The following constitutes the resolutions of the Montana Independent Bankers Association (MIB), which such resolutions broadly describe the Association’s major policy objectives for the 2024-2026 time period.

MEMBERSHIP
Montana Independent Bankers Association (MIB) exclusively represents Montana’s community banks of all sizes and types. MIB is dedicated to maintaining the highest value membership available for community banks that provide financial services to all of the people in Montana.
Independent Community Bankers of America (ICBA) is the exclusive voice for community banks on the national level.

TIERED REGULATION FOR COMMUNITY BANKS
MIB supports and advocates for Tiered Regulation for Community Banks. Community banks need regulatory relief to support the financial needs of their customers, serve their communities, and contribute to their local economies.

MIB urges Congress and the regulatory agencies to continue to expand and refine a tiered regulatory and supervisory system that recognizes the significant differences between community banks and large, complex institutions in terms of the risks they pose to consumers and to the financial system.
To preserve their original purpose, thresholds for regulatory accommodations and exemptions based on asset size and transaction volume should be continually reviewed and adjusted upward as community banks consolidate and the average asset size of banks increases.

SMALL BUSINESS LENDING
MIB believes that the Congress should repeal Section 1071 of the Dodd-Frank Act which requires new data reporting on small business loan applications. If repeal is not possible, the CFPB should exempt community banks under proposed regulations required by statute.
Small business lending is a complex business that cannot be “commoditized” in the same way as consumer lending.
Each small business loan has customized terms based on an analysis of numerous factors. Complex lending should not be subject to simplified, rigid analysis, which might give rise to unfounded fair lending complaints.
MIB opposes A 7(a) participation to Fintechs and other unregulated, non-depository institutions by removing the moratorium on the formation of new Small Business Lending Companies (SBLCs) including mission based SBLCs. MIB opposes proposals to create an SBA 7(a) direct lending program. Such a program could undermine the existing successful public-private partnership SBA loan programs.

CYBERSECURITY
Community banks should not be required by regulators to use one framework, tool or assessment over another to identify and mitigate cybersecurity risk. Community banks should maintain their existing flexibility to use the framework, tool or assessment that best fits their size and complexity.

DATA SECURITY AND FRAUD
MIB supports national data security standards that include appropriate exemptions for community banks that are already covered under GLBA. Regulators should broaden their supervision to include all third parties that have access to, use, or store consumer financial data. These companies should be regulated to Gramm-Leach-Bliley Act (GLBA) like standards.
To better address the increased threat and provide banks with the ability to implement risk-based security programs, state and Federal legislation, regulation, and guidance should be non-proscriptive and non-duplicative in approach and recognize existing or similar regulatory requirements. The patchwork of state data security laws and requirements increases burdens and costs, fosters confusion, and is detrimental to customers.

BANK SECRECY ACT
MIB steadfastly opposes the mandatory collection of beneficial ownership information of legal entities regardless of risk by financial institutions and advocates instead that this information be universally collected by FinCEN at the time an entity is formed. However, financial institutions should have access to this information to assist them in performing customer due diligence.

MIB strongly recommends raising Currency Transaction Reporting (CTR) and Suspicious Activity Reporting (SAR) thresholds with future increases linked to inflation to emphasize quality over quantity in reporting. Reporting should be streamlined to reduce unnecessary burden.

MIB supports Bank Secrecy Act/Anti-Money Laundering (BSA/AML) reforms that will ease compliance while providing more useful data to law enforcement.
MIB asks that FinCEN take a leadership role in combatting ransomware, synthetic IDs, and other types of fraud.
MIB recommends that nonbank institutions that perform “bank-like” functions and offer comparable financial services be subject to the same AML and BSA laws and regulations as banks.

POSTAL BANKING & FED RESERVE ACCOUNTS
MIB opposes the formation of new public banks or other types of public retail financial service providers, whether they are owned by states, municipalities, the United States Postal Service (USPS), or any other federal or quasi-federal instrumentality.
Such banks would directly compete with community banks, diverting deposits from local communities and create undue taxpayer risk. Financial services are best provided in a competitive, private, and free marketplace that openly and efficiently benefits customers.
The financially challenged USPS has virtually no expertise in providing financial services to consumers in a cost-effective manner. Greater entry by the USPS into financial services introduces another tax-advantaged and lightly regulated entity with limited expertise into the marketplace, akin to credit unions and the Farm Credit System.
Community banks and other financial institutions continue to offer low-cost financial services to underserved communities to help them break from the debt cycle of payday lenders.

TAX-EXEMPT CREDIT UNIONS
Credit unions were chartered by Congress to enable people of small means with a “common bond” to pool their resources to meet their basic deposit, savings and borrowing needs. Credit unions have become larger, more complex, and bank-like in their size, powers, product and service offerings, and fields of membership. Credit unions comprise nearly half the country’s federally insured depositories. Credit union acquisitions of community banks and their branches have accelerated rapidly, with the last five years seeing approximately a 400 percent increase over the previous five years. NCUA has significantly deregulated field of membership (FOM) protections over that same time period.

MIB urges the state and federal governments to end the unwarranted tax subsidy of the credit union industry. In addition, credit unions should not be given expanded powers as long as credit unions remain exempt from taxation and regulations.
MIB staunchly opposes credit unions’ exploitation of their tax subsidy and lax regulatory environment to acquire locally based community banks. Larger, out-of-market credit unions are displacing smaller, locally based community banks and other credit unions, creating an environment that is less competitive, has more systemic risk, and offers fewer choices for consumers and small businesses.
MIB opposes credit unions that exploit their tax subsidy and lax regulatory environment to acquire locally based community banks and urges Congress to use its oversight authority to investigate the National Credit Union Administration’s failure to adequately regulate and supervise the industry and to adhere to the original purpose of the credit union tax exemption.

MIB opposes expanded powers for credit union service organizations, which are independently owned, for profit, and not supervised by any federal agency, and supports legislation that would provide NCUA with authority to examine third-party service companies.

MIB supports applying Community Reinvestment Act requirements to credit unions comparable to and with the same asset size distinctions as banks and thrifts and urges states to prohibit the placement of public deposits in tax-exempt credit unions.
Credit unions should be subject to fair lending exams with the same frequency as banks. While FDIC reviews thousands of banks for compliance with fair lending laws every year, NCUA only conducts approximately 50 annual fair lending exams of credit unions.
MIB opposes NCUA’s weakening of safeguards on commercial lending, field of membership, and the growing use of credit union subordinated debt, which allows outside investors to exploit the credit union tax subsidy.

COMMUNITY BANK ACCESS TO CAPITAL
MIB supports legislative and regulatory changes that would improve the ability of community banks to raise capital.

MIB opposes the inequitable capital treatment of community banks, based solely on corporate structure, for banks participating in economic stimulus programs such as the Emergency Capital Investment Program. Subchapter S banks should receive the same capital treatment as Subchapter C banks when participating in economic stimulus programs designed to increase capital investments in local communities.

MIB is supportive of additional upward adjustments to the asset limits under the Federal Reserve’s Small Bank Holding Company Policy Statement to ensure these thresholds remain current and properly align with industry consolidation trends.

DIGITAL ASSETS AND CRYPTOCURRENCIES
In the past year, the cryptocurrency industry has demonstrated continued growth despite large-scale exploits and lawsuits against significant players. Community bankers remain concerned about the risks presented by digital assets, including rampant scams and misrepresentations to consumers, and their growing potential to jeopardize the financial stability of the traditional banking sector. Community banks are at risk of disintermediation if stablecoins become widely adopted for payments.
MIB has serious concerns regarding threats posed by cryptocurrency to privacy, consumer protections, and financial stability resulting from increases in money laundering, terrorist financing, and fraudulent activity.

Unregulated cryptocurrency threatens to disintermediate community banks and undermine their ability to provide funding to support local economic activity, growth, and development.

MIB urges policymakers to ensure public trust by fostering collaboration between domestic and international regulatory authorities to mitigate risks as the adoption of cryptocurrency continues to increase.

MIB supports ongoing efforts by policymakers to harmonize regulations to ensure strong, clear, and consistent oversight of cryptocurrency service providers and establish guidelines for any permissible activities by banks.

MIB believes most cryptoassets are likely offered and sold as securities. Therefore, crypto entities should be subject to relevant securities laws and regulations. MIB supports the efforts of the U.S Securities and Exchange Commission to apply the securities framework to cryptoassets and related entities.

MIB urges policymakers, regulators, law enforcement, and national security organizations to coordinate their efforts to combat ransomware and prevent bad actors from using cryptocurrencies for illicit activities.

MIB encourages regulators to collaborate on a comprehensive approach to prevent the rise of decentralized finance (DeFi), a shadow banking system filled with unregulated, decentralized platforms that pose risks to consumers, the financial system, and U.S. national security.

MIB urges policymakers to address serious risks to financial stability, national security, and consumer protection posed by stablecoins by ensuring that stablecoin issuers do not have access to Federal Reserve master accounts or the payments system. Special purpose bank charters or similar alternatives should not be granted to crypto entities that do not fully meet the requirements of federally insured and supervised chartered banks.

AGRICULTURAL POLICY
Community Banks Serve Rural America. Community banks are four times more likely to operate offices in rural counties and remain the only banking presence in over one-third of all U.S. counties. There are over 1100 agricultural banks (25 percent of portfolios in agriculture). While community banks hold 25 percent of total banking industry assets, they make nearly 90 percent of the banking industry’s farm loans.

USDA Guaranteed Loans. USDA farm loan guarantee programs benefit family farmers and ranchers and allow community banks to better manage the lending risks of producers who would otherwise be unable to obtain commercial credit. These programs should remain primarily financially geared to establishing successful farm and ranch operations. Program fee levels should not discourage participation by community bank borrowers and should not be set at levels that overfund government collections.

Farmer Mac. Farmer Mac should continue to focus on its primary mission of improving secondary market access for community banks’ agricultural lending.
Farm Credit System. FCS lenders enjoy unfair advantages over rural community banks and leverage their tax and funding advantages as a government sponsored enterprise (GSE) to siphon the best loans away from community banks. The FCS is the only GSE that competes directly against private sector lenders at the retail level.

Climate Risk. Policies should not increase regulatory or economic burdens on the agricultural or community banking sectors, should be voluntary, based on scientifically sound data, and offer incentives to establish healthy soil and water resources.

COMMUNITY BANK CLIMATE RISK REGULATION
With decades of experience managing concentration risks, maintaining strong underwriting and insurance practices, and responding to natural disasters, community banks are seasoned experts at monitoring the risk of their lending and investment portfolios and knowing when and how to reduce their loan concentrations.
As stewards of their local communities, community banks have prepared for, responded to, and survived myriad natural disasters since the early 19th century and are best positioned to evaluate the risk of their geographically limited loan portfolios.
MIB will oppose any federal or state climate risk regulation that adversely impacts community banks and their ability to support their communities and customers, including any guidance, rule, regulation or law that requires community banks to directly or indirectly: (1) comply with hard concentration limits on any type of legal lending, including lending to fossil fuel or other carbon- intensive industries; (2) perform climate stress testing or scenario analysis; (3) make mandatory climate related disclosures; (4) adhere to capital requirements based on climate risk; or (5) discriminate against legal but climate disfavored industries or customers.
MIB supports independent decision making at community banks and will oppose any federal or state initiatives designed to force banks to categorically deny or discriminate against lending to lawful but disfavored industries and businesses.
MIB supports providing incentives to industries deemed to be affected by climate risks if such incentives reward current and future voluntary practices and if climate impact is verified by accurate scientific analysis. Such incentives could include carbon sequestration or other climate mitigation efforts.
State and federal bank regulators should conduct outreach meetings with community bankers and collect empirical data prior to finalizing any supervisory guidance on climate risks to confirm community banks are successfully managing climate risks and better understand how burdensome “one-size-fits-all” climate risk supervision will harm community banks and their customers.

TAX POLICY
MIB continues to promote tax and budget policies that foster economic growth and support the community bank sector by providing direct tax relief and encouraging private savings and small business investment. A fair and unbiased tax code will enhance the viability of community banks and the vital role they serve in the U.S. economy as a source of lending for consumers, small businesses, and farms.

Tax laws should promote robust economic activity and a vibrant community banking sector and foster saving and investment.
The 2017 Tax Cuts and Jobs Act has provided significant tax relief for community banks and their customers. Community bank tax savings support community lending and investment in workforce, technology, and physical infrastructure. ICBA will advocate for permanent extension of the individual provisions, including the deduction for pass-through income (Section 199A), a top individual rate of no more than 37 percent, preferential tax rates for capital gains, and an adequate estate tax exemption, before their scheduled expiration in 2026.
MIB opposes any new bank-specific fees, punitive new tax levies, transaction taxes, limitations on the deductibility of FDIC premiums, or other proposals specifically targeting the financial services sector. Additionally, MIB will continue to oppose any legislation – tax or non-tax – that requires revenue offsets or “pay fors” that target the banking industry, in particular account reporting to the IRS.
Public policy should support community banks’ ability to raise capital including allowing S corporation banks to issue preferred stock, increasing their shareholder limits, and allowing new IRA shareholder investments.
MIB supports the creation of tax incentives for community bank retained earnings and community bank lending to low-to-middle income people, small businesses, and small farms. In particular, MIB supports the Access to Credit for our Rural Economy (ACRE) Act.
The tax code should create parity among all providers of financial services. Credit unions, Farm Credit System lenders, and community banks offer similar products and services and should be taxed equivalently.
MIB opposes changes that would effectively increase the taxation of estates, including taxation of capital gains at death and eliminating or curbing stepped up basis in the valuation assets. Such changes would trigger sales of community banks and promote industry consolidation.

ENDING TOO-BIG-TO-FAIL
The continued growth and dominance of a small number of too-big-to-fail banks has led to an overly concentrated financial system, created unacceptable moral hazard and systemic risk, thwarted the operation of the free market, and harmed consumers and business borrowers.
The greatest ongoing threat to the safety and soundness of the U.S. banking system is the dominance of a small number of too-big-to-fail megabanks, which have grown even larger since the financial meltdown of 2008. The 12 largest US banks, just 0.002 percent of all US banks, account for 52.6 percent of industry assets, dwarfing the rest of the banking system and posing massive systemic risk.
Because these firms are too big to fail, they act with impunity and court risks that no smaller firm would tolerate. The markets offer them credit at rates that do not reflect their true risk—rates that are subsidized by an implicit taxpayer guarantee. In addition, large or interconnected institutions are too big to manage, too big to prosecute, and their executives are too big to jail.
To address TBTF, we must both reduce the riskiness of megabanks to make it less likely they will fail inthe first place and, when an institution is failing, ensure that tools are available to implement an orderly liquidation of the institution without causing a destabilizing systemic impact.
MIB supports legislative and regulatory measures that would curb or end advantages currently enjoyed by too-big-to-fail banks and help mitigate the risk they pose to the financial system and economy. Such measures include: (1) higher capital and supplemental leverage ratio requirements on the largest banks and their holding companies; (2) enhanced liquidity standards; (3) activity restrictions; (4) concentration limits; (5) limitations on the federal safety net; and (6) more effective resolution authority.
MIB supports a significant capital surcharge on SIFIs and the imposition of total loss absorbing capacity (TLAC) and long-term debt (LTD) requirements on all banks with assets greater than $100 billion in assets. In addition to providing protection to the FDIC’s Deposit Insurance Fund and U.S. taxpayers from the failures of large banks, TLAC or long-term debt requirements would also allow the FDIC to resolve large banks over an extended period of time and provide community banks a greater opportunity to purchase a large bank’s assets and deposits in receivership.
MIB supports the Federal Deposit Insurance Corporation’s (FDIC’s) and the Federal Reserve’s rules on contingent resolution plans which would facilitate rapid and orderly resolutions and enable the FDIC, as receiver, to resolve the institution under the FDI Act. ICBA believes that the submission of resolution plans should be limited to those banking organizations with total consolidated assets of $100 billion or more. ICBA opposes the FDIC proposal to require informational filings for banks with assets of $50 billion or more.

DEPOSIT INSURANCE
Deposit insurance has been the stabilizing force of our nation’s banking system for more than 85 years. It promotes public confidence by providing safe and secure depositories for small businesses and individuals alike.
The Federal Deposit Insurance Act requires the FDIC to maintain a minimum reserve ratio for the DIF of 1.35 percent and to establish a Deposit Insurance Fund Restoration Plan if the reserve ratio falls below the statutory minimum.
Nonetheless, the FDIC published a final rule in 2022 which uniformly increased the base deposit insurance assessment rate for all banks by 2 basis points until the DIF reaches a “designated reserve ratio” of 2 percent. The 2 percent goal is the FDIC’s long-term goal for the DIF reserve ratio – it is not a ratio the FDIC is required, under any law, to maintain.
Our nation’s federal deposit insurance system is critical to depositor confidence in the banking system, to the protection of small depositors, and to the funding base of community banks. ICBA supports a deposit insurance assessment framework that is appropriately tiered and risk weighted.
MIB opposes sharp, procyclical increases to deposit insurance assessments.
MIB strongly opposes special assessments for community banks when the FDIC utilizes the systemic risk exception to resolve large, risky, and TBTF banks.
MIB encourages the FDIC to create a systemic risk premium, which would require the nation’s largest TBTF institutions to pay a premium on their deposit insurance assessments based on the unique risk they pose to the DIF in the event one of these institutions required resolution.
MIB urges Congress to ensure the FDIC has needed authority to quickly authorize a Transaction Account Guarantee (TAG) program to protect depositors without needing to make any determinations of systemic risk. ICBA has historically supported TAG programs that provide increased deposit insurance for noninterest bearing accounts to prevent or stabilize disruptive shifts in deposit funding.
MIB opposes increases to deposit insurance assessments that are based on the DIF achieving a 2 percent designated reserve ratio rather than the statutory minimum of 1.35 percent.

MUTUAL AND SAVINGS INSTITUTIONS
MIB supports and defends the choice of mutual ownership before all regulatory and legislative bodies. Mutuality is a viable charter alternative that should be accorded parity in all respects with other charter forms.

BANKING CANNABIS-RELATED BUSINESSES
Montana has legalized cannabis for medical and/or recreational use, it is critically important that cannabis-related businesses (CRBs) have access to traditional banking services. At the federal level, cannabis remains illegal under the Controlled Substances Act.
As CRBs continue to mature, the conflict between state and federal law creates increasingly significant legal and compliance concerns for state and federally chartered banks that wish to serve these businesses or continue to serve existing customers that may also do business with CRBs. CRBs have limited access to the traditional banking system, forcing them to operate mostly in cash. Cash-only businesses, especially those with a high volume of revenue, pose a significant risk to public safety.
MIB advocates for federal legislation establishing an effective “safe harbor” from federal sanctions for banks that choose to do business with cannabis-related businesses (CRBs), including businesses that provide products or services to CRBs, in states where cannabis is legal under state law.
This safe harbor must extend to banks that serve businesses that may serve CRBs (“ancillary businesses”) such as landlords, accountants, utility providers, and others as ancillary businesses may be paid in funds ultimately derived from cannabis sales.
Federal banking regulators should not be able to threaten or limit a bank’s deposit insurance, downgrade a loan made to a CRB, force a depository institution to cease providing banking services to a CRB, or take any other prejudicial action in a state where cannabis is legal, solely because the customer is a CRB.
MIB opposes any effort by a state or municipality to establish a publicly owned bank or credit union to service the cannabis industry. Traditional banks are fully capable of serving this industry with the creation of an effective “safe harbor” to protect them from government or regulatory reprisal.

DEFENDING THE BANK CHARTER
Corporate conglomerates or other companies engaged in commercial activities should not be allowed to own full-service or special purpose banks in violation of the longstanding U.S. policy of maintaining the separation of banking and commerce.
Congress should close the ILC loophole and prevent the creation of special purpose national bank charters because they not only threaten the financial system but create an uneven playing field for community banks.
The OCC should have explicit statutory authority from Congress before issuing any special purpose national bank charter for financial technology (fintech) companies. Any new federal charter should be subject to the same standards of safety, soundness, and fairness as other federally chartered institutions.
The Federal Reserve Banks should conduct rigorous due diligence of state chartered special purpose depository institutions (SPDIs) before granting them access to the payments system.
Policymakers must ensure that stablecoin issuers and other crypto-related entities do not have access to Federal Reserve master accounts or the payment system. Special purpose bank charters or similar alternatives should not be granted to cryptoasset entities that do not fully meet the requirements of federally insured and supervised chartered banks.

THE FEDERAL HOME LOAN BANK SYSTEM
The Federal Home Loan Banks (FHLBs) must remain a strong, stable, reliable source of funding for community banks.
MIB opposes any legislation or administrative action that would permit any new types of non-depository entities, which are not prudentially regulated, to access any FHLBank program or service, either directly or indirectly.
MIB strongly opposes any ongoing mortgage asset test for member institutions to access the FHLB system.
The regional structure and cooperative nature of the FHLB system must be maintained, and any structural changes to the FHLB system must originate and be supported by the member owners of the system.
Advances should remain the FHLBanks’ primary focus and members should not be required to track or segregate advances for “mission related purposes”.
FHFA should align the capital requirements for member bank FHLB advances with the prudential regulators to avoid disruption and possible liquidity problems for otherwise well capitalized community banks.