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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                            January 21, 2015

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • ICBA Launches Regulatory Relief Platform for 114th Congress
  • Obama Signs CBAI/ICBA-Backed Law Requiring Community Bank Fed Presence
  • Antonio Weiss Withdraws from Treasury Undersecretary Consideration
  • CBAI Announces 2015 Group Meeting Schedule
  • Study: Community Banks Have Highest Small-Biz Approval Rates
  • Philadelphia Fed Releases Guidance to Develop Effective Loan Policy
  • Supreme Court Ends Retailer Case to Increase Interchange Windfall
  • Baker Market Update
  • Baker Economic Brief
  • Rural Mainstreet Economic Index Remains Weak for January
  • 20 Questions the FFIEC Wants Your Directors to Answer
  • Census: Millennials to Become Nation’s Largest Living Generation in 2015
  • SHAZAM Blog: Millennials Want VIP Treatment from Mobile Payments
  • TILA-RESPA Implementation Toolkit Helps Bankers Prepare for New Rules
  • NFTB: U.S. Supreme Court Rules Scribbled Note Is Sufficient for TILA Rescission
  • Why Excess FDIC Deposit Coverage? Why Not!
  • Regulators to Hold Chicago EGRPRA Meeting
  • Privacy, Regulation V, and Fair Credit Reporting Set for February 3 & 4
  • Attracting and Retaining the Elusive Younger Customer Slated for February 4
  • Technology Conference to be Held February 5
  • Banking Essentials Scheduled for February 10 & 11

  • ICBA Launches Regulatory Relief Platform for 114th Congress

    CBAI Fully Supports Provisions

    ICBA last week announced its Plan for Prosperity regulatory relief platform for the 114th Congress. The Plan for Prosperity is a flexible platform designed to be quickly advanced as legislation to relieve community banks from unnecessary and excessive regulation while supporting greater regulatory accountability.

    The multi-pronged Plan for Prosperity includes a variety of regulatory relief provisions, such as amending Basel III capital standards, exempting community banks from certain mortgage reforms, improving accountability in bank exams and reforming the Consumer Financial Protection Bureau.

    CBAI will work closely with ICBA throughout the 114th Congress to advance and enact the provisions of the plan to provide community-bank regulatory relief and promote local economic growth. Read ICBA Plan for Prosperity.

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    Obama Signs CBAI/ICBA-Backed Law Requiring Community Bank Fed Presence

    President Barack Obama signed into law a measure requiring the White House to appoint someone with community banking experience to the Federal Reserve Board.

    The law reauthorizing the Terrorism Risk Insurance Act includes CBAI and ICBA-advocated language that would require at least one member of the Fed board to have experience as a community banker or community bank supervisor.

    While President Obama has announced his intent to nominate community banker Allan Landon to the Fed board, CBAI and ICBA strongly support the new law so that there is always such representation on the board. See CBAI Announcement.

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    Antonio Weiss Withdraws from Treasury Undersecretary Consideration

    Wall Street executive Antonio Weiss withdrew from consideration for a senior Treasury position. Following CBAI and ICBA concerns with the nomination and opposition by several senators, Weiss wrote a letter to President Barack Obama asking not to be renominated for undersecretary for domestic finance. Weiss will instead serve as a counselor to Treasury Secretary Jacob Lew, a position that does not require congressional confirmation. After Obama nominated Weiss for the undersecretary position in November, CBAI and ICBA expressed serious concerns with the nomination in letters to the heads of the Senate Banking and Finance committees. Both groups urged that the Treasury position be filled by someone with a broad background in financial services. Read CBAI Article. Read ICBA Letter.

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    CBAI Announces 2015 Group Meeting Schedule

    Please Mark Your Calendars!

    CBAI leaders and executive staff are visiting 11 locations on the 2015 Group Meeting tour this spring. Bankers from more than 200 banks participate in these enjoyable and informative events each year. Consisting of an optional golf outing and a dinner meeting, Group Meetings also provide an excellent opportunity to get the latest information on key banking issues and catch up with friends and peers. (Note: The Group 1, 2 & 3 meeting will include a lunch, meeting, and golf outing.) Make plans now to attend! See 2015 Group Meeting Schedule.

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    Study: Community Banks Have Highest Small-Biz Approval Rates

    Approval rates for small-business loans were highest at small regional and community banks, according to a study from four Federal Reserve Banks. According to the study, the approval rate at small regional and community banks was 59 percent, while large regional banks and large national banks had rates of 45 percent and 31 percent, respectively.

    The study of small businesses in 10 states found that 22 percent of firms overall reported applying for credit in the first half of 2014, with 34 percent of those firms applying to small regional and community banks.

    Generally, there was weaker demand among firms with less than $1 million in annual revenues. Firms are looking for small amounts of credit and are borrowing for expansion, the survey found. Read Survey Results.

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    Philadelphia Fed Releases Guidance to Develop Effective Loan Policy

    The Federal Reserve Bank of Philadelphia recently released guidance for banks to develop and maintain an effective loan policy. CBAI recognizes that loans generally have the greatest impact on the overall risk profile and earnings performance of a bank, and effective loan policies are essential for a sound operation.

    The initial guidance addresses both what is permissible and who is responsible in a comprehensive community bank loan policy. Two subsequent articles will address other elements such as underwriting, appraisals, risk ratings, pricing, and documentation. CBAI will make those available once they are released. See FRB Loan Policy Article.

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    Supreme Court Ends Retailer Case to Increase Interchange Windfall

    CBAI, ICBA and a coalition of other trade groups welcomed the U.S. Supreme Court’s decision not to consider a retailer legal challenge to Federal Reserve Board rules on debit card interchange price controls. The high court declined to take up the merchants’ case, which sought to overturn a lower court ruling to increase their $6 billion annual windfall from the interchange price caps.

    The merchants had initiated a multiyear lobbying effort to impose price controls and subsequently sued the Fed board in an effort to lower the board’s caps even further. The March 2014 lower court ruling overturned a previous court decision that would have required lower debit interchange price caps than those required under the Fed’s interchange rule.

    While the merchants have argued that consumers would benefit from lower retail prices due to debit interchange price caps, there is no evidence that prices have come down as a result of the Durbin amendment. CBAI and ICBA oppose government price fixing of interchange fees and will continue defending against merchant attacks. The case is NACS v. Board of Governors of the Federal Reserve System. Read More.

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    "CBAI Connected to Community Banking"
    Is Sponsored
    by The SHAZAM Network

    Wondering how you’re going to get all your marketing done this year without breaking your budget? Turn to the SHAZAM Network. With SHAZAM Marketing Services, you have access to affordable options to promote all your programs — not only debit and credit services, but also checking and savings accounts, home mortgages, auto loans, business and agricultural loans, investment services and much more! To learn more about how SHAZAM can help you will all your marketing needs. Learn More.

    Baker Market Update

    Murkiness over European and domestic economic prospects was made no less murky following Wednesday’s release of the latest FOMC minutes. See More.

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    Baker Economic Brief

    The price of the 10yr T-Note is up a full point and the yield is now at 1.82%. The long bond is at a record low 2.40% yield. In the short end, the 2yr sits at .46%. The reasons for this latest move are numerous, but this is punctuated by an acceleration to the downside of commodities prices. Read More.

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    Rural Mainstreet Economic Index Remains Weak for January

    The monthly survey of rural community bank CEOs in 10 Midwestern states found that there is tepid growth in the regional economy. Farmland prices declined for the 14th straight month, and bankers expect cash rents in 2015 to decline to $214 from last year’s $254. See Survey Summary. See Detailed Report.

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    20 Questions the FFIEC Wants Your Directors to Answer

    For the past year, the FFIEC has worked to raise awareness among community bank executives about the pervasiveness of cyber threats and the role of executive leadership in managing these risks. The FFIEC has made it clear that bank executive officers and directors are responsible for identifying and mitigating cybersecurity risks in their respective banks. In November 2014, the FFIEC released the results of its cybersecurity assessment, which included 20 questions bank executive officers and directors should answer.

    In the following paper, BankOnIT, a CBAI preferred provider, discusses the assessment and explains the 20 questions and prospective answers in greater detail. Read the 20 Questions.

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    Census: Millennials to Become Nation’s Largest Living Generation in 2015

    The Millennial generation is projected to surpass the baby boomer generation as the nation’s largest living generation in 2015, according to a Pew Research Center article on new Census data. Millennials (ages 18 to 34 this year) are projected to number 75.3 million, surpassing the projected 74.9 million boomers (ages 51 to 69).

    A recently released ICBA study found that more than half of Millennials would prefer to work with a community bank and that Generation Y is the generation most interested in learning about starting up and running a small business. The study results as well as news coverage, a white paper and more on the study are available on the ICBA Millennials webpage. Read Pew Research Article. See ICBA Millennials Webpage.

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    SHAZAM Blog: Millennials Want VIP Treatment from Mobile Payments

    Forty percent of North American consumers have used their smartphones to make a payment at a merchant location, a 150% increase since 2012. According to an Accenture survey, Millennials and high-income respondents are the first to adopt new payments offerings. They’re also beginning to expect special treatment for doing so. Read SHAZAM Blog Article.

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    TILA-RESPA Implementation Toolkit Helps Bankers Prepare for New Rules

    You Can Still Get Ready by August 2015!

    The research and foundational parts are completed for you, when you purchase the TILA-RESPA tool-kit. Now endorsed by the Community Bankers Association of Illinois, this is your next step to ensuring your mortgage business after August 2015.

    The new Truth-in-Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure requirements go into effect August 1, 2015, and according to a CBAI Quick Poll, more than half of member banks are not prepared. Take Poll Survey Now.

    The biggest misconception about the rule is that it only impacts two documents. Regulatory experts have identified more than 400 regulatory citation changes stemming from the new law that will impact bank processes, technology, policies and procedures, vendor relationships, employee readiness, training, and customer service. Wolters Kluwer Financial Services has developed a TILA-RESPA Tool Kit that includes an outline of all the required changes, implementation timelines, project management templates, and other resources needed to prepare for and implement the required changes so banks can continue to do business as of the effective date. Read More.

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    NFTB: U.S. Supreme Court Rules Scribbled Note Is Sufficient for TILA Rescission

    O.K., so maybe you won’t find the words “scribbled note” in Justice Scalia’s 4 and one-half page opinion published January 13 in the case of Jesinoski vs. Countrywide Home Loans, Inc., but in practical effect it could have been there. In that unanimous opinion of the Supreme Court, the rescission rights of a consumer under the federal Truth in Lending Act (“TILA”) were clarified to allow mere written notice of rescission rather than the filing of any legal action. For more information, Click Here.

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    Why Excess FDIC Deposit Coverage? Why Not!

    Scars of the financial crisis still run deep. Few are naïve enough to write off the possibility of systemic banking crisis. Excess FDIC, or so-called excess depository insurance, is not only a fantastic way to insure assets, but of equal importance, a fantastic assurance of peace of mind that can help community banks retain and attract wealthy depositors. Learn More.

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    Regulators to Hold Chicago EGRPRA Meeting

    Federal banking regulators have announced that an Economic Growth and Regulatory Paperwork Reduction Act (“EGRPRA”) outreach meeting will be held in Chicago on October 19, 2015. CBAI encourages Illinois community banks to attend this outreach meeting and express their views on regulatory burden directly to the federal banking agencies. In addition, the agencies will hold an outreach meeting this summer focusing on rural banking issues.

    CBAI urged the federal banking regulators to address outdated, unnecessary, and unduly burdensome regulation of community banks. In a September 2014 comment letter CBAI highlighted the need for tiered regulation and called on the regulators to encourage de novo bank formation, ease quarterly Call Report burden, and increase the Small Bank Holding Company Policy Statement threshold to $5 billion (and allow small savings and loan holding companies to be covered by the Policy Statement). Read Comment Letter. Read More from the Agencies.

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    Privacy, Regulation V, and Fair Credit Reporting Set for February 3 & 4

    Privacy, Regulation V, and the Fair Credit Reporting Act,” the second quarter of the Community Bankers for Compliance (CBC) program, first focuses on the Privacy regulation. This regulation was recently changed to permit more creative and, in some cases, simpler ways to deliver the annual privacy notice. This change saves everyone some money, but may not be the panacea that everyone was requesting. We discuss the entire Privacy regulation, with particular emphasis upon this new change. The second regulation discussed is Regulation V, which is the implementing regulation for FCRA. There are portions of FCRA that are not directly covered under Regulation V, so we will split this portion of the manual into Regulation V and other miscellaneous FCRA issues. Time is spent looking at the requirements for each of the regulations. The manual is split into separate sections, one devoted to each subject, which allows easier dissemination of the material to your staff. The subjects for the regulatory update are determined by circumstances and releases from the various agencies. At the time of this writing, we know that we will be briefly discussing the new BSA Exam Manual, the timing of releases from the CFPB, as well as other topics. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance at Young & Associates, Inc., Kent, OH.

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    Attracting and Retaining the Elusive Younger Customer Slated for February 4

    Attracting and landing the next generation of bank customers requires understanding and interacting with them, on their terms. Banks need to learn about their culture, their needs and motivations, and their purchasing behavior. For instance, Generation Y is coming of age with over $170 billion dollars in buying power, and over $50 billion in buying influence, and Generation Z is waiting in the wings. We can also refer to Gen Y as Generation Earn, as they like to make money. Gen Earn also likes to move money around, use bank technology, and also trust you! Lots of banks are competing for the attention and loyalty of both, with clear winners and losers. In this seminar, you learn specifically what the younger generations want from the banking experience (online and in-person), and why they want it. You discover specific actions to take to maximize the banking experience, and to increase the effectiveness of your marketing and sales efforts. Banks that embrace these strategies and tactics will see revenue increases in excess of 10 percent. Leading this seminar is Duane F. Sobecki, CEO of Focused Results, LLC, a sales strategy, consulting, and training firm.

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    Technology Conference To be Held February 5

    Anyone who values efficiency, understands the ongoing need to stay informed, wants to explore the latest in technology, and appreciates the increased productivity that technology can achieve benefits from this conference. The CBAI Technology Conference combines a hands-on technology show with tech-targeted educational sessions. An Exhibit Center also highlights the conference. This year's conference features top-notch speakers such as Mark Scholl, partner of information-technology services for Wipfli LLP, who opens the conference with “Emerging Technologies.” Also presenting are Kathy Enbom, senior manager with Wipfli LLP with?“Third-Party Review of Risks of Financial Aggregators;” Trent Fleming, president of Trent Fleming Consulting, who presents the closing session, “This Stuff Doesn’t Work” along with the breakout sessions, “Successfully Implementing Merchant Capture” and “Challenges of Electronic File Management.” Susan Orr, president of Susan Orr Consulting, presents the sessions “Mobile Financial Services”?and “Wi-Fi –– Is Your Institution Secure;”?along with Christina Throndson, web marketing manager with VGM Forbin presenting the session, “How to Prevent Dents & Dings in Your Security and Reputation.”

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    Banking Essentials Scheduled for February 10 & 11

    A must for the newer community bank employee, this series is designed to provide a complete knowledge of banking principles and operations. It is also geared toward veteran employees as a refresher course. Offered in one location, the four quarters are structured as two, two-day sessions, to cut down on travel for your convenience. As such, quarters one and two are offered on consecutive days in August and quarters three and four are offered on consecutive days in February. All seminars are held at the CBAI Headquarters in Springfield. While it is recommended that the individual attend all four quarters of the series to receive an entire overview of banking, each quarter's material stands alone; one quarter is not a prerequisite for another.

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    THROUGH 03/15/2015






    Finer Points Blog

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