NCBankers Bulletin - March 13, 2025

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Call to Action: Opposition to H 62

Approximately half of the House Republican Caucus are cosponsors of H 62 (The Farmers Protection Act), which the bankers association opposes and which we previously discussed in the Bulletin. The bill passed the House Judiciary 1 committee two weeks ago and passed the House Agriculture committee on Wednesday. The bill is directed at NC state-chartered banks and savings institutions. The bill’s sponsors have been very professional and have improved portions of the bill, but the negotiations have reached an impasse on a key provision in the bill.

The bill’s objective is to bar NC state-chartered banks from making environmental, social and governance commitments in the future. NCBA member banks have expressed frustration that the bill is using farmers as the way to frame the issue.

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Upcoming Professional Development Events:

CBS Benefits Day & HR Workshop - March 25-26

Regulation E and Payments - April 10-11

Credit Analyst Development Program - April 14 - June 13

Upcoming Annual Conferences:

2025 American Mortgage Conference - May 13-14

2025 NCBA/OBL Annual Convention - June 23-26

2025 North Carolina School of Banking - July 21-25

Creative Strategies to Address Talent Shortages at the CBS Benefits Day & HR Workshop! | March 25-26, 2025

Struggling with talent shortages? Join us at CBS Benefits Day & HR Workshop for Creative Strategies to Address Talent Shortages, a panel discussion featuring industry leaders tackling innovative approaches to recruitment and retention. Panelists include Paul Carney (Carter Bank), Emily Hinsley (First Bank), Laurel LaBonte (Fidelity Bank), Mike Tidwell (KS Bank), and Margaret Ward (Peoples Bank), with moderator Denise Pavona (Spherion Staffing).

This session will set the stage for engaging peer group discussions, where you can exchange insights and solutions with fellow HR professionals. Plus, explore the latest benefits offerings available through Community Bank Services. Join us in Durham for this annual tradition on March 25-26.

State Legislative & Regulatory Update

Automatic Renewal of Contracts

On Tuesday, the House Judiciary 2 committee passed H 188 (Automatic Renewal of Contracts). The bill’s primary sponsors are Rep. Sarah Stevens and Rep. Keith Kidwell. The bill would change notification requirements and impose additional authorization requirements before consumer contracts can renew.

The bill’s sponsors noted that they have received considerable feedback from the business community. They asked committee members to advance the bill to the next committee on the understanding that Rep. Stevens would be having conversations with stakeholders to address their concerns. Those concerns include those from the bankers association that the bill proposes to strike an existing exemption in North Carolina law for banks.

Nathan Batts, the association’s counsel and director of government relations, advised Rep. Stevens that without restoration of the exemption, the bill would completely undermine the operation of products like lines of credit and certificates of deposit. At least one member of the legislative committee suggested that the bill should be expanded in the future to also include commercial contracts. Currently, the bill has at least three committee referrals remaining before it could potentially make its way to the House floor, allowing time to fix many of the bill’s issues.

New Bill Filings in North Carolina

As discussed in the included Bill Tracker, there have been a number of new bill filings of note over the past week. These include:

H 360 (Homeowners Protection Act) to deal with the problem of fraudulent deeds and other real estate documents, including creating a process for expedited relief for victims; this bill has considerable support from real estate professionals and Registers of Deeds
H 377 (Changes to Estate and Trusts Statutes) to authorize the use of wills executed electronically and the storing of attested written wills in electronic form; part III of the bill proposes changes in phrasing to trust administration in GS 36C-6-604 where the statute addresses breach of trust by a trustee in distribution of trust property after death of the settlor; part III also allows a court to assess costs and attorneys’ fees against beneficiaries who refuse to return a distribution if ordered to do so
S 266 (Historic Food Event Bldg. Code Exemption), which would allow the owner of a building damaged by a 200-year or greater flood event to replace or reconstruct the building or structure to the same or lesser extent or volume, without regard to state or local regulations adopted after the building or structure was established
S 267 (Amend Business Corporation Act) proposing amendments to the NC Business Corporations Act in Chapter 55, including a new statute recognizing that the articles of incorporation or the bylaws may require that all internal corporate claims, such as for breach of fiduciary duties, be brought in NC court or, if so specified in the articles of incorporation or bylaws, in any other jurisdictions with which the corporation has a “reasonable relationship.”

Federal Legislative & Regulatory Update

President Trump to Nominate Governor Bowman

Multiple media outlets are reporting that President Donald Trump plans to nominate Federal Reserve Governor Michelle Bowman as the Fed’s vice chair for supervision. Governor Bowman is a former community banker and has criticized over-zealous bank regulation. She would replace Michael Barr, a Democratic appointee by former President Joe Biden who stepped down from the position at the end of February to avert a potential legal dispute with the Trump administration.

Government Funding Bill

By a vote of 217 to 213, the House has approved legislation (H.R. 1968) to fund the federal government through September. The bill also extends several expiring programs, including the National Flood Insurance Program. The bill has been received by the Senate, where it must receive at least 60 votes to overturn a filibuster.

Effort to Overturn Overdraft Rule

The House Financial Services Committee has voted to advance a joint resolution (H.J. Res. 59) to invalidate the CFPB’s final rule on overdraft protection. Rep. Tim Moore is an original cosponsor. The rule requires banks with at least $10 billion in assets to cap overdraft fees at $5 unless they voluntarily set a cap that covers their actual costs and losses or treat overdraft protection as a loan covered by the Truth in Lending Act.

Removing Reputational Risk from Bank Supervision

Senate Banking Committee Chairman Tim Scott (R-SC) has introduced legislation (S. 875) to prevent federal banking regulators from using reputational risk as a component in supervision. Sen. Thom Tillis is an original cosponsor. The Financial Integrity and Regulation Management (FIRM) Act would eliminate all references to reputational risk as a measure to determine the safety and soundness of financial institutions, according to Scott.

Scott said the legislation is necessary to prevent regulators from pressuring financial institutions to engage in debanking.

Central Bank Digital Currency

Rep. Tom Emmer (R-MN) has reintroduced a proposed bill (H.R. 1919) that would prevent the Federal Reserve from using a central bank digital currency to implement monetary policy. “Allowing the Federal Reserve to issue a digital currency would violate the separation of powers, expose Americans to unconstitutional financial surveillance, crowd out private investment and innovation, increase volatility in financial markets, and threaten persistent inflation,” said Rep. Emmer.

Representatives Richard Hudson, Addison McDowell, Tim Moore, Greg Murphy, and David Rouzer are original cosponsors of the bill.

Bank Authority to Engage in Cryptocurrency Activities

The OCC has published Interpretive Letter 1183 to confirm that crypto-asset custody, certain stablecoin activities, and participation in independent node verification networks such as distributed ledger are permissible for national banks and federal savings associations. The letter also rescinds the requirement for OCC-supervised institutions to receive supervisory nonobjection and demonstrate that they have adequate controls in place before they can engage in these cryptocurrency activities.

‘Credit Insecurity’

The Federal Reserve Bank of New York has released “Credit Insecurity in the United States, 2018–2023,” which introduces the Credit Insecurity Index, a geographic measure of credit access. The report, which uses the index to measure credit access at the national, state, city, town, and county level, finds the share of people in counties with the easiest access to affordable credit increased during the period covered. Still, more than one in 10 people live in counties where large shares of consumers rely on high-cost credit and struggle to manage debt.

Banker News

Scam Trends: One in Three U.S. Adults Impacted by Fraud Since Jan. 2024

More than one in three U.S. adults have experienced financial fraud or a scam since January 2024. Among them, nearly two in five lost money, according to a new survey by Bankrate. In related news, consumers reported losing more than $12.5 billion to fraud last year, representing a 25% increase over the previous year, according to the Federal Trade Commission.

Survey Finds Bank Loyalty Increases with Physical Presence

A new survey has found that most Americans with a checking account held onto the same account for an average of 19 years if their bank or credit union had physical locations. Residents with savings accounts held onto that account for an average of 17 years. Both those figures shrank to six years for online-only institutions. Asked why they stuck with their accounts, no or low monthly fees was the most popular answer.

NCBA Announcements

Don't Miss the American Mortgage Conference! | May 13-14, 2025

The American Mortgage Conference brings together decision-makers, investors, top financial leaders, and mortgage practitioners of every kind each year. Join your mortgage community for the chance to dive deep into crucial industry issues and discuss the latest progress from Washington.

Don’t miss out on this annual tradition—join us on May 13-14, 2025, in historic Charleston, S.C.!

Now Accepting Applications for the 2025 NCBA Foundation Scholarship

The North Carolina Bankers Association Foundation is now accepting scholarship applications from high school seniors with a parent who is a full-time employee of an NCBA member bank. Two $16,000 scholarships will be awarded during this year’s application cycle. Each applicant must be a current high school senior who will receive their diploma during the 2024-25 school year.

Scholarship guidelines and application instructions are available online. The deadline for uploading applications and supporting documentation is Friday, March 21.

For more information contact John Sullivan at johns@ncbankers.org.

NCBA’s Community Bank Services Endorses Arkatechture as Endorsed Solution

The North Carolina Bankers Association and its wholly owned subsidiary, Community Bank Services (CBS), announce the endorsement of data analytics company Arkatechture as a preferred vendor. This means NCBA community bank members will benefit from Arkatechture’s full range of solutions – known as Arkalytics – to help achieve business objectives by utilizing data to make more informed decisions.

For example, banks will increase profitability by using analytic dashboards to monitor goals against actual performance, helping teams adjust strategy in real time to improve profit margins. Banks will also benefit by creating efficiencies resulting in competitive advantages, such as automating time-consuming reporting so employees can repurpose those hours into revenue-generating opportunities, or analyzing transactions to reduce cash outflow while growing customer relationships by selling more of its products.

“We understand that no two community banks' needs are the same and the vendor they partner with needs to offer a wide range of services to be a valued partner,” said Jamie Jackson Arkatechture founder and CEO. “If a partner offers the same tool to every bank, they are solving only one piece of the data puzzle. We support the community bank by maximizing its data and leveraging that information into a competitive advantage.”