By Steve Rice, IBANYS Director of Government Relations, Policy, and Services Development 

ALBANY

Legislature Headed for Home Stretch

When the NYS Legislature reconvenes next week, there will be just over three weeks remaining in the 2012 legislative session. A number of IBANYS' legislative priorities remain open, including:

*    The Community Banks Deposit Program (S.4927 Griffo/A.8147 Magee) legislation, which IBANYS supports, would expand the overall funds available for the program from $250 million to $350 million, and increase the cap on the amount of funds an individual bank may have on deposit from the program from $10 million to $20 million.
*    The CDARS legislation (S.5135 Martins/A.8971 Magnarelli), which IBANYS supports, would allow New York State, its municipalities, agencies and public authorities to arrange for redeposit of monies through a deposit placement program.  The credit unions are seeking to amend this legislation to include them, subject to approval by the National Credit Union Administration.
*    8145-B (Jeffries)/S. 4567-B (Griffo), which IBANYS opposes, would greatly expand membership opportunities in State-chartered credit unions to anyone in "a geographic area," and provide many of the same investment powers and incidental powers as possessed by federal credit unions. This bill was reported out of Senate Banks on May 23.
*    The Banking Development District  legislation (A9296 Robinson/S6692 Griffo), which IBANYS opposes as currently drafted, would impose certain additional criteria regarding "affordable products and services" (including financial education) on banks seeking to qualify for renewal of their state deposits.
*    A1362 Jeffries/S4406 Robach, IBANYS opposes, would significantly expand the State's Community Reinvestment Act, requiring the assessment of the banks' record of meeting credit needs to include a separate discussion of each assessment factor which would be applicable to branches, rather than system-wide.

At this week's Senate Banks Committee meeting, three additional bills were also reported, including S.5144 (Farley) related to applications for a license to engage in mortgage banking and registering as a mortgage banker; S.6777 (Griffo), to amend the Banking Law in relation to branches, trust offices and interstate branching, and S.6952 (Farley), related to electronic preservation of banking records.

WASHINGTON

Support Extending TAG for Five Years --Take Action on Deposit Coverage Over Congressional Recess

IBANYS strongly supports extending for five years full FDIC deposit insurance coverage on noninterest-bearing transaction accounts once the temporary coverage expires this December 31, 2012. The FDIC Transaction account guarantee (TAG) -  created during the financial crisis - was extended in 2010 for two years. If TAG coverage ends abruptly at year-end, transaction account funds in excess of $250,000 could quickly flee an institution. More than $1.4 trillion in deposits could be impacted. Such a shift in funds could destabilize the recovering banking system, curtail credit and threaten the fragile economic recovery. Supporting the viability of community banks will promote lending in the communities they serve. Under the current temporary coverage, all noninterest-bearing transaction accounts at all insured depository institutions are covered, and the FDIC does not charge a separate assessment for the insurance. Instead, the FDIC takes into account the cost for this additional insurance coverage in determining the assessment rate schedule. TAG is fully funded by banks, with no cost to taxpayers.  IBANYS supports an extension of the coverage under the terms of the existing program.

Members of Congress are headed back home for the Memorial Day recess, and  ICBA is urging community bankers to contact their lawmakers' district offices to advocate an extension of full FDIC coverage of noninterest-bearing transaction accounts. ICBA is offering a custom letter to Congress and is urging community bankers to reach their lawmakers by calling (202) 224-3121 and asking for their district office. Contact Congress Today.

In other news from Washington, the U.S. House passed legislation (H.R. 5740) to extend for 30 days the National Flood Insurance Program, which is set to expire on May 31.  The House passed a five-year extension and reform bill (H.R. 1309) last July, and the Senate Banking Committee approved its version in September.  The Senate is expected to pass the 30-day extender by May 31.

Meanwhile, the Board of Governors of the Federal Reserve System is at full strength for the first time since 2006 after the U.S. Senate confirmed Harvard economist Jeremy C. Stein and investment banker and lawyer Jerome H. Powell  to fill the final two vacancies on the seven-member Fed Board. Powell was a senior Treasury Department official under President George H. W. Bush, and Stein was an adviser to Treasury Secretary Timothy F. Geithner.  

The May 2012 SBA 504 Refinance Rates are as follows:

4.67% = 20-year Fixed Rate

4.00% = 10-year Fixed Rate 

• Rent, utilities, inventory, payroll or other obligations;
• Existing loan and lines of credit (except government guaranteed or enhanced loans);
• Existing accounts payable, accrued expenses or other existing liabilities; and
• Expenses in any of the above categories that will come due within 18 months of the date of the application.

Business expenses that are ineligible:

• Acquiring a new business
• Acquiring a new property
• Financing a change of ownership with the buyout or buy down of one or more co-owners;
• Paying off or paying down debt owed to owners; and
• Paying off or paying down an owner's personal expenses.

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