Strong Push Needed in the Senate as S. 2155 Nears Floor Debate
Dear Independent Community Bankers:
With Congress scheduled to return to Washington next week, now is a good time for a progress report on high-priority ICBA-advocated legislation to provide comprehensive community bank regulatory relief.
The full Senate is expected to begin taking up the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) in the days ahead. The legislation enjoys broad bipartisan support following its passage in December by the Senate Banking Committee on a strong 16-7 vote. It now has 26 co-sponsors, including 13 Republicans, 12 Democrats and one Independent—offering a promising outlook for the upcoming Senate floor debate.
This is your senators’ best opportunity to demonstrate their support for the community banking sector and the communities you serve. If your senators are not co-sponsors of S. 2155, please contact them immediately and urge their support.
As you know, S. 2155 includes numerous provisions from ICBA’s Plan for Prosperity regulatory relief platform to provide relief from mortgage, capital, data-reporting and many other rules that pose a disproportionate burden to community banks. And these are policies ICBA has crafted, advocated and testified on for several years. Many of the items in S. 2155 have passed a House or Senate committee by a bipartisan vote as separate legislation. This will be looked upon favorably when the legislation comes over to the House upon Senate approval.
To build sustained momentum for this comprehensive legislation, ICBA has waged a comprehensive advocacy campaign to generate support for the legislation on Capitol Hill and across the country. ICBA has met with key policymakers on both sides of the aisle, including Senate Majority Leader Mitch McConnell (R-Ky.), Senate Banking Committee Chairman Mike Crapo (R-Idaho), and Sens. Jon Tester (D-Mont.), Heidi Heitkamp (D-N.D.), Mark Warner (D-Va.), and Joe Donnelly (D-Ind.). And last week we launched a multistate radio ad campaign urging key senators to support S. 2155 and thanking some of those who have already signed on. That media buy followed a series of targeted op-eds from ICBA community bankers in key states urging passage of the bill in local newspapers from Baltimore to Santa Fe. Additionally, 43 state community banking groups weighed in with a letter urging lawmakers to pass this important relief.
Altogether, ICBA and community banks are well-positioned in the forthcoming debate—but we need all community bankers to continue to be heard in the halls of Congress. Don’t miss this opportunity to weigh in when it is most needed. Fortunately, ICBA’s online resource center on S. 2155 offers everything you need to weigh in, including customizable tweets and emails to Congress and tips for placing a local op-ed.
Thank you, community bankers, for your tireless efforts to advance this landmark legislation, but your continued outreach is truly needed to ensure final passage. Please continue to stand up and be heard today!
Download the Informational PDF Here:
Minneapolis, February 6, 2018-- According to a new survey of nearly 300 financial institutions (FIs) across the country, payments fraud losses remain an issue for a majority of respondents. The survey also found that customer diligence, such as reviewing transaction activity and statements online and reporting suspicious activity to their FIs, is very effective across all payments types, including cards, checks, and automated clearinghouse and wire transfers. The survey, released by the Federal Reserve Bank of Minneapolis, aimed to identify ways to reduce payments fraud.
The survey found that payments fraud losses are a problem for 75 percent of FIs. FI losses on debit and credit cards are common, with 96 percent of debit card issuers and 77 percent of credit card issuers reporting them in 2016. Over 80 percent of FIs report that they are issuing chip cards for authentication, illustrating that the industry is continuing to increase chip card adoption. Chip card technology helps prevent counterfeit fraud for in-person point-of-sale transactions.
“This report provides great insights into what FIs are doing and find effective to mitigate payments fraud. FIs could use the information to benchmark their own fraud mitigation methods against those identified as effective in the survey,” said Guy Berg, vice president of the Payments, Standards, and Outreach Group at the Minneapolis Fed.
The report provides information about use and relative effectiveness of payments fraud detection and prevention methods as rated by FI respondents. Risk mitigation methods for each payment type are grouped into three categories: transaction screening and scoring, authentication methods, and other reporting and risk management methods.
Access the full 2017 Financial Institution Payments Fraud Mitigation Report.
The Federal Reserve Bank of Minneapolis is one of 12 regional Reserve Banks that, with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the nation’s central bank. The Federal Reserve Bank of Minneapolis is responsible for the Ninth Federal Reserve District, which includes Montana, North and South Dakota, Minnesota, northwestern Wisconsin and the Upper Peninsula of Michigan. The Federal Reserve Bank of Minneapolis participates in setting national monetary policy, supervises numerous banking organizations, and provides a variety of payments services to financial institutions and the U.S. government.
Sioux Falls, SD – January 18, 2018 - First Dakota National Bank will host AgriVisions 2018 featuring Kevin Van Trump on Tuesday, February 13, at the Ramkota Conference Center, 3200 W Maple St, Sioux Falls with registration beginning at 10:00 a.m. and Mr. Van Trump presenting at 10:30 a.m. Farmers, Agri-Business professionals and business owners are invited to attend.
Nate Franzen, President of First Dakota’s Agri-Business Division, states, “Mark Tuesday, February 13, on your calendar and plan to attend AgriVisions 2018. Kevin Van Trump is a leading expert in Agricultural marketing and analysis. Plan to join us at AgriVisions 2018.”
Van Trump is a leading expert in Agricultural marketing and analysis, he also produces an award-winning and world-recognized daily industry Ag wire called "The Van Trump Report." With over 20 years of experience trading professionally at the CME, CBOT and KCBOT, Kevin is able to 'connect-the-dots' and simplify the complex moving parts associated with today's markets in a thought provoking yet easy to read format. With thousands of daily readers in over 40 countries, Kevin has become a sought after source for market direction, timing and macro views associated with the agricultural world. Kevin is a top featured guest on many farm radio programs and business news channels here in the United States. Kevin is currently the acting Chairman of Farm Direction, an international organization assembled to bring the finest and most current agricultural thoughts and strategies directly to the world's top producers. The markets have dramatically changed and Kevin is trying to redefine how those in the agricultural world can better manage their risk and better understand the adversity that lies ahead.
AgriVisions 2018 begins with registration from 10:00 – 10:30 a.m. and Mr. Van Trump’s presentation at 10:30 a.m. Lunch will follow the presentation. Please go to FirstDakotaAg.com to register online today. Or call us, at 605-333-8282 or 800-657-5826, to reserve a seat.
First Dakota was founded in 1872 and holds the first bank charter issued in Dakota Territory. It has 19 full-service banking locations in 14 South Dakota cities. It also has six loan production offices throughout South Dakota and Nebraska.
January 24, 2018
The Honorable Mitch McConnell The Honorable Charles E. Schumer
Majority Leader Minority Leader
U.S. Senate U.S. Senate
Washington, D.C. 20510 Washington, D.C. 20510
Dear Leader McConnell and Minority Leader Schumer:
The undersigned state banking associations representing our nation’s more than 5,700
community banks respectfully urge you to take up and pass S. 2155, the Economic Growth,
Regulatory Relief and Consumer Protection Act, as quickly as possible and free of any
amendments that would upset the bipartisan balance of the bill. S. 2155, a robust package of community bank regulatory relief measures, is a rare opening for real, impactful relief that will strengthen economic growth, job creation, and consumer protection. It is the culmination of years of collaborative effort to achieve consensus among members of Congress across the spectrum and community bankers in their home states and districts.
This multipronged regulatory relief bill was driven by a bipartisan coalition of lawmakers,
including Senate Banking Committee Chairman Mike Crapo, R-Idaho, and committee
Democrats Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, Jon Tester of Montana
and Mark Warner of Virginia. The bill currently enjoys support from 11 Republicans, 11
Democrats and one Independent.
S. 2155 passed out of the Senate Banking Committee on December 5 by a vote of 16-7. The
bill’s bipartisan supporters stood together in opposition to all amendments — even those they supported. This commitment to maintaining the bill’s focus on common-sense relief for
community banks will be essential in ensuring its passage through the full Senate and beyond. We urge the Senate to seize the opportunity that presents itself today and pass this bill as quickly as possible.
Thank you for your consideration.
Alabama Bankers Association, Inc.
Arkansas Community Bankers
Arizona Bankers Association
California Community Banking Network
Independent Bankers of Colorado
Florida Bankers Association
Community Bankers Association of Georgia
Idaho Bankers Association
Community Bankers Association of Illinois
Indiana Bankers Association
Community Bankers of Iowa
Community Bankers Association of Kansas
Bluegrass Community Bankers Association
Louisiana Bankers Association
Maine Bankers Association
Maryland Bankers Association
Massachusetts Bankers Association
Community Bankers of Michigan
Independent Community Bankers of Minnesota
Mississippi Bankers Association
Missouri Independent Bankers Association
Montana Independent Bankers
Nebraska Independent Community Bankers
New Hampshire Bankers Association
New Jersey Bankers Association
Independent Community Bankers Association of New Mexico
Independent Bankers Association of New York State
North Carolina Bankers Association
Independent Community Banks of North Dakota
Community Bankers Association of Ohio
Community Bankers Association of Oklahoma
Oregon Bankers Association
Pennsylvania Association of Community Bankers
Independent Banks of South Carolina
Independent Community Bankers of South Dakota
Tennessee Bankers Association
Independent Bankers Association of Texas
Vermont Bankers Association
Virginia Association of Community Banks
Community Bankers of Washington
Community Bankers of West Virginia
Wisconsin Bankers Association
Wyoming Bankers Association
CC: United States Senate
The credit union model has become outdated, and its charter, purpose and tax - exempt status should be reviewed by Congress. Credit unions were chartered by Congress to enable people of small means with a “common bond” to pool their resources to meet their basic deposit, savings and borrowing needs. While some credit unions operate that way today, the NCUA has enabled others to grow their membership and their markets well beyond their statutory mission. As a result, in just the last five years, the total assets of federally insured credit unions have grown by more than $70 billion and membership has grown by more than 10 million, while the total number of credit unions has declined by over 1,000. Credit unions are also aggressively expanding into business lending. According to the NCUA, total business lending by credit unions ballooned from $13.4 billion in 2004 to $56 billion in September 2015, an annualized growth rate of 14 percent.
ICBA urges Congress to level the tax and regulatory playing field between community banks and credit unions. Bank - like credit unions should be subject to the same laws and regulations as banks - including taxation and CRA. Large, multi - bond and geographic - based credit unions have exceeded their statutory mission and use their tax - exempt, government - subsidized status to gain competitive advantage over taxpaying community banks.
ICBA vigorously opposes legislation to expand commercial lending powers of credit unions. Under the Federal Credit Union Act, credit union member business loans are capped at 12.25 percent of total assets. However, there are numerous exceptions to the cap. Small Business Administration loans, as well as any small business loans of $50,000 or less, are exempt from the cap. In addition, nearly 2,000 credit un ions are now completely exempt from the member business lending cap as “low - income credit unions.” Credit unions also aggregate their commercial lending capacity through the use of participation syndicates which are often marketed and serviced by large, interstate Credit Union Service Organizations or “CUSOs.” These provisions exceed the NCUA’s statutory authority which limits the amount of business lending credit unions may engage in.
Field of Membership
In December 2016, the NCUA finalized a new field of membership rule which , if allowed to stand, will significantly expand the reach of tax - exempt credit unions beyond their statutory limits. The proposal will weaken numerous legal requirements designed to ensure credit unions remain focused on their fundamental mandate of serving people of modest means with a common bond. For instance, federal credit unions would be able to apply to serve much larger areas than metropolitan statistical areas or to include areas contiguous to their existing core - based statistical areas. Credit unions also would have a much easier time converting to community charters and expanding into larger geographical areas. The Final Rule quadruples a rural district field of membership’s population limit - raising the area’s permissible population from 250,000 to 1,000,00 0. It would permit a community credit union to treat an entire state as a single rural district or to concentrate its busin ess on multiple disparate areas, even if those areas are urban in nature, within a broader region that meets the overall population and density limits set by NCUA.
This new rule makes a mockery of the statutory requirement that community credit unions serve local, well - defined communities and is another example of how the NCUA has transformed itself from a regulator to a “cheerleader” for the credit union industry. ICBA and its affiliated state associations have filed an amicus brief in support of the American Bankers Association's lawsuit challenging the National Credit Union Administration's rule.
ICBA is adamantly opposed to any legislation or regulation that would allow the NCUA to issue rules allowing tax - exempt, nonprofit credit union s to raise supplemental capital and , in effect, cease being exclusively member - owned (“mutual”) entities. Recently, the NCUA issued an advanced notice of proposed rule making allowing federally insured credit unions to issue supplemental capital to meet the minimum risk - based net worth requirement. ICBA believes that such regulation would exceed the agency’s authority under the Federal Credit Union Act. Since their creation, credit unions have been mutual entities that serve their members, not capital investors. This regulation would fundamentally alter the limited, member - oriented character of credit unions - the very basis of their tax exemption. Mutual ownership is one of the few structural characteristics that distinguish credit unions f rom most commercial banks. Mutual ownership - along with credit unions’ original mission of serving people of modest means with a common bond among them - was the original justification for their tax exemption. Congress long ago removed the tax - exempt stat us of mutual savings banks and should now do the same with regard to credit unions. Supplemental capital could fund and exacerbate the recent trend of credit unions’ purchasing community banks.
Community Reinvestment Act
ICBA urges Congress to apply CRA to tax - exempt credit unions in a manner comparable to, and with the same asset size distinctions, as banks and thrifts. Multiple studies have indicated that credit unions are not meeting even the fundamental mandate of their charter to serve people of modest means; their members have higher incomes and education levels than bank customers. ICBA urges Congress to move towards more regulatory equity by applying CRA standards to all credit unions.
Charter Choice . NCUA routinely approves mergers and conversions from occupational to geographic charters that allow credit unions to serve large population bases without regard to common bond. At the same time, NCUA has made it more difficult for credit unions to convert to mutual savings bank charters. ICBA support s and encourages credit union conversions to bank or thrift charters, and supports legislation to prohibit the NCUA from obstructing these conversions.
It is time to level the playing field. Nearly unchecked commercial lending powers and field of membership are already an abuse of the costly and unfair credit union tax subsidy. Coupled with the NCUA's pending alternative capital proposal, this reinforces the argument that the tax subsidy is distorting the marketplace and harming community banks and consumers.
It is time for Congress to intervene. The NCUA has refused to keep credit unions focused on their intended mission: serving people of modest means through a mutual ownership structure. The time is ripe for Congress to reexamine the tax-exempt status of credit unions and support a competitive financial system.
Send a letter, or pick up the phone and make a call, to Representative Kristi Noem and Senator John Thune today asking them to reexamine the Credit Union Tax Subsidy! They have been appointed to Conference Committee on Tax Reform; now it the time to act!
Representative Kristi Noem:
2457 Rayburn House Office Building
Washington, DC 20515
Senator John Thune:
Dirksen Senate Office Building, 511
Washington, DC 20510
Call Your Senator to Protect Subchapter S Banks
The Senate’s proposed tax reform bill fails to Subchapter S community banks into closer tax parity with C corporations. As a constituent in a key battleground state, please urge your senators to address this issue.
The proposal would reduce the top rate on C corporations to 20 percent. For Subchapter S banks and other pass-through businesses, the top rate is reduced to 38.5 percent. The proposal also includes a deduction of up to 17.4 percent, which would bring the effective tax rate on Subchapter S banks to 32 percent—12 points higher than the rate for C corporations.
The Senate proposal also removes the state and local tax deduction for pass-through entities, but retains it for C corporations. For higher-tax states, this will increase the effective rate up to 37 percent. Additionally, passive investors will be subject to the Net Investment Income Tax of 3.8 percent, which would further increase the effective tax rate up to more than 40 percent for certain taxpayers.
Please contact your senators to tell them to increase the pass-through deduction to bring Subchapter S community banks, and all pass-through entities, into closer tax parity with C corporations. At a minimum, the Senate bill should restore the state and local tax deduction for pass-through businesses.
Take Action Now!
Thank you for your advocacy efforts!
Megan Olson, IOM
President & CEO
Independent Community Bankers of South Dakota
S-Corp Banks Be Heard on Tax Reform
ICBSD joins the Independent Community Bankers of American in calling on Subchapter S community banks to make their voices heard as Congress debates comprehensive tax reform.
ICBA's Be Heard grassroots action center allows community bankers to tell Congress to ensure the maximum 25 percent tax rate is available to the more than 2,000 S-corp community banks.
As a Subchapter S bank, it is imperative that you weigh in on the tax reform debate. Tell Congress to ensure that the proposed maximum 25 percent pass-through tax rate is available to the nation's more than 2,000 community banks organized under Subchapter S of the tax code.
Thank you in advance for your thoughtful consideration of this request and for all you do in support of community banking.
Megan R. Olson, IOM