12 Hoosier Banker November 2016 HOOSIER BANKER HERITAGE: 2010-2016 1916 - 2016 YEARS The 2010 IBA Commercial Lending School attracted bankers from Indiana, Ohio and Wisconsin. Shown are students gathering for an end-of-course dinner in Indianapolis. 2010 The years 2010-16 saw much change for banks nationwide. The decade opened under the shadow of the financial crisis of 2008, with lingering side effects of a struggling economy and misplaced disparagement of banks. In fact misunderstandings about banking were so pronounced, and fear of a repeated crisis so intense, that in 2010 President Barack Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. The result was the most comprehensive influx of banking regulation since the Great Depression, with increased regulatory burden affecting banks to this day. A byproduct of the Dodd-Frank Act was the establishment of the Consumer Financial Protection Bureau. Other major banking developments since 2010 were the development of Basel III standards in 2011; emergence of chip-based credit card technology in 2012; new mortgage rules in 2013 involving “Qualified Mortgages,” which resulted in a tightening of mortgage lending; mobile phone bill pay, as introduced in 2013; and the launch in mid-2015 of .BANK, a bank-specific website domain. For Indiana banks, several statewide legislative victories took place. In 2010 the Indiana Bankers Association Government Relations Team advocated so successfully against legislation harmful to banking that it won a statewide award from the Indiana Society of Association Executives (ISAE). In 2012 the IBA GR Team earned another ISAE award for its work in advocating against a provision in HB 1072 that would have included Federal Low Income Housing Tax Credits into assessed values of low-income properties ‒ which would have significantly increased the property taxes of future low-income developments. Perhaps most notably, in 2013 the IBA won a major victory in its yearslong campaign to protect the Public Deposit Insurance Fund (PDIF) — a pool of funds, unique to Indiana, that protects local taxpayers — with the signing of HEA 1018 into law. In addition to creating a statutory fence around the PDIF, HB 1018 reduces the Financial Institutions Tax from 8.5 percent to 6.5 percent, incrementally phased in over a four-year period; provides for repayment over 10 years of the $50 million that the Indiana General Assembly had borrowed from the PDIF in 2003; and reverses interest back to the PDIF, which had been directed to supplement the pre1977 Police and Firefighter Pension Fund. Additional legislative victories this decade include the passage in 2014 of SEA 1, a state and local taxation bill that phases down Indiana’s Corporate Income Tax rate from 6.5 percent in 2015 to 4.9 percent in 2021, and also phases down the Financial Institutions Tax rate to 4.9 percent in 2023. By contrast, the FIT rate had been 8.5 percent prior to the passage of HEA 1018 one year earlier. Another recent legislative win was the collaborative crafting in 2015 of SEA 415, which focuses on new tools and changes to existing law aimed at reducing vacant homes and neighborhood blight. Through all of these ups and downs, Hoosier Banker magazine has continued as the flagship publication of the IBA, helping keep members informed in support of the Association’s mission: To advocate for and sustain an environment in which banks can succeed. Next month, the December 2016 issue of Hoosier Banker will be a commemorative edition, rounding out the year-long celebration of the magazine’s 100-year heritage.
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