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Illinois Congressmen Support the CLEAR Act

September 9, 2013

The Community Bankers Association of Illinois thanks Illinois Congressmen Rodney Davis (R-13th) and Mike Quigley (D-5th) for quigley davisstanding up in support of community bank regulatory relief.  These Illinois Congressmen have joined a bi-partisan coalition of lawmakers to co-sponsor the Community Lending Enhancement and Regulatory Relief Act (CLEAR Relief Act of 2013, HR 1750). 

Community bank’s face a regulatory burden that is completely out of proportion to their size, business model, or risk they pose to consumers or the financial system.  Regulations disproportionally burden community banks because they cannot spread these costs over a large number of customers.  Targeted and sensible regulatory relief will allow community banks to better serve their customers and communities.

The CLEAR Act provisions include:

  • Provide QM status and escrow relief for community bank portfolio loans.
  • Increase the small services exemption threshold.
  • Create an independent appraiser exemption for loans of $250,000 or less.
  • Eliminate the annual privacy notice requirement when a bank has not changed its policies.
  • Exempt community banks (with assets less than $10 billion) from SOX 404(b) assessment and controls requirements.
  • Increase the Small Bank Holding Company asset threshold from $500 million to $5 billion.
  • Require the SEC to conduct a cost-benefit analysis regarding new or amended accounting principles.
  • Coordinate compliance with OFAC programs regarding automated clearing house funds transfers from another financial institution.

Congressmen Davis and Quigley, thank you again for your support for Illinois community banks.

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ICBA President Cam Fine to Speak at CBAI Convention

Highlighting the Business Meeting Luncheon at CBAI’s 39th Annual Convention & Expo will be an address by Independent Community Bankers of America® (ICBA) President & CEO Camden R. Fine.

A passionate advocate for community bank issues for more than 20 years, Fine is recognized as the voice and face of community banking in Washington. He has been featured and published in The Wall Street Journal, The Washington Post, The New York Times, USA Today, and The Hill newspapers, and has made numerous appearances as guest host on CNBC’s “Squawk Box” and has appeared on CNN, MSNBC, Fox Business News, Bloomberg, PBS and NPR. He has been recognized by The Hill newspaper and CEO Update as one of Washington, D.C.'s most effective and influential trade association CEOs and lobbyists for five consecutive years.

A native Missourian and career community banker, Fine came to ICBA in May 2003. Prior to ICBA, Fine chartered and organized Midwest Independent Bank of Jefferson City, Mo., serving as its president and CEO for nearly 20 years. In addition, Fine owned Mainstreet Bank of Ashland, Mo., a $50-million-asset community bank.

Fine also has a strong background in government. In 1978, he joined the Missouri state government and in 1981 was appointed director of the State Division of Taxation. Under Fine’s leadership, ICBA has had a string of legislative and regulatory successes. These achievements include permanently raising deposit insurance levels to $250,000; broadening the deposit-insurance assessment base, saving community banks billions in insurance assessments in future years; enacting meaningful new restraints on too-big-to-fail institutions; and carving out community banks from several new fees and examinations in consumer-protection legislation. He currently serves on the President’s Committee of the World Savings Bank Institute headquartered in Brussels, Belgium.

During the Business Meeting Luncheon, CBAI members and guests will also hear from Association Chairman Rick Jameson, Morton, who will address key events during his term, and Incoming Chairman Bill Wubben, Apple River, will present his views on the community banking profession looking forward. CBAI President Bob Wingert will provide an Association update and his perspective on banking, CBAI Treasurer Gregg Roegge of Rushville will review the Association’s financial position, and Career Development Division Chairman Kim McKee of Hennepin will reveal the importance of developing the next generation of community bank leaders. The delegation also elects CBAI officers for the annual period commencing October 1, 2013.

Held at the Crowne Plaza in Springfield, the luncheon is scheduled for Friday, September 27, 2013, as is part of CBAI’s annual showcase event. For more information regarding CBAI’s 39th Annual Convention & Expo or to register, please click here.

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Governor Quinn Approves CBAI Initiatives HB 1335 and HB 2432

Governor Quinn approved two CBAI initiatives on August 16, 2013:

HB 1335 (PA 98-0387) allows financial institutions and title companies that know each other and agree to use cashier’s checks, teller’s checks and certified checks as settlement funds in transactions greater than $50,000. While the bill is permissive in nature, the title insurance industry still opposed the legislation. At the request of Senator Don Harmon (D-Oak Park), the bill was amended in the Senate to make it clear the parties will address the issue of delivery of the check to the title company in sufficient time for the check to be deposited to the title company’s account before any disbursement of funds is made by the title company. As part of the compromise, a January 1, 2015 sunset was also included in the bill. Senator Harmon inserted the sunset and committed to repeal it next year if there is no proof that that this legislative change negatively impacts the title insurance industry. CBAI plans to continue to work with the General Assembly on this issue and to repeal the sunset.

HB 2432 (PA 98-0415) removes the requirement for banks to disclose ATM fees with a physical sign on the terminal, when the fee is shown electronically on the terminal screen. Last year, Congress removed this physical signage requirement in federal law, and this bill makes state law consistent with that change. Both bills are effective immediately. 

CBAI thanks Representative Ron Sandack (R-Downers Grove), Representative Lou Lang (D-Skokie) and Senator John Mulroe (D-Chicago), for their hard work on these bills. CBAI also thanks Governor Quinn for approving these initiatives.

Third Anniversary of the Dodd-Frank Wall Street Reform Act – Unfinished Business

July 21, 2013

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. The intent of the Act was to prevent a recurrence of the events that led to the 2008 financial crisis and address the issue of too-big-to-fail. This legislation was directed primarily at the nation’s largest banks and financial firms and marked the greatest change to regulation in the financial service industry in decades. With the passage of the 848-page bill, it became the responsibility of the federal agencies to begin writing the rules to turn Congress’ law into detailed implementing regulations.

More than 10 federal agencies have been mandated to implement aspects of the Dodd-Frank Act, but the majority of the rules are being written by just six agencies: the Federal Reserve, the FDIC, the OCC, the CFPB, the Commodity Futures Trading Commission (CFTC), and the Securities and Exchange Commission (SEC). In certain cases the rule-writing requires coordination among several autonomous federal regulatory agencies which is proving to be more challenging and time-consuming than expected – leaving much that remains to be done.

July 21, 2013 marked the third anniversary of the Dodd-Frank Act. The law included a total of 398 federal rulemaking requirements.

Of the 398 required rules –
    158 rules have been finalized,
    113 rules have been proposed (but not finalized), and
    127 rules have not been proposed. *
Key provisions of the Dodd-Frank that are still unfinished include a rule that curbs a bank’s ability to do its own in-house trading (Volker Rule), and a rule requiring lenders to retain some credit risk in loans they securitize.

Treasury Secretary Jacob “Jack” Lew said recently, “If we get to the end of this year and we cannot, with an honest, straight face, say that we have ended too-big-to-fail, we are going to have to look at other options.” Lew stressed, “It is unacceptable to be in a place where too-big-to-fail has not ended.”

CBAI supports the continued reform of our financial system to significantly reduce the probability and severity of a future financial crisis. The taxpayer bailout of big banks and financial firms must never happen again!

*Source - Davis Polk & Wardwell - Dodd-Frank Three-Year Anniversary Report

Staff Visit to Washington D.C. Reinforces Support for Illinois Community Bank Positions and Initiatives

July 22-25, 2013

CBAI's David Schroeder, vice president federal governmental relations, recently called on the offices of every member of the Illinois Congressional delegation and federal regulators to urge support for positions and initiatives which are vitally important to Illinois’ community banks.

Support resolving the issue of too-big-to-fail (TBTF)

Support regulatory relief contained in ICBA’s Plan for Prosperity and tiered regulation for community banks

Oppose expanded powers for tax-exempt credit unions

Oppose expansion of the Farm Credit System (FCS)

Support for our positions and initiatives will allow community banks to encourage additional small business lending, fuel job creation, help create economic stability, and more fully serve their communities.

Support resolving the issue of too-big-to-fail (TBTF)
CBAI urges the continue reform of our financial system to significantly reduce the probability and severity of a future financial crisis. The taxpayer bailout of big banks and financial firms must never happen again!

Support for resolving too-big-to-fail is growing among banking regulators, a bipartisan group of legislators, and distinguished thought leaders. This chorus has been fueled by the taxpayer-funded bailouts of the mega banks and also by their numerous misdeeds. No financial institution, its directors, officers, or employees should be too-big-to-manage, too-big-to-regulate, too-big-to-fail, too-big-to-prosecute, too-big-to-jail, and should certainly not be too-big-to-change.

Senator Sherrod Brown (D-OH) joined with Senator David Vitter (R-LA) in introducing the Terminating Bailouts for Taxpayers Fairness Act of 2013 (S. 798). This legislation will help eliminate the threats posed by too-big-to-fail financial institutions with capital guidelines appropriately scaled to the size, scope and risks of the institutions, and offers much-needed regulatory relief to community banks. CBAI thanks Illinois Senator Richard Durbin for taking a leadership position by co-sponsoring this important legislation.

Support regulatory relief contained in ICBA’s Plan for Prosperity and tiered regulation for community banks
The steady increase in regulations threatens community banks and their communities. CBAI supports regulatory relief and tiered regulation for community banks. The financial crisis clearly demonstrated that the material risks of Wall Street mega banks are very different from those of community banks, and they should not be treated the same way.

CBAI has joined 37 state and regional community bank associations in endorsing ICBA’s Plan for Prosperity, a policy platform for the 113th Congress that promotes a regulatory environment in which community banks can thrive and lend more robustly to small businesses and residents, thereby helping their communities grow and thrive.

Many Plan for Prosperity provisions have made their way into legislation, the most encompassing to-date is the Community Lending Enhancement and Regulatory Relief Act of 2013 (H.R. 1750 and S. 1349). CBAI thanks Illinois Senator Mark Kirk for taking a leadership position by co-sponsoring this important legislation.

Oppose expanded powers for tax-exempt credit unions
The original credit union model has become outdated as credit unions have long since strayed from their founding purpose of serving individuals of modest means and with a common bond. Their federal tax-exempt status, in exchange for serving their original mission, is clearly no longer justified. Their tax subsidy should be eliminated and they should all pay their fair share.

Credit unions are seeking to expand their commercial lending powers by increasing the percentage of assets cap on member business lending (H.R. 688 and S. 968). If authorized, any growth will likely come at the expense of tax-paying community banks. In addition, credit unions are seeking to raise capital from outside investors (H.R. 719), discarding their longstanding reliance on retained earnings. This change would fundamentally alter the exclusive member-focused character of credit unions – a condition for their original tax exemption. Credit unions should not be granted these or any additional powers as long as they remain exempt from taxation.

Oppose expansion of the Farm Credit System (FCS)
CBAI opposes the expansionist agenda of the Farm Credit System (FCS) which would allow FCS lenders to become the equivalent of commercial banks while retaining their Government Sponsored Enterprise (GSE) status. The FCS’s funding advantage as a GSE constitutes an unfair competitive advantage over rural community banks.

The FCS should follow its historical mission of serving bona fide farmers, ranchers, and young, beginning and small farmers and their farmer-owned cooperatives. If it chooses not to follow this mission, it should be subject to taxation and should also face regulatory safeguards, disclosures and controls equal to community banks, including CFPB oversight.