Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois Community Bankers Association of Illinois
 
     A Bi-Weekly News Bulletin for CBAI Members              February 11, 2009 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • Treasury Announces Bank Rescue Plan
  • Senate Approves Stimulus Package – Conference Ahead
  • Treasury Releases Restrictions on Executive Compensation
  • Wall Street’s Collapse Driving Financial Restructuring Debate
  • CBAI Washington Visitation Slated for May 11-13
  • CBAI's 25th Annual Capital Conference Set for April 22
  • CBAI 2009 Spring Group Meetings Scheduled
  • Baker Market Update for February 6, 2009
  • Fed Survey: Lending Standards Remain Tight
  • Fed Extends Liquidity Programs
  • Sageworks: Ranks 10 Most Profitable Industries
  • CBSC Recommends Data Loss Prevention Service of CTH Technologies
  • Giannoulias: Beware of Refund Anticipation Loans
  • "Finally Home" Looking For Lenders
  • Survey – ID Fraud Increasing But Being Caught More Quickly
  • Are Illinois Banks Ready for 2009 Red Flags Exams?
  • Wolters Kluwer Financial Services Offers Red Flag Video
  • FDIC Releases Survey of Banks' Efforts to Serve Unbanked
  • Troubled JP Morgan Chase Jacks Up Credit Card Fees
  • More Farms in U. S. for First Time in 60 Years
  • SBA’s Patriot Express Program Loans $250 Million to Veterans
  • CBAI Announces 35th Annual Golf Tournament
  • Register Now for CBAI Operations/Technology Groups


  • Treasury Announces Bank Rescue Plan

    On Tuesday (February 10) Treasury Secretary Tim Geithner introduced a
    four-point plan to stabilize the banking system and stimulate the flow of credit to consumers and businesses: 1) stress-test the biggest banks and provide capital to those that need it; 2) make credit more available to consumers and businesses by pumping $100 billion in seed money to expand the Fed’s Term Asset-Backed Securities Loan Facility; 3) create a private-public partnership to take bad assets off banks’ balance sheets by using public financing to create private sector buying capacity; and 4) commit $50 billion to reduce mortgage payments.

    The rescue plan is primarily structured to make sure the big banks don’t fail, although Treasury and the SBA will soon announce the launch of a Small Business and Community Bank Lending Initiative to stimulate SBA lending by reducing fees and increasing the guarantees. Click here for more details on the plan.

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    Senate Approves Stimulus Package – Conference Ahead

    On a 61-37 vote, an $838 billion economic stimulus
    measure passed the U. S. Senate this week. It includes nearly $300 billion in tax relief and $550 billion in spending. A joint committee of House and Senate members will now convene to reconcile the differences between each chamber’s legislation. Under the Senate version, homebuyers could get a $15,000 tax credit if they purchase.

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    Treasury Releases Restrictions on Executive Compensation

    On February 4, 2009, the Treasury Department
    announced restrictions on executive pay for banks that receive government assistance. The guidelines distinguish between banks participating in the Capital Purchase Program and banks needing “exceptional assistance” such as Bank of America and Citigroup.

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    Wall Street’s Collapse Driving Financial Restructuring Debate

    In the next few months, the Obama Administration and Congress will determine winners and losers in what will likely be the largest overhaul in financial regulation since the 1930s. One of the critical issues for community banks is whether or not the too-big-to-fail/manage/regulate institutions will be effectively addressed. For a more detailed description of the issues that are on the table for discussion,
    click here.

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    CBAI Washington Visitation Slated for May 11-13

    Washington Visitation is an annual lobbying trip organized by CBAI. For more than 25 years community bankers have been traveling to the nation’s capital to meet with federal regulators and Illinois Congressional members. CAN YOU MAKE A DIFFERENCE? YES! Let your voice be heard by those who can affect the process. Illinois is among the largest banking contingents from any state to regularly visit Washington, D.C. For more information, contact Jessica Schmidt.

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    CBAI's 25th Annual Capital Conference Set for April 22

    Early Bird Registration is just $150 per bank and available until Friday, April 3. After April 3, the registration fee is $200 per institution. One registration fee covers the cost for ALL! Bring as many of your officers, directors, and employees as you can. All meal functions, transportation to and from the Capitol, and materials are included. Please contact Jessica Schmidt with questions.

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    CBAI 2009 Spring Group Meetings Scheduled

    Each spring CBAI leaders and staff travel around the state to attend 11 golf outings and dinner meetings with hundreds of community bankers and associate members. CBAI President Bob Wingert reports on Association projects and banking issues, and Kraig Lounsberry, CBAI Senior Vice President of Governmental Relations, provides up-to-the-minute reports on legislative activities. This year, Vimal Patel, senior director of financial markets at Sageworks, Inc., discusses today’s business climate and more. Plan now to attend!
    Click here for the 2009 Spring Group Meeting schedule.

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    Baker Market Update for February 6, 2009

    The U.S. economy lost 598,000 payrolls in January, more than economists were expecting. Average hourly earnings slowed. How will the stimulus package affect the economy?
    Click here to read more.

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    Fed Survey: Lending Standards Remain Tight

    The Federal Reserve said the number of banks reporting tighter lending standards fell in the past three months, but remained elevated. The
    survey found 64 percent said they tightened standards on commercial and industrial loans, compared with 84 percent in October and 32 percent a year before. In addition, 79 percent said commercial real estate lending standards were tightened, down from 87 percent in October. Respondents said loan demand continued to weaken over the survey period.

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    Fed Extends Liquidity Programs

    The Federal Reserve
    announced the extension through Oct. 30, 2009, of several liquidity programs. The Commercial Paper Funding Facility, the Money Market Investor Funding Facility, temporary swap lines between the Fed and other central banks and other programs were extended. The expiration date for the Term Asset-Backed Securities Loan Facility remains Dec. 31, 2009.

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    Sageworks: Ranks 10 Most Profitable Industries

    Sageworks, a preferred service provider of Community BancService Corp, Inc., recently compiled a
    ranking of the 10 most profitable industries in the U.S. Companies in these industries have the highest net profit margins of all privately held companies over the last 12 months. Nine of the 10 industries are service providers and four of the 10 provide healthcare. These industries are well positioned to withstand the economic downturn due to their profitability.

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    CBSC Recommends Data Loss Prevention Service of CTH Technologies

    The Community BancService Corporation, Inc. (CBSC), a subsidiary of CBAI, today
    announced that it has selected CTH Technologies as its preferred provider for data loss prevention (DLP) solutions. The CTH SecureCARE software product is designed to help community banks manage and secure their most valuable asset, customer data. In addition, CBSC has negotiated member-favorable contract specifics.

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    Giannoulias: Beware of Refund Anticipation Loans

    With income tax season now here, State Treasurer Alexi Giannoulias
    warned Illinois residents about the high cost of refund anticipation loans and other “instant” filing offers and urged them to use free assistance and direct-deposit alternatives.

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    "Finally Home" Looking For Lenders

    The Illinois State Treasurer’s Office is looking for community banks to offer its Finally Home mortgage guarantee to borrowers who may not otherwise meet their mortgage requirements.

    Under Finally Home, the Treasurer’s Office earmarks 10 percent of the qualifying mortgage for the participating lender for the first five years of the loan. If the borrower defaults in that period, the Treasurer’s Office reimburses the bank for the losses up to the 10 percent earmark.

    Borrowers can use the guarantee to purchase a home or to refinance a loan if an ARM is about to reset to an unaffordable level or if they have missed payments due to circumstances beyond their control and can continue repayment.

    To be eligible, the borrowers’ combined household income may not exceed 115 percent of U.S. Department of Housing and Urban Development's median family income for the area in which the home is located. The purchase price of the 1- to 4-unit, owner-occupied home cannot exceed the conforming loan size limits as established by the Federal National Mortgage Association.

    Lenders must portfolio the loans, but are not obligated to meet any loan participation quotas. The program is free and counts toward CRA credit.

    To find out more or to enroll, call program director Ben Noven at (312) 814-1249 or visit
    www.treasurer.il.gov and follow the Finally Home link.

    To help the Treasurer's Office improve the program, please take a moment to answer a survey.

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    Survey – ID Fraud Increasing But Being Caught More Quickly

    On February 9, 2009, Javelin Strategy
    released its annual identity fraud survey results which found that the number of identity fraud victims has increased 22 percent to 9.9 million adults in the U. S., while the total fraud losses increased by seven percent to $48 billion. The survey also determined that consumers and businesses are detecting and resolving fraud more quickly.

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    Are Illinois Banks Ready for 2009 Red Flags Exams?

    For many Illinois banks, automating ID Verification and ID Authentication processes to eliminate the pitfalls of manual processes will be crucial to meeting regulators’ Red Flags scrutiny. “While there may not initially be any heavy penalties, the slaps on the wrists from regulators are going to be hard and hurt very much from a reputational standpoint,” said Ted Dreyer, senior attorney with Wolters Kluwer Financial Services, recently in Bank Technology News Intelligencer. For a short online demo of how Wiz Sentri: RiskID from Wolters Kluwer Financial Services, a CBAI Endorsed Vendor, can help,
    click here.

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    Wolters Kluwer Financial Services Offers Red Flag Video

    Wolters Kluwer Financial Services, a CBAI preferred services provider, recently released a video on ComplianceHeadquarters.com about the importance of keeping your bank’s “red flag” compliance program current. View the video for free after registering to become a user.

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    FDIC Releases Survey of Banks' Efforts to Serve Unbanked

    In the first national survey of banks' efforts to serve unbanked and underbanked individuals and families in their market areas the FDIC found that improvement may be possible in the areas of focus, outreach and commitment. The majority of banks (– 63 percent –) offer basic financial education materials, but fewer participate in the types of outreach efforts that are viewed by the industry as most effective to attract and maintain unbanked and underbanked individuals as long-term customers.

    The bank survey, which was voluntary, was administered in 2008 to a nationally representative random sample of about 1,300 FDIC-insured banks and thrifts; 685 completed surveys were returned, representing a 54 percent response rate. Case studies were also developed for 16 banks that are employing innovative ways of serving.

    For the "FDIC Survey of Banks' Efforts to Serve the Unbanked and Underbanked,
    click here. Back to top

    Troubled JP Morgan Chase Jacks Up Credit Card Fees

    JP Morgan Chase, the nation’s largest credit card issuer, is now charging $10 per month for card holders with low promotional rates who have carried large balances for more than two years. Although the rate affects less than 1% of its credit card accounts, the troubled giant is seeking to raise revenues and receiving considerable criticism in the process.
    More.

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    More Farms in U. S. for First Time in 60 Years

    First the first time in six decades, the U.S. has experienced an increase in the number of farms. The 2007 USDA Agriculture Census found that farm numbers climbed by 4% in 2007 compared to 2002 (definition of a farm entails the sale of at least $1,000 in ag products). Overall, there are 2.2 million farms in the U.S. The survey also found growing diversity in farming as the number of women comprising “principal operators” increased by almost one-third.
    More information.

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    SBA’s Patriot Express Program Loans $250 Million to Veterans

    In just 20 months, the SBA has authorized more than $250 million in loan guarantees to about 2,900 veterans and their spouses for creating and expanding their small businesses. The Patriot Express program builds on the more than $1 billion in loans the SBA guarantees annually for veteran-owned businesses. The program is offered through participating lenders. For more details,
    click here.

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    CBAI Announces 35th Annual Golf Tournament

    Scheduled for Thursday, September 24, 2009, this year's Golf Outing at the 35th Annual Convention and Expo in Schaumburg, IL, will be held at The Arboretum Club in Buffalo Grove, a lushly landscaped and elegantly appointed course and club. This seasoned 18-hole Dick Nugent-designed course has been home to many corporate and charity outings since its opening in 1990. Its 100 acres of rolling fairways, large varieties of trees and wildflowers, and undulating greens offer visual and playing pleasure. A fun and challenging experience for all levels, players navigate the course with state-of-the-art electric carts with full GPS mapping. The new, 27,000-square-foot clubhouse boasts spacious locker rooms for men and woman and a fully stocked pro shop.

    Look for complete details and registration information for CBAI's 35th annual Convention in early March.

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    Register Now for CBAI Operations/Technology Groups

    This March, CBAI is pleased to offer the
    Operations/Technology Groups, which provide an opportunity for community bankers to exchange ideas, dissect problems, and discuss important issues with their peers. The Operations/Technology Groups are designed to be a rewarding experience where bankers can grow professionally and personally. To ensure that participants have as much in common as possible without being competitors, individuals are assigned to groups based on bank size and location. The Groups meet four times a year in three locations the CBAI Headquarters in Springfield, the Holiday Inn Select in Naperville, and the Holiday Inn in Mt. Vernon. The Springfield and Mt. Vernon groups are facilitated by Bert Purdy, manager at BKD, LLP in St. Louis. Tim Tedrick, executive officer with the accounting firm of Lindgren, Callihan, Van Osdol in Sterling, facilitates the Naperville group.

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