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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    February 1, 2017

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Trump, Pence Advocate Regulatory Relief
  • Op-Ed: Unleash Community Banks with Regulatory Relief
  • ICBA Calls on New Administration to Curb Fair Lending Overreach
  • Hensarling Announces Republican Subcommittee Assignments
  • Court Dismisses ICBA Case Against NCUA
  • CBAI Co-Hosts Increasing Access to Affordable Mortgage Credit Workshop
  • OCC Issues Guidance on Third-Party Relationships
  • The 2017 CBAI Compensation Survey Is Now Online
  • Investment News From THE BAKER GROUP
  • Rural Economy Continues to Struggle: Mainstreet Index
  • St. Louis Fed: The End Is in Sight for the U.S. Foreclosure Crisis
  • BankOnIT Deploys Virtual Engineers
  • Midwest Office: February Ergonomics Promotion-Discounts for CBAI Members!
  • Six Hottest Trends in Banking
  • Keep Your Bank Strong: Move Loan Growth into the Fast Lane
  • Why Millennials Are Your Canaries
  • Determining the Loan Purpose: The New Challenges
  • Talking to Customers about Reg E Doesn’t Have to be Painful
  • Don’t Take Check Writers for Granted
  • CBAI LEGAL: Alleged Website ADA Violations Pose No Civil Money Damages Threat
  • CBIS Nicoud: Post-Inauguration Insurance Considerations for Community Banks
  • CBAI Announces Golf Outing Location for the 43rd Annual Convention
  • Popular Ag Lenders’ Conference Scheduled for February 7
  • IRA Institute Scheduled for February 8 & 9
  • Commercial Lending Institute Scheduled for February 15-17
  • BSA/AML Conference Scheduled for February 23


  • Trump, Pence Advocate Regulatory Relief

    The White House expressed support for bank regulatory relief last week, with President Donald Trump and Vice President Mike Pence espousing relief in separate speeches. Speaking before the Congressional Republican Retreat in Philadelphia, Trump and Pence expressed support for pursuing financial reform and overturning Dodd-Frank Act regulations to spur economic growth. ICBA is working with the administration and Congress to advance regulatory relief through its Plan for Prosperity platform. Hear Trump’s Remarks. Hear Pence’s Remarks. See Plan for Prosperity.

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    Op-Ed: Unleash Community Banks with Regulatory Relief

    ICBA’s Plan for Prosperity platform would free community banks from excessive regulations to strengthen U.S. economic growth and investment, ICBA President Cam Fine wrote in a new American Banker op-ed. Fine cited the mounting regulatory burdens facing community banks and spotlighted the comprehensive list of reforms contained in its Plan for Prosperity.

    “The new Congress and Trump administration are taking on a variety of complex policy areas to speed up growth, from reforming the tax code to revitalizing the manufacturing sector,” Fine wrote. “Releasing the economic power of community banks would produce an immediate and practical benefit for our economy and help include more Americans left behind by our nation’s spotty recovery.” Read Op-Ed.

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    ICBA Calls on New Administration to Curb Fair Lending Overreach

    The ICBA last week called on President Donald Trump’s administration to rein in the overzealous application of fair lending laws. ICBA said despite community banks’ strong compliance systems for ensuring credit decisions are fairly and uniformly applied without regard to race, gender or national origin, these local institutions are threatened by a recent trend of unwarranted enforcement actions.

    “Community banks are fully committed to fair lending and strongly oppose discrimination prohibited under laws such as the Fair Housing Act and Equal Credit Opportunity Act,” ICBA President Cam Fine said. “However, community banks are experiencing enforcement overreach that diverts an abundance of resources from serving their local communities to complying with and responding to unwarranted fair lending allegations.” Read ICBA Release.

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    Hensarling Announces Republican Subcommittee Assignments

    House Financial Services Committee Chairman Jeb Hensarling (R-Texas) announced subcommittee assignments for Republican members. New committee members and the committee’s leadership team were previously announced. Illinois Congressman Randy Hultgren (R-14) was appointed vice chairman of the Capital Markets, Securities and Investments Subcommittee as well as a member of the Housing and Insurance Subcommittee. Read Hensarling Release.

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    Court Dismisses ICBA Case Against NCUA

    A federal court dismissed ICBA’s lawsuit against the National Credit Union Administration’s commercial lending rule. The U.S. District Court for the Eastern Division of Virginia granted the NCUA’s motion to dismiss ICBA’s case.

    In a statement, ICBA said it is evaluating the decision and its options and will continue pushing to level the tax and regulatory playing fields between community banks and credit unions through all appropriate avenues. “If the decision stands, tax-exempt credit unions will be permitted to exceed Congressional limitations on commercial lending activity under relaxed regulatory oversight, thereby posing a tangible threat to community banks, consumers and the financial system at large,” ICBA President and CEO Cam Fine said.

    ICBA’s suit charges that the NCUA’s rule, which took effect January 1, increases the powers of tax-exempt credit unions beyond their statutory limit. Read ICBA Release.

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    CBAI Co-Hosts Increasing Access to Affordable Mortgage Credit Workshop

    On January 26, 2017, the Community Bankers Association of Illinois was pleased to partner with the Federal Deposit Insurance Corporation, Federal Reserve Bank of Chicago, and the Office of Comptroller of the Currency to co-host the Increasing Access to Affordable Mortgage Credit Workshop at the FDIC offices in Chicago. Participants learned about affordable mortgages and refinancing products that may be helpful in meeting the needs of low and moderate income customers and underserved communities. Read More.

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    OCC Issues Guidance on Third-Party Relationships

    The Office of the Comptroller of the Currency issued supplemental examination procedures to promote consistency in examining risk management of third-party relationships. The updated procedures are designed to tailor examinations to bank risk and complexity. They expand on the core assessment contained in the “Community Bank Supervision” booklet in the Comptroller’s Handbook. See OCC Bulletin.

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    The 2017 CBAI Compensation Survey Is Now Online

    And You’re Not Going to Believe the Improvements We Made!

    Is your bank competing effectively with your peers to attract, reward and retain the top talent in today’s job market? What is your strategy to win the race for qualified leadership and employees?

    Complete the 2017 Compensation Survey now and receive the results at no cost. National compensation experts BalancedComp have partnered with CBAI to:

       1. ease the process of participating - possible to complete in under 30 minutes
       2. increase the survey's relevance to today’s banking environment
       3. enhance the resulting data's usability

    Survey results remain confidential and free to CBAI member participants, thanks to sponsor IZALE Financial Group. Click Here to Begin!

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    Investment News From THE BAKER GROUP

    Baker Market Update

    Information received since the Federal Open Market Committee met in December indicates that the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace. Job gains remained solid and the unemployment rate stayed near its recent low. See Baker Market Update.

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    Rural Economy Continues to Struggle: Mainstreet Index

    Creighton University’s Rural Mainstreet Index slipped to 42.8 in December, its 17th consecutive reading below growth-neutral. When asked to identify the greatest economic threat to their local economy in 2017, 87.8 percent of surveyed bank CEOs cited continuing low agriculture commodity prices. Nearly one in three said soaring loan defaults represented the greatest banking threat.

    The January RMI for Illinois improved to a regional high of 63.2 from 34.2 in December. The farmland-price index climbed to 34.6 from December’s 17.9. The state’s new-hiring index rose to 55.0 from last month’s 52.4. Illinois job growth over the last 12 months: Illinois Rural Mainstreet, +1.4 percent; Urban Illinois 0.6 percent. See RMI Report.

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    St. Louis Fed: The End Is in Sight for the U.S. Foreclosure Crisis

    The extended period of historically elevated rates of extreme mortgage distress and defaults in the U.S. housing market, better known as “the foreclosure crisis,” has faded from view as the economy continues its slow recovery. A deeper look at mortgage performance data from the Mortgage Bankers Association suggests the crisis has ended in some states, while it is not quite over yet for the nation as a whole. However, the end is near. The condition of current mortgage borrowers considered as a group—nationwide or state by state—is once again comparable to the period just before the Great Recession and the onset of the foreclosure crisis. Read Report.

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    BankOnIT Deploys Virtual Engineers

    BankOnIT has implemented a new service into its Banker’s Private Cloud® solution that allows technical issues to be addressed more accurately, more efficiently and with faster resolution times for client banks. These improved capabilities are only available through BankOnIT’s own virtual engineers. The Bankers Private Cloud® Virtual Engineers utilize artificial intelligence (AI) decision support systems while simultaneously working alongside human engineers. The combination provides capabilities that are not possible with people or AI systems alone. The virtual engineers have been able to resolve 85% more cases automatically. See BankOnIT Blog.

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    Midwest Office: February Ergonomics Promotion-Discounts for CBAI Members!

    Midwest Office is offering CBAI Members exclusive discounts on popular and ergonomically friendly office furniture during the month of February. Take advantage of the discounts provided in the flyer attached here! Choosing office furniture that is ergonomically friendly can increase productivity, quality of work, employee retention and improve health and safety. Click Here for product pricing and information!

    To place your next order, contact your Midwest Office Sales Representative, Kevin Gaffney at 217-303-5511 or email kgaffney@midwestoffice.com.

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    Six Hottest Trends in Banking

    Change is imminent in banking, and as we begin the new year the only debate seems to be what is going to be driving that change. Over the course of 2017, what is going to transform banking the most? Well, we have some ideas. Read More.

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    Keep Your Bank Strong: Move Loan Growth into the Fast Lane

    In the face of pressure from big banks and online lenders, community banks will need to pick up the pace to strengthen their loan portfolios – especially in their two biggest loan sectors: autos and mortgages. Over the past 10 years, community banks’ share of mortgages has been relatively flat, based on an August report by the White House Council of Economic Advisors. And market share has fallen for those with less than $10 billion in assets.

    Who’s picking up the slack? Primarily, digital lenders like Quicken Loan, Lending Tree and PennyMac, which have a solid toehold and are growing fast. Time is of the essence if community banks are to turn the tide and win back their loan business from these digital upstarts. Read More.

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    Why Millennials Are Your Canaries

    Despite the higher propensity to switch banks, Millennials are more engaged. They interact with their bank almost twice as much compared to both generations. Normally, the more engagement a customer has, the more loyal they are. Millennials defy that traditional correlation.

    The same goes for branch proximity attraction. Millennials are much more likely to use mobile banking functionality compared to other generations, but most Millennials switched banks because they wanted a closer branch. How do you explain this aspect of the Millennial mind? Why care about a branch if you are a power user of a bank’s mobile banking? Read More.

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    Determining the Loan Purpose: The New Challenges

    Identifying the loan purpose is a common issue facing lenders under the new Uniform Residential Loan Application (URLA) regulation, as well as for TRID disclosure requirements (Regulations X and Z) and HMDA reporting requirements (Regulation C). While it’s possible for the loan purpose to be the same for the new URLA under TRID and HMDA, lenders should understand that loan purpose may in fact be different for each-- and know what they can do to prepare for that eventuality. Read More from CBAI preferred provider Wolters Kluwer.

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    Talking to Customers about Reg E Doesn’t Have to be Painful

    Do you know how your front line employees explain Reg E options to customers? If you don’t, sit on the other side of the desk and listen to how the options are presented. Your employees should be presenting your customers’ options in a way that is clear, consistent, compliant and objective. There should be no bias in this conversation. However, if your Reg E opt-in rates are 90% or higher, or 10% or lower, it’s a pretty good sign that employee bias is a factor. Read More.

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    Don’t Take Check Writers for Granted

    In this era of digital banking, it may be surprising just how many people still write checks, and why. Just as surprising is how big a role check writers play for community banks. With 18.3 billion checks written each year, it’s a demographic few banks can afford to ignore. Learn More.

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    CBAI LEGAL: Alleged Website ADA Violations Pose No Civil Money Damages Threat

    Dozens of CBAI member banks have received “demand letters” circulated by one or more law firms seeking a “Settlement” of a grievance against the bank under Title III of the Americans with Disabilities Act (hereafter, “Title III”). Despite all of the bluster in the demand letters and the alleged urgency of entering into a “Settlement Agreement,” CBAI members might want to consider that a bank’s lack of compliance with Title III does not expose the bank to monetary penalties (in amounts either specified in the statute or handed down by a court in a civil-court judgment against the bank). Read Most Recent CBAI LEGAL.

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    CBIS Nicoud: Post-Inauguration Insurance Considerations for Community Banks

    In an impromptu press conference last week, President Trump claimed his administration will cut “regulations” by 75 percent for businesses. Even if skeptics call that estimate arbitrary, the proclamation was, at the least, another strong signal in the early days of the Trump Administration that delivering regulatory relief to the economy, in the effort to spur growth and job creation, will be the primary theme of the Trump Presidency. Read More. Read More.

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    CBAI Announces Golf Outing Location for the 43rd Annual Convention & Expo

    CBAI is pleased to announce the Golf Outing at CBAI’s 43rd Annual Convention & Expo on September 14, 2017, will be held at Panther Creek Country Club in Springfield. Panther Creek Country Club has been called Springfield’s best renue for a golf outing. Professionally designed by PGA Hall of Fame golfer Hale Irwin, all 7,244 yards will excite and challenge every level of golfer. Panther Creek has five sets of tees to choose from so it provides a complete test for the game’s best golfers while also featuring wide fairways and large putting surfaces which level the playing field. Opened in 1992, the 18-hole, par 72 course at Panther Creek Country Club has a course rating of 74.2 and a slope rating of 128 on Bent grass. For more information on Panther Creek, please Click Here.

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    Popular Ag Lenders’ Conference Scheduled for February 7

    This jammed-packed day takes a look at a variety of issues facing agricultural lenders. Attend CBAI’s 2017 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 “Managing Weather Risk: Planning for 2017” with Eric Snodgrass, director of the Undergraduate Studies Department of Atmospheric Science University of Illinois at Urbana-Champaign; “Global Economics: Points to Ponder” and “New Insights on Credit Analysis” with Dr. David Kohl, professor emeritus, Virginia Tech, Blacksburg, VA; and “Top Trends in Used Machinery” with Greg Peterson, aka “Machinery Pete.”

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    IRA Institute Scheduled for February 8 & 9

    Do you get an uneasy feeling in the pit of your stomach whenever a customer starts asking questions about IRAs? Do you know a little about IRAs but need more information? Would you have a hard time explaining the differences between a Traditional IRA and a Roth IRA? Would it be stressful for you to describe what a Recharacterization is to a customer? Have you ever looked at various IRA forms and not understood why the information that's being requested on them is necessary? Have you wondered if any of the rules have changed recently? If you answered “Yes” to any or all of the above questions then this two-day institute is for you. Leading this institute are Randy J. Heidmann and Robert Skomars, both consultants at Wolters Kluwer Financial Services.

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    Commercial Lending Institute Scheduled for February 15-17

    This three-day institute provides your commercial lenders with a solid foundation for producing and managing a quality loan portfolio. It focuses on analytical tools such as ratio, financial, cash flow analysis, as well as commercial loan structuring to enhance repayment capacity. Topics covered on day one include financial statement review, credit and ratio analysis, asset-conversion cycle analysis, and ratio interpretation. Cash budgeting, loan structuring, commercial loan documentation, and credit risk management are among the topics on day two. Day three examines cash-flow analysis, financial forecasting, and writing credit memos. Jeffery Johnson, president and founder of Bankers Insight Group, Atlanta, Georgia, heads this faculty. He is joined Robert M. Swartz, manager, and Gary Genenbacher, CPA and partner, both of BKD, LLP.

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    BSA/AML Conference Scheduled for February 23

    The annual BSA/AML conference is the place to keep up-to-date with current BSA/AML activity and trends. Regulatory expectations for BSA remain high, and there continues to be subtle changes in the enforcement of the rules. This means there is a continued need to focus on the effective and meaningful elements of a BSA program. This conference will discuss many “need--to--know” issues for the BSA/AML professional. This one-day program is designed to focus specifically on all applicable BSA activity over the last 12 months. This program helps to keep BSA personnel informed of industry trends, regulatory focuses, proposed rules, and other information relevant to the BSA professional. This conference is ideally suited to employees with BSA/AML responsibilities who have a basic understanding of anti--money laundering laws and regulations, including BSA officers, compliance officers, auditors, head tellers, and risk managers. Leading this seminar is Adam Witmer, senior consultant with Young & Associates, Inc., where he focuses on regulatory compliance.

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