Community Banking News Blog | Community Bankers of Iowa (CBI)

Government Affairs Weekly Report: Week 7, 2015 - Feb 23-26, 2015

2/27/2015

by CBI Lobbyist Jeff Boeyink

Overview / Major Events
One week to the first legislative funnel and committees are working at a frenetic pace to clear their dockets of policy legislation. Policy bills are resolved next week, one way or another: (1) the committee of origin passes the bill and moves it to the House or Senate floor, or (2) the committee takes no action on the bill and it become ineligible for further consideration this year. Next week the Weekly Report will contain a list of key bills that both made and missed the cut.

House and Senate pass Gas Tax Increase on Tuesday / Governor signs it on Wednesday
The House, Senate, and Governor’s office each acted swiftly this week to finally pass a gas tax increase and take a big step toward filling the funding gap in our state and local road system.

In a rare display of bipartisan efficiency, the House and Senate adopted SF 257 in a matter of hours on Tuesday. The Senate began the process with an affirmative vote of 28-21 in favor of SF 257 (with 16 Democrats and 12 Republicans voting for the bill). Within hours the House had also passed SF 257 on a 53-46 vote (with 30 Republicans and 23 Democrats voting for the bill).

The bill was quickly prepared for consideration by Governor Branstad and transmitted to his office late Tuesday. Normally the Governor has three full days to consider legislation that comes to him during the session. However, the Governor moved quickly and signed the bill before noon on Wednesday.

The full 10-cent increase in the gas tax will go into effect on March 1 (this Sunday). Expect to see quick action by the Iowa DOT to adopt a new plan for allocating the additional revenue in the coming year so that Iowans can see immediate impact in regards to the fulfillment of critical road and bridge construction needs.

View the Iowa Legislative Bill Tracker

Iowa Bank Lending Continues to Grow

2/27/2015

Iowa banks were busy lending money last year, with loan volume up 8.3 percent from 2013 totals to $49.5 billion. Loan demand in real estate, farm, commercial and consumer segments all saw increases from the year prior. Nationwide, bank lending gained 5 percent last year over the previous year.

In Iowa, loan quality remained strong. Net loan charge-offs ended the year at 0.15 percent of total loans, compared with 0.19 percent the year prior. Other loan quality indicators, such as noncurrent and nonperforming loans also improved. Noncurrent loans were down to 0.65 percent of total loans from 0.83 percent last year. Nonperforming loans declined to 0.62 percent of total loans from 0.78 percent. Iowa banks also reduced the number of properties acquired through foreclosures.

Net income for Iowa banks was $848.8 million, up 4 percent from last year to $813 million. Return on assets, another indicator of overall bank performance, edged up to 1.15 percent from 1.13 percent at the end of 2013. Total assets reached $75.9 billion in 2014. Iowa's banks also reported holding just under $80 billion in assets as of Dec. 31, compared to holding $73 billion in assets at the end of 2013.

Iowa Banks Performance Q4 2014

Branstad Signs 10-Cent Gas Tax Hike

2/27/2015

Re-posted from The Des Moines Register

It's official: Iowa's gas tax is going up. Gov. Terry Branstad signed a bill on Wednesday raising the state's gasoline and diesel fuel taxes by 10 cents a gallon.

The bill passed the Iowa House and Senate on Tuesday after legislative leaders from both parties worked with the Republican governor to reach a consensus on a funding package to provide an additional $215 million annually for city, county and state roads.

Branstad received Senate File 257 in his Iowa Capitol office on Wednesday morning and immediately signed it.

"This is a great example, on a difficult and controversial issue, of the kind of bipartisan cooperation that really makes Iowa stand out as a state where we work together and we get things done on behalf of the citizens of our state," Branstad said. "This is important for economic development. This is important for our farmers to be able to get their crops to market. I know that many people have been waiting a long time for this." The last gas tax increase was in 1989.

Related Article: How Did Your Legislator Vote on the Gas Tax?

What 'Net Neutrality' Could Mean for Banks

2/26/2015

by Joe Adler, Deputy Washington Bureau Chief for American Banker

Impending "net neutrality" rules would help level the playing field for an ever-changing assortment of companies competing for financial services success, according to observers.

The Federal Communications Commission is moving closer to a plan to regulate online and mobile providers like other utilities, which would impede their ability to act as Internet gatekeepers and block or limit access to specific sites.

The effects of the FCC plan — assuming it is approved at a scheduled vote on Thursday — will likely not be immediately felt by banks, and the financial industry has stayed out of the debate. But experts say keeping the Internet open would afford financial institutions future benefits similar to other online players. Net neutrality would prevent a carrier from "throttling" sites of institutions offering similar products, as well as from charging certain banks a higher price for faster online service.

"They would be prohibited from doing anything that could be viewed as discriminatory toward competing applications provided by banks," said Brooks Harlow, a principal at Lukas Nace Gutierrez & Sachs. "To our knowledge, this hasn't been an issue yet. But one of the concerns is that an Internet service provider that has its own payments applications might in some way favor its applications at the expense of competitors."

The FCC's plan has received strong backing from Chairman Tom Wheeler, but some commission members had pushed either to narrow the rule's scope or delay the vote, according to published reports.

Government Affairs Weekly Report: Week 6 - Feb 16-19, 2015

2/20/2015

by CBI Lobbyist Jeff Boeyink

Overview / Major Events
With the completion of Week 6 of the current legislative session, there remain but two weeks of legislative work before policy bills face the first funnel. Policy bills must clear at least one committee in one chamber by March 6 to remain eligible for discussion the remainder of the session. Exempt from the funnel requirements are bills that deal with taxation or that spend state funds.

Gas Tax Drama Takes Center Stage
Companion bills in the Iowa House and Senate cleared their final committee hurdles this week and will be eligible for debate by the full House and Senate early next week.

Late last week the bills were approved in the respective House and Senate Transportation Committees. Once approved at the full committee level, these “study bills” were renumbers as official House and Senate Files. Here are the new numbers: SSB 1168 is now SF 257 and HSB 129 is now HF 351.

Here are the major components of SF 257 / HF 351:

Legislative intent: 100% of the additional revenue generated by the bill shall be used for critical road and bridge construction projects.
Prohibits the use of these additional funds to pay for debt service—interest on bonds, loans, or other indebtedness incurred on or after the effective date.
Raises permit fees for heavy haul loads.
Increases by 10 cents the rate of the excise tax on motor fuel.
Provides an incentive for the use of biodiesel blended as B-11 or higher.
Will raise more than $200 million annually in new road revenue.

View the Iowa Legislative Bill Tracker.

Midwest M&A Index Indicates Demand for Deals

2/20/2015

Midwest merger and acquisition activity in the past quarter continues to reflect a strong deal-making environment, according to the latest analysis by Bridgepoint Merchant Banking.

The Bridgepoint Midwest M&A Index rose substantially to 103.3 to end the fourth quarter of 2014. On a year-over-year basis, the index decreased 13.0 percent from the year-ago quarter. The strength of the index in the latest quarter indicates that Midwest M&A activity remains at healthy levels.

The number of merger/acquisition transactions involving Midwest companies increased to 175 deals in the fourth quarter, compared with 159 transactions in the third quarter. Transactions with Midwest companies as acquisition targets increased by nearly 39 percent to 161 in the fourth quarter, "which reiterates the strong buyer appetite for Midwest companies," the report said.

The report tracks selected merger and acquisition transactions in Iowa, Kansas, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Download the Bridgepoint Midwest M&A Index
File Size:	535 kb
File Type:	pdf

Gas Tax Bill Advances in Iowa Senate

2/13/2015

Reposted from the Des Moines Register.

A bill raising Iowa’s tax on gasoline and diesel fuel by 10 cents a gallon cleared its first hurdle Wednesday in the Iowa Senate.

A three-member subcommittee agreed to send the Senate Study Bill 1168 to the Senate Transportation Committee after the proposal received widespread support from a broad array of lobby groups representing Iowa businesses, agriculture, and labor unions. A companion bill is pending in the Iowa House.

The measure also includes increases in fees charged for permits needed to operate oversized and overweight vehicles. The Iowa Department of Transportation estimates the additional taxes and fees would generate about $215 million annually to help address the most critical needs for Iowa’s 114,000-mile system of city, county and state roads and bridges.

“We have a huge problem in Iowa,” said Sen. Tod Bowman, D-Maquoketa, chairman of the Senate Transportation Committee. “The effect of this problem is that we have a crumbling infrastructure.”

The subcommittee heard from a parade of witnesses who praised lawmakers for pushing ahead with a bill to raise the gas tax, which hasn’t been increased since 1989, even though costs for road construction projects have increased dramatically since then. The bill’s opponents include Iowans for Tax Relief, Truckstops of Iowa, and Petroleum Marketers and Convenience Stores of Iowa.

Jeff Boeyink, a lobbyist for Community Bankers of Iowa and the Highway 61 Coalition, a road lobby group in eastern Iowa, said better infrastructure is needed to attract new businesses and to accommodate traffic growth. “We have come to the realization that without additional funding some of those projects just aren’t going to be taken care of,” Boeyink said.

Government Affairs Weekly Report: Week 5, 2015, Feb. 9 - Feb. 12

2/13/2015

by CBI Lobbyist Jeff Boeyink

Overview / Major Events
One of the most significant issues facing the Iowa General Assembly began to move with the introduction of companion bills in the House and Senate to increase the state’s gas tax by 10 cents per gallon.

House Study Bill 129: assigned to House Transportation Committee (subcommittee consists of Rep. Byrnes, Rep. Cohoon, Rep. Lykam, Rep. Moore, and Rep. Worthan)

Senate Study Bill 1168: assigned to Senate Transportation Committee (subcommittee consists of Sen. Bowman, Sen. Dvorsky, and Sen. Kapucian)

The Senate began the process of moving the bill forward with an extremely well attended subcommittee on Wednesday. After more than an hour of testimony (most of it expressing support for the measure), all three members of the subcommittee approved the measure and moved it to the full Senate Transportation Committee.

This was following by action on Thursday in a House subcommittee when (after a repeat of the previous day’s testimony) all five members of the subcommittee approved the measure and move it to the full House Transportation Committee.

Expect full committee work to begin on these bills in their respective committees next week. Once approved at that level, both will need to clear their chamber’s Ways and Means Committee before debate by the full House and Senate.

The SHAZAM Network Adds Person-to-Person Payments to SHAZAM BOLT$ Mobile App

2/6/2015

DES MOINES, Iowa (February 5, 2015) — This week’s update to SHAZAM BOLT$, the mobile app offered by the SHAZAM Network, will give debit cardholders even greater access to their cash. New features include a person-to-person (P2P) money transfer service and an interactive ATM locator.

The app offers even greater value to community financial institutions looking to provide expanded digital services, particularly P2P features, to their customers. According to research firm Forrester, P2P activity is expected to grow to $17 billion in volume by 2019.

The P2P money transfer feature allows SHAZAM BOLT$ cardholders to send money to other enrolled cardholders instantaneously. “While other P2P solutions use ACH to support their transactions, we’re using our SHAZAM debit rails, resulting in a much faster transaction,” said Terry Dooley, SHAZAM executive vice president and CIO. “A user can easily determine whether an intended recipient is enrolled simply by entering the recipient’s email address into the app.”

SHAZAM also integrated GPS technology into the mobile app to help cardholders in the U.S. locate nearby ATMs. Users can confirm if the ATMs are surcharge-free Privileged Status terminals and get directions.

Government Affairs Weekly Report: Week 4, Feb 2-Feb 5, 2015

2/6/2015

Every month the Iowa Department of Management (DOM) publishes a report on the general fund receipts collected in the previous month. The report includes the monthly receipts, the year-to-date receipts, comparisons to the same time period a year ago, and comparisons to the revenue estimate on which the current budget is based. This week DOM published the memo outlining collections for January 2015 and year-to-date for the fiscal year (FY15). While revenue collections are running ahead of collections for the same period in FY14, they are running slightly behind the revenue estimate that was used to establish the FY15 budget.

Year-to-date revenue growth through January 2015 is a positive 3.1%. However, when the General Assembly and Governor agreed to the FY15 budget, the official revenue estimate on which that budget was based was a positive 4.5%. If this deficit were to continue through the end of FY15 (June 30, 2015) then the state would collect $98 million less than anticipated and that would likely result in the need to use cash reserve funds to make up the difference. However, during the income tax season there are often wide swings in revenue collections that cause the state’s position relative to the revenue estimate to fluctuate significantly from month to month.

Other data points from the January 2015 DOM memo:

Personal income tax collections have increased by 4.2% year-to-date (estimate was an increase of 5.7%)
Sales / Use tax collections have increased 4.4% year-to-date (which is exactly where the revenue estimate placed this growth)
Corporate income tax collections have declined by 5.6% year-to-date (whereas the revenue estimate anticipated a 3.8% increase)

In March, the Revenue Estimating Conference will reconvene and revisit the revenue estimate that is currently being used to craft the FY16 budget.