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  Governor Signs IBANYS’ Priority Legislation Into Law
Governor Signs IBANYS’ Priority Legislation Into Law
IBANYS and New York community banks realized a significant victory in late October when Gov. Andrew Cuomo signed into law S. 3758-A, Hamilton (same as A. 8129-A, Zebrowski). It is now Chapter 380 of the Laws of 2017. This initiative was a major component of IBANYS state legislative program. It permits the state superintendent of the Department of Financial Services (DFS) to extend the bank examination interval from 12 to 18 months for banks with assets of under $1 billion, up from the previous $250 million threshold.
The legislation was developed with strong input from IBANYS’ Government Relations Committee and Board, and we worked hard for more than two years with both the DFS and the state Senate and Assembly to bring our ideas to fruition. In the end, it was sponsored by the chairmen of the Senate and Assembly Banks Committees Sen. Jesse Hamilton and Assemblyman Kenneth Zebrowski, supported by DFS and signed by the governor. It marks a big step in our ongoing effort to ease the regulatory burden on community banks at both the federal and state levels. Community banks are facing challenges from increased regulatory and technology demands. The thousands of pages of new federal regulations from Dodd-Frank apply to banks irrespective of size or their business model. Community banks have additional costs and staffing needs to respond to compliance requirements. This increased regulatory burden has been reflected in the continuing loss of community banks in New York State. From 1992 to 2011, the number of community banks in New York state was significantly reduced, from 299 to 169. There is continuing pressure to consolidate – in part to achieve scale to meet compliance requirements in a cost-effective manner.
This new law was designed to provide community banks with under $1 billion in assets with regulatory relief by extending the it examination cycle from annually to 18 months. To be eligible for the extended cycle, a bank must demonstrate it is well capitalized, that the most recent exam determined it was well managed, that its composite condition was outstanding or good, and that there was no pending enforcement proceeding. This new approach will not only benefit community banks – it will also permit the Department of Financial Services to more effectively deploy examiners its bank examiners.
Meanwhile, the 2018 NYS legislative session will not begin until January, but there is early preliminary activity in Albany in terms of legislative introductions. A.8705(Cusick)/S.6845 (Peralta) would require that a notice be posted on all ATMs warning customers about the use of skimming devices, and informing them how to file claims if they believe they have been victimized. There have also been a few bills introduced pertaining to data breaches. One would prohibit certain fees for security freezes by consumer credit reporting agencies in the case of a breach of information. Another would require a preliminary notice that a breach has or may have occurred to be sent to the attorney general within 24 hours, and to all persons potentially effected within 48 hours. A third would expand the definition of “personal information” that, when leaked would constitute a data breach under state law, to include birthdates, home addresses and phone numbers.

A different bill would enact the Credit Empowerment Act, requiring any person or business in New York to provide any consumer whose personal information they are in possession of with a credit freeze on a credit report, free of charge, upon request.
Of course, we anticipate continuing efforts to broaden the scope, powers and authorities of tax-exempt credit unions, including their efforts to enter the municipal deposits business, which we will again vigorously oppose. And, we expect again pursue our effort to establish community bank service corporations. S.3755 (Savino) would enable community banks to invest in and own community bank service corporations which would provide shared services to community banks.
In Washington, tax reform and regulatory relief continue to be the major focus. The House Financial Services Committee has held markups of a number of reg relief proposals – many based on the ICBA’s “Plan for Prosperity” platform.
IBANYS will be reviewing all of these state and federal proposals, and all the legislation to be introduced, as we continue to protect and advance the interests of New York’s community banks.

Steve Rice coordinates government relations and communications for the Independent Bankers Association of New York State. He has worked in the New York banking industry and New York state government for more than three decades.

Posted on Friday, December 01, 2017 (Archive on Thursday, March 01, 2018)
Posted by Scott  Contributed by Scott


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