STATE GOVERNMENT RELATIONS
Holcomb Announces Inflation Relief Plan
On Thursday Gov. Eric Holcomb announced a plan to return $1 billion to Indiana taxpayers from current state reserves amid high inflation. Under the plan, each taxpayer would receive roughly $225 in addition to the $125 each taxpayer has already received through the automatic taxpayer refund statute. In order to facilitate this plan, the governor plans to call lawmakers back to Indianapolis for a special session. The special session is expected to occur by the end of June.
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. Five regional meetings remain, each beginning at 11:00 a.m. local time. Below are the dates, locations and registration links of each regional meeting.
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
IBA Joins ICBA, State Associations in Urging Passage of Cannabis Safe Harbor
A coalition of 44 state community banking associations, including the IBA and the Independent Community Bankers of America, urged Congress to include a cannabis banking safe harbor in the America COMPETES Act conference report.
In a letter to congressional leaders, the groups noted that the House has passed the bipartisan SAFE Banking Act six times to establish a safe harbor for financial institutions that serve cannabis-related businesses in states where cannabis is legal.
This legislation is designed to address a conflict between state and federal law that presents legal uncertainty for community banks, inhibits access to the banking system for cannabis-related businesses, and creates public safety concerns by forcing these businesses to rely on cash.
A 107-member bicameral conference committee is convening to merge the House-passed COMPETES Act and Senate-passed U.S. Innovation and Competition Act into a final compromise bill. These measures are designed to bolster U.S. competitiveness with China.
ARRC Issues Recommendations for Contracts Linked to USD Libor ICE Swap Rate
The Alternative Reference Rates Committee issued recommendations for contracts linked to U.S. dollar Libor Intercontinental Exchange Swap Rates. These recommendations include a suggested fallback formula that can be used for USD Libor ISR fixings after three-month USD Libor has been discontinued or becomes non-representative. The ARRC noted that these contracts “are not covered by federal [Libor] legislation and…counterparties may need to take proactive steps to address the end of USD [Libor] ISR.”
Specifically, the ARRC recommended that market participants inventory their contracts, identify the existing fallback provisions, and, where necessary, take proactive steps to address the Libor cessation by: converting these positions to their SOFR or SOFR ISR equivalent; incorporating hardwired fallbacks consistent with the approach suggested by the ARRC and included in the prevailing version of the International Swaps and Derivatives Association definitions; or considering calling or buying back debt instruments with problematic fallback provisions.
If a legacy position cannot be proactively converted or amended, “the ARRC believes that, once three-month USD LIBOR has ceased to be published as a representative rate, the fallback formula suggested would accurately represent the at-the-money rates of standard interest rate swaps which are tied to it and which incorporate the fallback provisions introduced in the ISDA 2020 IBOR Fallbacks Protocol,” the committee noted. “As a result, if the contractual fallbacks involve calculation agent determination, the ARRC recommends that calculation agents consider the ARRC’s suggested fallback formula in determining a successor rate.”
Second CECL Tool for Community Banks to Launch June 16
To help community banks successfully implement the current expected credit loss accounting standard, the Federal Reserve next week will launch a second tool, the Expected Losses Estimator. The Fed will launch the spreadsheet-based tool on June 16 during an “Ask the Fed” webinar.
The new tool uses a financial institution’s loan-level data and management assumptions to assist in calculating CECL allowances. The Fed previously released the Scaled CECL Allowance for Losses Estimator (SCALE) tool to help simplify the CECL calculation for community banks.
Access the tool after June 16 at supervisionoutreach.org/cecl.