FHFA Extends Comment Period for Proposed FHLB Rule


The Federal Housing Finance Agency (FHFA) today announced that it is extending the comment period for the agency’s proposed rule on Federal Home Loan Bank membership by 60 days. The comment period was previously set to close on November 12, 2014, 60 days after publication in the Federal Register. The comment period will now close on January 12, 2015. CBAI encouraged the FHFA to extend the comment period in a September 8th comment letter. Read Comment Letter


CBSC and Diversified Extend Relationship to Help Community Banks Earn Fee Income

Springfield, IL. (September 15, 2014) - Community  BancService Corporation, Inc (CBSC), the business services affiliate of Community Bankers Association of Illinois (CBAI), the state’s largest banking trade organization exclusively representing community banks, today announced that it has extended its partnership with Diversified Crop Insurance Services, a provider of crop insurance and grain marketing services. This agreement gives CBAI member banks access to tools that help their farm clients develop an overall risk management program.

During difficult times, selling crop insurance can help banks offset challenges to profitability while providing a service nearly every farm customer’s needs. “There are Illinois banks routinely earning $20,000 up to $500,000 annually selling crop insurance” said Mike Kelley, CBSC President. “Farm Credit Services and local agents are selling crop insurance. The local community bank should also have the same opportunity to sell it and provide valued crop risk management services to their farm customer.”

“We are excited about continuing our partnership with CBSC to provide CBAI members with access to the tools they need to help their farm customers better manage risk” said Scott Crumbaugh, regional marketing manager at Diversified. “Our partnership with the Association helps us deliver tools bankers need to help educate and inform their farm clients. For example, we recognize the new farm bill may be difficult to understand. It is our job to understand every nuance and provide education resources.”

Diversified has worked with community bankers to develop a Farm Bill Seminar for farmers. Banks schedule a day, time and location for the seminar and invite their AG customers. Diversified provides the 2-hour seminar free of charge. “ It’s proven to be a popular program among the farmers and bankers” said Crumbaugh.

There are 17 Approved Insurance Providers (AIPs) authorized to sell crop insurance. While the federal government sets the rates and terms, which are the same for all AIPs, the quality of the service each provides is not. Additionally, AIPs are authorized to pay an annual bonus to agencies based on profitability.

“Not all AIPs are profitable” said Mike Kelley. “ Diversified has an impressive track record of paying profit bonuses.”

For more information about crop and hail insurance, please contact Scott Crumbaugh , regional marketing director at Diversified, via email at or phone at 989-513-0833.

About Diversified - Founded in 1997, Diversified provides services to hedge and manage price, yield, and other risks involved with agricultural commodities for farmers, processors, and investors. It offers grain marketing, commodity brokerage, crop insurance, and accounting programs. One of seventeen Approved Insurance Providers (AIP) in the nation authorized to sell and service federal crop insurance services, Diversified also provides administrative, marketing, and adjusting services for federal crop insurance programs. Headquartered in Jacksonville, Illinois, Diversified employees 500 people, operates 13 offices in Illinois and another 55 offices in 16 states.


Community Bank Tips on Responding to Home Depot Breach

On September 8, 2014, Home Depot confirmed in a press release that its payment data systems have been breached, potentially affecting its nearly 2,200 U.S. and Canadian stores. Home Depot’s investigation is focusing on a timeframe from April 2014 forward.

According to Home Depot, the at-risk information includes full track data. PIN block data is NOT believed to be at risk at this time, nor is any information from its e-commerce site.

Visa began distributing at-risk accounts to issuers based on preliminary information provided by Home Depot as early as September 9, 2014.

The criminals apparently had enough information to get some banks to reset customers’ PINs. Banks are reporting that thieves were able to change the PINs on the cards using the banks’ automated IVR systems. Issuers have reported PIN debit fraud at ATMs in Canada. Additionally, some consumers have reported receiving spam emails phishing for personal financial data in conjunction with the breach.

The Community Bankers Association of Illinois (“CBAI”) and the Independent Community Bankers of America (“ICBA”) have informed lawmakers that the costs of reissuing cards should ultimately be borne by the party that experiences the breach.

CBAI and ICBA Recommends the Following to Community Banks and Customers:

  • When a community bank is contacted for a PIN reset or change request, implement a stronger authentication process by requiring the cardholder to accurately supply all necessary information before processing the request. Consider asking for the last financial transaction the customer conducted and/or the name, if any, of a joint customer on the account.
  • Consider instituting a “call back customers” process for PIN change and PIN reset requests to ensure such requests are valid.
  • Advise customers to review account activity frequently—either online or over the phone—and immediately report any suspicious card activity back to the bank.
  • Consider putting a section on your bank’s website with suggestions on ways that customers can protect themselves against a breach. Updating customers on the status of any current breaches could also be placed here. Providing information in an easily accessible location helps your customers find the appropriate information quickly, reducing confusion and phone calls to the bank.

Additional information and resources on how community banks can deal with this and other data breaches are available on ICBA’s comprehensive resource called The ICBA Toolkit on Maintaining Consumer Confidence During a Data Security Breach. See Toolkit.

New Initiative Seeks to Promote Executive Leadership of Cybersecurity Management

The increase in frequency and sophistication of cyber-attacks directed at financial institutions in recent years is requiring a shift in thinking on the part of community bank CEOs that cybersecurity is not simply an IT issue, but an executive level issue for the board room, senior executives and the CEO.

This is the core message of an initiative launched recently by the Conference of State Bank Supervisors (“CSBS”) called “Executive Leadership of Cybersecurity.” The goal is to promote and encourage community bank CEOs and senior executives to actively engage in the management of cybersecurity risks at their institutions.

“Executive leadership is critical to ensure sufficient resources and attention is paid to emerging cybersecurity threats,” said CSBS President and CEO John W. Ryan. “Ensuring that a financial institution’s defenses are able to protect against cyber-attacks is critical; not only to the bank, but for the bank’s customers and the sector as a whole.”

The Executive Leadership of Cybersecurity (“ELOC”) initiative doesn’t simply tell bank CEOs they should get involved in the cybersecurity management of their banks. The ELOC also shows bank CEOs how to get involved and what questions to ask their IT staff.

“ELOC encourages CEO engagement by bringing together current best practices and fundamental information on cybersecurity that is tailored for the bank CEO and by presenting it in a non-technical and easily understandable way,” Ryan said. “This information is culled from credible resources, such as the Federal Financial Institutions Examinations Council, the U.S. Department of Homeland Security, and the U.S. Secret Service, to name a few.”

Each week, for the next two months, new content will be published on the ELOC website that focuses on different cybersecurity topics, including the risk management process, incident response plans, the types of cyber-attacks, and much more.

To learn more about the Executive Leadership of Cybersecurity initiative and sign up to receive a cybersecurity 101 resource guide including content designed exclusively for bank senior management, Click Here.


CBAI Urges the FHFA to Grant Additional Time to Comment on Proposed Rule

September 10, 2014

The Federal Housing Finance Agency (FHFA) has proposed significant revisions to Federal Home Loan Bank membership eligibility requirements. If adopted the Propose Rule would have a profound impact on the FHLB System, FHLBanks and FHLB members. A thorough analysis and in-depth discussion of the intended and unintended consequences of the Rule requires an extension of the proposed 60 day comment period. CBAI has submitted a formal request to the FHFA to extend the comment period by at least an additional 60 days.  Read CBAI Letter.


CBAI Urges Federal Regulators to Ease Regulatory Burden

September 8, 2014

The Community Bankers Association of Illinois (“CBAI”) urged federal banking regulators to address outdated, unnecessary, or unduly burdensome regulation of community banks. In a recent comment letter on the review required by the Economic Growth and Regulatory Paperwork Reduction Act (“EGRPRA”), CBAI highlighted the need for tiered regulation and called on the regulators to encourage de novo bank formation, ease the quarterly Call Report burden, and increase the Small Bank Holding Company Policy Statement threshold to $5 billion (and allow small savings and loan holding companies to be covered by the Policy Statement). Read Comment Letter.