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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 7, 2015

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • ACTION ALERT - Urge FHFA to Withdraw Proposed Restrictive FHLB Membership Rules
  • Fine: Doing the Right Thing is in the Community Bank DNA
  • News from THE BAKER GROUP
  • White House Nominates Community Banker for Federal Reserve Board
  • Three Compliance Trends for 2015
  • CRA Threshold Adjustments for Small and Intermediate Small Institutions Announced
  • Knowing the Limits of Umbrella Coverage
  • Learn More About How Your Bank Can Facilitate Customers' Student-Loan Requests
  • Rural Mainstreet Economic Index Remains Weak in December
  • Take This Week’s CBAI Quick Poll
  • Banks Dive into Payments Tech Investments
  • The #Tokenization Bandwagon
  • NFTB: No Need to Pay $125 for Annual Corporate Minutes
  • SHAZAM: Data Protection is a Shared Responsibility
  • Lenders’ Guide to Mortgage Loan Compliance Set for January 7 & 8 and 13 & 14
  • Compliance Institute (Operations/Deposit) Scheduled for January 13-14
  • Community Bank Directors’ College Scheduled for January 21-22
  • Ag Lenders’ Conference to be Held January 28


  • ACTION ALERT - Urge FHFA to Withdraw Proposed Restrictive FHLB Membership Rules

    Earlier this fall, the Federal Housing Finance Agency (“FHFA”) released proposed changes to Federal Home Loan Bank (“FHLB”) membership rules. These proposed changes will have a profound impact on the FHLB System, FHLBanks and FHLB Members, by imposing ongoing requirements that all FHLB Members would need to meet in order to maintain their membership. Read More.

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    Fine: Doing the Right Thing is in the Community Bank DNA

    The Dutch Banking Association has a requirement that its 90,000 members pledge to act honorably and lawfully. That is completely alien to America’s community banks, according to ICBA President and CEO Cam Fine in his blog post this week. He said community banks don’t have to take an oath to do what’s right; they live the oath every day.

    “It’s simple,” Fine wrote. “Community bankers have to do right by their customers because they answer to them every day inside and outside the bank—at Little League games, PTA meetings and church breakfasts. As members of their local communities, community bankers are in the business of putting their customers first, of doing the right thing.” Read Fine’s Blog Post.

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    News from THE BAKER GROUP

    Join the BAKER Quarterly Investment Strategies Conference Call


    Baker Market Update

    If the FOMC made a list of New Year’s resolutions for 2015, would raising interest rates be on it? See More.


    THE BAKER GROUP: FDIC Clarifies Conducting an Independent Review of ALCO Processes

    Regulators are once again emphasizing the importance of sound interest rate risk (IRR) management systems and processes. The winter 2014 issue of the FDIC’s Supervisory Insights publication is dedicated almost entirely to the subject. It contains articles discussing specific IRR topics including key assumptions analysis for measurement systems, corporate governance processes, detail on examiner expectations, and a general framework of independent review of overall ALCO processes.

    Management should routinely review and assess the effectiveness of the bank’s policies, processes, and procedures for measuring and managing IRR. The findings of this assessment should be reported annually to the board of directors. Read more.


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    White House Nominates Community Banker for Federal Reserve Board

    ICBA and CBAI Support Allan Landon

    ICBA and CBAI have expressed support for the nomination of Allan Landon to the Federal Reserve Board. President Barack Obama announced his intent to nominate Landon, who is a partner with investment fund Community BanCapital and was CEO of the Bank of Hawaii from 2004 until 2010.

    ICBA and CBAI have been outspoken in calling on the White House and Congress to ensure a community bank presence on the Fed board and called for a swift confirmation of Landon by the Senate. Both associations continue to strongly support legislation that would require at least one member of the Fed board to have experience as a community banker or community bank supervisor.

    House leaders announced they are planning a vote this week on legislation requiring community bank experience on the Fed board. The House is expected to vote this week on legislation reauthorizing the Terrorism Risk Insurance Act with the community bank-advocated language. The House passed identical legislation last month by a 417-7 vote, but lawmakers have to take up the measure again because the 113th Congress adjourned. Read White House Statement. Read ICBA Statement.

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    Three Compliance Trends for 2015

    Andy Greenawalt, CEO of Continuity Control, a CBAI-recommended compliance management system for community banks, has identified three keys to managing compliance and regulatory change in 2015. He notes that automated systems, formal processes, and an institution-wide commitment to compliance will be essential for community bank success in 2015 and beyond. Read Continuity Control Article.

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    CRA Threshold Adjustments for Small and Intermediate Small Institutions Announced

    As required by CRA rules, the federal bank regulatory agencies have announced the annual adjustment to the asset-size thresholds used to define small bank, small savings association, intermediate small bank, and intermediate small savings association under the Community Reinvestment Act (CRA) regulations.

  • • “Small bank” or “small savings association” means an institution that, as of December 31 of either of the prior two calendar years, had assets of less than $1.221 billion.
  • • “Intermediate small bank” or “intermediate small savings association” means a small institution with assets of at least $305 million as of December 31 of both of the prior two calendar years, and less than $1.221 billion as of December 31 of either of the prior two calendar years.
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    Knowing the Limits of Umbrella Coverage

    Data from Thomson Reuters shows that one in every 25 plaintiff awards are for more than $5,000,000. And 13 percent of personal injury claims result in awards for more than $1 million.

    If that weren’t substantial enough, there is also the cost of litigating against those claims that go to trial. In 2011, the average time between the incidence of a claim and the trial date was 3.7 years.

    Those are relevant figures to consider when bankers set out to assess their excess umbrella liability coverages, which are designed to provide banks with an extra layer of security on top of coverage for standard liability. Read More.

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    Learn More About How Your Bank Can Facilitate Customers' Student-Loan Requests

    iHELP has partnered with the Community Bankers Association of Illinois’ Foundation for Community Banking to offer a Referral Partner program to CBAI member banks that also helps fund the Foundation’s scholarship programs while offering affordable private student loans to Illinois residents. This includes both in-school loans and loan consolidation. What does your bank have to do to participate? Simply put the iHELP icon on your bank’s web site. That’s it!

    The icon will direct the parent or student to www.ihelploan.com. There, through a simple process, loan assistance may be forthcoming for qualified students. If the loan goes through, your bank receives fee income and the CBAI Foundation for Community Banking receives a donation. Your bank does not make the loan – it simply acts as a conduit.

    Learn more by sitting in on one of two free webinars:

    January 8th, 9:00AM Central Standard Time
    Event address for attendees: https://ihelploan.webex.com/ihelploan/onstage/g.php?d=666752997&t=a

    January 14th, 2:00PM Central Standard Time
    Event address for attendees: https://ihelploan.webex.com/ihelploan/onstage/g.php?d=660492589&t=a

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    Rural Mainstreet Economic Index Remains Weak in December

    According to Creighton University’s monthly survey of community bank CEOs in 10 Midwestern states, lower energy and grain prices continue to restrain growth in the rural economy. See Survey Release. See Survey Details.

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    "CBAI Connected to Community Banking"
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    by The SHAZAM Network


    As the year draws to a close, the SHAZAM Network sends best wishes for a warm and safe holiday season. And, when you’re ready to implement your strategic plans for the new year — remember to call SHAZAM for help with all your payments needs. Learn More how to benefit from the choice and flexibility SHAZAM offers.



    Take This Week’s CBAI Quick Poll

    Take this week’s Quick Poll on the TILA-RESPA Integrated Disclosure Rule taking effect August 2015. Click Here to view results of the previous polls.

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    Banks Dive into Payments Tech Investments

    The payments industry is set to be a key area of focus for banks across the globe in 2015, says Ovum based on interviews with 6,500 IT executives.

    The shift in payments modernization, brought on by diversification and mobile channels in particular, is a truly global phenomenon. In most instances less than a third of surveyed respondents claimed that they will be maintaining their payments technology in its current state. Read More.

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    The #Tokenization Bandwagon

    Tokenization, one of the latest security measures the payment-card industry is implementing to protect cardholder information, is also the method leveraged by Apple’s mobile payment platform. MasterCard and Visa both recently announced their support of Apple Pay’s tokenization process. Specifically, both card companies will manage the tokenization process. The processor and other networks can provide token services, yet the actual vault service and token creation is limited. This minimizes the opportunities of other networks and processors to manage the vault or to provide vault services to their customers. Read More.

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    NFTB: No Need to Pay $125 for Annual Corporate Minutes

    From time to time, corporations such as CBAI and banks receive solicitations, usually accompanied by a form to be completed and returned with payment, pertaining to the validation or recordation of annual corporate minutes. CBAI recommends that banks save their money, as this solicitation is not a valid request for anything mandated by law. Click here for more information.

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    SHAZAM: Data Protection is a Shared Responsibility

    This week SHAZAM emphasized that consumers, financial institutions, and merchants must share responsibility for protecting sensitive data. Consumers must make smart choices such as using debit cards with PIN, whenever possible, and practicing safe online shopping habits; banks must maintain fraud detection and prevention strategies to match the sophistication of fraudsters; and merchants must step up efforts to secure their systems, especially those tied to payments processing. Read SHAZAM Network Blog.

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    Lenders’ Guide to Mortgage Loan Compliance Set for January 7 & 8 and 13 & 14

    During the last few years, both Congress and the various federal regulators have crafted revisions to some of the regulations that have been a part of our lending lives, and have added new regulations as well. This has resulted in many additional regulatory issues in every mortgage loan transaction. As a result, lenders have been struggling to determine what they should do to assure that they not only make a safe and sound loan for the bank, but also do so in a manner that will not create regulatory problems for the bank. This year continues this process with many, many new rules and mandated ways of doing things. This seminar covers all aspects of mortgage compliance that a lender should know, including the current rules and regulations as they now stand. This seminar is designed to discuss the compliance issues from the perspective of mortgage lenders and lending management. This seminar also assists compliance officers, senior management, bank trainers, loan auditors, loan operations personnel, and others involved in the mortgage lending compliance process to understand all of the new requirements and to share this information with others inside the bank. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance at Young & Associates, Inc., Kent, OH.

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    Compliance Institute (Operations/Deposit) Scheduled for January 13-14

    CBAI is pleased to present the “Compliance Institute” this January & April. 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. Bill Elliott, CRCM, senior consultant and manager of compliance, and Adam Witmer, CRCM, consultant, both of Young & Associates, Inc., Kent, Ohio, lead this institute.

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    Community Bank Directors’ College Scheduled for January 21-22

    The Community Bank Directors’ College was developed in close cooperation with both state and federal regulators and is designed to teach individuals how to become more effective, capable, and supportive members of their bank’s board of directors. Its goal is to graduate directors who return to your bank more active, more knowledgeable, and more decisive. In effect, they will be an even bigger asset to your community bank. The College is offered once a year and provides a thorough understanding of bank operations and bank directors’ responsibilities. The college is recommended for both new and seasoned bank directors. It is structured as two, two-day sessions offered on an annual basis; either may be attended as a stand-alone course. The first session is being held at Northfield Inn and Conference Center in Springfield, IL, January 21-22, 2015.

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    Ag Lenders’ Conference to be Held January 28

    This jammed-packed day takes a look at a variety of issues facing agricultural lenders. Attend CBAI's 2015 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 and speakers include “Global Dashboard Indicators for Value-Added Producers and Lenders” and “Effective Traits of a Winning Ag Lender-Producer Team” by Dr. David Kohl, Professor Emeritus, Virginia Tech; “Global Grain Marketing” with Dan Hueber, The Hueber Report; and “Farm Bill Update” by Larry Smith, Diversified Crop Insurance Services.

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