WEDNESDAY DECEMBER 30, 2020 VOL. 185 No. 250 AMERICANBANKER.COM Follow us on Twitter @AmerBanker First Reliance in S.C. cites 5 growth push in announcing First responder executive moves The company promoted two executives as The Federal Reserve was out early with actions to contain part of an effort to revamp its leadership economic fallout from the pandemic, including: team and establish a bigger presence in the See story on page 2 Carolinas. Page 6 Goldman’s Sheila Patel, March 3: First emergency rate cut since 2008 financial crisis 6 chairman of $1.8 trillion manager, to retire March 15: Interest rate and reserve requirements both Patel is among Goldman Sachs’s most senior lowered to zero women and shepherded some of its highest- profile relationships with investors around March 17: Emergency launch of lending facility to backstop the world. Page 6 commercial debt Credit unions get their wish April 9: Plans unveiled for Main Street Lending Program, 7 with extension of CLF changes other facilities Provisions implemented under the CARES Act that made it easier for institutions to use June 25: Freeze on bank stock buybacks and cap on dividend the NCUA’s Central Liquidity Facility have payments been extended for a year with the signing of Consolidated Appropriations Act. Page 7 July 6: Initial purchases of loan participations in Main Street JPMorgan Chase to buy credit program 8 card loyalty platform cxLoyalty JPMorgan Chase is buying cxLoyalty, a major credit card platform, in a bid to enrich its own card loyalty programs when travel Cross River chief resumes after the global pandemic. Page 7 dailybriefing 3 prepares for PPP encore Gilles Gade, one our community bankers Tumbling mortgage rates Fed won praise for 2020 to watch in 2021, led an effort that made 9 partly offset ‘super-sellers’ 1 crisis response, but will Cross River Bank one of the biggest Paycheck market pricing its hands be tied in ’21? Protection Program participants. He is ready Despite intensified demand and The Federal Reserve is credited with for his team to pick up where it left off when plummeting inventory, consumer home containing damage to the financial system the new stimulus package kicks in. Page 4 purchasing power made gains behind falling from the coronavirus pandemic, but experts interest rates in October, according to First say the limits of the central bank’s power Small bank, startup join American. Page 7 to prop up the economy will likely become 4 forces on compliance tech more apparent in the new year. Coastal Community in Washington OCC again overreaches (See chart above.) Page 2 is an investor in and the first client of 10 on preemption law Synctera, a software company that aims Brian Brooks, the acting comptroller of the Sudden change at the top to help community banks manage their currency, used a selective (and dubious) 2 of New York Community fintech relationships, including regulatory interpretation of the Dodd-Frank Act to Longtime chairman and CEO Joseph obligations. Page 5 argue for more say on when banks can Ficalora will step aside Thursday as head of preempt state law, a consumer finance law the regional bank and be succeeded by CFO professor writes. Page 8 Thomas Cangemi. Page 3 WEDNESDAY DECEMBER 30, 2020 AMERICANBANKER.COM PAGE 2 House Financial Services Committee. “The injection,” said Brad Rustin, a partner at CRISIS MANAGEMENT Fed’s authorities and abilities here are pretty Nelson Mullins and chair of the firm’s financial limited going forward.” regulatory and fintech team. “I think that Fed Chair Jerome Powell has said as much, anything that was fast did well.” Fed won calling the case for fiscal policy “very strong” at The central bank created a whole slate of a Dec. 16 news conference. emergency lending facilities as authorized praise for “With the expiration of unemployment under Section 13(3) of the Federal Reserve benefits, some of the unemployment benefits, Act, some of which were backed with funding the expiration of eviction moratoriums, with from the Coronavirus Aid, Relief and Economic 2020 crisis the virus spreading the way it is, there is a need Security Act that passed in the spring. for households and businesses to have fiscal “I think the Fed shined as a professional, response, but support,” he said. highly competent agency with lots of talented And although the Fed does have a role and dedicated staff that were able to step up and to play, Powell acknowledged, experts say do the work that needed to be done at the time,” will its hands that the Fed’s main responsibility is to grease said David Portilla, a partner at Debevoise & markets, while its ability to backstop the areas Plimpton and a former Treasury official. be tied in ‘21? of the economy that most need support is Unlike during the 2008 financial crisis, constrained. the Fed was required to get the Treasury By Hannah Lang Calls from the Fed and others for Congress Department to sign off on the creation of any December 28, 2020 to pick up more of the slack in responding to emergency lending facilities. Observers say WASHINGTON — By all accounts, the economic hardships were answered in the $900 that requirement created a unique relationship Federal Reserve’s assertive response to the billion stimulus package signed by President between the Fed and Treasury that provided coronavirus pandemic earlier this year helped Trump on Sunday. But whether the latest relief confidence to investors. contain the damage to the U.S. economy. But bill is enough is yet to be determined. “The Fed and the Treasury worked pretty the limits of the Fed’s powers will likely become closely together and to act quickly in order more apparent in 2021, experts say. Notable successes, some failures to foster economic conditions that basically The central bank’s initial action came on The Fed has won ample applause for its bought biomedical science some time to come March 3, in the face of rising pressure on the earliest actions in the pandemic. Staff were said up with a real solution,” said Keith McCutcheon, markets due to COVID-19 outbreak, when the to have worked around the clock to stand up senior vice president and treasurer at the $4.9 Fed made its first emergency interest rate cut crucial programs, such as the Money Market billion-asset Bryn Mawr Trust in Pennsylvania. since the 2008 financial crisis. Mutual Fund Liquidity Facility, which the Norton called it “a historic degree of Before the month ended, the Fed again agency announced close to midnight on March cooperation” between Treasury and the Fed slashed rates (this time to zero), reduced 18 in response to hemorrhaging short-term that enabled Powell and Treasury Secretary reserve requirements to 0%, began purchasing funding markets. Steven Mnuchin to create new facilities to Treasury securities and mortgage-backed “All of the programs that launched early respond to a crisis that originated outside of the securities, and created five emergency lending in March — the liquidity facilities and the financial system. facilities to backstop stressed sectors of the aggressive drop in the rates — all of that tended “Many of the 13(3) programs were economy. to be very effective and act as an immediate unprecedented,” he said. “Some of them were “The American economy was definitely cruising along, 100 miles an hour on the interstate, and then hit a wall, and the car got Established 1836 One State Street Plaza, 27th floor, New York, NY 10004 totally obliterated, and the Fed, Congress and Phone 212-803-8200 AmericanBanker.com the administration acted as the airbag,” said Keith Noreika, a partner at Simpson Thacher Editor in Chief Alan Kline 571.403.3846 Copy Editor Neil Cassidy 212.803.8440 and former acting comptroller of the currency. Managing Editor Dean Anason 770.621.9935 “They did a masterful job, I think, of deploying Reporters/Producers that cushion.” Executive Editor Bonnie McGeer 212.803.8430 Laura Alix 860.836.5431, Kate Berry 562.434.5432 But with the book on 2020 all but closed, Washington Bureau Chief Joe Adler 571.403.3832 the Fed’s tools appear to be exhausted just as Executive Editor, Technology Miriam Cross 571.403.3834 the economy is again threatened by the largest Penny Crosman 212.803.8673 Jim Dobbs 605.310.7780 wave of COVID-19 cases yet and ensuing small- BankThink Editor Rachel Witkowski 571.403.3857 business closures. Many of the economic John Heltman 571.403.3847, Allissa Kline 716.243.2679 Community Banking Editor Paul Davis 336.852.9496 closures have become permanent, forcing Hannah Lang 571.403.3855 thousands out of work. Contributing Editor Daniel Wolfe 212.803.8397 John Reosti 571.403.3864, Gary Siegel 212.803.1560 “I think we’re done at the Fed,” said Travis Digital Managing Editor Norton, counsel at Brownstein Hyatt Farber Christopher Wood 212.803.8437 Jackie Stewart 571.403.3852, Kevin Wack 626.486.2341 Schreck and a former general counsel at the For up to date and complete coverage go to AmericanBanker.com WEDNESDAY DECEMBER 30, 2020 AMERICANBANKER.COM PAGE 3 reruns of programs that we saw in ‘08 and ‘09, in August. The latest $900 billion stimulus The Fed will also be responsible for but certainly the Main Street Lending Program package will reboot the small-business lending ensuring that the banking system remains in its different iterations, including for nonprofit program. well capitalized. The agency will have to make organizations, was completely new ground for Some argue that the government’s relief a decision in early 2021 whether to loosen its the Federal Reserve.” efforts have resulted mainly in booming restrictions on bank dividend payments and The Fed’s asset purchases of Treasury stock markets and profits for large companies share repurchases.