STATE GOVERNMENT RELATIONS
Director Fite Elected CSBS Chair
Thomas C. Fite, director of the Indiana Department of Financial Institutions, was elected chair of the board of directors of the Conference of State Bank Supervisors during the organization’s annual membership meeting, held virtually on Wednesday. At the meeting, CSBS also elected new officers for 2022-23 and announced new committee chair appointments.
“The annual meeting was long scheduled. As we mourn the loss of long time CSBS President and CEO John Ryan, who died suddenly of natural causes on Monday, CSBS leadership decided it was important to proceed with this part of our governance to support the organization as it continues the work that was so important to John,” said CSBS Acting President and CEO Jim Cooper.
State Lawmakers to Return for One-Day Session
The Indiana General Assembly is scheduled to return for a one day “technical corrections” session on May 24. Technical corrections day meetings often follow the conclusion of the regular legislative session to correct any conflicts or unanticipated issues created with the passage of legislation during the previous regular legislative session. The General Assembly is also expected to override the governor's veto of HEA 1041, a bill that restricted transgender participation in school sports.
Read the technical corrections bill
Register 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, locations and registration links of our eight regional meetings.
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
FEDERAL GOVERNMENT RELATIONS
Bipartisan Group of 24 Senators Urges Passage of SAFE Banking Act
As lawmakers attempt to reconcile the House and Senate versions of the America Competes Act, a bipartisan group of 24 senators led by Sens. Jeff Merkley (D-Ore.) and Jacky Rosen (D-Nev.) this week advocated for the SAFE Banking Act to be included in the final version of the bill. The provision – which would enable banks to serve legitimate cannabis businesses in states where it is legal – was included in the House version of the Competes Act.
“Allowing cannabis businesses operating legally and in compliance with state law to access financial services without federal reprisal would address public safety and compliance challenges, helping communities reduce cash-motivated crimes,” the senators wrote. “Enacting the SAFE Banking Act via the jobs and competitiveness legislation before us would support a rapidly growing industry that creates jobs, fosters innovation, supports small businesses, and raises revenue in states that have chosen to legalize cannabis, while reducing safety risks to industry employees and the public alike.”
The IBA continues calling on all bankers to write to their members of Congress and urge them to support the inclusion of the SAFE Banking Act.
House Committee Advances Misguided CU Expansion Bill on Party-Line Vote
By a party line vote of 27 to 22 on Wednesday, the House Financial Services Committee voted to advance H.R. 7003, which would allow credit unions to expand their membership and business lending capacity— – the credit union industry’s latest attempt at charter enhancement. Industry advocates had vigorously opposed the bill, emphasizing that it “will not deliver on the purported objective of improving banking access to underserved communities but instead expand taxpayer subsidies of business lending.”
During the committee's debate over the bill, Rep. Andy Barr (R-Ky.) expressed opposition to the bill, emphasizing that “there’s not a clear need for this bill, and it will actually have more unintended consequences if enacted.” Barr added that credit unions already “have an advantage, and their advantage is that they don’t pay taxes – they are a tax-exempt organization…This bill would give larger, more prosperous credit unions more preferential treatment in underserved areas at the expense of other community financial institutions and rural banks.” H.R. 7003 has moved to the full House for consideration.
FDIC Issues Small Bank Guide on Deposit Insurance Changes for Trust Accounts, MSAs
The Federal Deposit Insurance Corp. published a small entity compliance guide on Wednesday to help supervised depository institutions comply with a recent final rule that made changes to the deposit insurance regulations for trust accounts and mortgage servicing accounts.
The rule establishes a “trust accounts” category that governs coverage of deposits of both revocable trusts and irrevocable trusts using a common calculation. It also provides “consistent deposit insurance treatment” for all mortgage servicing account balances held to satisfy principal and interest obligations to a lender.
Hsu: Banks Should Focus on Counterparty Credit, Concentration Risk
As high inflation and economic uncertainties persist, Acting Comptroller of the Currency Michael Hsu on Tuesday said that “now is the time for banks to take a fresh look at their exposures and take actions to adjust their risk positions – to ‘trim their sails,’ so to speak – ahead of potential uncertainty and volatility.”
“Just as the banking system stepped up and provided invaluable support to the economy as part of the pandemic response, the banking system can be a source of strength to communities, individuals, and businesses, if banks are disciplined in their risk management and fully prepared for the tide going out,” Hsu added during an industry event.
In particular, Hsu noted that banks should be carefully monitoring counterparty credit risk, and “pay special attention to where risk limits, margin practices escalation procedures, and client onboarding have been relaxed.” He also flagged concentration risk as another area that warrants scrutiny – in particular, he noted that firms with concentrations in non-depository financial institution lending and commercial real estate lending could be especially vulnerable in the event of a downturn.
CSBS President and CEO John Ryan Dies
John Ryan, president and CEO of the Conference of State Bank Supervisors, died unexpectedly on Monday in Washington, D.C. Ryan – who joined CSBS in 1997 – served as the head of the organization since August 2011.
“John was an inspirational and humble leader who brought incredible dedication, intellect and passion to CSBS, the state regulatory system and financial services more broadly,” said Melanie Hall, chair of the CSBS board of directors.
The CSBS board of directors has named EVP James Cooper as acting CEO of CSBS.
ILC Bill Withdrawn from Committee Markup
Industry-advocated legislation to close the industrial loan company loophole was withdrawn from a House Financial Services Committee markup amid concerns with an amended version of the bill.
One of the Close the ILC Loophole Act’s (H.R. 5912) lead co-sponsors – Rep. Jesús “Chuy” García (D-Ill.) – withdrew his bill after committee members raised concerns that they didn’t receive enough time to review a newly amended version of the measure. Lawmakers also raised questions about a provision that would have added the Financial Stability Oversight Council to the ILC review process.
The bipartisan legislation would remove the Bank Holding Company Act’s exemption of ILCs from the definition of “bank” and thereby permanently close the ILC loophole – a top industry advocacy goal to ensure a level regulatory playing field and preserve the separation of banking and commerce.
St. Louis Fed’s Bullard: Crypto a Return to Non-Uniform Currency
Cryptocurrencies might be pushing the United States back in the direction of a non-uniform currency system, Federal Reserve Bank of St. Louis President James Bullard said.
In a blog post based on a message in the reserve bank’s recent 2021 annual report, Bullard cited the pre-Civil War era, in which most of the U.S. money supply consisted of privately issued banknotes marked by constantly fluctuating values. Due to the exchange rate chaos, the nation responded by implementing a uniform currency, Bullard wrote.
The St. Louis Fed published the blog post amid ongoing volatility in the crypto markets, with declining values at stablecoins Tether and TerraUSD and trading platform Coinbase fueling a broader sell-off.
FDIC Diversity Self-Assessment
The Federal Deposit Insurance Corp. is requesting that FDIC-supervised bank participate in their Annual Diversity Self-Assessment. This survey allows member banks to:
- Assess your diversity, equity, inclusion, and accessibility (DEIA) efforts and evaluate how they impact your employees, customers, suppliers, and surrounding communities.
- Build a better DEIA program, starting with a framework based on leading DEIA practices. The self-assessment can help guide discussions with senior leadership and your board on challenges, gaps, and opportunities to grow your DEIA program.
- Find out what you do not know about DEIA and access resources to make data based decisions about your program.
- Learn about DEIA practices that can help you improve your engagement and decision-making, innovate by tapping into diverse perspectives, and ultimately provide a better customer experience.
- Establish stronger partnerships with your employees and customers by demonstrating a genuine commitment to DEIA and showing progress over time.
The FDIC is accepting submissions through June 30, 2022. The Assessment is strictly confidential. Visit Financial Institution Diversity Program webpage for instructions on how to submit the Diversity Self-Assessment. If you have questions, contact Angela Herring at Section342@fdic.gov.