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CBAI Opposes Postal Service Banking Proposal

In a July 13, 2018 comment letter to the U.S. Department of the Treasury, the Community Bankers Association of Illinois (CBAI) stated its opposition to a proposal that is again being revisited in Congress and elsewhere for the United States Postal Service to provide banking services.

The disadvantage of the Postal Service delivering these services is that it will require developing and installing an entire infrastructure and expertise for its employees to be qualified to deliver banking services. The business of banking involves considerable risks, but the Postal Service possesses none of the required risk-management expertise for delivering banking services. Developing and installing this infrastructure and expertise will involve a massive up-front effort and financial investment which will divert the Postal Service’s focus away from its primary mission of delivering the mail and successfully addressing its own financial issues, which include annual losses and billions in unfunded liabilities.

Community banks have developed expertise in delivering traditional banking services. Rather than recreating and implementing a government-directed postal-banking system, it makes more sense to encourage and support existing community banks which have been successfully delivering market-driven banking services across the country for well over a century. CBAI recommended the various stakeholders work cooperatively to find ways to enhance the ability of community banks to expand the delivery of banking services in a safe and sound manner. Read Letter.

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Farm Bill Passes the U.S. Senate

The United States Senate passed its version of the Farm Bill with a strong bi-partisan 86-11 vote. Both Illinois Senators Durbin and Duckworth voted in favor of the Bill. Previously, the U.S. House passed the Agricultural and Nutrition Act of 2018 (H.R. 2) on a vote of 213 to 211, with all Illinois Republicans voting in favor, and all Illinois Democrats voting against, passage. The Bill now moves to a conference committee and CBAI encourages the conferees to successfully resolve their differences and implement the legislation by the September 30th expiration of the current farm bill.

The Community Bankers Association of Illinois has long been active in advocating for a strong Farm Bill. On June 22nd CBAI joined with 639 state and national organizations in signing a letter to the U.S. Senate urging support for crop insurance (see graphic below). CBAI joined 417 state and national associations in signing a similar letter to the U.S. House on May 16th. The letters highlighted crop insurance as a critically important risk-management tool for farmers, ranchers and the lenders that finance their operations. The letters urged lawmakers to oppose harmful amendments to the Bill that would reduce or limit participation in crop insurance, make insurance more expensive in times of economic downturn, and harm private-sector delivery. Read Comment Letter to the Senate.

In a July 31, 2017 letter to the Illinois members of the U. S. House Agriculture Committee, CBAI urged the adoption of a new multi-year farm bill which incorporates several broad principles to prevent a future farm-credit crisis and enable producers and lenders to engage in sound planning and business decision-making. The number one principle stated in that letter was “providing producers ample funds for commodities, crop insurance and credit programs to help them weather a potential farm income or farm credit crisis.” Read Letters to Illinois Ag Committee Members.

CBAI will continue in its advocacy efforts for a robust Farm Bill for the protection of Illinois community-bank lenders and producers alike.

June 29, 2018

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CBAI Urges Improvements to the FHLB’s Affordable-Housing Program

In a June 12, 2018 letter to the Federal Housing Finance Agency (FHFA), the Community Bankers Association of Illinois (CBAI) provided its observations and recommendations regarding proposed amendments (Proposal) to the Affordable Housing Program (AHP). CBAI emphasized that the importance of AHP should not be understated. For more than 25 years, the FHLB-Chicago’s AHP has provided nearly $300 million to help more than 57,000 low and moderate-income individuals and families to obtain, develop or preserve safe, decent and affordable housing.

Unfortunately, the FHFA’s Proposal recommends a top-down approach that promotes a number of national housing priorities that may not align with the housing priorities and needs within the various FHLB districts. In addition, the Proposal makes the AHP more complex, less flexible and less transparent.

CBAI urged the FHLB to withdraw the proposal and resubmit after consultation with stakeholders or allow each FHLB to retain its current AHP structure and requirements. If the FHFA decides to move forward with this Proposal, any final rule should provide maximum ease and flexibility to best meet the housing needs of FHLB districts and not threaten the relevancy of the AHP and lessen the value of FHLB membership. Read Comment Letter.

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CBAI Urges Support for Crop Insurance in the Senate Farm Bill

The Community Bankers Association of Illinois (CBAI) joined with 693 state and national organizations in signing a letter to the U.S. Senate urging support for crop insurance in its version of the Farm Bill. The letter highlighted crop insurance as a critically important risk-management tool for farmers, ranchers and the lenders that finance their operations. The letter urges lawmakers to oppose harmful amendments to the Bill that would reduce or limit participation in crop insurance, make insurance more expensive in times of economic downturn, and harm private-sector delivery. Read Comment Letter.

CBAI signed a similar letter to the United States House of Representatives on May 16th in which 417 state and national organizations urged support for crop insurance in the Agricultural and Nutrition Act of 2018 - H.R. 2. CBAI has been actively engaged in the development of a robust Farm Bill. In a July 31, 2017 letter to the Illinois members of the U. S. House Agriculture Committee, CBAI urged the adoption of a new multi-year farm bill which incorporates several broad principles to prevent a future farm-credit crisis and enable producers and lenders to engage in sound planning and business decision-making. The number one principle stated in that letter was “providing producers ample funds for commodities, crop insurance and credit programs to help them weather a potential farm income or farm credit crisis.” Read Letters to Illinois Ag Committee Members.

CBAI will continue to advocate for a robust Farm Bill for the protection of Illinois community-bank lenders and producers alike.

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Jelena McWilliams Takes the Helm at FDIC

CBAI congratulates Jelena McWilliams upon her being sworn in as the 21st Chairman of the Federal Deposit Insurance Corporation (FDIC). McWilliams was appointed by President Donald J. Trump to serve as FDIC Chairman for a term of five years and a six-year term on the FDIC Board of Directors. She succeeds Martin Gruenberg, who has served on the FDIC board since August 2005 and as Chairman since November 2012.

Prior to joining the FDIC Board, McWilliams’ professional experience included serving as chief legal officer at Fifth Third Bank, chief counsel and deputy director of the U.S. Senate Banking Committee, assistant chief counsel of the U.S. Senate Small Business Committee, and attorney at the Federal Reserve Board of Governors. McWilliams received a Bachelor of Science degree in political science and a law degree from the University of California, Berkeley. CBAI looks forward to working with FDIC Chairman Jelena McWilliams. Read FDIC Release.