FHLB-Chicago Chairman Steve Rosenbaum Responds to Call for System Consolidation

Steve Rosenbaum, President and CEO of CBAI member Prospect Federal Savings in Worth, and Chairman of the Federal Home Loan Bank of Chicago and its’ Council of FHLBanks, thoughtfully responded to a call for consolidation in the FHLB System by the ABA-affiliated North Carolina Bankers Association. Read BankThink article.

Rosenbaum countered Woodward’s proposed halving the number of FHLBanks by highlighting that each of the 12 Banks have diverse memberships and a cooperative structure that reflects their regional nature and a focus on serving the needs of their members and local communities.

He noted that the current FHLB System has worked well for more than eight decades. Throughout the most recent financial crisis the FHLBanks remained a critical source of liquidity for members and the entire financial system. Unlike the too-big-to-fail banks and financial firms FHLBanks did not require taxpayer-funded bailouts.

For many years the individual FHLBanks have had the ability to voluntarily consolidate if their Boards of Directors felt that it was in the best interests of their members and communities. Rosenbaum said, “[T]he power of doing so voluntarily rests in the hands of the institutions that own and make up the national network of regional cooperatives.”

CBAI supports Rosenbaum’s position on System consolidation and his important service on the FHLB-Chicago and Council Board which benefit Illinois community banks.


CBAI Urges the CFPB to Exempt Community Banks from Redundant Annual Privacy Notice Requirements

July 7, 2014

In a recent Comment Letter, CBAI urged the Consumer Financial Protection Bureau (CFPB) to exempt community banks from redundant annual privacy notice requirements because they represent an unnecessary regulatory burden on community banks and information overload for their customers.

CBAI recommended that community banks be exempt from these requirements so long as they delivered their privacy policies when the accounts were opened, the privacy policies have not changed, and the customers do not have the opportunity to opt-out because  community banks only share nonpublic personal information with nonaffiliated third parties performing services or functions on their behalf.

If these exemption requirements are met then community banks should only be required to provide their privacy policies on their websites, and in response to in-person, e-mail, telephone, and regular or express mail requests.


Illinois Senators Kirk and Durbin Support Redundant Privacy Notice Relief

June 10, 2014

Illinois Senators Mark Kirk (R) and Richard Durbin (D) are cosponsors of redundant privacy notice relief legislation. The addition of Senator Durbin brings the number of bipartisankirk durbin Senate cosponsors to 70.

The Privacy Notice Modernization Act of 2013 (S. 635) amends the Gramm-Leach-Bliley Act to exempt from the annual notice requirement financial institutions which: provide nonpublic personal information only in accordance with specified requirements, have not changed its privacy policy with respect to sharing nonpublic personal information, and provide customers access to the most recent privacy policy in methods permitted in the regulations.

The United States House of Representatives passed this legislation by voice vote on March 13, 2013. CBAI thanks all members of the House for voting in favor of this legislation and we especially thank Cheri Bustos (D-17), Tammy Duckworth (D-8), Bill Enyart (D-12), Bill Foster (D-11), Randy Hultgren (R-14), Dan Lipinski (D-3), and Aaron Schock (R-18) for cosponsoring this legislation.

CBAI urges the United States Senate to quickly pass S. 635.


Bipartisan and Bicameral Support for the CLEAR Act Grows!

August 15, 201461114

Bipartisan and bicameral support is growing for the Community Lending Enhancement and Regulatory Relief Act (CLEAR Relief Act of 2013, H.R. 1750/S. 1349) with Congresswoman Tammy Duckworth (D-8th) recently cosponsoring this important legislation. Currently the CLEAR Act has 38 cosponsors in the Senate and 172 cosponsors in the House.

Community banks face a regulatory burden that is completely out of proportion to their size, business model, and risks they pose to 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.

This CLEAR Act included the following important provisions.

  • Providing “qualified mortgage” status under the CFPB’s ability-to-repay rules for any mortgage originated and held in portfolio for at least three years by a lender with less than $10 billion in assets.

  • Exempting from any escrow requirements any first lien mortgage held by a lender with less than $10 billion in assets.

  • Exempting servicers that service 20,000 or fewer mortgages from certain new servicing rules.

  • Providing an exemption from the independent appraisal requirement for mortgages of less than $250,000.

  • Providing that a financial institution is not required to provide an annual privacy notice to its customers if it has not changed its privacy policies (House version only).

  • Exempting community banks with assets of less than $10 billion ($1 billion in Senate version) from the Sarbanes-Oxley 404(b) internal-controls assessment mandates. The exemption threshold would be adjusted annually to account for any growth in banking assets.

  • Requiring the SEC to conduct a cost-benefit analysis of new or amended accounting principles (House version only).

  • Requiring the Federal Reserve to revise the Small Bank Holding Company Policy Statement by increasing the qualifying asset threshold from $500 million to $5 billion.

CBAI thanks Senator Kirk and Congressman Rodney Davis, Bill Enyart, Aaron Schock, Bobby Rush, John Shimkus, Randy Hultgren, and Adam Kinzinger and Tammy Duckworth for your support for Illinois’ community banks.


U.S. House Passes CBAI/ICBA Advocated Regulatory Relief Legislation

May 6, 2014

The U.S. House of Representatives passed two CBAI/ICBA advocated regulatory relief bills which were inspired by ICBA’s Plan for Prosperity regulatory relief platform. The votes came one week after CBAI’s Call on Washington and the ICBA’s Washington Policy Summit where community bankers from across Illinois and the nation met with their legislators and regulators to advocate on behalf of community banks.

H.R. 3329 would increase the qualifying asset threshold of the Small Bank Holding Company Policy Statement from $500 million to $1 billion and allow small savings and loan holding companies to be covered by these provisions. This legislation would make it easier for community bank and thrift holding companies to raise capital.

H.R. 2672 would create a process where individuals could petition the Consumer Financial Protection Bureau to have a county designated as rural. A broader range of evaluation criteria would be allowed to more accurately identify rural counties and help ensure continued access to mortgage credit in those communities.

These bills passed the House by voice vote, indicating strong bipartisan support. CBAI thanks the Illinois members of the House for supporting this important community bank regulatory relief legislation.

CBAI joins the ICBA in urging the U.S. Senate to take up and quickly pass both bills.