Connected To Community Banking!
Community Bankers Association of Illinois
Community Bankers Association of Illinois    Community Bankers Association of Illinois CBAI E-Newsletter Sponsor - SHAZAM
     A Bi-Weekly News Bulletin for CBAI Members                                    January 6, 2016

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • Illinois Bank-related Legislation Effective in 2016
  • ICBA Urges Fast Application of Highway Law Regulatory Relief
  • Community Banks Score Updated Accounting Plan for Financial Assets and Liabilities
  • CFPB Responds to TRID Concerns
  • GAO and Dallas Fed Report on Community Bank Burden
  • FDIC Announces Relief Following Mississippi Storms
  • Illinois Division of Banking Issues Flood Proclamation
  • Investment News From THE BAKER GROUP
  • Ideas Offered for Banking in 2016
  • CBIS Nicoud: Fracking’s Presence Will Have Consequences for Community Banks
  • New Year, New Design: Midwest Office Can Help!
  • CBAI Announces Opening Breakfast Speaker at 42nd Annual Convention & Expo
  • Compliance Institute: Operations/Deposit Session Set for January 12 & 13
  • CBC Program: RESPA in a TRID World To Be Held February 2 & 3
  • Ag Lenders’ Conference Scheduled for February 3

  • Illinois Bank-related Legislation Effective in 2016

    Several amendments to Illinois law affecting banks went into effect on January 1, 2016. The changes address mortgage licensure, equal pay, the Mechanics Lien Act, the Illinois Insurance Act, and more. See Legislation Effective in 2016.

    Back to top

    ICBA Urges Fast Application of Highway Law Regulatory Relief

    ICBA urged the CFPB to quickly implement the regulatory relief measures contained in the FAST Act transportation law. In addition to exempting community banks with assets of $10 billion and under from cuts to Fed stock dividends, the law also eliminates redundant privacy notice requirements and allows more banks to qualify as “rural” mortgage lenders under CFPB rules, among other provisions.

    In a statement, the CFPB said it is coordinating the privacy notice rulemaking with other banking agencies and conveying to its supervision and enforcement staff that the law is effective immediately so that no financial institution is expected to comply with superseded regulatory requirements. ICBA offers a summary and fact sheet on the community bank provisions of the FAST Act. See Letter. Read Summary. See Fact Sheet.

    Back to top

    Community Banks Score Updated Accounting Plan for Financial Assets and Liabilities

    The Financial Accounting Standards Board issued a long-awaited accounting standards update that changes the recognition of certain financial statement items. In a major victory for community banks, the final guidance deviates greatly from FASB’s original plan to require most assets and liabilities to be reported at fair value.

    Under the guidance, equity investments with readily determinable fair values will be measured at fair value with changes in fair value recognized in net income. Additionally, nonpublic entities will no longer be required to disclose the fair values of financial instruments held at amortized cost. The guidance also includes changes to footnote disclosures about the types of financial instruments held on the balance sheet. The amendments are effective for public banks for fiscal years beginning after December 15, 2017. For nonpublic banks, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods for fiscal years beginning after December 15, 2019.

    CBAI and ICBA have long opposed fair value measurement for financial assets that community banks do not intend to sell. Read FASB Standards Update.

    FASB Responds to Community Banker Concerns and Requests to Meet

    FASB’s Chairman, Russell Golden, responded to community banker concerns about his disturbing comments regarding the cause of the financial crisis and the proposed Current Expected Credit Loss (CECL) model. Golden has requested a meeting during the first quarter of 2016 to discuss those concerns. Read More.

    FASB to Host CECL Roundtable

    The Financial Accounting Standards Board will host a roundtable in the first quarter of 2016 to solicit feedback and address concerns raised by ICBA leadership surrounding FASB’s Current Expected Credit Loss model. Notice of the meeting to ICBA President Cam Fine follows an ICBA letter responding to controversial statements made by FASB’s leader implicating Main Street banks in the Wall Street financial crisis.

    “Your letter provides a welcomed opportunity to improve our mutual understanding of potential issues faced by community banks in applying the new credit loss model,” wrote FASB Chairman Russell Golden. Regulators and auditors are also expected to attend the Norwalk, Connecticut meeting. See Meeting Notice. Read ICBA Letter.

    ICBA Continues Media Campaign Against FASB Plan

    ICBA continued its media campaign against FASB's new accounting standards in a recent op-ed that takes issue with FASB Chairman Russell Golden’s comments on community banks. ICBA President Cam Fine wrote in an American Banker Op-Ed that Golden’s remarks show a misunderstanding of the financial system, a disdain for local financial institutions, or a skewed historical view—any one of which harms FASB’s credibility.

    In separate commentary on the FASB dust-up, ICBA Chairman Jack Hartings said the comments revealed a “disconnect between FASB and understanding community bankers and how we lend." ICBA Vice President of Accounting and Capital Policy James Kendrick questioned whether the use of complex modeling by larger banks to arrive at early-stage loan-loss projections required under CECL would establish a precedent that smaller banks would be required to observe. Read Fine’s Op-Ed.

    Back to top

    SHAZAM’s 2016 Forum will be here before you know it, so be sure to add it to your list of “must attend” conferences. We have a full schedule of industry experts ready to share valuable information to keep your organization operating successfully. You won’t want to miss this great opportunity to learn, network with industry peers and have a great time! Early bird registration ends January 31 so register today!

    CFPB Responds to TRID Concerns

    The Consumer Financial Protection Bureau recently noted that its TILA-RESPA Integrated Disclosure rule allows for the correction of errors even after closing. Responding to a Mortgage Bankers Association letter expressing concerns with TRID errors that may be delaying or blocking secondary market sales, CFPB Director Richard Cordray wrote that the TRID rule provides for the correction of errors after closing, such as clerical mistakes and violations of monetary tolerance limits.

    Cordray reiterated previous statements that the CFPB and other regulators will focus on “good-faith efforts to come into compliance” during the early days of TRID implementation. He also noted that the TRID rule did not change the fundamental principles of liability under TILA or RESPA. Consequently, for non-high cost mortgages:

    • There is no general TILA assignee liability unless the violation is apparent on the face of the disclosure documents and the assignment is voluntary.
    • TILA limits statutory damages for mortgage disclosures, in both individual and class actions, to failures to provide a closed-set of disclosures.
    • Formatting errors and the like are unlikely to give rise to private liability unless the formatting interferes with the clear and conspicuous disclosure of one of the TILA disclosures listed as giving rise to statutory and class-action damages.
    • Certain disclosures required by TILA that give rise to statutory and class-action damages do not include either RESPA disclosures or the new Dodd-Frank Act disclosures, including the Total Cash to Close and Total Interest Percentage. Read the CFPB Letter.
    Back to top

    GAO and Dallas Fed Report on Community Bank Burden

    The Government Accountability Office (GAO) has just issued a sweeping report on the negative impact of increasing regulatory burdens on community banks and other institutions. The new report cites concerns with the rising cost of compliance and the impact on credit availability of Dodd-Frank Act mortgage regulations, including qualified mortgage standards and the TILA-RESPA Integrated Disclosures.

    The GAO report coincided with a Federal Reserve Bank of Dallas paper on the impact of community bank regulations on new bank formation. That paper also notes the rising community bank compliance burden, and it concludes that regulatory oversight should match the level of risk an institution poses to the financial system and economy at large. CBAI and ICBA are aggressively lobbying for meaningful regulatory relief for community banks. Read GAO Report. See Dallas Fed Paper.

    Back to top

    FDIC Announces Relief Following Mississippi Storms

    The FDIC announced steps to provide regulatory relief to financial institutions and to facilitate recovery in areas of Mississippi affected by severe storms, tornadoes and flooding. The agency is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the storms. Banks may receive favorable Community Reinvestment Act consideration and regulatory relief from certain filing and publishing requirements. Read More from FDIC.

    Back to top

    Illinois Division of Banking Issues Flood Proclamation

    On December 30, 2015, the Illinois Division of Banking issued a proclamation authorizing state-chartered banking offices in Central and Southern Illinois affected by flooding to close for all or part of the normal business day on December 30, 2015 and thereafter until normal business operations are no longer affected. Read Division of Banking Statement.

    Back to top

    Investment News From THE BAKER GROUP

    Baker Market Update

    It’s been a few weeks now since the Fed’s first rate hike in almost ten years, and the Committee has become strangely quiet. Ever since Chairman Yellen decided to commemorate the occasion by treating the FOMC to lunch at Chipotle’s, not a peep has been heard. Que? Well, it’s like they say; no news is good news. See Baker Market Update.

    Join the Baker Group’s Q1-16 Investment Strategies Conference Call

    Back to top

    Ideas Offered for Banking in 2016

    With 2016 in its infancy, now is a good time to consider ideas and opportunities for banking this year. The article linked below offers several ideas for consideration from consumer lending to capital access. Read More.

    Back to top

    CBIS Nicoud: Fracking’s Presence Will Have Consequences for Community Banks

    Fracking causes earthquakes, but property polices may not cover them!

    Hydraulic fracturing—or fracking—technology has ushered in an energy renaissance in the country that’s created a lot of wealth for energy investors. Volatile global energy markets will affect the velocity of fracking throughout the country, but the safe money is that fracking technology is here to stay.

    Going forward, fracking’s growing presence will have consequences for community bankers. The first relates to a bank’s own earthquake coverage. Read More from CBIS Nicoud Insurance Services.

    Back to top

    New Year, New Design: Midwest Office Can Help!

    Here's to a happy, healthy and organized 2016. Midwest Office can help you achieve the right mix of functionality and style. See Midwest Office January Specials!

    If you have any questions, please contact Kevin Gaffney at or by phone (217) 303-5511.

    Back to top

    CBAI Announces Opening Breakfast Speaker at 42nd Annual Convention & Expo

    The Opening Breakfast Speaker at CBAI’s 42nd Annual Convention and Expo is Eric Boles, president of The Game Changers Inc., a training and development company dedicated to maximizing the human asset. A highly acclaimed keynote speaker and consultant for some of the most recognized and respected organizations in the world, Boles presents his inspiring and challenging insights and strategies to thousands of men and women each year. Prior to becoming an authority on high performance, Boles learned many principles of team dynamics and leadership from his experience playing in the National Football League (NFL) with the New York Jets and the Green Bay Packers. While in the NFL, he had the privilege of being coached and mentored by some of the finest coaches and players in the game. In his presentation, Leading Change in the New Reality, Boles examines how leading has never been easy, but it has never been more challenging than it is today in this “new normal” or “new reality.” Boles weaves powerful stories and depth around strategies that touch your head and heart. Scheduled for September 15-17, 2016, at the Marriott in Kansas City, CBAI’s showcase event is a can’t miss! More details will be available in the coming months.

    Back to top

    Compliance Institute: Operations/Deposit Session Set for January 12 & 13

    CBAI is pleased to present the “Compliance Institute" this January and May. 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 May, include Regulation Z: Truth in Lending, 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). Bill Elliott, CRCM, senior consultant and manager of compliance, and Adam Witmer, CRCM, consultant, both of Young & Associates, Inc., Kent, OH, lead this institute.

    Back to top

    CBC Program: RESPA in a TRID World To Be Held February 2 & 3

    The second quarterly Community Bankers for Compliance (CBC) seminar, this program focuses on what RESPA still requires, even though most mortgage loans are governed more by the TRID rules than RESPA. Even with the advent of TRID, the actual RESPA regulation has not changed substantially and still contains many features that need to be considered in the average mortgage loan. In addition to reviewing the regulatory language RESPA and its commentary, we will take a look at the recently changed examination procedures regarding RESPA. The latest OCC version was actually published prior to TRID (April 2015), so we will not focus extensively on this slightly out-of-date version. However, during the last quarter of 2015, both the FDIC (55 pages) and the Federal Reserve (84 pages) issued new examination procedures. We will include relevant portions of all of the examination manuals to offer a broad perspective regarding what the examiners are being told by their agencies to review, with particular emphasis on how these new examination procedures will or could impact your institution. There are circumstances when the Good Faith Estimate and HUD-1 still must be used, however, they are extraordinarily limited. We will discuss those situations in which they are still required and the examination procedures for both of these documents. However, we will not perform a line-by-line review regarding the completion instructions of these forms. Other than the limitation regarding the GFE and HUD-1, we will fully review all other sections of the regulation and the accompanying exam procedures. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance at Young & Associates, Inc., Kent, OH.

    Back to top

    Ag Lenders’ Conference Scheduled for February 3

    CBAI will offer it's annual “Ag Lenders’ Conference” at the Crowne Plaza on February 3, 2016. This jammed-packed day takes a look at a variety of issues facing agricultural lenders. Attend CBAI’s 2016 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. Topics covered include “Illinois Farmland Values – At an Interesting Intersection” with Dale Aupperle, AFM, ARA, president of Heartland Ag Group, Ltd., Forsyth, IL; “Chapter 12 Bankruptcy Reorganization” with Kevin Stine, attorney and shareholder, Mathis, Marifian & Richter, Ltd., Belleville, IL; and “Credit Risk 2016: Answers to Critical Questions” and “Effective Traits of a Winning Ag Lender-Producer Team” with Dr. David Kohl, Professor Emeritus, Virginia Tech, Blacksburg, VA.

    Back to top


    THROUGH 02/15/2016






    Finer Points Blog

    800.736.2224 (IL) | 217.529.2265 |

    DISCLAIMER:The association is not responsible for and has no control over the subject matter, content, information, or graphics when viewing links attached to this association's site. If you do not wish to receive e-mails from Community Bankers Association of Illinois (CBAI), 901 Community Drive, Springfield, IL 62703, through CBAI in the future, please click here. - OR - If you would like to be removed from the CBAI e-mail database, please click here.

    © 2016 Community Bankers Association of Illinois. All Rights Reserved.