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     A Bi-Weekly News Bulletin for CBAI Members                                    January 3, 2018

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • 2018 Brings Staff Changes to CBAI
  • CBAI Optimistic Entering 2018
  • Cam Fine to Congress: Don’t Drop the Ball on Regulatory Relief
  • CBAI Urges Additional Capital Regulatory Relief
  • How the Banks Won over Washington Again
  • CBAI Continues Effort to Reign-in CFPB’s HMDA Overreach
  • Multi-Source Banking Predictions for 2018
  • Sheltered Harbor is Data Fallout Shelter
  • Investment News From THE BAKER GROUP
  • Rural Economic Index Improves in December
  • Identifying Procedural Changes to Prepare for CECL
  • CBAI LEGAL: 30/30/30 Foreclosure Grace Period Revisited
  • Save the Date for CBAI’s Community Bankers School
  • Compliance for Lenders Slated for January 8, 9 and 31
  • Compliance Institute – Operations/Deposit Set for January 17-18
  • Ag Lenders’ Conference Scheduled for January 29
  • CBC Program: Reg E and Reg DD Seminar Set for January 30 & 31


  • 2018 Brings Staff Changes to CBAI

    Kraig Lounsberry has assumed the presidency at CBAI. Lounsberry is only the second President in the history of CBAI and takes over for Bob Wingert who retired in December after nearly 43 years leading the association.

    Jerry Peck has commenced his career with CBAI as Senior Vice President of Governmental Relations. For the past five years, Peck served as director of Government Affairs for the Illinois Manufacturers’ Association. He also worked as a contract lobbyist, and owned his own media and communications company. Peck holds a B.A. degree in communications from Eastern Illinois University, Charleston.

    Additionally, David Schroeder has been promoted to Senior Vice President of Federal Government Relations. Schroeder has been with CBAI since January 2010.

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    CBAI Optimistic Entering 2018

    With tax reform now on the books and regulatory relief in clear site, CBAI is optimistic about community banking in 2018 and beyond.

    The economic stimulus, which promises job creation and business expansion, bodes well for community banks in an atmosphere of reduced regulations. CBAI believes the combined effect will boost the profitability and performance of community banks for many years to come.

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    Cam Fine to Congress: Don’t Drop the Ball on Regulatory Relief

    ICBA President Cam Fine believes there is plenty of room for optimism when it comes to the prospects for community bank regulatory relief soon. CBAI wholeheartedly agrees!p> Fine points out in his most recent blog that amid so much partisan rancor in Washington, support for the nation’s community banks really is just about the only thing Republicans and Democrats alike can agree on.p> He notes, however, that community bankers are used to seeing substantial regulatory reforms advance through committee, or even through the full House of Representatives only to have these measures too often fail to achieve final passage because of the Senate’s stringent supermajority requirement.

    But this time is different because the multipronged regulatory relief bill was driven by a bipartisan coalition of lawmakers, including Mike Crapo, R-Idaho, chairman of the Senate Banking Committee, and committee Democrats Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, Jon Tester of Montana and Mark Warner of Virginia.

    Fine emphasizes that, not only was the legislation forged in bipartisanship, it enjoys broad support in the Senate on both sides of the aisle. The bill has 20 original cosponsors, including five additional Democrats and Independent Senator Angus King of Maine. A total of 11 Democrats have signed on to support the bill — indicating it has supermajority backing in the upper chamber.

    The only question at this point is this: can the bill remain focused on community banks to maintain its broad backing? With community banker involvement, CBAI and ICBA will continue to work with Congress to deliver the bill to the president’s desk to be signed into law. Read Fine Blog.

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    CBAI Urges Additional Capital Regulatory Relief

    In a December 21, 2017 comment letter to the Federal Reserve, FDIC, and the OCC, CBAI urged the regulators to provide additional, long-overdue and well-deserved capital regulatory relief for community banks. The comment letter was in response to the Agencies’ Notice of Proposed Rulemaking (NPR) regarding the simplification of capital rules pursuant to the 2016 EGRPRA decennial review and included recommendations for mortgage servicing assets (MSAs), certain deferred tax assets (DTAs), the investments in the capital of unconsolidated institutions (including Trust Preferred Securities (TruPS). Read Article. Read CBAI Comment Letter.

    CSBS Agrees: Proposal Doesn’t Go Far Enough for Community Banks

    In a comment letter sent December 26 to the federal regulatory agencies, the Conference of State Bank Supervisors (CSBS) asked for more substantial changes to the rules that would result in a simpler method for calculating risk-weighted assets for community banks.

    “State regulators support simplification, but only if it’s real and meaningful,” said John Ryan, CSBS president and CEO. “In the past couple years, community banks have adjusted their systems to conform to the current methodology, and small changes will result in additional costs for these banks to tweak their core systems without any perceivable benefit.”

    Ryan added: “Federal regulators need to keep in mind that a community bank is often the only local source of credit and banking services in hundreds of U.S. counties. And regulatory compliance has a disproportionate impact on their cost structure.” At issue is the significant burden on community banks posed by sweeping banking reforms, specifically Basel III, a global framework regulating bank adequacy that in 2013 created a standardized methodology for all banks, including community banks. Read More. See CSBS Comment Letter.

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    How the Banks Won over Washington Again

    According to a recent article in Politico, less than a decade after being blamed for fueling the worst financial crisis since the Great Depression, banks are winning again in Washington. The rebound for the lenders has been so remarkable that Republicans and Democrats in Congress are pushing to scale back financial regulations imposed in the wake of the meltdown — one of the few areas where the two parties agree. Read Politico Article.

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    CBAI Continues Effort to Reign-in CFPB’s HMDA Overreach

    CBAI applauds the continued legislative and regulatory efforts to reign-in the Consumer Financial Protection Bureau’s (CFPB) overreach on Home Mortgage Disclosure Act (HMDA) reporting. While the Dodd-Frank Act mandated additional data to be collected and reported, the CFPB used its discretionary authority to materially increase the number of data fields beyond what was required. Those additional data fields are unnecessary and clear regulatory overreach. They also present legitimate consumer privacy concerns and will impose a significant additional regulatory burden on community banks by diverting bankers’ resources towards unnecessary regulatory compliance rather than serving their customers and communities. These recent legislative and regulatory developments clearly indicate that the voices of community bankers and their associations are being heard by Congress and the new leadership of the CFPB. Read Article.

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    Multi-Source Banking Predictions for 2018

    Having just entered the new year, here are some predictions for the banking profession from various sources. Opinions may vary and even contradict, but they will hopefully shed some light and stimulate thought on topics of the day:

    Read US News Report

    See Financial Brand Article

    Read Forbes Article on Small Business Lending

    Access Consumer Intelligence Report

    See AB Slide Show to Bank Tech Trends

    Read Bloomberg Markets Predictions

    Read FICO Predictions on Regulatory Relief

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    Sheltered Harbor is Data Fallout Shelter

    The financial services sector’s Sheltered Harbor initiative helps community banks protect themselves and their customers from natural disasters and cybercrime, ICBA President and CEO Cam Fine wrote in a new blog post. Fine noted that the initiative enables financial institutions to securely store and rapidly reconstitute account information in a secure, decentralized data vault while they recover. “While we hope not to have to use the program, it offers us all the insurance we need should the unthinkable happen,” Fine wrote. “Sheltered Harbor is the answer if all other disaster recovery options have been exhausted—a fallout shelter for customer data.” Read the Blog Post. Learn More About Sheltered Harbor.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    To those brimming with Christmas spirit, who is more reviled; the Grinch, or Ebenezer Scrooge? Well, those two Christmas- carol- curmudgeons are getting a public relations gift this year. By voting against Janet Yellen on the occasion of her fifth and final rate hike, Neel Kashkari and Charles Evans moved to the top of the bah-humbug heap. See Baker Market Update.

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    Rural Economic Index Improves in December

    Creighton University’s index of the rural economy improved in December but remained below growth-neutral at 47.8. The Rural Mainstreet Index is up 11.4 percent from the same time a year ago. While 20.4 percent of bank CEOs reported that their local economy was expanding, that’s well above the 8.7 percent response rate of February 2016. Read More from Creighton.

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    Identifying Procedural Changes to Prepare for CECL

    CWhile most non-public business entities aren’t required to implement the current expected credit loss (CECL) model for the allowance for loan and lease losses (ALLL) until after December 15, 2020, many institutions have begun the transition to ensure effective implementation of this major change in estimating losses. An actionable step banks can take to prepare for CECL is to identify how the new model will require modifications to ALLL procedures and mapping out sequencing and ownership. Some reasonable steps to take now include examining the items discussed in an article by Sageworks. Read More.

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    CBAI LEGAL: 30/30/30 Foreclosure Grace Period Revisited

    An Illinois Appellate Court recently ruled that the July 1, 2016 repeal of the delinquency and credit counseling grace periods prior to foreclosure barred an appeal of a foreclosure judgment brought after that date, even though the foreclosure and the bank’s alleged failure to comply with the grace period statute came before July 1, 2016. See Most Recent CBAI LEGAL.

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    Save the Date for CBAI’s Community Bankers School

    Save the date for the Community Bankers School, which begins on Sunday, July 15, and concludes on Friday, July 20, 2018. Consisting of two, one-week sessions over a two-year period at Illinois Wesleyan University in Bloomington, The School allows you to immediately contribute to the overall success of your bank, and give you the knowledge necessary to get ahead. The School features a nationally recognized faculty, an updated curriculum, and timely topics. Topics covered during this intense week for Class I participants include compliance, accounting, commercial and consumer loan documentation, collections, bank security, auditing, investments, and technology, while Class II focuses on management aspects. However, the benefits extend beyond the classroom with outside case studies, an invaluable student notebook with supplemental materials, as well as networking opportunities with peers, instructors, and senior bankers. You will gain a background and experience for broader responsibilities and greater effectiveness, as well as insight into a community bank’s overall operations responsibilities.

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    Compliance for Lenders Slated for January 8, 9 and 31

    Each bank employee has a duty to master a working knowledge of the compliance issues that pertain to his or her assigned position description. And with a relatively new set of Dodd-Frank rules and the even newer TRID rules, the life of a lender is getting more and more complex. The challenge is to ensure that lending personnel have the right information at the right time. This one-day program provides an overview of the current "hot-button" changes that are part of the lender's responsibilities; an overview of the lender's responsibility for assuring that all the TRID rules are met; an overview of the Loan Estimate and the Closing Disclosure; and up-to-date information on other compliance issues and other developments in bank regulations that relate to lending. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance with Young & Associates, Inc., Kent, OH.

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    Compliance Institute – Operations/Deposit Set for January 17-18

    Community banks are constantly faced with a bewildering array of ever-changing regulations. In response to this training need, CBAI is pleased to present the Compliance Institute this January & June. An introductory course for those compliance officers who are either new to banking or new to their positions, this institute is designed to provide a comprehensive understanding of the major regulatory compliance regulations that have been determined to be “must-knows” for all compliance officers. The school has been divided into two sessions, Operations/Deposit Compliance and Lending Compliance. Attendees can attend one or both sessions, dependent upon need. Offered in January, session I, Operations/Deposit Compliance, addresses topics including compliance management, privacy of customer information, Fair Credit Reporting Act, Customer Identification Program, Bank Secrecy Act, Regulation D: Reserve Requirements, Regulation DD: Truth in Savings Act, Regulation CC: Expedited Funds Availability Act, and Regulation E: Electronic Funds Transfer Act. Topics covered in Lending Compliance, offered in June, include Regulation B and the Fair Housing Act: Fair Lending, Regulation X: Real Estate Settlement Procedures Act, National Flood Insurance Program, Regulation C: Home Mortgage Disclosure Act, compliance management, privacy of customer information, FCRA and Regulation V (lending portion only), and Customer Identification Program (BSA). This year, due to the massive size of regulations, Regulation Z (Truth in Lending) will be covered in its entirety in a separate program called Reg Z University. This three-day program will be offered April 16-18, 2018. Bill Elliott, CRCM, senior consultant and manager of compliance, and Dale Neiss, consultant, both of Young & Associates, Inc., Kent, Oh, lead this institute.

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    Ag Lenders’ Conference Scheduled for January 29

    This jammed-packed day looks at a variety of issues facing agricultural lenders. Attend CBAI’s 2018 Ag Lenders’ Conference to develop the skills and tools to better understand the issues affecting your farm and agribusiness customers and to meet their credit needs. A mini-expo featuring the latest in products and services for ag lenders also highlights the day. Speakers and topics include “Bullish on Agriculture - 2018 & Beyond” with Tyne Morgan, Host, U.S. Farm Report & Farm Journal Broadcast, South Bend, IN; “Estate Planning Trends for Family Farms” with Curt W. Ferguson, The Farmers' Estate Planning Attorney, Salem, IL; “Weather Outlook & Forecasting for 2018” with Eric Snodgrass, Director of Undergraduate Studies Department of Atmospheric Science, University of Illinois, Champaign; “Forces Shaping Future Farmland Markets” with Dr. Bruce J. Sherrick Ph.D., Marjorie and Jerry Fruin Professor of Land Economics & Director of the TIAA Center for Farmland Research in the Department of Agricultural and Consumer Economics at the University of Illinois, Champaign; and “The Joys of Stress” with David Okerlund, professional speaker.

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    CBC Program: Reg E and Reg DD Seminar Set for January 30 & 31

    The Regulation E presentation will be limited to Subpart A, which is the portion of the regulation that discusses electronic issues such as distribution of electronic cards, error resolution, disclosures, and similar subjects. Included in this portion of the presentation will be all of the April 1, 2018 changes. While the changes are not critical, bankers should know what they are. If the changes do not impact your bank right now, they may in the future, and having the appropriate knowledge base will assist your bank with any current or future decisions regarding new electronic products. We will cover Regulation DD in its entirety. Note that both regulations cover overdrafts, and we will include the new proposed forms for overdraft programs in the presentation. The subjects for the regulatory update will be determined by circumstances and releases from the various agencies. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance with Young & Associates, Inc., Kent, OH.

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