CBAI Donates to Hurricane Relief Fund

CBAI has contributed to the ICBA Hurricane Harvey Community Bank Relief Fund. Community banking associations and community bankers across the country are reaching out to support the thousands of community bank employees and their families impacted.

ICBA, in partnership with MainStreet Bank in Fairfax, Va., launched the Hurricane Harvey Community Bank Relief Fund donation portal via Aircharity® through which community banks and others can send financial resources directly to other community banks via qualified charitable relief organizations. MainStreet Bank will cover service charges, so 100 percent of the proceeds can go to support the cause. For more information and to donate, Click Here.


Congressman Kinzinger (R-16th) Meets with Community Bankers

Illinois Congressman Adam Kinzinger (R-16th) met with a delegation of community bankers to discuss their important issues and opportunities. The meeting was hosted by Foresight Financial Group’s German-American State Bank and Northwest Bank of Rockford.

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Prior to the meeting, CBAI’s Vice President Federal Governmental Relations, David Schroeder, provided the community bankers with an update of federal issues. During the meeting with Congressman Kinzinger, community bankers urged support for the following: the CLEARR Act of 2017 (H.R 2133), in particular relief from onerous residential mortgage regulations and “disparate impact” causes of action; issues in the upcoming Farm Bill including maintaining the E-15 fuel blend requirements; reciprocal deposits not being considered brokered deposits (H.R. 2403); grandfathering captive insurers in FHLB membership (H.R. 2890); and regulatory relief from expanded HMDA reporting requirements (H.R. 2954).

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The Congressman appreciated this opportunity to meet with local community bank leadership, and the bankers expressed their sincere appreciation to the Congressman for taking time to discuss their important priorities.

August 16, 2017


CBAI Urges Illinois Congressmen to Cosponsor FHLB Member Bill

In a July 17, 2017 letter, the Community Bankers Association of Illinois (CBAI) urged the Illinois members of the United States House of Representative to cosponsor the Housing Opportunity Mortgage Expansion Act (H.R. 2890), which is bi-partisan legislation introduced by Representatives Randy Hultgren (R-IL-14th) and Gwen Moore (D-WI-4th). This bill will grandfather the Federal Home Loan Bank (FHLB) memberships of approximately 20 captive insurance companies which are threatened as a result of a regulation implemented by the Federal Housing Finance Agency that prohibits new captive insurers from joining a FHLB and requires existing captive members to terminate their memberships in the coming years.

Two of the Chicago FHLB’s largest borrowers are captive insurers, cumulatively accounting for about one-third of its total advances/borrowings. Unless Congress acts, the FHFA’s rule will terminate the memberships of these Chicago FHLB members, significantly reducing its size and scale, as well as its overall profitability. Also, the borrowing costs for community bank members will likely increase while the amount of FHLB funding devoted to affordable housing and community investment programs will decrease. A regulation that results in a smaller and less efficient Chicago FHLB, with lower profits and less ability to carry out its mission, is the wrong approach and will hurt efforts to revive and sustain Illinois housing markets and local economies.

CBAI partnered with the Chicago FHLB in Capitol Hill meetings urging support for this legislation, and as a result of this cooperative effort Illinois Representatives Mike Bost (R-12th), Danny Davis (D-7th), Rodney Davis (D-13th), Bill Foster (D-11th), Robin Kelly (D-2nd), Darin LaHood (R-18th), Peter Roskam (R-6th), Bobby Rush (D-1st), and Brad Schneider (D-10th) are now cosponsoring this legislation. Read Letter.


CBAI Again Urges CFPB to Provide HMDA Reporting Relief

In a July 31, 2017 comment letter, CBAI again urged the CFPB to provide community banks with HMDA reporting relief. The letter was sent in response to the Bureau’s proposal to temporarily increase the transaction threshold to 500 lines of credit for two years and during that time reconsider the open-ended transaction coverage limits. CBAI renewed the recommendations made in its May of 2015 comment letter to the CFPB which specifically included permanently increasing the open-end line of credit reporting threshold to 2,000 (versus the temporary proposed 500) lines of credit.

CBAI also expressed concern with the Bureau’s rulemaking process which has only provided few and minor exemptions for community banks after voluminous and complex rulemaking, which in itself constitutes an unnecessary and additional regulatory burden on community banks. CBAI urged the Bureau to use its authority granted under the Dodd-Frank Section 1022(b)(3)(A) which recognizes the need to tailor regulations to fit the diversity of the financial marketplace, and explicitly gives the CFPB the authority to adapt regulation by allowing it to exempt any class of entity from its rulemaking. Community banks do not abuse their customers and communities and are deserving of the broad exemptions the Bureau is able to grant them under the law. Read Comment Letter.


CBAI Seeks Congressional Support for Reciprocal Deposit Legislation

In August 2, 2017 letters to the United States House and Senate leadership, the Community Bankers Association of Illinois urged lawmakers to support for H.R. 2403 and S.1500 which address the issue of reciprocal deposits inappropriately being treated as brokered deposits. Read Letters.

Reciprocal deposits are used by many community banks in Illinois and around the country to meet the needs of their customers and obtain funds to lend in their communities. Customers such as local governments require FDIC insurance on their deposited funds. With deposit insurance limits at $250,000 community banks join networks that allow them, through the use of reciprocal deposits, to ensure that those deposits are fully insured while receiving back from those network participants the amount of the shared deposits to lend back in their communities.

Reciprocal deposits are included in the definition of brokered deposits. However, reciprocal deposits did not exist when the law was enacted, and reciprocal deposits actually have all the characteristics of a bank’s core deposits. As a result, they are wrongly governed by the law on brokered deposits.

The House and Senate legislation addresses this issue and provides strong safety and soundness protections.