Friday's News

May 13, 2022

It was an extremely active week as NYBA zeroed in on several concerning bills moving in the State Legislature. With just a few weeks left in the Session, NYBA was executing its strategy of mobilizing its members and leveraging partnerships with other stakeholders. In Washington, the Senate focused on Federal Reserve confirmations.

State Developments

• Today, NYBA’s Board and Legislative and Regulatory Policy Committee met to review the status of several bills NYBA is working on as the Session heads into its final weeks. The detailed briefing will help to prepare NYBA members for potential grass roots campaigns and other actions in the days ahead.   Importantly, NYBA has been working closely this Session with several other stakeholder groups and associations on various bills. The bills on NYBA’s Albany agenda include:
  
  

• Opposed by NYBA and several other stakeholders, a bill commonly referred to as the “Anti-Engel bill,” A.7737B (Weinstein) / S. 5473D (Sanders), would, among other things, overturn a recent Court of Appeals ruling in Freedom Mortgage v. Engel.  The bill would no longer allow lenders to unilaterally deaccelerate mortgage loans and creates a new, more restrictive savings clause for real property actions. This bill has now passed both the Assembly and Senate and is awaiting delivery to the Governor. NYBA has met with the Governor’s office and is  exploring every option for next steps, including seeking a veto or amendments prior to enactment. We will continue to meet with the Governor’s staff in the coming weeks along with several other industry groups and stakeholders.NYBA has long opposed the bill and submitted a memo strongly opposed to this legislation.

• A bill which would allow credit unions and savings banks to accept deposits from municipalities, A.8289 (Fahy) / S.670 (Sanders) is strongly opposed by NYBA because credit unions are not subject to CRA, have less stringent collateral requirements and do not pay taxes. NYBA is working with partners in County and local governments to urge further examination of its implications for municipalities before further action is taken.  In addition, NYBA submitted a Memorandum in Opposition to the Assembly and Senate Banks Committees as the bill was on both committee agendas this week.   In a positive development, the bill was removed from the agenda of the Assembly Banks Committee by the Committee Chair and bill sponsor, who said that more work needed to be done on the measure. The Senate version of the bill is expected to be considered by that chamber.

• Another bill strongly opposed by NYBA would authorize the establishment of municipal public banks, A.8290 (Fahy) / S.1762A (Sanders).  NYBA opposes any legislation to create a public bank in New York State but continues to work on alternative solutions that would enhance existing programs to address the unbanked/underbanked, access to capital by MWBEs and other small businesses.  This legislation is currently before both the Senate and Assembly Banks Committees. NYBA participated in a meeting with Senate Banks Committee Chair this week to discuss potential alternatives to the bill.      

• A bill commonly referred to as the Anti-Trust bill, A.1812A (Dinowitz) / S.933A (Gianaris), which would redefine anti-competitive conduct in significantly broad terms and blur the lines between pro-competitive behavior and unfair business practices, with the potential to harm small businesses throughout the State. NYBA has submitted a Memorandum in Opposition, and is closely tracking this bill.

• A bill that would enact the NY Privacy Act to require companies to disclose their methods of de-identifying personal information and placing safeguards around data sharing, S.680B (Rosenthal) / S.6701A (Thomas). NYBA is seeking an entity-level exemption from the sponsors, as has been granted in other States, in light of the existing regulatory requirements for financial institutions. NYBA has submitted a Memorandum in Opposition and is closely tracking its movements.
   

• This week NYBA President & CEO Clare Cusack, together with IBANYS President & CEO John Witkowski, met with the Department of Financial Services to share concerns on a range of issues. NYBA and IBANYS discussed their ongoing efforts to promote effective alternatives to a public bank for reaching underserved communities, and voiced strong objections to proposals seeking to allow credit unions to receive public deposits.

State Legislative Developments

• In response to NYBA’s sustained advocacy, this week Senator Shelley Mayer introduced a bill, S. 9121, extending by one year the effective date for legislation enacted in 2021 and imposing new disclosure requirements on card issuers in connection with credit card rewards programs. 

Among the other bills that moved this week:

• A bill that would create new licensure and MWBE lending requirements for non-bank entities offering commercial loans and other financial products, A.1420A (Jean-Pierre)/S.1061B (Sanders), was reported  out of the Senate Banks Committee this week and moved to the Senate Finance Committee.   The bill remains on the Assembly Banks Committee calendar.  While banks are exempt from this legislation, their subsidiaries and affiliates are not.  NYBA has expressed its concerns about the bill to senior legislative staff, including the potential need for an exemption for wholly-owned bank subsidiaries.
  
  
• NYBA continued to advocate this week for changes to a bill, A.2428A (Dinowitz) / S.2143A (Kavanaugh), that would create a private right of action for borrowers against servicers and lenders for violating New York’s mortgage servicer regulations and would allow for recovery of treble damages and attorneys’ fees, both against mortgage servicers and mortgage originators. NYBA recently circulated a Memorandum in Opposition to the State Senate and continues to work with the Assembly bill sponsor toward potential amendments. This bill passed the Senate and is now in the Assembly Banks Committee.

Federal Regulatory Developments

• NYBA President & CEO Clare Cusack and staff met with officials from the Office of Comptroller of the Currency this week as part of the agency’s outreach on its newly reorganized supervisory structure for mid-sized community banks, effective October 1. The agency has realigned the area in response to emerging risks, innovative technologies, and increased complexity within financial institutions. OCC officials stressed that 95% of banks in this category will maintain the same Assistant Deputy Comptroller in their supervisory regime.
  
  
• The CFPB issued an advisory opinion affirming that the Equal Credit Opportunity Act and Regulation B, which implements it, applies to consumers who are seeking credit as well as those who have previously sought and received credit. The Bureau is also working on additional guidance and advisory opinions to clarify lenders’ obligations under the law.
  
  
• The SEC announced that it will extend the public comment period of its recently proposed climate disclosure rule from May 20 until June 17 after several groups requested additional time to thoroughly examine the proposal and its impact.
  
  
• The federal agencies issued updated flood insurance guidance, in the form of Q&As, to address the newest amendments to flood insurance laws.
  
  
• Acting Comptroller of the Currency Michael Hsu, in a speech this week, said that regulators are considering whether to update the framework used to analyze bank merger applications.
  
  
• The Department of Justice provided guidance for employers on the use of artificial intelligence and algorithms in hiring processes with the goal of helping companies avoid unlawful discrimination.
  
  
• In testimony before a House Financial Services subcommittee, the OCC’s Deputy Comptroller for Operational Risk Kevin Greenfield discussed supervisory expectations for banks’ use of artificial intelligence.

Federal Legislative Developments

• The Senate confirmed Fed Chairman Jerome Powell to a second four-year term, as well as nominees Lisa Cook and Philip Jefferson to the Federal Reserve Board of Governors. Next week, the Senate Banking Committee expects to take up the nomination of Michael Barr to be Federal Reserve Vice Chairman for Supervision.

Local Developments

• New York City Mayor Eric Adams signed the Salary Transparency Law, Int 1208-2018. Among other things, this law amends the Salary Transparency Law to: clarify that the law applies to employees who are paid hourly or through an annual salary; a person would not be able to bring a lawsuit against an employer based on this law unless that individual is a current employee who is bringing an action against their employer for advertising a job, promotion or transfer without posting a minimum and maximum hourly wage or annual salary; the penalty for the first violation of this law would be $0 and employers would have 30 days to correct the violation; and would also move the effective date of the Salary Transparency Law to November 1, 2022 (The original version of this bill was set to go into effect on May 15^th, 2022). The Albany County Legislature is considering a similar bill, introduced this week, that would amend the county’s human rights law to require employers to post an open job’s minimum and maximum salary or hourly wage.

Resources

• DFS is holding its third and final Cybersecurity Symposium honoring the 5th year anniversary of New York's Cybersecurity Regulation, “Spotlight on Small Business: DFS and the Global Cyber Alliance Share Achievable Cybersecurity Controls for Smaller Organizations,” on May 24 at 10:00 am. Register here.
  
  
• The Federal Reserve has updated its resources to help banks and consumers protect against the risks associated with “synthetic identity fraud.”

Questions? 

Contact us at govrelations@nyba.com

Questions?