IBANYS' 2015-16 Officers 

 

IBANYS' officers for 2015-16 have assumed their responsibilities. Left to right, they are Chairman John Buhrmaster (1st National Bank of Scotia), Vice Chairman Doug Manditch (Empire National Bank), Secretary/ Treasurer Mike Briggs (USNY Bank) and Immediate Past Chairman Chris Dowd (Ballston Spa National Bank). Thanks to these leaders of the New York community banking industry for their commitment.  

KeyCorp-First Niagara Deal  

"Troubles" Senator Schumer  

New York's senior U.S. Senator Chuck Schumer called the KeyCorp/First Niagara transaction announcement "extremely troubling" and said he might oppose it. KeyCorp, with major operations in the capital region and Buffalo, plans to buy Buffalo-based First Niagara for $4.1 billion. The boards of each bank approved a merger agreement last Friday. Sen. Schumer commented: "The proposed acquisition
. . .on initial examination, seems extremely troubling because the banks overlap so much and merging may entail significant job losses and reduce competition across Upstate New York. . .I am seriously considering opposing this merger, but will await getting some details . . .as to the specifics of their plan and how it would affect jobs in Western New York." Click here to read a Buffalo News article noting the reaction of community banks to the announced merger.     

 

"Congressional Highway Robbery"

The House of Representatives is poised take up long-term transportation funding legislation this week, with the provision that would dramatically reduce the dividends banks receive for holding Federal Reserve stock to help fund the law. ICBA President & CEO Cam Fine's op-ed appeared this week in the Washington, D.C. newspaper The Hill and online.

He noted the "backdoor tax"

would "set a costly precedent, that unilaterally cutting dividends paid on Federal Reserve Bank stock is a haphazard way to fund highways and poses risks to the Federal Reserve, its member institutions, and the communities they serve." ICBA urges community bankers to continue expressing opposition to the proposed dividend cut. IBANYS encourages New York community bankers to visit ICBA's website at www.icba.org, click on the "Be Heard grassroots" section and help keep the dividend cut out of the House measure. Click here to read the full op-ed.   

A Message From IBANYS Chairman
John Buhrmaster 

Recently, Cap Com Federal Credit Union -- a regional credit union headquartered in the Capital Region of New York State -- was  recognized by the Capital Region Chamber of Commerce as a FOR-PROFIT ORGANIZATION.  Unfortunately, it appears this recognition must have been made based on a misunderstanding on the part of the Chamber. Apparently, Chamber executives 

must have believed credit unions pay taxes, as do all "for-profit" entities. The reality is, credit unions DO NOT pay taxes, and they are not "for-profit" businesses.  I urge the CEO of Cap Com Federal Credit Union to  decline the Chamber's recognition, which was clearly never intended to go to an organization that is tax-exempt.

 

That is the reality: Credit unions, unlike "for-profit" companies such as banks, are tax-exempt. A similar situation existed for thrift institutions until 1952, when Congress saw the light and began taxing them once the original purpose for their exemption was no longer practical or applicable. It is time for today's Congress to see a similar light, and impose taxation on the huge Federal Credit Unions, essentially banks in credit union clothing, which no longer meet the original congressional intent of the credit union tax exemption.   

 

Many of our nation's priorities could be addressed if the government received the tax revenue it is rightly due from these institutions. Our infrastructure, veterans' benefits, the budget deficit ...these and so many other concerns could be positively impacted if credit unions just paid their fair share of taxes, just as other businesses do. 

 

As a community banker, I am a strong supporter of small, local credit unions that remain true to their mission and meet the congressional intent of their charter. In fact, our bank is proud to count one such small Credit Union as a long-time shareholder of our bank. However, many large credit unions have now expanded their "fields of membership" far beyond the intended "common bonds" geography or employment, and are in direct contradiction of Congress's original intent: providing access to credit to groups of closely linked individuals of modest means. Their  "philanthropy" should instead be called a misappropriation of members funds. Their consumers or borrowers could see lower mortgage or car loan rates if these entities actually returned their "profits" to their members, as they are supposed to do. 

 

There are people of modest means who are longtime large credit union members/part-owners who have been denied credit, while their credit union actively pursues risky million dollar business loans. Losses on such loans come directly out members' pockets through higher loan rates and fees. That contributes to why credit unions' personal loan standards have tightened.

 

I am proud of what our small community bank has given back to the community over the last 92 years in the form of growth, loans, stability, volunteers, contributions, and all while still paying an enormous amount of taxes. I magine what our bank could give back to the community if we did not have to pay more than 45% in taxes!

 

I hope the Capital Region Chamber of Commerce acknowledges their mistake, and decides instead honor a REAL "for profit company" -- one that that contributes to the local community both through charity, and by fulfilling its civic duty of paying taxes.

 

Freddie Mac's Tough Quarter 

Freddie Mac lost $475 million in the third quarter, its first quarterly loss in four years. Freddie has received $71.3 billion in bailout funds since the 2008 financial crisis, and returned $96.5 billion to the Treasury since returning to profitability in 2012. Comunity bankers are concerned the loss shows the need for the Federal Housing Finance Agency to require Fannie and Freddie to rebuild their capital. ICBA urges policymakers to pursue housing-finance reform and building capital at the GSEs to support their safety and soundness and protect taxpayers.

Upstate Job Market Faces Challenges 

The employment scenario in upstate New York continues to be challenging, despite efforts by state leaders to boost the upstate economy. Entergy this week announced plans to close its FitzPatrick nuclear plant outside Syracuse, which would eliminate about 600 jobs. State officials are fighting those closure plans, and also trying to dissuade Kraft- Heinz Co. from closing or downsizing three manufacturing facilities near Rochester and in the Southern Tier that would impact another 940 jobs.  

Banking Regulators Again Warn  

About Cyber Attacks 

Federal banking regulators have again warned financial institutions about the increasing frequency and severity of cyber-attacks involving extortion. Their statement notes the increase of cyber-attacks against financial institutions to extort payment in return for the release of sensitive information.  Regulators encourage financial institutions to develop and implement effective programs to protect against these types of attacks.

• Signed contracts to buy existing homes dropped 2.3% in September from August, and were just 3% higher than a year ago.
• U.S. consumer spending in September recorded its smallest gain in eight months as income barely rose. The Commerce Department reported that consumer spending edged up 0.1%, after an un-revised 0.4% rise in August. Consumer spending accounts for more than two-thirds of U.S. economic activity.
• U.S. consumer sentiment inched up in October, but missed expectations. The Thomson Reuters/University of Michigan's final October reading on the index was 90.0, higher than the previous month's 87.2 but below Reuters' estimates of 92.5.

 

Continuity Webinar Nov. 12 On Regulatory Enforcement Actions

Continuity, an IBANYS preferred provider, hosts a free webinar Nov. 12 on "Enforcement Actions." With r egulatory scrutiny at an all-time high, bankers across the entire country are reporting that their exams are tougher than ever. This webinar will examine why, and analyze the most current trends in enforcement actions over the last year. Participants will also learn steps that may be taken now to help prepare their banks to withstand the increased regulator scrutiny!  Register Online:

Link:  http://info.continuity.net/q3-2015-enforcement-action-webinar?utm_campaign=RegAdvisor&utm_medium=IBANYS&utm_source=Partner

 

Control Your Bank's  Health Care Costs
-- AND Boost Employee Benefits?

Fed Chair Yellen Testifies Before Congress

Federal Reserve Chair Janet Yellen testified before the House Financial Services Committee today on banking regulatory issues. She stated that December would be a "live possibility" for a rate hike if the upcoming data are supportive. She expects the economy to grow "at a pace that's sufficient to generate further improvement in the labor market, and to return inflation to our 2% target."  Nevertheless, the country's biggest banks still have substantial compliance and risk-management issues. 
The financial services industry's belief that financial regulations are having a serious negative impact on small banks. The Fed, a main member of the Financial Stability Oversight Council created by Dodd-Frank Act, is a  primary authority implementing its regulations--which include increased compliance requirements for small banks. Many believe they have a crushing effect on small banks. House Financial Services Chairman Jed Hensarling (R-TX) had noted: "Dodd-Frank's massive expansion of the Federal Reserve's authority has made the Fed America's most powerful regulatory agency as well as our nation's central bank."

 

In today's banking and business environment, community banks face a number of significant challenges. Bank officers, board members and employees understand that their responsibilities (and potential liabilities) continue to evolve. Is YOUR bank doing everything possible to provide them with the information and tools necessary? Are You Ensuring that they are fully informed, and equipped to manage the bank and guide it into the future?  IBANYS' webinars are designed to meet the needs of community banks, and are both effective -- and, cost-effective. Your bank's officers, directors and employees can participate directly from their offices. They  provide bottom line value. That's why participation in IBANYS webinars has expanded dramatically over the past eighteen months! Take a moment to review our upcoming programs  below.