STATE GOVERNMENT RELATIONS
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
2022 IBA Annual Washington Trip
Nearly 70 IBA members joined the Indiana Bankers Association in our nation’s capital this week for the IBA Annual Washington Trip. Indiana bankers spent two full days meeting with regulators and the Indiana congressional delegation. The Annual Washington Trip is critical to the IBA’s grassroots advocacy efforts by providing attendees with the opportunity to educate both policymakers and regulators on issues that directly impact the banking industry here in Indiana. There are certainly challenges that the industry faces in the policy arena, but our members were thorough in educating lawmakers about complex banking issues. The IBA would like to thank all of our members who were able to attend the IBA Annual Washington Trip. Your involvement better serves the banking industry.
FSB Issues Progress Report on Climate Risk Efforts
The Financial Stability Board on Thursday issued a progress report on its work to implement its roadmap for addressing climate-related financial risk. Specifically, the report noted that significant progress has been made toward establishing global baseline climate reporting standards, with the newly established International Sustainability Standards Board issuing exposure drafts addressing climate and general sustainability-related disclosure statements.
The FSB also indicated that it is continuing work on improving the availability and cross-border comparability of climate-related data; using scenario analysis to monitor climate-related vulnerabilities; and introducing supervisory risk management expectations and guidance regarding climate-related financial risk.
FSB acknowledged that “the understanding of the financial risks arising from climate change and the policy approaches needed to address them remains at an early stage” and that “there continues to be a need for strong international coordination of actions in the coming year (and beyond) because of the importance of this issue for the global financial system.”
The work of the FSB and ISSB influences what is ultimately implemented at the national level by prudential regulators and by other financial regulatory agencies. The FSB’s initiatives are typically aimed at large, internationally active institutions.
Senate Confirms Barr as Fed Vice Chairman for Supervision
By a bipartisan vote of 66 to 28 on Wednesday, the Senate confirmed Michael Barr to serve a four-year term as vice chairman for supervision at the Federal Reserve. Barr was also confirmed by a 66-28 vote to serve the 10-year balance of a term on the Fed board of governors, bringing the board to full strength for the first time in nearly a decade.
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.
Financial Trade Groups Urge Congress to Include SAFE Act in Defense Bill
The American Bankers Association, Independent Community Bankers of America, the Credit Union National Association and National Association of Federally Insured Credit Unions joined together in a letter to House leaders urging them to include the SAFE Banking Act as an amendment to the 2023 National Defense Authorization Act. The SAFE Banking Act – a bill that has passed the House multiple times with bipartisan majorities – would enable financial institutions to serve legitimate cannabis businesses in states where it is legal.
“The SAFE Banking Act puts in place necessary protections to bring revenue from state-sanctioned cannabis businesses into the financial services mainstream,” the groups indicated. “Legal cannabis businesses would no longer be forced to deal exclusively in cash, which makes them vulnerable to violent robbery and puts customers, employees, and the public at risk.”
Treasury Solicits Public Input on Digital Asset Development
The Treasury Department is seeking public comment about potential opportunities and risks presented by digital assets.
The request follows an executive order issued by President Biden in March directing relevant agencies to report on the implications of the development and adoption of digital assets, as well as changes in financial market and payment infrastructures for United States consumers, investors and businesses.
As part of the request, Treasury is also seeking feedback on potential risks associated with digital asset markets and how digital assets may benefit or pose risk to vulnerable populations. Comments must be received by Aug. 8.
Fed’s Brainard: Time Is Right for Crypto Regulation
Recent volatility has uncovered “serious vulnerabilities” in the crypto financial system that may require new regulation, Federal Reserve Vice Chair Lael Brainard said last Friday during a speech in the United Kingdom.
While new technology often holds the promise of system-wide benefits, Brainard noted that new products are “often fraught with risks, including fraud and manipulation” and it can be difficult “to distinguish between hype and value.” Industry needs to be vigilant about new forms of risks, she added, because of how novel crypto technological innovations are. Current market turbulence and losses emphasize the need to ensure compliance with existing regulations and to “fill any gaps,” Brainard said.
Financial resilience will be “greatly enhanced” if regulation “encompasses the crypto financial system and reflects the principle of same risk, same disclosure, same regulatory outcome,” she said, adding that doing so would allow regulators to more effectively address the risks posed to the broader financial system. “Strong guardrails for safety and soundness, market integrity and investor and consumer protection will help ensure that new digital finance products, platforms and activities are based on genuine economic value and not on regulatory evasion,” she said.
Rather than stifle innovation, a strong regulatory framework would help investors and developers build “a resilient digital native financial infrastructure” and help banks, payments providers and fintech companies “improve the customer experience, make settlement faster, reduce costs and allow for rapid product improvement and customization,” Brainard explained. The crypto system is not yet too large or interconnected with the traditional financial system to pose a systemic risk, she said, making it “the right time” to ensure that “like risks are subject to like regulatory outcomes and like disclosure” to help investors distinguish between genuine innovation and risky easy returns.