community bankers are urged to send messages to their lawmakers on key issues.

• Just Said NO. Tennessee’s Governor signed state legislation clarifying that the state’s banks may only be acquired by FDIC-insured institutions. Recent ICBA polling shows public support for reforming credit union policies, with 68% of adults saying credit union customers should have the same consumer protections that banks provide. Community bankers: Use ICBA’s Be Heard grassroots action center to ask your Members of Congress to hold a hearing on credit union policy. Additional resources on credit union policy are available on the ICBA website.

• FHFA On Fair Lending/Fair Housing. The FHFA released a final rule to codify fair lending and fair housing standards. The final rule codifies: 1) Fair lending oversight requirements for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks; 2) Requirements for the government-sponsored enterprises to maintain Equitable Housing Finance Plans. 3) Requirements for the GSEs to collect and report homeownership education, housing counseling, and language preference information from the Supplemental Consumer Information Form; 4) Expanded fair lending compliance requirements and Equitable Housing Finance Plan oversight. The FHFA seeks public feedback to inform the next three-year plans through a request for input and listening session; expects to hold a public listening session in June 2024, and anticipates releasing the next plans in January 2025. In a 2023 comment letter ICBA said the FHFA should ensure the rule does not further limit the ability of community banks to use Fannie Mae and Freddie Mac to access the secondary mortgage market, and that the FHFA should resume discussions with Treasury to release Fannie and Freddie from their 15 years of conservatorship and to amend their Preferred Stock Purchase Agreements so the GSEs won’t have to resume their net-worth sweep once recapitalized.

• Too Many Banks? Nope! Responding to claims the U.S. has too many banks, ICBA noted the importance of community banks to local communities and the banking system in an op-ed on LinkedIn. ICBA noted community banks have remained a steady source of financial services in local communities despite last year’s failures of large banks. ICBA offers a customizable op-ed that discusses the benefits of the nation’s community banking system and pushes back against claims that the U.S. financial system is overbanked. It's available on ICBA’s Marketing and Communications Toolkit

• Whitepaper On Redlining. A new ICBA whitepaper offers an in-depth look at current trends in fair lending and the scrutiny of redlining practices. It explores disparate impact, disparate treatment, traditional and reverse redlining, and emphasizes the importance of understanding market demographics. It provides practical guidance, suggests proactive measures to help banks increase lending in underserved areas, helping to prevent inadvertent exclusion based on national or ethnic characteristics and avoid redlining violations before they occur. Read the whitepaper.

• They're Leaving! A total of 52 members of Congress—eight Senators and 44 members of the House—are not seeking re-election this year. Of the senators, 5 are Democrats, 2 are Republicans and 1 is an Independent. Of the House members, 12—three Republicans and nine Democrats—are running for the U.S. Senate. Two—one Democrat and one Republican—are running for state attorney general. Two—one Democrat and one Republican—are running for governor. One Democrat is running for President of the United States. 27 (12 Democrats, 15 Republicans) are retiring from public office.

• Dems Rescue GOP Speaker? House Democratic leadership announced Democrats would vote to table Rep. Marjorie Taylor Greene’s (R-GA) attempt to remove Speaker Mike Johnson (R-LA), likely protecting Johnson from a motion to vacate the speakership. Read more...

• Big Focus On New York House Races. The GOP National Committee Chair told top House Republicans the party will focus on states like New York and California, home to key battleground seats in the fight to control the House in the next Congress. New York reportedly has six House seats in play – five held by first-term GOP incumbents. House GOP Conference Chair Stefanik (R-North Country) has been leading the GOP effort in the state to maintain power in the House. Since her election in 2024, Stefanik has quickly moved up the ranks of the House GOP and the state delegation: She’s currently the longest-serving House Republican from New York and the GOP conference chair. Stefanik said her party will spend $100 million in New York to retain key House seats. Democrats are also aggressively competing and fundraising in the state.

• Cannabis Banking Update. Senate Majority Leader Schumer (D-NY) wants to include cannabis banking and stablecoin legislation in the upcoming Federal Aviation Administration reauthorization bill. Senate Republican opposition is expected, including from Senate Minority Leader McConnell (R-KY), who “continues to oppose marijuana legislation.” Meanwhile, the Biden administration is expected to ease federal restrictions on marijuana: The U.S. Drug Enforcement Administration will reportedly move to reclassify the drug as less dangerous, though it will not legalize it for recreational use. The Associated Press reports.