Florida Banking December 2022/January 2023

GOVERNMENT RELATIONS

ODDS AND ENDS FOR 2022-23

BY ANTHONY DIMARCO, FBA EXECUTIVE VICE PRESIDENT AND DIRECTOR OF GOVERNMENT AFFAIRS

A new year is beginning with a slew of new possibilities. What will transpire in 2023? Your guess is as good as mine. Election Results Florida Republicans gained firm control of federal and state offices. As expected, Republicans made gains in Florida’s Congressional delegation, due to changing voting registration, redistricting, and the party in power usually losing seats in the midterms. Before the election, the Florida Congressional delegation consisted of 27 members — 16 Republicans and 11 Democrats. With redistricting, Florida gained one congressional seat. The Republicans appear to have picked up four seats and the new delegation will be made up of 20 Republicans and eight Democrats. In addition, Sen. Marco Rubio was reelected. In Tallahassee, Governor Ron DeSantis, Attorney General Ashley Moody, and CFO Jimmy Patronis were reelected in their statewide races. Wilton Simpson will now join the Cabinet as the Republican Agriculture Commissioner. Along with Sen. Rick Scott, all statewide elected officials will be Republican for the first time since Reconstruction. Governance In Washington, D.C., regardless of whether it is one or both chambers, we will have a divided government. What will this mean for the banking industry? Will the regulators appointed by the President be more mindful of the legislative branch of government as they push their respective agendas? It is doubtful, but there should be plenty of hearings on Capitol Hill. In Tallahassee, the new favorite parlor game is whether Governor DeSantis will run for president in 2024? Will he run regardless of whether Trump announces that he is also running? There have been mixed signals on these questions during the last week of the election. (I make no predictions here. Sorry!) We do know that there will be a Special Session in December to address the rising cost and lack of

availability of property insurance. We can probably expect more insurance legislation during the March to May Regular Session as well. We expect to see the credit unions make another run at public deposits. We will also see legislation on PACE lending and ESG. Please be ready to answer our Calls to Action on these or any other pieces of legislation. Economy The biggest question facing the economy is whether the Fed can tame inflation through rate hikes, or overshoot and head the economy into a recession? Depending on which expert you ask, you will get a variety of answers to these questions. But it is safe to say that the economy is a big player in the 2022 elections, and the impact will be felt throughout 2023. Banking Industry Trends What is in store for the banking industry as a whole across Florida? Will there be more mergers with other community banks or with credit unions? What is the future of cryptocurrency and crypto banks in 2023? Bitcoin and other cryptocurrencies saw a massive drop in value in 2022. Will this continue in 2023? Will there be regulation of the industry? We are also watching crypto banks sprouting across the country.The FBA is opposed to any new crypto bank that does not have the same regulation as our members, including the assessments to pay for our regulators. What other new competitors may be on the horizon? Who expected the growth of fintechs 20 years ago? The one thing that is constant is change. The economy is in a constant state of flux. It was just a little more than 20 years ago that we had the dot com bubble.Who foresaw the Covid-19 pandemic in 2019? What is the future of climate change and how will that impact our regulations and the economy? In summary, who knows what 2023 holds? We can only wait to see what tomorrow brings. We hope you had a great 2022 and here is to an even better 2023!

12 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING