Introducing 2025‑2026 NMBA President Max Myers, Century Bank, Santa Fe Page 4 113th Annual NMBA Convention Page 10 How the One Big Beautiful Bill Will Impact Senior Citizens By John W. Anderson Page 6 PUB 22 | ISSUE 3 PUBLISHED BY NEW MEXICO BANKERS ASSOCIATION, FOUNDED IN 1906
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OVER A CENTURY: BUILDING BETTER BANKS — HELPING NEW MEXICO REALIZE DREAMS The mission of the New Mexico Bankers Association (NMBA) is to serve member bank needs by acting as New Mexico banking’s representative to government, the public and the industry; providing resources, education and information to enhance the opportunities for success in banking; promoting unity within the industry on common issues; and seeking to improve the regulatory climate to the end that banks can profitably compete in the providing of financial and related products and services. ©2025 New Mexico Bankers Association (NMBA) | The newsLINK Group LLC. All rights reserved. New Mexico Bankers Digest is published four times per year by The newsLINK Group LLC for NMBA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of NMBA, its board of directors or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. New Mexico Bankers Digest is a collective work, and as such, some articles are submitted by authors who are independent of NMBA. While a first-print policy is encouraged, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (855) 747-4003. 4 Introducing 2025-2026 NMBA President Max Myers, Century Bank, Santa Fe EXECUTIVE VICE PRESIDENT’S MESSAGE 6 How the One Big Beautiful Bill Will Impact Senior Citizens By John W. Anderson, Executive Vice President, NMBA WASHINGTON UPDATE 8 Shaping the Future of Stablecoins By Rob Nichols, President and CEO, American Bankers Association 10 113th Annual NMBA Convention 12 Strengthening Franchise Value Why Community Banks Are Growing Their Use of Reciprocal Deposits By Joseph Hooker, Chief Sales Officer, IntraFi 14 The Dots of Reckless Policy Choices Eventually Connect By Mark Anderson, Legal and Legislative Assistant, NMBA 15 John Anderson, NMBA EVP, Named to Best Lawyers in America 16 Mastering the Cash Management Gap Beyond Tech Adoption By Michael Johnson, SVP & Southwest Regional Manager, PCBB Our Mission CONTENTS 2025-2026 NMBA Board of Directors President Max Myers Century Bank 100 S. Federal Pl. Santa Fe, NM 87501 President-Elect Aaron Emmert Pioneer Bank 3000 N. Main St. Roswell, NM 88201 Secretary-Treasurer Elizabeth Earls Capra Bank 400 Tijeras Ave. NW Albuquerque, NM 87102 Immediate Past President Kyle Beasley Bank of Albuquerque 100 Sun Ave. NW, Ste. 500 Albuquerque, NM 87109 Executive Vice President John Anderson NM Bankers Association 316 Osuna Rd. NM, Ste. 502 Albuquerque, NM 87107 TERMS EXPIRING 2026 Renanah Taylor Bank of Montreal 303 Roma St. NW, Ste. 100 Albuquerque, NM 87102 J. Chesley Steel Southwest Capital Bank 1410 Central Ave. SW Albuquerque, NM 87104 Sheila Matthews Four Corners Community Bank 500 W. Main St., Ste. 101 Farmington, NM 87401 TERMS EXPIRING 2027 Nicole Noto Wells Fargo Bank N.A. 200 Lomas Blvd. NW, 12th Fl. Albuquerque, NM 87102 Jay Jenkins CNB Bank PO Box 1359 Carlsbad, NM 88220 Jason Wyatt Western Commerce Bank 212 N. Canal St. Carlsbad, NM 88220 TERMS EXPIRING 2028 Paul Mondragon Bank of America 2125 Louisiana Blvd., Ste. 120 Albuquerque, NM 87110 Andrew Hogan Bank of Southwest 226 N. Main St. Roswell, NM 88202 Ken Clayton Western Bank 320 W. Texas St. Artesia, NM 88210 3
What changes do you see in banking? AI changes everything. I think AI will start to manage much of the risk-based decision-making on both sides of the balance sheet, such as loan approvals and pricing, along with deposit holds. The potential ability of AI to foresee areas of fraud that are currently running rampant would be a great addition to the tools we are already using. On the other hand, AI can also be used in negative ways. We will need to fight the deepfakes that are already being used to trick our customers into disclosing personal information to the fraudsters. In my mind, you are either using AI or will be run over by it. What challenges do you foresee for bankers in New Mexico? The federal reduction in Medicaid payments to our state will have a significant impact on the state budget.. How we handle this shortfall will be important across the state because many businesses are reliant on it. Who was the greatest influence on your career? I have had several impactful mentors in my life. I was raised by a single parent. My father taught me about discipline, honesty and hard work. He was firm but compassionate while we were growing up. He grew up poor, so he instilled moderation and simplicity in how we lived. If he found clothes in our closet that MAX MYERS, INTRODUCING 2025-2026 NMBA PRESIDENT CENTURY BANK, SANTA FE 4
we had not worn in a few months, they were sent off to Goodwill so that someone else could use them. He also taught me how to cook. Sam Levenson was the president at my first real bank. I was uncomfortable talking to people I did not know, so Mr. Levenson made me leave my desk every time a customer came in to introduce myself. Nobody is born with the confidence that this helped me build. He was also the smartest self-made banker I ever knew. Lastly, Ike Kalangis was the president of the holding company for the Sunwest Bank system while I was president of the Sunwest Bank in Santa Fe. We both grew up in Santa Fe and my Greek uncle knew Ike since he was born. Ike started the bank in 1973, so he was very interested in the bank being community focused and friendly. There was no private banking. Ike wanted every customer to have a private banking experience. If you worked for Ike, your greatest fear was letting him down. He never yelled at anybody, and if you screwed up, his disappointment only lasted a few hours before he called you back to let you know everything was back on track. Any advice for young bankers? Hit the ground running. Consume information from all sources to build your knowledge base. Read the Wall Street Journal, Forbes, The Economist and other sources. Have discussions with your mentors about what you are reading. You will be visible and respected for your efforts. Here is a great quote from Mark Cuban: “Read like a maniac. Knowledge compounds faster than money.” Also, don’t be a one-trick pony. Work and learn in all areas of the bank. Every member of bank management should be a teller for a month, as it will give them a true appreciation for what goes on at the front line. Learn about the back-room operations because it is a pace of work very different from the rest of the bank. Deadlines come fast every day until you settle. Similar to washing dishes in a restaurant, when you are done, everything is clean, and you go home with no worries. Finally, don’t be afraid to move around. Take the job no one wants and make it yours. You will differentiate yourself from the herd of people who are afraid to take a risk. Tell us about your family. Linda and I just celebrated our 40th wedding anniversary. She is a true partner, and I could not have had the success I have enjoyed without her support and counsel. She has also signed several personal guarantees for some business adventures along the way. That’s a confidence builder. We have three boys, ages 34, 35 and 36. I am not sure how that happened so quickly. It was great because they all had the same interests growing up. All three are married, and Linda and I have eight grandchildren ranging in age from seven years to four months. I am involved with the New Mexico Amigos, just finishing my year as president in 2024. I have also been on several nonprofit boards over the years, including St. Michaels High School, El Rancho de las Golondrinas, New Mexico Children’s Foundation, El Castillo and the New Mexico State Hotel Restaurant and Tourism Management Board of Advisors. I also like to play squash, golf (work in progress) and cook for my friends. I am currently trying to play my trumpet again — the lip is weak after 40 years. Take the job no one wants and make it yours. You will differentiate yourself from the herd of people who are afraid to take a risk. 5
HOW THE ONE BIG BEAUTIFUL BILL WILL IMPACT SENIOR CITIZENS EXECUTIVE VICE PRESIDENT’S MESSAGE JOHN W. ANDERSON Executive Vice President NMBA In 2020, on behalf of the NMBA, we asked former Representative Daymon Ely to introduce legislation to exempt federally taxable social security retirement income from state personal income tax. Although the bill did not pass, it sparked much discussion in and out of the state capital concerning the fairness of imposing the tax on senior citizens. New Mexico began taxing Social Security benefits in 1990. Frankly, many suggested that you do not realize that both the feds and the state tax Social Security until you are eligible for benefits. After 2020, there were several attempts by legislators to repeal the tax. In 2022, the Legislature did revise the tax, so currently, Social Security income is exempt from state income tax for individuals with income of less than $75,000 for married filers filing separately, $150,000 for heads of household, surviving spouses, and married filers filing jointly, and $100,000 for single filers. We are proud that the NMBA got the debate started on this issue to protect our state’s senior citizens. This year, Congress and the executive branch have raised a number of issues impacting seniors. In July, President Donald Trump signed the sprawling One Big Beautiful Bill (OBBB), a 900-page piece of legislation that will impact Americans in a variety of ways. Seniors, in particular, will be acutely affected, both positively and negatively. It’s difficult to get the whole picture of any piece of legislation until it’s fully implemented, but we will attempt to paint as clear a picture as possible at this early stage regarding its implications for seniors. On the positive side of the ledger, under the OBBB, millions of taxpayers aged 65 and older receive a break for tax years 2025 through 2028. According to AARP, “You must be at least 65 years old by the end of the tax year and have a modified adjusted gross income (MAGI) of less than $175,000. If you’re married and filing a joint return, your spouse can also claim the deduction if they’re 65 or older and your combined MAGI is less than $250,000.” The deduction is for $6,000 per eligible taxpayer and $12,000 for married couples filing jointly if both spouses are 65 or older. The deduction is reduced by 6% for MAGI exceeding $75,000 ($150,000 for a couple) and can’t be claimed if it exceeds $175,000 ($250,000 for a couple). As for the much-ballyhooed possible end to the taxation of Social Security, the new law contains no provision ending that tax or changing how those taxes are calculated. That’s not the only bit of bad news contained in OBBB for seniors; there are multitudes of changes to Medicare, Medicaid, SNAP benefits and other programs that will be hugely detrimental. As AARP details, “The legislation imposes new documentation requirements on the roughly 5.5 million adults ages 55 to 64 who have an ACA plan. “Those changes will add more red tape for enrollees and further drive down coverage,” according to AARP Chief Advocacy and Engagement Officer Nancy Leamond in a letter to Senate leaders. OBBB also creates work requirements designed to disqualify people from enrolling in Medicaid and creates a massive amount of red tape to prove compliance. Obviously, this affects the millions of Medicaid recipients under 50 years old, but also affects 6
the 9.2 million Medicaid recipients aged 50-64 who are not yet eligible for Medicare. The bill stipulates that Medicaid-eligible recipients who apply for coverage or receive coverage through the ACA would have to work at least 80 hours per month or fulfill similar criteria. OBBB doesn’t just affect Medicaid, but also increases health care costs for more than a million Medicare enrollees. The legislation blocks implementation of an existing regulation that makes it easier for eligible low-income Medicare beneficiaries to enroll in Medicare Savings Programs (MSPs) that lower Medicare premiums and out-of-pocket costs. MSPs exist to make healthcare more affordable for Medicare enrollees with limited assets and income and, without programs like this, even low-cost medical bills become unaffordable and basic care becomes a pipe dream. Blocking the regulation would make streamlining and automating enrollment into MSPs practically impossible. The nonpartisan Congressional Budget Office (CBO) estimated that the legislation would cause up to 1.3 million Medicare enrollees eligible for these programs to lose or forgo their Medicaid coverage. The CBO estimates that some of the hardest-hit Americans under the OBBB would be Medicare enrollees living at or just above the federal poverty level. For example, a couple on Medicare who are eligible but no longer able to enroll in the Qualified Medicare Beneficiary Program, making a combined $21,000 per year, could see their out-of-pocket costs skyrocket by $8,340 per year. A single Medicare enrollee making $19,000 per year could see their out-of-pocket costs go up by $3,300 per year if they are unable to enroll in Medicare Savings Programs. Another crucial government program for seniors is the Supplemental Nutrition Assistance Program (SNAP), previously known as food stamps. In 2023, more than 11 million people age 50 and older received food aid through SNAP. However, beginning in October 2027, most states will have to pay 5-15% of the cost of the SNAP benefits their residents receive. OBBB also raises the age limit for work requirements to be eligible for SNAP benefits from 55-64, meaning many people up to 64 will be required to work at least 20 hours of per week to receive benefits for more than three months in three years. One of the overriding themes of OBBB is making life more difficult for vulnerable groups, including seniors. The original purpose of programs such as Medicaid, Medicare, Social Security and SNAP was to keep vulnerable groups out of poverty. These programs provide economic lifelines to single mothers, veterans, children in foster care and senior citizens. Removing these lifelines will not improve anything but instead cause a more desperate and precarious society. The Advisors’ Trust Company® Zia Trust, Inc. Independent Corporate trustee • Estate Settlement and Distributing Trusts. • Special Needs and General Support Trust Administration. • Serve as Financial Agent Under Power of Attorney. • Charitable Trust Administration. 6301 Indian School Rd NE Suite 800 Albuquerque, NM 87110 Albuquerque • SAntA Fe • lAS CruCeS • Phoenix • Tucson 7
Earlier this summer, President Trump signed into law the GENIUS Act, a long-awaited bill that will kickstart the development of a new regulatory framework for stablecoins in the U.S. Stablecoins like Tether, Circle and others, currently have a market cap of about $275 billion — a relatively small fraction of the total money supply in the U.S. Nonetheless, interest in stablecoins has grown rapidly in recent months. In simple terms, stablecoins are digital assets designed to maintain a stable value over time and that are pegged to a reference asset like the U.S. dollar on a one-to-one basis. They can function as both a store of value and a means of payment, and several potential use cases are starting to emerge, from cross-border payments to integration into smart contracts. ABA has been closely following the conversations around the future of stablecoins, and we were engaged on behalf of our members as lawmakers debated and refined the GENIUS Act prior to its passage. Our input, which included feedback from bankers and our state association alliance partners, helped shape a better legislative outcome for the banking industry, though, as with most pieces of legislation, there remain areas we’d like to see improved. Among our top priorities was ensuring that banks are not disintermediated by stablecoin issuers incentivizing customers to hold their money in the form of stablecoins instead of bank deposits. We also advocated for a framework that would ensure that America’s banks have the freedom to participate in the stablecoin ecosystem if they choose. With the GENIUS Act now law, bank and credit union subsidiaries, along with national trusts and nonbanks, can apply to become stablecoin issuers. However, lawmakers included a key exclusion for non-financial public companies to maintain an important firewall between banking and commerce — a principle ABA has long supported. The law also includes several key prohibitions applied to payment stablecoin issuers that ABA supports, including those preventing pledging of stablecoin reserves, paying interest or yield to holders of payment stablecoins and the misrepresentation of insured status of payment stablecoins, among other things. As I write this, we are actively engaged on the Hill, trying to strengthen some of these provisions through separate but related digital asset legislation focused on market structure. The GENIUS Act places rulemaking authority in the hands of the banking agencies, which means that banker engagement will continue to be critical in the months ahead as these rules are crafted, as more than a dozen rulemakings are expected related to this new law. ABA is continuing to engage through its Digital Assets Working Group — a banker-driven advisory panel that convenes ABA members from across the country, led by our Office of Innovation. We have also made a comprehensive suite of resources — including a full summary of the GENIUS Act and associated rulemakings — available for our members at aba.com/stablecoin. More than 2,100 bankers participated in a recent ABA webinar on the topic. As we work to shape the future of stablecoin regulation, ABA remains committed to helping banks responsibly meet customer demand for digital assets, including stablecoins and other cryptocurrencies, while mitigating the risks these emerging products and technologies may pose to consumers and the broader financial system. Our goal will always be a fair and level playing field on which banks and other financial service providers can compete. Email Rob at nichols@aba.com. SHAPING THE FUTURE OF STABLECOINS WASHINGTON UPDATE ROB NICHOLS President and CEO American Bankers Association 8
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113th Annual NMBA CONVENTION On September 11-12, the NMBA held its 113th Annual Convention in Albuquerque at Sandia Resort and Casino. It was a terrific event with a bevy of excellent speakers, and thanks to our long-time NMBA event planner and office manager, Debbie Schaefer, who retired on October 1. Congratulations to Debbie on her retirement! Thank You to Our Convention Sponsors! Ruby Slipper Sponsors, $3,000 • Housing New Mexico MFA • Western Bank, Artesia • FHLBankDallas Cowardly Lion Sponsor, $2,500 • Capital CDC Tin Man Sponsor, $2,000 • BHG Financial Scarecrow Sponsors, $1,000 • Banc Consulting Partners • WesPay A vendor from Farmers National tends to her booth. The full convention crowd intently listens to a speaker. “The Wizard of Oz” main characters to illustrate the convention’s theme 10
ABA Chairman John Asbury speaks. UNM Finance Professor Reilly White speaks. Former APS Superintendent Scott Elder speaks. Outgoing NMBA President Kyle Beasley speaks. Debbie Schaefer speaks. A vendor speaks with an interested convention attendee. John Anderson, Liz Earls and her husband participate in a “The Wizard of Oz” sketch. 11
STRENGTHENING FRANCHISE VALUE Why Community Banks Are Growing Their Use of Reciprocal Deposits By Joseph Hooker, Chief Sales Officer, IntraFi Deposit competition remains fierce. According to IntraFi’s latest survey of bank executives, 93% say they expect deposit competition to remain at current levels or increase over the next year.1 To stay competitive in the current environment, community banks need every tool in their arsenal to attract and retain large-dollar depositors like businesses, nonprofits, government entities and high-net-worth individuals. A reciprocal deposit network, which enables banks to attract and retain loyal, franchise-building customers by offering access to multi-million-dollar aggregate FDIC insurance across a bank network, is one such tool. Per recent research published by the Federal Reserve Bank of Dallas, reciprocal deposit networks get an outsized share of deposits from small and mid-sized banks. “Reciprocal deposits represented 6.47% of total deposits for banks with less than $10 billion in assets in the first quarter, up from 6% at the end of the first quarter of 2024. Among institutions with assets of $10 billion to $100 billion, such deposits accounted for 6.2% of total deposits as of March 31, 2025, down only slightly from year-end 2024 but up from 6.1% at the end of first quarter 2024.”2 Why Are Community Bankers Increasing Their Use of Reciprocal Deposits? Use of reciprocal deposits saw a significant uptick after 1) the 2018 Economic Growth, Regulatory Relief and Consumer Protection Act, which recognized most reciprocal deposits as nonbrokered deposits, and 2) bank failures in the spring of 2023. Since then, small and mid-sized banks have maintained their heightened usage patterns. Per the Economic Growth, Regulatory Relief and Consumer Protection Act, reciprocal deposits held by an FDIC-insured depository institution are reportable as nonbrokered if the bank is well capitalized and has received an “outstanding” or “good” on its most recent examination; and the total amount of reciprocal deposits held does not exceed the lesser of $5 billion or 20% of the bank’s total liabilities. With this new (in 2018) characterization of reciprocal deposits — and because reciprocal deposits tend to be lower-cost deposits that come in large increments from local customers — more banks embraced reciprocal deposits as an attractive option for growing franchise value. Then, the high-profile bank failures in spring 2023 drew attention to the risks for bank customers who have cash balances greater than the FDIC-insured maximum of $250,000, thereby increasing demand for large deposit 12
Personalized Financial Consulting for Your Business Growth Small Business Commercial Real Estate Government Fiscal Analysis & Legislative Advocacy Interested in working together? Visit www.ponderosaeconomics.com or call (505) 699-1841. Financial & Management Consulting Firm safety. A survey of bank executives at the time revealed that 68% of respondents experienced an increase in inquiries about the safety of their deposits.3 Banks that were already members of a deposit network, such as the IntraFi network, had a solution at the ready, and other banks quickly sought reciprocal deposit network membership so they could offer their customers the peace of mind of knowing that their large cash balances and deposits had access to protection. The awareness that uninsured deposits pose a risk to bank customers, particularly those who need daily access to operational cash, increased after the 2023 banking crisis and has remained sporadically in the news, with various news outlets reporting on how customers can protect their cash balances over $250,000. Reciprocal deposit networks are usually featured in these articles as they offer the convenience of managing one bank relationship to access insurance across many banks. As a result, more customers know to ask for access, and more banks proactively offer the services to strengthen relationships with high-value customers. Good for Banks and Communities As more community banks utilize reciprocal deposits, they realize how nicely reciprocal deposits dovetail with their community missions. With reciprocal deposits, the full amount of funds placed can stay local to support community lending. This has special appeal for community banks that, by design, exist to help their communities grow and thrive by lending to local customers. Community banks play a vital role in local economic stability and growth. By using reciprocal deposits, banks can expand their lending capacity for their local customers, creating a virtuous cycle of mutual success. Reciprocal Deposits for Today’s Market Environment In an environment where deposit competition is intensifying and customer concerns about deposit safety remain top of mind, reciprocal deposits have emerged as a vital tool for community banks. They offer a unique combination of customer reassurance, cost-effectiveness, community support and franchise-building potential. 1 IntraFi Q2 2025 Bank Executive Business Outlook Survey. 2 Docherty, Christine, and Alessio Saretto. “How Do Reciprocal Deposit Networks Interact with Deposit Insurance?” Federal Reserve Bank of Dallas, accessed August 27, 2025. https://www.dallasfed.org/research/ economics/2025/0805. 3 IntraFi Q1 2023 Bank Executive Business Outlook Survey. Since its founding over 20 years ago, IntraFi has been chosen by over 3,000 financial institutions. IntraFi’s deposit network is the largest of its kind, and its tested, trusted services help its network members acquire high-value relationships, fund more loans and seamlessly manage liquidity needs. IntraFi invented reciprocal deposits and is the No. 1 provider of deposit placement solutions, offering the largest per-depositor, per-bank capacity. Visit www.intrafi.com to learn more. IntraFi is not an FDIC-insured bank, and deposit insurance covers the failure of an insured bank. A list identifying IntraFi network banks appears at www.intrafi.com/network-banks. Certain conditions must be satisfied for “pass-through” FDIC deposit insurance coverage to apply. Deposit placement through an IntraFi service is subject to the terms, conditions and disclosures in applicable agreements. Deposits that are placed through an IntraFi service at FDIC-insured banks in IntraFi’s network are eligible for FDIC deposit insurance coverage at the network banks. To meet the conditions for pass-through FDIC deposit insurance, deposit accounts at FDIC-insured banks in IntraFi’s network that hold deposits placed using an IntraFi service are titled, and deposit account records are maintained, in accordance with FDIC regulations for pass-through coverage. The depositor may exclude banks from eligibility to receive its funds. Although deposits are placed in increments that do not exceed the FDIC standard maximum deposit insurance amount (SMDIA) at any one bank, a depositor’s balances at the institution that places deposits may exceed the SMDIA before settlement for deposits or after settlement for withdrawals. The depositor must make any necessary arrangements to protect such balances consistent with applicable law and must determine whether placement through an IntraFi service satisfies any restrictions on its deposits. IntraFi and the IntraFi logo are registered service marks of IntraFi LLC. 13
There’s an old adage when discussing politics, usually said to cut through all of the noise: “People vote with their pocketbook.” Given the myriad issues that encircle political discourse in America, the saying goes that there’s one issue above all, the economy, which ultimately determines which way the populace swings. While this may be an overly simplistic view of politics, its general premise is undoubtedly true. A person may be completely oblivious to foreign policy, healthcare policy or climate policy, but is acutely aware of his or her month-to-month financial plight. As a result, a politician engenders a ton of goodwill if the public perceives said lawmaker as having a financially strong agenda. Positive economic news can create a buffer of sorts in politics, allowing an elected official to swat away concerns in other areas. While the economy is a determining factor in how many people vote, in America, there’s a curious way the media often frames it. In the punditry class, there is a notion that the economy exists in a vacuum, and areas such as foreign policy or social policy occur in separate worlds. Our media often refuses to connect the dots or present our political landscape in a coherent manner, so issues are discussed in a discrete fashion, as if each is in its own separate container. This creates an incomplete, sloppy, one-dimensional analysis that treats the economy as a game of pure numbers, free from morality and unaffected by individual issues. On this note, there is one recent alarming economic indicator that is a harbinger of far more than simple economic distress. According to the most recent reports in July, the value of the U.S. dollar has declined by 11% so far this year. The dollar ended the first half of the year with its biggest loss since 1973 and marked the conclusion of a structural bull cycle for the dollar, which started in 2010 and ended in 2024 with an accumulated gain of about 40%. According to Morgan Stanley Research (MSR), the decline is expected to continue, with MSR predicting up to possibly 10% more in losses in the value of the dollar by the end of 2026. As a Morgan Stanley research paper from August of this year details, “The U.S. currency depreciation could have significant impacts for consumers, businesses, investors and ultimately for the overall economy. It would be more expensive for Americans to travel abroad. U.S. assets could be less compelling for foreign investors. Import prices could rise, putting pressure on inflation. The consensus after the 2024 election of U.S. President Donald Trump was that another period of U.S. growth outperformance was about to begin, with strong economic expansion, continued capital inflows and outperformance of U.S. equities and the dollar. That view changed in April after announcements about tariffs and the subsequent policy and economic uncertainties. Increasing worries about growth, inflation and public debt added negative pressure on the greenback. The U.S. dollar index lost almost 7% from the beginning of April to the end of June.” Since the Bretton Woods Agreement in 1944, the U.S. dollar has been the world’s foremost reserve currency, meaning that it is held by foreign governments, central banks and other monetary authorities as part of their foreign exchange reserves. According to the Atlantic Council, 54% of world exports were denominated in dollars in 2023, though the U.S. accounts for about a quarter of global GDP. Further, according to the International Monetary Fund (IMF), about 60% of all bank deposits are denominated in dollars, while nearly 70% of international bonds are quoted in the U.S. currency. Meanwhile, 57% of the world’s foreign currency reserves — assets held by central banks — are held in dollars. The U.S. dollar hasn’t been the world’s reserve currency by some law of nature, but for obvious reasons. For decades, the world had largely unwavering confidence in the U.S. economy, financial THE DOTS OF RECKLESS POLICY CHOICES EVENTUALLY CONNECT By Mark Anderson, Legal and Legislative Assistant, NMBA 14
markets and, crucially, its legal system. However, under the current Presidential administration, numerous factors that are often viewed as being separate from the economy are actively undermining America’s economic standing. For instance, pursuing absurdly draconian immigration policies, twisting the legal system to serve at the pleasure of the president, war-mongering with no strategy other than provocation, and needlessly saber-rattling with reliable allies all actively undermine economic prosperity and progress. All of these factors currently exist within the federal government and, most acutely, at the executive level. If these policies continue to be pursued, the U.S. dollar will no longer be the world’s reserve currency much quicker than anyone could possibly anticipate. In addition, the U.S. federal government is also pursuing economic policies that directly undermine its own economic standing. Tariffs, as they’re being deployed by the current administration, are being used as a coercion tactic. It’s no coincidence that, upon the implementation of a new round of tariffs, the responses from the governments on the business end often use words like “shock,” “anger,” “dismay” and “frustration.” There is widespread belief that these tariffs are being used to economically browbeat other countries, all the way from perceived economic adversaries like China to long-time economic partners like Canada. This mode of what is essentially economic warfare can be enormously beneficial to those in power in the short term, but it hugely undermines the long-term economic viability and standing of a nation. A major component of the dollar’s status as the world’s reserve currency is having cooperative, trusting relationships with allies and, at a minimum, a level of basic respect and honesty with adversaries. This has also been a core component of America’s diplomatic strength post-World War II. Currently, the American federal government is in the process of dismantling all of the economic and social goodwill we have accumulated over decades. It seems that our federal government, the media and other power centers have completely lost sight of what made America’s ascent possible in the first place. As a result, we have people in power who believe success can be achieved through force rather than diplomacy, bluster rather than honesty, and extortion rather than fair economic terms. No matter what lens one chooses to view it from — whether social, economic or diplomatic — these kinds of comprehensively reckless choices are speeding up our nation’s demise in a remarkably clear way. JOHN ANDERSON, NMBA EVP, NAMED TO BEST LAWYERS IN AMERICA John Anderson, Executive Vice President of NMBA, has been recognized by his peers in the 2026 edition of The Best Lawyers in America for his high-caliber work in banking and finance law. Inclusion in Best Lawyers is based on a rigorous peer-review survey. For over 40 years, Best Lawyers in America has been regarded by both the profession and the public as the most credible measure of legal integrity and distinction. As such, recognition by Best Lawyers in America symbolizes excellence in practice. Best Lawyers in America’s founding principle remains unchanged since 1981 and forms the basis of its transparent methodology: The best lawyers know who the best lawyers are. As always, no fee or payment to participate is allowed. Consequently, as a Best Lawyers in America honoree, John possesses the elite privilege to participate in the exclusive voting process for next year’s edition. 15
In 2025, over 70% of community banks reported plans to use both in-house and third-party cash management technology, aiming for real-time liquidity, automated workflows and a proactive response to economic disruption. Yet less than half of these institutions achieve the results they expect in the first year, highlighting an uncomfortable reality: Most technology upgrades fail to deliver lasting value without a transformation of underlying processes and strategy. Why Banks Are Chasing Automation What’s driving the rush to automate cash management? In the current rate environment, where deposit competition, credit risk and regulatory demands are driving up costs and tightening margins, community banks are in a tough spot. They have to balance these high costs with operational efficiency. The answer to efficiency is often through technology, especially in industries like banking, where staffing struggles and high turnover make streamlining tasks equally necessary and difficult. Global treasury surveys also show that fraud and cybersecurity threats are top of mind. Modern cash management platforms promise “click-and-go” efficiency, and API-driven dashboards deliver real-time data on balances, exposures and payment flows. Another driver is the potential for better cash flow visibility, optimized working capital and reduced manual labor in sweeping moves. Barriers to Better Results However, implementing automated cash management isn’t a guarantee of results on its own. Strategy is just as crucial as having the technology to back it up. Relying on surface-level adoption can cause fragmented processes and disconnected data, leaving expensive tools gathering dust. For community banks, this often appears as siloed departments, manual reconciliation and limited ability to react to market changes quickly. The pressure to add features can overwhelm, while the underlying issues of your past cash management operations — outdated workflows, unclear accountabilities or legacy system limitations — are still unaddressed. MASTERING THE CASH MANAGEMENT GAP Beyond Tech Adoption By Michael Johnson, SVP & Southwest Regional Manager, PCBB Roadmap for Effective Cash Management Best-in-class institutions blend technology with strategy, using automation not just to digitize forms but also to connect the processes across treasury, lending and risk. Leading banks rethink everything from payment approvals to receivables, using tech as an enabler rather than a quick fix. For example, automating accounts payable and receivable does not just speed up settlement, but also reduces errors, enhances fraud monitoring and produces better data for cash flow forecasting. This cycle improves with every reconciliation. Successful implementations are marked by three key steps: 1. Systematic mapping (How does money really move here?). 2. Full integration across IT and finance. 3. Continuous education for frontline staff. Community banks making the leap are also investing in secure and centralized data flows. There’s an emergence of platforms where all entities — whether branches, business lines or even correspondent partners — can see liquidity positions and risk metrics at a glance. This transparency improves regulatory reporting, funding decisions and fraud defense, especially as cyberattacks grow more sophisticated and payment fraud becomes more common. Modern tools allow for automated anomaly detection, flagging unexpected activities and providing audit trails at every touchpoint. Strategic Cash Management Essentials • Utilize a Holistic Approach: Tech alone won’t bridge the cash management gap — strategic integration with processes and people makes the difference. • Use Automation To Unlock Value: Automating payables and receivables reduces errors, speeds settlement and strengthens fraud controls. • Prioritize Real-Time Liquidity: Centralized, up-to-date views of liquidity and risk metrics are crucial for responsive decision-making. • Implement Continuous Staff Education: Ongoing training ensures teams use new platforms effectively and can continually expand their capabilities. • Encourage Collaboration: Cross-departmental mapping of cash flows aligns IT, treasury and business units — maximizing ROI from tech investments. Continued on page 18 16
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2025 has proven to be a crossroads for banking operations. As budgets tighten and threats multiply, the gap between early adopters and high-performing operators is widening. Community banks that invest in connecting process, people and technology rather than just chasing features are already demonstrating improved working capital, more efficient use of liquidity and a stronger reputation for operational resilience. The next chapter in cash management will reward those willing to move beyond the basics and align transformation across the enterprise. To continue this discussion, or for more information, please contact Michael A. Johnson at mjohnson@pcbb.com or visit www.pcbb.com. Dedicated to serving the needs of community banks, PCBB’s comprehensive and robust set of solutions includes cash management services such as settlement and liquidity for the FedNow Service, international services, lending solutions and risk management advisory services. PCBB was recognized by American Banker as one of the “Best Banks to Work For” in 2024. Continued from page 16 YOUR FAMILY COMES FIRST. HTRUST.COM ∙ 575.758.7700 ∙ NEW MEXICO Offices in Taos, Santa Fe & Albuquerque We are a state-chartered, locally-owned, independent trust company, devoted to families & their advisors. 18
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