Idaho’s Financial Institutions Proactive on Coronavirus

BOISE – Idaho’s Banks have sprung into action to meet the financial service needs of our state’s families and businesses during the coronavirus public health emergency. The Idaho Bankers Association and the Idaho Community Bankers Association collectively represent Idaho federally insured depository institutions. On behalf of our members, we want to share the following important information with you.

Here are some key facts:

  1. Financial institutions are prepared and able to be the source of strength for the communities we serve.
  2. Money in insured financial institutions is safe
    -Not a penny of deposits insured by FDIC has ever been lost.
    -The safest place for your money is in an insured depository institution.
    -Up to $250,000 is the basic amount covered by federal insurance for single accounts at any insured institution. Additional coverage may be available depending on account type and structure.
    FDIC insurance coverage details are accessible here:

What consumers and businesses should know:

  1. Financial institutions are working proactively with borrowers experiencing challenges in the current environment.
    -Each institution is eager to work with you for a solution customized to your situation.
  2. Financial institutions have responded positively to Governor Little’s and President Trump’s health directives. Pandemic business continuity plans were already in place and are being exercised
  3. Lobby access may be restricted, but we’re open for business (check your financial institution’s webpage for details):
    -Drive through service, when available at a branch, is open for transactions.
    -Individual appointments for in-person meetings are being scheduled.
    -Technology platforms give ready access to online services like bill pay, remote depositing of checks and ATMs for cash.
    -Consumers can take advantage of the United States’ world-class payments system and use mobile payment channels and debit cards or credit cards to make purchases

Be on guard for scams. To learn more about what to avoid, visit FTC Coronavirus Scams Page.

“Idaho’s banks are open for business, and we are seeing banks statewide responding positively to the Governor and President’s health directives,” said Trent Wright, president and CEO of the Idaho Bankers Association. “Bankers are taking care of their team members by protecting their health as best as possible so they can continue to operate. And they’re focusing on helping concerned customers. For those with loans, it’s all about staying in touch, identifying needs and working on customized solutions. For savers and depositors, it’s reassuring to know that deposits within FDIC insurance limits are fully protected. The almost 5,000+ Idahoans who work as bankers are fully committed to helping lead our communities through this trying time.”

“Tailoring” on appraisals when a qualified appraiser cannot be found.

S.2155 Section 103 Exemption from Appraisal of Real Property located in Rural Areas, provides an exemption under certain circumstances that you can have an “waiver” if unable to locate an appraiser.  There are several requirements in order to meet this exemption.  Additionally, the Final Rule published last week by the inter-agency on the Residential Real Estate Appraisals Threshold Increase, implemented changes to the Exemption from Appraisal of Real Property -these changes to Exemption from Appraisal of Real Property located in Rural Area January 1, 2020.  All of the requirements to use the Exemption are within the legislation. 

Two IBA Members Recognized as Best to Work for by American Banker

Congratulations to our IBA members who were on the list of best banks to work for out this week from the American Banker publication. As the article points out, the bank’s leaders must work purposefully every day to ensure that employees are engaged, having fun and enjoy what they are doing. Getting on the list also requires having to answer a lot of survey questions about their leadership philosophy, going above and beyond for employees, efforts to recruit a diverse workforce, their most effective ways to communicate and more.

Recognized are Washington Trust Bank, Chairman and CEO: Peter Stanton; Zions, President and CEO: A. Scott Anderson

Here’s a link to the article to read more and why they were selected.

2019 Excellence in Finance Awards

Idaho Bankers Association Endorses ICBA Bancard

Washington, D.C. (Aug. 8, 2019)—ICBA Bancard, the payments services subsidiary of the Independent Community Bankers of America® (ICBA), has been endorsed by the Idaho Bankers Association (IBA). This marks the 39th state banking association to give its seal of approval to ICBA Bancard, which provides payments solutions to community banks.

“We are honored to be selected by IBA to serve Idaho’s community banks and deliver on our promise to offer best-in-class products and services that meet the needs of today’s savvy customers and keep community banks at the forefront of payment innovation,” said ICBA Bancard President and CEO Tina Giorgio. “Working with leading state associations like IBA allows ICBA Bancard to further its mission to deliver flexible, innovative payments solutions that allow community banks to flourish.”

ICBA Bancard provides nearly 2,400 community banks with the best industry pricing, along with access to proven education and marketing programs and consultative client support. In addition, ICBA Bancard clients receive access to innovative programs such as the exclusive Fraud Loss Protection Plan.

“The Idaho Bankers Association is proud to endorse ICBA Bancard, a highly respected and trusted community bank partner for more than 30 years,” said IBA President and CEO Trent Wright. “By harnessing the collective buying power of the nation’s community banks, ICBA Bancard and IBA are helping community banks across our great state realize their card portfolio’s potential and achieve their strategic payments objectives.”

About ICBA

ICBA Bancard® is the wholly owned payment services subsidiary of the Independent Community Bankers of America. ICBA Bancard’s community bank issuers generated $29.3 billion in sales volume in 2018 and are ranked collectively as the 24th largest credit card portfolio in the United States. ICBA Bancard enables thousands of community banks to provide competitive credit card, debit card, ATM and merchant processing solutions. The company also provides exclusive services to issuers including its Fraud Loss Protection Plan, marketing support, and product education. For more information, visit

Relief for Community Banks in the Competition for Deposits

Relief for Community Banks in the Competition for Deposits

An important reform of the rules governing reciprocal deposits will make it easier for community banks to compete for the business of large depositors.

By: Steve Davis, Regional Director at Promontory Interfinancial Network, LLC

The recent bank reform bill made a lot of news, but what may surprise you is the specific provision of the Economic Growth, Regulatory Relief, and Consumer Protection Act that community bankers believe will have the biggest impact on their daily business.

Before the bill became law, a lot of attention was placed on the provision raising the systemically important financial institutions, or SIFI, threshold from $50 billion to $250 billion in assets, above which banks must contend with a heavier compliance burden.

Yet, the provision involving SIFIs directly impacts only a small number of commercial banks based in the United States—the dozen-plus with between $50 billion and $250 billion in assets.

Perhaps that’s why when Promontory Interfinancial Network queried bankers for its second-quarter Executive Business Outlook Survey, executives from the 390 banks that responded pointed elsewhere when asked to identify the law’s most impactful provision.

Thirty-seven percent of respondents said the law’s provision that allows most reciprocal deposits to be treated as nonbrokered deposits ranked highest on a scale of one to five, placing it first among the seven other provisions tested.

It was up against stiff competition. The other provisions included those that eased the qualified mortgage rule, extended the regulatory exam cycle and simplified capital rules for community banks, among others.

“We think the change to reciprocal deposits is great,” says Christopher Cole, executive vice president and senior regulatory counsel for the Independent Community Bankers of America. “It clarifies the status of reciprocal deposits and alleviates the concerns many community banks had about using them.”

Similarly, the American Bankers Association noted that, “the definition of brokered deposits needs to be modernized and we appreciate that Congress took a first step by recognizing reciprocal deposits are a stable source of funding for many community banks.”

The change in the law makes sense, says Neil Stanley, president of community banking at TS Banking Group, which owns three banks, including Treynor State Bank, a $400 million bank based in Treynor, Iowa: “This is one of those areas that reflects what bankers always thought was true—when a large, local depositor does business with us, any deposits above the $250,000 FDIC insurance threshold shouldn’t be considered brokered or highly volatile just because we place them with other institutions on a reciprocal basis.”

Underscoring the significance of the change, 58 percent of respondents to Promontory Interfinancial Network’s survey said they plan to start using, or expanding their use of, reciprocal deposits immediately or very soon because of the new law. An additional 29 percent said they would consider doing so in the future.

To put this in perspective, according to the same bank leaders, the next most impactful provision included in the new law relates to the easing of rules surrounding commercial real estate loans, followed by the provision that shortened call reports and then by the provision that provided qualified mortgage relief.

The change in reciprocal deposits may seem like a peripheral issue, but it addresses a fundamental inequity in banking. It does so by helping to level the playing field between the handful of large, money center banks headquartered in places like New York City and the thousands of smaller banks spread across the country that serve as economic lifelines in their communities.

Institutional investors have often favored big banks because of the belief they are “too big to fail.” And since they have more resources to invest in mobile and online banking technology, big banks have become magnets for deposits from the new generation of digitally savvy consumers. These banks no longer need to rely as heavily on building branches in rural communities to compete with community banks for funding; they can now reach small-town customers through their smartphones.

As such, many of the nation’s biggest banks are reporting organic increases in deposits. And the competition on the funding side of the balance sheet will only intensify as interest rates climb. The Federal Reserve’s Open Market Committee has raised the fed funds rate multiple times this year and is expected to continue doing so.

By making it easier for community banks to use reciprocal deposits, in turn, the new law strengthens their ability to grow relationships and deposits from a local customer base without losing either one to bigger banks with deeper pockets.

“This is a step in the right direction,” says Bert Ely, a principal of Ely & Company, where he monitors conditions in the banking industry. “It makes it easier for community banks to accommodate large depositors.”

Given all this interest, it seems likely that the use of reciprocal deposits will increase in the coming months and years. Banks not currently familiar with them would thereby be wise to familiarize themselves with how reciprocal deposits work and their benefits.

To learn more about reciprocal deposits and the impact of the new law, contact Steve Davis at

FDIC Deposit Insurance Coverage and Related Matters – Free Webinar

FDIC Deposit Insurance Coverage and Related Matters – Free Webinar

Provided complimentary as a member service by the Idaho Bankers Association and Promontory Interfinancial Network, LLC.

Click here to register – May 7, 2019 – 10:00–11:00 AM CT
Click here to register – May 9, 2019 – 2:00-3:00 PM CT

Now is a great time for bankers to refresh their knowledge on FDIC insurance regulations as the FDIC continues to examine bankers’ understanding of deposit insurance rules that apply to third-party agency accounts.

FDIC insurance eligibility is a key benefit banks provide to depositors. It can be an important selling point in maintaining key customer relationships and obtaining bank funding.

This 45-minute educational webinar is designed for all levels of bank employees and executives and will include a Q&A segment to address your specific concerns. The webinar will be presented
by Joe DiNuzzo, a former attorney with the FDIC and an expert in FDIC insurance regulations.

A certificate of completion will be available for all attendees.

For additional information, please email

Statewide Industry Earnings up 54 Percent in First Half of Year

The 13 banks based in Idaho earned $40 million in the first six months of 2018, according to data released by the FDIC Thursday. Net income for the period was up 54 percent over the same time in 2017. Loans grew by 11.3 percent to $4.29 billion, and deposits increased by 6.9 percent to $5.36 billion during the first half of the year. Net interest margin also improved to 4.37 percent, which is above the national average. For the quarter, the state’s banks earned $21 million, an increase of 58 percent over the second quarter 2017. “The performance numbers validate what we’re hearing from members that the economic conditions in general remain strong around the state, and that, in turn, leads to improved industrywide bank results,” said Trent Wright, IBA President and CEO. Family and business finances remain relatively stable as well, with the amount of noncurrent loans and loans charged off declining. Nine of 10 loans are being paid on time. Nationally, increased operating revenues and a lower effective tax rate helped industrywide earnings increase 25.1 percent for the quarter.

 See the FDIC Quarterly Banking Profile here.

Good News for Banks: Congress Makes Way for Reciprocal Deposits.

Glenn Martin, Regional Director
Promontory Interfinancial Network, LLC
Arlington, VA

A lesser-known provision of a new law just changed the market for deposits, and it could not have come at a better time for banks, especially community banks. The provision, which is part of the regulatory relief package for banks just signed by President Trump, provides that most reciprocal deposits are no longer treated as brokered. As a result, well-capitalized banks can now attract more large-dollar, local relationships and, in turn, have more cost-effective funding on hand to finance lending in their communities.

In recent months, U.S. banks have been bracing for increased competition for customer deposits. According to the Bank Executive Business Outlook Survey (2018, Q1) a record number of bank respondents (76 percent) reported facing more competition for deposits over the past year and almost 90 percent believe it is only going to get tougher.[1]

Source: Bank Executive Business Outlook Survey 1st Quarter, 2018

In fact, the combination of rate hikes (more are expected later this year) and the Federal Reserve’s $1.5 trillion reduction of its balance sheet should continue to push deposit costs upward. With the Fed not reinvesting the principal proceeds from maturing securities, liquidity will be pulled from the markets and banking system, reversing the impact of the first and second Quantitative Easing. And banks are bracing themselves for more competition from the nation’s largest banks, as well as from non-traditional players that include the likes of fintech companies, Goldman Sachs’s Marcus, and the potential entry of Amazon.

Reciprocal Deposits

Fortunately, the enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act should offer banks some relief. This important new law provides that most reciprocal deposits are no longer considered brokered deposits.

Reciprocal deposits are deposits that a bank receives through a deposit placement network in return for placing a matching amount of deposits at other network banks. Although there are a number of providers, the leading reciprocal deposit placement network in the United States is operated by Promontory Interfinancial Network, LLC, which invented reciprocal deposits and offers two of the nation’s largest reciprocal deposit placement services: Insured Cash Sweep®, or ICS®, and CDARS®.

The Economic Growth, Regulatory Relief, and Consumer Protection Act

This new law recognizes something that many in the banking sector have long understood –reciprocal deposits behave as core deposits in that they are “sticky” (CDARS deposits reinvest at a rate of approximately 80%, for example), and that the institution accepting the deposit maintains the relationship with the depositor.[2]

Specifically, the law amends section 29 of the Federal Deposit Insurance Act so that, subject to the definitions, terms, and conditions of the Act as amended:

  • If a bank is well capitalized and has a composite condition of outstanding or good (CAMELS 1 or 2), its reciprocal deposits up to the lesser of $5 billion or 20% of the bank’s total liabilities are no longer considered brokered. Reciprocal deposits over these amounts are allowed, but the incremental amount (overage) is treated as brokered.
  • If a bank drops below well capitalized, the bank no longer requires a waiver from the FDIC to continue accepting reciprocal deposits, so long as the bank does not receive an amount of reciprocal deposits that causes its total reciprocal deposits to exceed a specified previous average. As before, interest rate restrictions apply while the bank is less than well capitalized.

Banks now have a much larger, approved source of stable deposits that can be tapped. This means banks can help even more customers—including businesses (large and small), nonprofits, municipal governments, financial advisers, and even individuals—to safeguard their funds, potentially at even higher levels. All at the same time attracting locally priced, large-dollar deposits, which can be used to reinvest in the bank’s community.

Furthermore, banks can use reciprocal deposits to replace more expensive deposits, like routinely collateralized deposits that come with tracking burdens, and those from listing services (generally associated with wholesale pricing and no loyal or local customer relationship).

Making the Most of This New Opportunity

Now is the time to act by taking advantage of this important change in banking law. Read more about the new law and about the nation’s largest, most well-known reciprocal deposit services by visiting For more information, contact Glenn Martin at

Economic Outlook by Alan Blinder

March 2018Alan Blinder Bio Photo
Alan S. Blinder

Vice Chairman and Co-Founder, Promontory Interfinancial Network
Professor of Economics and Public Affairs, Princeton University

Jay came, Jay saw, Jay conquered.

Well, maybe it wasn’t that hard a conquest, but Jerome (“Jay”) Powell’s first Federal Open Market Committee (FOMC) meeting as Chairman of the Federal Reserve has to be scored a success. He delivered the widely expected, 25 basis-point increase in the federal funds rate on a unanimous vote. Yes, it’s true that the FOMC is smaller (only eight voting members these days) and a lot less fractious than it used to be. The Committee’s hawks and doves are no longer very far apart. But still…

He and his fellow Committee members nudged the so-called “dot plot” up a bit, apparently without upsetting markets. The 15-member committee is now about evenly split between expecting (or is it favoring?) two or three more rate hikes of 25 basis points each this year, and a total of about six (150 bps) in 2018 and 2019 together. If that comes true, the funds rate will be in the 2.75-3.00 percent range by the end of next year, just about where the Committee sees the long-run “neutral” funds rate to be. But consistent with a belief that they’ll have some mild overshooting to combat, the FOMC also penciled in another 50 basis points of tightening in 2020.

The Committee bumped up its real GDP estimates for 2018 and 2019 by amounts that are broadly consistent with what the economic consensus—but not the Trump administration—says the new fiscal policies will do to growth. Perhaps more notably, members now project a considerable overshoot of full employment—with the unemployment rate trailing down to 3.6 percent against an estimated NAIRU of 4.5 percent. Yet they barely touched their inflation forecast. That’s a pretty flat Phillips curve.

Last, but certainly not least, Powell’s answers to questions at his first press conference were taciturn, and his words sufficiently well-chosen, that he didn’t make news—which is what Fed chairs generally want to do.

Congratulations, Jay.