New Indiana chair expects year to be active, again

James Marcuccilli, president of Fort Wayne-based STAR Financial Bank, began his year as chair of the Indiana Bankers Association on Jan. 1. The new chair assumes his seat as the association finishes an active year and begins another..In 2012, the IBA won a victory for state bankers when it settled a law suit with the State of Indiana over a new law for mortgage liens. In 2013, IBA and Marcuccilli will have the job of ensuring the state complies with the agreement. The association expects to grow banker attendance on its Washington visit, in addition to keeping bankers current on regulation. IBA also plans to introduce a bill to the state legislature which will change where the state's insurance fund for government deposits is housed and how it is managed..Marcuccilli looks forward to making his contribution. "It's all part of being a chairman and involved in the association," he said. "We must work in our communities and be involved with the legislature.".Last year's victory.Last year, Indiana lawmakers passed a bill which reduced the amount of time a mortgage lien would remain on a property from 20 years to 10 years for contracts without a term date. The legislature also made the law retroactive. "That effectively made our 10-year-old contracts without a term date null and void," Marcuccilli explained. "A borrower's lawyer could simply look at the commencement date of the loan and see the contract was written 10 years ago. Then the borrower could walk away from the debt, even if they still owed a balance.".On May 15, 2012, the Indiana Bankers Association and several banks filed a lawsuit in federal court against Indiana Governor Mitch Daniels. The association requested the court remove the law's effective date of July 1, as well as its retroactive language. After only a month, the association settled with the state and obtained both a delay in the law's implementation and an agreement to remove the law's retroactive language. "The victory here was the collaboration between the association, bankers and the state. It wasn't a judge's ruling but rather a decision by the legislature and the industry to work together and do the right thing," Marcuccilli said..Now, the association must ensure the agreement is carried out by the state. No formal order was issued by the court regarding the law's effective date or its application to mortgages recorded prior to July 1, 2012. The association expects to work with the legislature in 2013 to get the law changed as agreed..A busy year ahead.The association also plans to introduce a bill to prevent the state legislature from taking funds from Indiana's Public Deposit Insurance Fund to finance budget shortfalls. Created in 1937 to protect public funds deposited in private financial institutions, the PDIF is administered by a board consisting of the governor, treasurer, other state officials and four gubernatorial appointees. With $300 million in assets, the fund has been drawn into the state's budgetary discussions for the last two years.."Governor Daniels felt that if the state needed the money, it should be able to use it. He suggested the fund be melded into the treasury in 2011," Marcuccilli said. "Indiana bankers opposed the suggestion and it became a confrontational issue," he added..The state's management of the fund brought Indiana bankers to action. Nearly 11 years ago, the state Treasurer lent the state $50 million from the fund; the state has yet to repay the debt. In addition, another $100 million or so is tied up in non-liquid assets. IBA is concerned that the fund will not have sufficient liquidity to protect against a loss at a bank..So, the association has decided to seek legislation that would remove the fund from state control. IBA supports a bill that requests the fund be moved out of the state treasury and placed in a separate not-for-profit corporation. It also adds representatives of municipal deposits to the board in addition to state officials. "I feel strongly that insurance for public deposits shouldn't be a political football. The bill would move the fund out of the budget discussions," Marcuccilli said. "Local board members also have more interest in how the funds are invested. We want to work to grow the fund and maintain it in liquid assets so the insurance is available when needed.".While it is too early to tell how much support the bill will get, IBA sees no road blocks in front of the bill. "This year we have a new governor and a budget surplus," Marcuccilli said. "No one has thrown a red flag in opposition to it.".Working together.Looking ahead on the year, Marcuccilli will join IBA's work to educate lawmakers about banking in the state. "One of the strengths of our association is our lobbying group. There are a variety of proposed laws the legislature thinks will help consumers, but they are often unaware of the unintended consequences," Marcuccilli said..Marcuccilli is a good fit for the association's efforts to educate lawmakers. "Having been actively involved on the federal and state level of the association's government relations, I have seen the need for bankers to sit down and tell legislatures what's important for the industry, otherwise they won't make the right laws," he said. "Part of being a chairman is to show lawmakers the results of their well intentioned laws.".The 2013 chairman also looks forward to working with a unique association like IBA. "Many states have an American Bankers Association affiliate and an Independent Community Bankers of America affiliate; we have an association with combined strength and one voice," Marcuccilli said. "Lawmakers hear one message about the right thing to do; it has removed a lot of confusion in our state." The Community Bankers Association of Indiana merged into the Indiana Bankers Association in 2006.A second generation banker in his family's $1.6 billion bank, Marcuccilli is the 116th chairman of IBA. A graduate of the University of Notre Dame, Marcuccilli was named president of STAR Financial in 1997; he served as a director of the family holding company since 1985.