STATE GOVERNMENT RELATIONS
2021 Legislative Session Concludes
The General Assembly concluded the 2021 session midafternoon yesterday. Lawmakers now return home but are expected to be called back into session later this year to complete the work of redrawing legislative districts for all House, Senate and congressional districts, a process that occurs every 10 years. This process relies on census data provided to states, which has been delayed, thus creating the need to reassemble once the information is available.
Lawmakers concluded session with the passage of a two-year $36 billion state budget. This marks the end of nearly four months of legislative work that started in early January. The IBA Government Relations Team worked on a number of bills that were of consequence to the financial services industry.
Click here for a complete list of bills that the GR Team tracked during the 2021 Indiana General Assembly.
FEDERAL GOVERNMENT RELATIONS
IBA Washington Trip - July 18-20
Register now for the IBA Annual Washington Trip, scheduled for July 18-20. Join with fellow Hoosiers as we travel to our nation’s capital to tell the story of Indiana banking to elected officials and regulators. This is an opportunity to discuss the impact legislation has had or may have on your bank, and how currently proposed policies could influence your customers and communities. It is more important now than ever to engage in grassroots advocacy as you share your concerns, your successes and what you believe will allow you to better serve your communities. We look forward to seeing you in Washington!
House Passes SAFE Banking Act
By a bipartisan vote of 321 to 101 Monday night, the House passed the SAFE Banking Act of 2021, the industry-supported bill that provides clarity to financial institutions seeking to serve legitimate cannabis businesses.
Earlier in the day, the Indiana Bankers Association joined with multiple other bankers associations in writing to lawmakers in support of the bill, which provides a safe harbor for depository institutions seeking to serve legitimate cannabis-related businesses in states where such activity is legal.
The bill was previously passed by the House in the last Congress but was not taken up in the Senate. Currently, 36 states have legalized cannabis for medical or adult use, but current federal law prevents banks from safely banking cannabis businesses, including ancillary businesses that provide them with goods and services.
In a separate letter, the state bankers associations emphasized that as a result of this conflict, “this segment of our local economies is forced to operate on an all-cash basis, which creates serious public safety, revenue administration and legal compliance concerns.” They added that “our members are committed to serving the financial needs of their communities – including those that have voted to legalize cannabis.”
Read the state bankers associations’ letter
Rep. Barr Introduces Bill to Encourage De Novo Bank Formation
To help expand access to banking services and promote financial inclusion, Rep. Andy Barr (R-Ky.) last week introduced H.R. 2561, the Promoting Access to Capital in Underbanked Communities Act of 2021, which would establish a three-year phase-in period for new banks to comply with federal capital standards, among other provisions designed to promote de novo formation. Barr introduced a similar bill in the last Congress.
ARRC Offers Principles for Future SOFR; CME States Term SOFR Reference Rates
The Alternative Reference Rates Committee this week issued a set of principles that will guide its efforts to recommend a forward-looking Secured Overnight Financing Rate term rate. The ARRC indicated that this potential forward-looking rate should meet the ARRC’s criteria for alternative reference rates, be rooted in a robust and sustainable base of derivatives transactions over time, and have a limited scope of use.
In light of guidance from U.S. regulators encouraging banks to cease entering into new contracts referencing U.S. dollar Libor by Dec. 31, the ARRC told market participants “not to wait for a term rate and to make use of current SOFR conventions available now,” but added that it “has long recognized that a forward-looking SOFR term rate may be a supporting tool for certain uses in the transition, and has recommended a number of actions aimed at building liquidity in SOFR derivatives that would help to ensure the robustness of any recommended term rate.”
In related news, the financial derivatives exchange CME Group on Wednesday announced that it has begun publishing CME Term SOFR Reference Rates for one, three and six-month tenors, all of which it states align with the ARRC’s key principles. The rates – which are anchored in CME SOFR futures – are available for licensing at no charge with use limited to cash transactions initially until June 20, 2023.
SBA Updates Guidance on Deadlines for PPP Extension
The Small Business Administration has issued a procedural notice addressing Paycheck Protection Program-related deadlines in the wake of the PPP Extension Act. The law extends the PPP application period through May 31 and provides an additional 30 days for SBA to process pending applications.
The procedural notice addresses several narrow sets of circumstances, including: applications for increased first draws on unforgiven PPP loans approved before Aug. 8, 2020, for eligible partnerships, seasonal employers and agricultural producers; re-applications by or re-disbursements to eligible borrowers who fully or partially repaid their first-draw PPP loans before Dec. 27, 2020; and increases for eligible borrowers who did not accept the full amount of an approved first-draw PPP loan before Aug. 8, 2020. The notice also covers procedures when these types of PPP loans are delayed by SBA hold codes.
CFPB Updates Small Entity Compliance Guide on Debt Collection
The Consumer Financial Protection Bureau has updated its small entity compliance guide on the debt collection final rules to reflect changes from a December 2020 final rule, which addressed passive debt collection, time-barred debt and required validation notices to consumers. The CFPB earlier this month proposed to extend the effective date of this both rule and an October 2020 final debt collection rule from Nov. 30, to Jan. 29, 2022.
View the small entity compliance guide
IBA COVID-19 Updates
The IBA has several COVID-19 resources and updates available at our website.