STATE GOVERNMENT RELATIONS
Indiana Primary Update
Indiana primary elections took place across the state on Tuesday. Erin Houchin and Jennifer-Ruth Green won Republican Congressional nominations. Erin Houchin is poised to become the newest Hoosier in Congress after winning the Republican 9th congressional district nomination in a district rated R+30. The seat is currently held by Trey Hollingsworth, who announced earlier this year he would not seek re-election. Houchin defeated Mike Sodrel 37.3-25.8%, with Stu Barnes-Israel following with 21% of the vote.
In the lone Indiana Senate dual incumbent race in SD47, State Sen. Gary Byrne overcame a late deficit to defeat State Sen. Kevin Boehnlein. In the two Indiana House dual incumbent races, Rep. Craig Snow defeated Rep. Curt Nisly, and Rep. Bruce Borders defeated Rep. Jeff Ellington.
Indiana's Fite Re-elected FFIEC State Liaison Committee Chairman
The Federal Financial Institutions Examination Council announced Monday that Thomas C. Fite has been re-elected chairman of the group's State Liaison Committee. Director Fite has been a member of the SLC since September 2017 and has served as chairman since 2021.
Fite has been serving as director of the Indiana Department of Financial Institutions since 2016 and was the state regulatory agencies' representative on the FFIEC Task Force on Supervision for more than four years before being elected chairman. The chairman of the five-member State Liaison Committee serves a one-year term, representing the perspectives of state banking agencies on the group of federal regulatory bodies.
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
Major Bank CEOs See Possibility of Recession
The CEOs of three major U.S. banks said that with the Federal Reserve's latest interest rate hike raises, the risk of the U.S. economy slipping into recession has increased. Still, they stopped far short of saying it was a certainty. Bank of America CEO Brian Moynihan noted averting a recession requires "a tricky execution," JPMorgan Chase CEO Jamie Dimon predicted a "33% chance" of a soft landing, and Morgan Stanley's James Gorman estimated a recession was a "50-50 proposition."
Warren Raises Pressure on Banks to Scrap Overdraft Fees
Sen. Elizabeth Warren, D-Mass., has written to the CEOs of JPMorgan Chase, Bank of America, and Wells Fargo, calling on them to follow the lead set by Capital One and Citigroup in eliminating overdraft fees altogether. While all three banks state they have made some adjustments in that direction, Warren's letter presses them to disclose their measures and how much they have earned in fees since making those changes.
Agencies Propose Highly Anticipated CRA Overhaul
The Federal Reserve, Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency have issued a much-anticipated joint notice of proposed rulemaking to modernize regulations implementing the Community Reinvestment Act. The agencies proposed changes to how CRA activities qualify for consideration, where activities are considered, and how they are evaluated. Enacted in 1977, CRA's last interagency revision was in 1995. In the proposal, the agencies identified five key goals of the proposal, including:
- Expanding access to credit, investment, and basic banking services in low- and moderate-income communities;
- Adapting to technology changes in the banking industry by updating CRA assessment areas to include activities associated with online and mobile banking, branchless banking, and hybrid models;
- Providing greater clarity, consistency, and transparency in the application of the regulations;
- Tailoring CRA evaluations and data collection to bank size and type; and
- Maintaining a unified regulatory approach from all three regulatory agencies.
SBA May Pursue Direct Loan Offers for Small Businesses
Isabella Casillas Guzman, head of the Small Business Administration, says it may continue investigating the possibility of offering loans directly to firms, despite opposition from banks and credit unions and its failure to apply for 2023 fiscal funding. Guzman noted a decline in small-dollar loan offers of under $50,000 from banks and said institutions which may be reluctant to authorize a loan could refer it to the SBA to deal with.
Senate Hearing Rekindles Debate Over Durbin Amendment
At a Senate Judiciary Committee hearing, banking, credit card industry representatives, and some lawmakers pushed back against proposals to expand interchange regulation to credit cards, arguing that the existing interchange fee limits imposed by the Durbin amendment more than a decade ago are hurting consumers.
Sen. Chris Coons (D-Del.) emphasized interchange revenue to support broad access to credit and debit cards. "Community banks, in particular, are concerned that a substantial decrease in interchange would mean they could no longer sustain card programs that extend credit to individuals who may not otherwise be able to access credit cards," Coons said. "The issue here … is [consumers] losing access to credit and the ability of smaller issuers to participate and compete."
Charles Kim, EVP, and CFO of Commerce Bancshares in Kansas City, Missouri, agreed, noting that smaller banks may be "pushed out" of being able to issue credit cards, with larger banks filling the gap. "You'd see that element of competition just go away," Kim said.
Sen. Thom Tillis (R-N.C.) said that the issue of fees and their impact on competition may require additional investigation. "A lot of the things we can do to address these issues, I look forward to taking up in the Banking Committee," he said.
Fed Announces 50 Basis Point Rate Hike
In a significant move, the Federal Reserve announced that it will increase the target range for the federal funds rate to 0.75 to 1% and signaled that "ongoing increases in the target range will be appropriate."
"Assuming that economic and financial conditions evolve in line with expectations, there is a broad sense on the committee that additional 50 basis point increases should be on the table at the next couple of meetings," Fed Chairman Jerome Powell said in a press conference following the announcement. However, he noted that the Fed was not currently contemplating 75 basis point hikes. "We will make our decisions meeting by meeting as we learn from incoming data and the evolving outlook for the economy."
Despite a decline in first-quarter economic activity, Powell maintained that "underlying momentum remains strong." He added, however, that "inflation is much too high" and that "it is essential we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all."