#2022-31, December 2, 2022

Updates on the Massachusetts Congressional Delegation

On Wednesday, November 30th, Katherine Clark, Representative for Massachusetts’ 5th Congressional District, was elected by acclamation as the Democratic House Whip for the 118th Congress.  Hakeem Jeffries (D – NY), Pete Aguilar (D – CA) also ran unopposed and were tabbed as House Minority Leader and Caucus Chair, respectively.  We are aware of the historic and significant ramifications of these leadership changes and congratulate Representative Clark on her ascension within the Democratic House Minority.

To read more about Representative Clark in the news, please click here or here.

Massachusetts Joins with 43 state associations and ICBA – SAFE Act

This week, the Association joined with 43 other state banking associations and the Independent Community Bankers of America (ICBA) on a letter to Senate leaders urging them to hear the Secure and Fair Enforcement Act (SAFE Banking Act) as a stand-alone bill or an amendment to another bill during the end of year session underway on Capitol Hill.  The letter is addressed to Senate Majority Leader Chuck Schumer (D – NY) and Minority Leader Mitch McConnell (R – KY) and makes clear the safe harbor protections within the bill are of vital interest to small businesses, banks and financial institutions and consumers around the country in states that have legalized cannabis sales.  This bill has passed the House seven times but has yet to receive a full floor vote in the U.S. Senate.

To read the letter, please click here.

Federal Open Market Committee (FOMC) to Meet December 13-14th

The FOMC will meet later this month on December 13th.  This week, Federal Reserve Chairman Jerome Powell gave remarks on Inflation and the Labor Market at the Hutchins Center for Fiscal and Monetary Policy in Washington D.C.  The remarks are extensive and can be found on the Federal Reserve’s website by clicking here.  Chairman Powell indicated some progress has been made to slow inflation in the long-term, but it remains persistently high today.  Further analysis of his remarks indicates the FOMC may be willing to slow the pace of rate increases.

Complicating this matter, however, is new data on the labor market released this morning.  Nominal wage growth (+0.6% for November) continues to run and trend in a hotter direction.  Year-over-year, wage growth has risen about 5.1%.  Combined with the historically high growth rate in payroll employment numbers (+263k for November), this economic data may lead to a more hawkish mood amongst the FOMC when it meets on the 13th.  To read more about the FOMC and its monetary policy, please click here.

FDIC Quarterly Banking Profile

The FDIC released its Quarterly Banking Profile yesterday.  Acting Chairman Martin Gruenberg indicated the industry’s liquidity strength is healthy, and net income is up 3.2% year-over-year.  Across the country, insured banks and savings associations earned approximately $72B for the 3rd quarter of 2022.  Banks defined as community banks by the FDIC reported $1B in net income growth (13%) from the previous quarter.

Not surprisingly, net interest margins increased 35 basis points (bps) from the previous quarter, and 58 bps from just one year ago.  These reported increases are the largest recorded increases in the history of the Quarterly Banking Profile.  Of concern, unrealized losses did grow quarter-over-quarter by 47%, and totaled approximately $690B.

The full report can be found here.