By Steve Rice, IBANYS Director of Government Relations

Things are moving swiftly and changing day-to-day in Albany as the 2012 Legislative Session nears completion. With the session scheduled to adjourn on Thursday, June 21, here is an update on legislation of significant interest to IBANYS.

• The CDARS legislation (S.5135 Martins/A.8971 Magnarelli), which would allow New York State, its municipalities, agencies and public authorities to arrange for redeposit of monies through a deposit placement program, passed the Assembly June 6 and was delivered to the Senate. The legislation was then referred to the Senate Finance Committee, then to the full Senate, which approved it on June 12. The credit unions have been seeking to amend this legislation so that it includes them, subject to approval by the National Credit Union Administration. This is a tactic they have used in other states, essentially laying the groundwork for future inclusion if approved by the NCUA. IBANYS continues to support the legislation as drafted, without amendment. The legislation was passed without being amended to include the credit unions.

• Legislation proposed by the Office of Court Administration (A10395/S7571) was discussed during our most recent Government Relations Committee conference call). It would impose new burdens on plaintiffs in foreclosure actions. The legislation has passed the Assembly and is in the Senate Rules Committee.  It does not appear to be relevant to smaller community banks which are involved in relatively few foreclosure actions. IBANYS plans to seek to exempt from the legislation institutions which either a) have assets of less than $8 billion, or b) have fewer than 25 active foreclosure actions annually.

• A.10567 (Robinson, Kearns)/S.6777-A, Griffo) - introduced at the request of the Department of Financial Services - is in the Assembly Ways & Means  Committee, while the Senate version is on the Calendar, 3rd reading. This bill is generally directed at conforming New York's Banking Law as it relates to branching to the Dodd-Frank Act, and is on the Senate Calendar (3rd reading) and in the Assembly Banks Committee (on agenda for June 12). An analysis of the language was done to ensure that there are no negative or unintended consequences for community banks, with particular attention to home office protection and the exclusion of ATMs as branches.  If A10567 were enacted in its current form, the effect would be to exclude such automated teller machines from home office protection because they would not be branches for purposes of Section 224(3). IBANYS will suggest changing the second sentence of subdivision 13 of Section 222 as added by  Section 6 of A10567 to read: "Except for purposes of subdivision 3 of section two hundred twenty-four of this chapter, the term shall not include an automated teller machine or other electronic facility."

• S.4927 (Griffo)/A.8147 (Magee) would increase the overall cap on funding available (from the current $250 million to $350 million), and the individual bank cap on how much may be on deposit (from $10 million to $20 million)under theState Community Deposit Program. The Senate has passed its version. The Assembly version remains in the Assembly Banks Committee, and the sentiment in the Assembly is that since only about $90 million total funding has been used, there is no need to increase the overall cap to $350 million. Following discussions during the past two Government Relations Committee  conference calls, IBANYS asked the Senate to recall its bill, and  amend to only increase the per bank cap from $10 million to $20 million, while leaving the overall cap as is at $250 million. This has been done (see attached bill and sponsors memos), and the Senate bill was restored to 3rd reading on the Senate Calendar.

• 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.  This would significantly increase the required paperwork burden on participating banks. The legislation is on the Assembly calendar on 3rd reading, but remains in the Senate Banks Committee. IBANYS' efforts to offer alternative and less onerous provisions have so far been resisted by the Assembly.

• A1362 Jeffries/S4406 Robach, which 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, is now on the Assembly Calendar, on 3rd reading, and in the Senate Banks Committee. IBANYS is opposed.

• A8145-B (Jeffries)/S. 4567-C (Griffo) 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. IBANYS is opposed to this legislation. The Senate and Assembly versions are not yet identical. The Senate bill is in Senate Finance Committee, while the Assembly bill is the Assembly Ways & Means Committee.

• S6817A Maziarz/A9990A Morrelle would allow a local government to sell tax liens to a third party in return for the third party lending the homeowner enough funds to satisfy the liens.  The NYBA memo in opposition pointed out that the bill was an invitation to fraud, particularly against senior citizens, could cut off the rights of other lienholders and would leave municipalities in worse shape than before. The Senate and Assembly bills are not yet identical. The legislation is in the Senate Finance and Assembly Insurance Committees.

IT'S AN ELECTION YEAR - NYSIBPAC NEEDS YOUR SUPPORT!

Why contribute?

There has never been a greater time to support NYSIBPAC.

2012 is a critical election year in New York State, and every one of the State's 150 Assembly seats and 63 State Senate seats will be on the ballot in November. The New York State Independent Bankers Political Action Committee (NYSIBPAC) plays a vital role in supporting New York State elected officials and candidates for state office who support community based banking, and share an interest in improving the business climate for independent banks in New York.

If you haven't already contributed to the New York State Independent Bankers Political Action Committee, here are just a few reasons why you should do so today:

• Your support helps to fund necessary political contributions that IBANYS alone cannot fund.
• Your funds support political campaigns that support YOU and your fellow New York Community Bankers!
• Your participation allows you to pool your support together with those who have the same goals, and give to candidates and officials whose views best support our industry's needs.

There are two ways to contribute to NYSIBPAC.

• A New York State chartered bank or the holding company of a national bank may contribute up to $5,000 in a calendar year. These are the suggested minimum levels of bank contributions: for banks with assets of $500 million and above: $1,500; for banks with assets of between $250 - $400 million: $1,250; for banks with assets of $100-$249 million: $1,000; and, for banks with assets of between 0 to $99 million: $500.

• Individual bank directors and executive officers may also contribute their personal funds: recommended contributions are $250. Those who contribute at least $100 join the Franklin Club and receive a special recognition pin.
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To contribute, please make your checks payable to NYSIBPAC, and mail them to NYS Independent Bankers Political Action Committee, 1 Commerce Plaza, Suite 704, Albany, N.Y. 12210.  

Questions? E-mail IBANYS' Director of Government Relations Steve Rice: Stever@ibanys.net. 

By David Brooks, Nashua Telegraph, June 13, 2012 http://www.nashuatelegraph.com/news/964130-196/nashua-based-hampshire-first-bought-by-ny-state.html     

When Hampshire First Bank opened its doors Dec. 1, 2006, it was quite a novelty.

It was the first time since 1890 that a new Nashua-based bank had been created from scratch.

After a decade of banking turmoil that saw venerable institutions like Nashua Trust and Bank of New Hampshire collapse or get swallowed up, and shortly before Nashua Bank was created, Hampshire First was hailed as a return to local finance.

Five and a half years later, the story has changed. On Tuesday, New York-based NBT Bank finished its $45 million purchase of Hampshire First, demonstrating that very small banks face some very big pressures.

"With the continued low rate environment, compressing banks' margins, and the increased cost of regulatory compliance, there will continue to be consolidation in the industry," said Hampshire First President James Dunphy, who will stay in his position as state regional president for NBT.

Up-front costs and the expertise associated with new banking technologies also makes it hard on small institutions.

Dunphy noted that one of the things NBT will be able to offer is mobile banking, via smartphones and the like, a service that Hampshire First doesn't have.

Hampshire First is a state-chartered bank with total assets of $275 million, while NBT has assets of $5.8 billion. ...

...read the rest here.