State Department of Revenue Issues Tax Refund VISA Debit Card

February 6, 2013 -- The Community Bankers Association of Illinois is aware that the Illinois Department of Revenue (“Revenue”) has circulated a one page information sheet (“notification”), informing financial institutions that Revenue has issued VISA prepaid debit cards for State tax refund payments in lieu of drawing paper checks for tax refunds. The Revenue notification states that tax refund cardholders can receive cash draws from any bank, regardless of whether the cardholder has an account relationship with that bank. The notification also states that the cash draw shall be provided “without surcharge or other cardholder fees” and the notification is titled “NO FEE MANUAL CASH DISBURSEMENTS.”

Unlike the Illinois Department of Public Aid’s cooperative efforts several years ago to work with Illinois financial institution trade associations before finalizing Public Aid’s data match program pertaining to accountholders with delinquent child support obligations, Revenue adopted the VISA tax refund debit card program and circulated the notification to financial institutions without prior discussion with CBAI or other financial institution trade associations.

CBAI will pursue discussions with Revenue in an effort to reach an understanding that will minimize the financial and operational burdens that Revenue’s notification might present to CBAI Members and CBAI will apprise our membership of all relevant information that we gather related to this issue.

In the interim, if you have concerns, questions or comments regarding the impact of Revenue’s notification on your bank, please contact CBAI General Counsel Jerry Cavanaugh by e-mail at


CBAI Supports Dallas FRB Plan for "Too-Big-To-Fail"

January 22, 2013

The Federal Reserve Bank of Dallas recently published a proposal titled Financial Stability: Traditional Banks Pave the Way. CBAI subsequently wrote Richard W. Fisher, Dallas Federal Reserve Bank President and CEO, in strong support of his prescription to end "too-big-to-fail." READ PROPOSAL.

CBAI has long advocated downsizing the mega banks that have become unmanageable and unregulatable but receive government bailouts when they fail. Fisher’s important proposal states, “For a prosperous future, the nation must find lasting financial stability … but where? Not in the big financial institutions at the center of the recent crisis. Not in the misplaced hope of restraining these powerful organizations via regulation. Instead, stability is to be found in a surprising place – all around us. America’s numerous community banks, small and traditionally oriented, demonstrated stability during the crisis and its aftermath. Imparting their virtues to the financial system as a whole will require the end of financial institutions that are too-big-to-fail.”

Fisher recommends that these overly complex TBTFs should be restructured into multiple business line entities and only the commercial banking operations should benefit from deposit insurance and access to the Fed’s Discount Window. He cites the significant differences between the 12 financial behemoths that have amassed 69% of the banking industry assets and the 5,500 community banks that represent just 12% of the banking assets.

In a speech delivered on January 16th, 2013, Fisher said, “The approach of the Dallas Fed neither expands the reach of government nor further handicaps the 99.8% of community and regional banks. Nor does it fight [the] complexity [of TBTF banks and financial firms] with complexity [Dodd-Frank].”

Fisher concluded, “There should be more than two present solutions: bailout or the end-of-the-economic-world-as-we-know-it. Both choices are unacceptable. The next financial crisis could cost more than two years of economic output, borne by millions of U.S. taxpayers. … End TBTF by introducing market forces instead of complex rules, and in so doing, level the playing field for all banking institutions.” READ SPEECH.

CBAI, in cooperation with the ICBA, will actively advocate the adoption of the plan during this session of Congress.


CBAI Applauds GAO Study of "Too-Big-To-Fail"

January 15, 2013

CBAI applauds the decision by the Government Accountability Office to study the economic benefits received by the “too-big-to-fail” megabanks as a result of actual or implied government bailouts. In the waning days of the 112th Congress U.S. Senators David Vitter (R-LA) and Sherrod Brown (D-OH) introduced legislation requiring the GAO to conduct this study (Vitter-Brown GAO Study on Government Subsidies of Megabanks). While this bill passed the Senate by unanimous consent it was not taken up in the Republican-controlled House. In January Senators Vitter and Brown wrote the GAO to encourage this study, and last week the GAO announced they will conduct a study. READ LETTER In the letter to GAO Comptroller General Dorado the Senators said the government has not done enough to prevent future bailouts. “There is broad bipartisan support for the position that we must end “too-big-to-fail” government policies, whereby the U.S. government provided financial support to large financial institutions to protect them from failures of their own making.” “We should all want free-market principles to apply across the financial system and do everything possible to ferret out any market distortions fostered by government involvement and subsidies to the largest megabanks.” In a separate statement the Senators said, “After the financial crisis of 2008, policymakers should seek all available data to unwind too-big-to-fail market distortions.” CBAI thanked Senators Vitter and Brown and also the GAO. We look forward to the results of this important study and vigorously support legislation to downsize "too-big-to-fail" banks.


Regulators Delay Basel III Implementation

November 9, 2012

The Federal Reserve, FDIC and the OCC announced today that the proposed Basel III rules would not become effective on January 1, 2013 as they had originally planned. The three Agencies stated the high volume of comments letters as the reason for their decision.

CBAI encouraged Illinois community bankers to submit comment letters detailing the negative impact of these misguided proposed Rules on their banks and communities. The regulators have already posted over a thousand letters on their websites to-date. At the Chicago Federal Reserve Community Bankers Symposium, Federal Reserve Governor Elizabeth Duke stated that the total number of comment letters being reviewed and posted will be approximately 2,000! Read CBAI’s comment letter

CBAI is encouraged with this impressive industry response and that the regulators have chosen to the take time to carefully review the thoughtful input from community banks about how these Rules will impact lending and their ability to serve their communities. Read Joint Regulator Press Release


ACTION ALERT: Sign Online Petition Opposing Credit Union Power Grab

February 2, 2012

Credit unions are poised to charge Capitol Hill by the busload to advance their member business lending bills (H.R. 1418/S. 509). Your action is urgently needed to help prevent these bills from moving forward . Please sign an online petition today so your voice opposing their unwarranted power grab is heard in Washington D.C.

Credit unions are primed for a full scale campaign to expand their small business lending by 1) raising the cap on member business loans from 12.25% to 27.5% of assets; 2) increasing the size of loans exempt from the cap; 3) excluding any loan made in an underserved area; and 4) repeal certain lending restrictions on undercapitalized credit unions, thereby raising safety and soundness concerns. CBAI has consistently held the position that tax subsidized credit unions should meet the basic statutory mission that Congress spelled out for them by serving individuals of modest means and with a common bond.

H.R. 1418 and S. 509 currently have 114 bipartisan co-sponsors in the House and 22 bipartisan co-sponsors in the Senate. Seventeen members of the Illinois delegation have not co-sponsored this legislation. The 4 House members that have cosponsored are Congressmen Rush (D-1st), Jackson (D-2nd), Lipinski (D-3rd), and Congresswoman Schakowsky (D-9th).

Please click here to sign the online petition. Please also encourage your employees, Directors, customers, and even family members to join in supporting taxpaying Illinois community banks.

Here is the link to the petition if you would like cut/paste and send the link to others -

It takes under a minute to complete and send the petition. Please sign it today.

Thank you!