STATE GOVERNMENT RELATIONS
Save the Dates for 2022 IBA Regional Meetings
The IBA is once again hosting a series of regional meetings around the state to facilitate grassroots communication between the bankers we serve and the legislators who serve our state. The meetings will include an hour-long update on the IBA, including legislative information and advocacy opportunities. Following the update, local legislators from the Indiana General Assembly will meet for lunch with bankers from the community. This year, the IBA will be hosting eight regional meetings, each beginning at 11:00 a.m. local time. Below are the dates and location of our eight regional meetings. More information, including registration, is forthcoming.
Evansville – May 25
Biaggi’s Ristoranto Italiano
6401 E Lloyd Expy., Ste. 3
Evansville, IN 47715
Fort Wayne – June 1
The Landmark Center
6222 Ellison Road
Fort Wayne, IN 46804
Indianapolis – June 2
The Columbia Club
121 Monument Circle
Indianapolis, IN 46204
Merrillville – July 19
Cooper’s Hawk
2120 Southlake Mall
Merrillville, IN 46410
West Lafayette – July 20
Walt’s Pub & Grill
1050 Kalberer Road
West Lafayette, IN 47906
New Albany – August 4
The Exchange Pub
118 W Main Street
New Albany, IN 47150
Richmond – August 29
Olde Richmond Inn
138 South 5th Street
Richmond, IN 47374
Bloomington – August 30
Graduate Hotel
210 East Kirkwood Avenue
Bloomington, IN 47408
Holcomb Announces $189M Broadband Expansion
The Next Level Broadband Grant Program is the largest single state investment in broadband. In total, rounds one, two and three of the program have awarded $268 million for broadband infrastructure for more than 74,800 homes and commercial locations. Projects will have been completed in 83 of Indiana’s 92 counties through the three rounds of the awards. This third round of funding will provide broadband infrastructure to more than 52,900 homes and commercial locations in 80 counties.
Indiana Jobless Rate at 2.2%
Indiana recorded a 2.2% unemployment rate in March. It's the third-lowest rate in the country and yet another record low for the state. This is good news for workers, but indicates an increasingly competitive labor market for employers.
FEDERAL GOVERNMENT RELATIONS
Biden Taps Michael Barr to Be Fed Vice Chairman for Supervision
President Biden announced that he would nominate Michael Barr to serve as the next vice chairman for supervision at the Federal Reserve. Barr – who is currently a law and public policy professor at the University of Michigan – served in the Treasury Department during the Obama administration and was a chief negotiator during the drafting of the Dodd-Frank Act.
Barr's nomination comes after Sarah Bloom Raskin, President Biden's first pick for vice chair, withdrew her nomination last month after failing to obtain support from enough senators to be confirmed.
Senate Banking Chair: Fintechs Pose Increased Risk to Consumers
Sen. Sherrod Brown, D-Ohio, has warned consumers against putting their money in neobanks, which offer banking services but are not subject to the same regulatory oversight as banks. Brown's remarks follow an investigation into Chime, which has been the subject of at least 2,267 complaints to the Consumer Financial Protection Bureau since 2020.
Focus of PPP Prosecutions Shifting to Lenders
According to the Justice Department, an estimated 178 individuals have been convicted of fraudulently claiming funds from the Payment Protection Program, and many more are currently being prosecuted. A lawsuit against the CEO of a lender that facilitated PPP loans, launched last week, could mark a shift in prosecutors' focus, with lenders likely to see more cases brought against them, legal experts say.
GOP Lawmakers: USPS Financial Services Pilot Program Still Unlawful
House Republican leaders on Wednesday called upon the postmaster general of the U.S. Postal Service to stop the extension of a financial services pilot program that the lawmakers claim has been in violation of statutory restrictions from its inception.
The four-city pilot program – which was launched quietly in September last year and extended earlier this month – allows customers to cash payroll and business checks to pay for Visa gift cards of up to $500. Lawmakers say the program was started without approval from Congress or the Postal Regulatory Commission. Therefore, its extension violates regulations prohibiting the USPS from offering non-postal products and using taxpayer funds for programs related to non-banking financial services.
"Indeed, the program's popularity reflected the fact that it was not designed in response to customer demand – only six gift cards were issued under the pilot, and total fee revenue was $35.70," the lawmakers wrote in their letter to the postmaster general. "In light of the fact that the pilot program undoubtedly cost more to develop and implement than was raised in revenue, the subsequent decision to extend the program begs for an explanation as to why. Republicans on the committees of jurisdiction in Congress will conduct oversight of this program as USPS attempts to justify its continued existence."
Beige Book: Economic Activity Expands Despite Uncertainty
Economic activity expanded at a moderate pace between February and mid-April, though outlooks for future growth remained uncertain, given current geopolitical and inflation conditions, according to the Federal Reserve’s third Beige Book release of the year.
Consumer spending picked up during the survey period, and manufacturing activity remained solid overall – though districts did note that supply chain backlogs, persistent tight labor market conditions, and other factors continued to affect firms' ability to meet demand. Commercial real estate activity saw modest acceleration, and residential real estate demand remained strong, though supply was limited. Agricultural conditions were mixed, the Fed indicated.
Districts continued to report that inflationary pressures remained strong, prompting price increases, and a few districts noted that sales were being negatively affected by rising prices. Businesses in most districts said they expect inflationary pressures to continue in the months ahead.
CFPB Report Highlights Reliance on Community Banks in Rural Areas
In a data snapshot published on Tuesday, the Consumer Financial Protection Bureau highlighted the unique challenges facing rural Americans, including an increased reliance on physical bank branches, given the limited access to high-speed internet and online banking options in many of these communities. The CFPB noted that rural customers visit bank tellers – often at community banks – "at nearly double the rate of urban and suburban customers," according to a 2020 Federal Deposit Insurance Corp. analysis.
"Community banks are three times more likely to locate their offices in a non-metro area, and community banks hold the majority of banking deposits in U.S. rural and micropolitan counties," the CFPB indicated. "According to the FDIC, in 2012, there were more than 600 counties – or almost one out of every five U.S. counties – that had no other physical banking offices except those operated by community banks."
Bank consolidation, however, has contributed to the expansion of so-called "rural banking deserts," which the Federal Reserve Bank of St. Louis defines as "census tracts in which there are no branches within a 10-mile radius from the tracts' centers." The CFPB report pointed out that "lack of broadband access is a major limiting factor" in filling the banking needs of these communities. "Only 75.6% of rural people had access to a smartphone compared to 86.2% in urban areas and 88.4% in suburban areas, and only 68 percent of rural households had access to the internet in their home, which was a much lower rate than urban households (79.5%) and suburban households (84.5%)," the bureau noted.
FHA Offers 40-year Mortgage Modification, Proposes Rule to Make It Permanent
The Federal Housing Administration added a 40-year mortgage modification option to assist borrowers who are behind on their mortgage payments for FHA Title II forward mortgages.
The new option is designed to help borrowers who cannot achieve a minimum targeted 25% reduction in their mortgage payment's principal and interest portion through FHA's existing 30-year mortgage modification with a partial claim. It is to be used for borrowers where other FHA recovery options are unable to achieve the minimum targeted reduction. The 40-year modification with the partial claim is now included as a component of FHA's COVID-19 Recovery Modification.
Earlier this month, FHA published a proposed rule in the Federal Register to solicit public comments on a standalone 40-year loan modification option. This would align FHA with modifications available to borrowers with mortgages backed by Fannie Mae and Freddie Mac, which both currently provide a 40-year loan modification option.