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ICBA Files Suit Against NCUA for Unlawful Commercial Lending Limit Rulemaking

On September 7, 2016, the Independent Community Bankers of America (ICBA) filed suit against the National Credit Union Administration (NCUA) for unlawful rulemaking for allowing tax-exempt credit unions to exceed commercial lending limits set by Congress. The NCUA rule would dramatically expand lending loopholes for credit unions by allowing them to exclude purchased nonmember commercial loans and participations from the calculation of their aggregate member business loans.

This unlawful rulemaking is the latest step in the NCUA’s transformation from a federal financial regulator to a cheerleader for its taxpayer-subsidized industry. The NCUA action in rulemaking is contrary to the plain language of the Federal Credit Union Act, as amended by the Credit Union Membership Access Act, which expressly limits the amount of member business loans that may be held on credit union balance sheets.

Opposing the expansionist agenda of credit unions has long been a federal policy priority of CBAI. CBAI which fully supports the ICBA legal action against the NCUA for ignoring its statutory boundaries and its blatant end-around Congress. Read Complaint.

September 7, 2016

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State Bank of Toulon Hosts Meeting with Congressman Darin LaHood (R-18)

CBAI Regional Vice Chairman Doug Parrott, President and CEO of State Bank of Toulon, hosted a meeting with Congressman Darin LaHood (R-18) and Congressional District Director Brad Stotler to discuss community bank issues and opportunities. Joining in the meeting were Andrew Black (President and CEO of Princeville State Bank), Keith Douglas (President and CEO of Tompkins State Bank, Steve Leuthold (President and CEO of State Bank of Speer), and David Schroeder (CBAI Vice President Federal Governmental Relations). The roundtable discussion covered a variety of topics of interest to both the community bankers and Congressman LaHood.

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Doug Parrott started the meeting by thanking Congressman LaHood for cosponsoring the CLEAR Act (H.R. 1233) which includes many community bank regulatory relief measures contained in the Independent Community Bankers of America (ICBA) Plan for Prosperity, and also for signing a bi-partisan United States House of Representatives’ letter to the Consumer Financial Protection Bureau asking them to exempt community banks from their rules.

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The Congressman asked what keeps community bankers up at night. The bankers highlighted a diverse list of challenges they face in meeting new regulatory requirements while trying to maintain their focus on serving their communities. The issues included: overregulation, the “trickle down” of many regulations meant for the largest banks being applied to community banks and its unfortunate impact on industry consolidation, the new Department of Labor overtime rules and the impact on small banks and small business, the new Qualified Mortgage (QM) requirements discouraging residential mortgage lending, harmful Farm Credit and credit union expansion, the importance of maintaining the crop insurance programs, rural economic development, and the various issues the State of Illinois and its citizens face with the budget stalemate and growing indebtedness.

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Congressman LaHood appreciated the opportunity to meet with local community bank leadership and the bankers expressed their sincere appreciation for the Congressman taking the time to visit with them about their issues and opportunities.

August 31, 2016

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Governor Signs Vehicle Storage Fee Initiative

Last Friday, Governor Rauner signed into law HB 2642 (Cassidy/Koehler) which amends the Labor and Storage Lien Act and the Labor and Storage Lien (Small Amount) Act. P.A. 99-0759 requires repair shops and garages that seek to impose fees in connection with the storage of a vehicle, to provide written notice to the lienholder of record prior to the assessment and accrual of such fees. The written notice must include the rate at which fees will be incurred and must be sent by certified mail.

The new law also requires repair shops and garages to provide an opportunity to inspect the vehicle on the premises where the vehicle is stored, and allows the lienholder to choose whether to make payment with cash, cashier’s check, certified check or wire transfer. This bill was a joint initiative introduced by the Illinois Credit Union League, and supported by CBAI, the Illinois Bankers Association, and the Illinois League of Financial Institutions.

CBAI thanks the sponsors, Representative Kelly Cassidy (D-Chicago) and Senator David Koehler (D-Peoria) and also Senate President John Cullerton and his staff for their persistency in getting this bill passed after it initially stalled in the House.

August 15, 2016

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Strong Advocacy Efforts Helped Spur Proposed Call Report Changes

The results are indisputable! Community bankers’ strong advocacy efforts, combined with those of the ICBA and CBAI, have led to the long-awaited proposed changes to the Call Report requirements for community banks. 

In August of 2014, approximately 15,000 community bankers (over 1,000 of which were from Illinois) signed an ICBA petition to the Federal Financial Institutions Examination Council (FFIEC) calling for relief from increasingly onerous quarterly Call Report requirements.

 

In a September of 2014 comment letter to FFIEC, as part of the EGRPRA process to eliminate of unnecessary or outdated regulations, CBAI proposed that certain community banks be entitled to file short-form Call reports for the quarters ending March and September and file full Call Reports for the other quarters.

 

In a November of 2015 comment letter regarding a FFIEC proposal, CBAI called for meaningful regulatory relief for community banks by streamlining the existing Call Report and renewed its call to provide a short-form version of the Call Report for two of the four quarters.  CBAI stated that regulatory relief for community banks must be the Agencies number one priority.  The Agencies' current efforts at meaningful regulatory relief are insufficient and much more needs to be accomplished. 

Finally, on August 5, 2016, a proposal was released by the banking regulators to implement Call Report regulatory relief.  The regulators have proposed that domestic banks with less than $1 billion in assets, approximately 90% of filers, would qualify for a streamlined Call Report.  This new report would have 40% fewer data items, bringing the number down from roughly 2,400 to 1,450 and the page count down from 85 to 61.  The agencies intend to begin implementing the changes on March 31, 2017.

CBAI will be carefully reviewing the 57 page proposal and provide our observations and recommendations for improvements.  Read FFIEC News Release.

August 5, 2016

 

 

 

 

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CBAI Meets with Federal Reserve Bank of Chicago President Charlie Evans

Last week, CBAI member and ICBA leadership banker Greg Ohlendorf, President and CEO of First Community Bank and Trust in Beecher, and David Schroeder, CBAI Vice President of Federal Governmental Relations, met with Federal Reserve Bank of Chicago President and CEO Charlie Evans and other senior management to discuss a variety of issues important to Illinois community banks.

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CBAI meets periodically with senior management of the Federal Reserve Bank of Chicago to review current issues and highlight the concerns and recommendations gleaned from discussions with community bankers. The wide-ranging topics included the importance of the dual banking system, the electronic delivery of loan files to streamline examinations, the impact of the prolonged low interest rate environment, shared examination responsibility with other regulators, and a lengthy discussion about the Financial Accounting Standards Board’s (FASB) Current Expected Credit Loss (CECL) model.

Ohlendorf told of his experience with the ICBA delegation at FASB’s final outreach meeting in February of 2016. He explained how, after several meetings and calls, FASB finally understood that community banks will require special consideration in the final accounting standard.

Schroeder emphasized CBAI’s work in Washington to inform the Illinois Congressional Delegation; the grass roots support of Illinois’ and the nation’s community bankers in outreach to FASB’s Chairman Russell Golden; and the United States House of Representatives letter signed by 62 bi-partisan members urging FASB to proceed with the utmost caution as CECL has the potential to “irreversibly damage” community banks.

Ohlendorf and Schroeder concluded that the combined efforts of community bankers, their associations dedicated to exclusively representing their interests, and the support of our elected officials were required to ‘move the needle’. These efforts resulted in not only a more favorable accounting statement but were also evident in the regulators’ Joint Statement on the New Accounting Standard. Ohlendorf identified a dozen references in the Joint Statement where there were concessions and accommodations, clear nods to our advocacy efforts, and a willingness to implement the new model “especially mindful” of community banks.

Schroeder stated that even in its current form FASB’s CECL is not optimal for community banks but is far better than previously proposed versions. The important work now will be to monitor the implementation of CECL by the regulators to assure they are fulfilling the obligations in their Joint Statement and to find other opportunities for improvement. Ohlendorf and Schroeder held out this cooperative effort as an example of what can and needs to be done going forward in regulatory rulemaking to further tier regulations for community banks. CBAI appreciated the opportunity to meet with the Chicago Fed and welcomes their understanding and support for Illinois community banks.

August 1, 2016