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                     February 22, 2012 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • ACTION ALERT: Urge Congress to Extend Full TAG Coverage
  • CBAI Retains All Members in Recent Dues Assessment
  • Former Citigroup CEO Urges Stronger Volcker Rule
  • ICBA’s Fine: “Big Bank Abuses to Blame for Regulatory Burden”
  • Community Banks are a Better Small Business Partner
  • FDIC Community Banking Conference: "Small Banks Important"
  • ICBA Seeks Banker Participation in Regulatory Burden Survey
  • President’s 2013 Budget Proposes $61 Billion Big Bank Fee
  • Mega Banks Betting on Romney
  • U.S. Senate Banking Chair Seeks Audits of Exam Policies
  • CBAI Applauds Withdrawal of HUD Proposed Rule
  • ADA ATM Compliance Deadline Nears
  • Baker Market Update
  • Chicago Fed’s AgLetter Cites Continuing Strong Farm Economy
  • Rural Mainstreet Index Holds Steady
  • How Does the Compensation in Your Bank Stack Up?
  • CBSC Comments on BancInsure Downgrade
  • Are Community Banks Preparing for Baby Boomer Retirement?
  • CBSC Endorses Student Financial Literacy Program for CBAI Members
  • Bancography Demographic Trends Report Available for 2012
  • CBSC, Southwest Renew Agreement for Flood Zone Determinations
  • 2012 CBAI Convention General Session Speaker Announced
  • Deposit Documentation Scheduled for March 5-8
  • CBAI Marketing Groups Scheduled for March 6 & 7
  • Residential Real-Estate Lending Institute Set for March 19-21
  • CDD Spring Conference to be Held March 21-22


  • ACTION ALERT: Urge Congress to Extend Full TAG Coverage

    During the depths of the financial crisis in 2008, the FDIC established full deposit insurance coverage for non-interest-bearing transaction accounts to support community bank liquidity and stability and to prevent the sudden withdrawal of bank deposits which could have disrupted the entire banking system. In 2010, Congress modified and extended this FDIC insurance coverage through 2012. Because the banking system and the economic recovery remain fragile, a continuation of this FDIC insurance coverage is necessary to avert the risk of an abrupt dislocation of deposits for community banks. If the expanded insurance coverage is not extended, insurance coverage will revert to $250,000.00. An important political point is that this insurance coverage is not a government bank bail-out and that FDIC insurance is fully paid for by banks with their deposit insurance premiums.

    Congress must act to extend insurance coverage by year-end and community bankers must make their voices heard. Leaving this important issue unaddressed will create a disruptive uncertainty for community banks and result in an additional regulatory burden to draft contingency plans in the event of significant reductions in deposits.

    Please
    click here to urge your members of Congress to support a five (5) year extension of the TAG program.

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    CBAI Retains All Members in Recent Dues Assessment

    During the most recent semi-annual dues assessment, all of CBAI’s 400 financial institution members maintained their membership. CBAI Chairman Mary Sulser, EVP of Buena Vista National Bank in Chester, stated, “CBAI’s extraordinary member retention rate reflects the fact that community banks are taking advantage of the many services offered by the association that deliver real value and help them stay competitive.”

    CBAI President Bob Wingert said, “Community banks also recognize the importance of maintaining dedicated, autonomous representation among lawmakers, regulators, and other public officials. The recent financial crisis revealed the increasingly divergent positions of Wall Street mega banks and Main Street community banks.”

    CBAI represents approximately 70% of all banks and thrifts headquartered in Illinois and more than $72 billion in banking assets.

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    Former Citigroup CEO Urges Stronger Volcker Rule

    Former Citigroup CEO John Reed said last week that the U.S. should strengthen the Volcker rule by targeting bank traders’ pay and imposing severe penalties. The Volcker rule bans banks that accept deposits from trading that could put their firms at risk. Reed also supports establishing “a modernized Glass-Steagall wall between client-oriented banking and the high-risk trading activities that helped cause the collapse of the world’s financial system.” CBAI concurs with
    Reed’s recommendation.

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    ICBA’s Fine: “Big Bank Abuses to Blame for Regulatory Burden”

    In his most recent blog post, ICBA President Cam Fine accurately reveals that the root cause of unwarranted regulatory burden on community banks over the past 20 years has primarily been due to the abuses and greed of the mega banks as Congress and regulators moved to protect consumers.
    See Finer Points.

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    Community Banks are a Better Small Business Partner

    Recent research has again confirmed that community banks are more reliable than the giant banks when it comes to credit availability for small businesses.
    See CNBC Article.

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    FDIC Community Banking Conference: "Small Banks Important"

    The Federal Deposit Insurance Corporation (FDIC) hosted a one-day conference last week on “The Future of Community Banking” where community bankers and federal regulators discussed the unique role community banks play in the country’s economy and the challenges small financial institutions face in today’s environment. The conference featured remarks by Federal Reserve Board Chairman Ben Bernanke, Rep. Shelley Moore Capito, FDIC Director Thomas J. Curry, and Martin J. Gruenberg, acting chairman of the FDIC.

    Regulators emphasized the contributions community banks make to the national and local economies and expressed interest in helping small banks in this regulatory environment. Gruenberg said the agency would make a significant effort to prevent new rules from unduly hurting smaller banks. Bankers addressed the importance of community banks in the financial system, shared their views on regulatory burdens affecting small banks, and called on regulators to join them in convincing lawmakers to ease these burdens.

    The conference was the first in a series of community banking initiatives that the FDIC is undertaking this year. The event will be followed by a roundtable discussion in each of the FDIC’s six regions.
    See Conference Agenda and Remarks.

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    ICBA Seeks Banker Participation in Regulatory Burden Survey

    ICBA is asking community bankers to complete a brief survey to help formulate comments to the Consumer Financial Protection Bureau (CFPB) which intend to streamline consumer financial services regulations. The deadline is February 24th. To access the survey,
    Click Here.

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    President’s 2013 Budget Proposes $61 Billion Big Bank Fee

    Last week, President Obama released his $3.8 trillion budget proposal for fiscal year 2013. In the proposal, the President calls for a $61 billion bank fee on the largest U.S. banks, a 2.7 percent reduction in the Treasury Department's budget, and an increase in funding for the Securities and Exchange Commission (SEC) and the Consumer Financial Protection Bureau (CFPB).

    The President’s proposed bank fee would require banks with assets of $50 billion or more to pay $61 billion over a 10-year period, starting in 2013, to pay for their role in the financial crisis. The bank fee would “compensate Americans for the extraordinary assistance they provided to Wall Street, as well as to discourage excessive risk-taking.” The bank fee would also offset the cost of the President’s latest mortgage refinancing program proposal that helps underwater borrowers refinance into cheaper loans.

    Meanwhile, the CFPB budget would jump 32 percent in fiscal year 2013 to $448 million. As an independent bureau in the Federal Reserve System, funding for the CFPB comes from mandatory transfers from the Federal Reserve. The CFPB has the ability to request up to $597.6 million in 2013, and may request up to $200 million more in discretionary appropriations from Congress until 2014.
    See President’s 2013 Budget Proposal.

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    Mega Banks Betting on Romney

    The large Wall Street firms are now backing Presidential candidate Mitt Romney based on campaign contribution data compiled by the Center for Responsive Politics. According to financial consultant Francine McKenna, the TBTF bankers are voting for “business as usual” with their wallets.
    See BankThink Article.

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    U.S. Senate Banking Chair Seeks Audits of Exam Policies

    Senate Banking Committee Chairman Tim Johnson (D-S.D.) asked federal financial inspectors general to audit and report on their agencies’ examination processes for small community banks and credit unions. In a
    letter to the IGs, Johnson asked that the reports include examination timelines, how agencies ensure exam consistency, and how regulated institutions can question exam results.

    Johnson said he has heard community bank and credit union concerns about examinations with unclear standards or inconsistent application of agency policies and procedures, which creates uncertainty in their business operations and stunts credit. ICBA testified on behalf of legislation before the Senate Banking Committee and other committees in both chambers of Congress on the need to address excessive regulation and harsh exams. CBAI applauds the Chairman's actions.

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    CBAI Applauds Withdrawal of HUD Proposed Rule

    An October CBAI comment letter and community-banker responses to an Action Alert have helped convince the Department of Housing and Urban Development (HUD) to withdraw its Proposed Rule to enable Farm Credit System (FCS) lenders to participate in Federal Housing Administration (FHA) mortgage insurance programs. This positive outcome reflects the importance community banker involvement in the governmental relations process.
    See Announcement.

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    ADA ATM Compliance Deadline Nears

    Banks have less than 30 days to comply with the Justice Department's final rule governing ATM accessibility for the visually impaired. As of March 15th, all ATM locations and bank self-service terminals must include an audio component for displayed information, and additional ATM functions must be outfitted with audio headset capabilities. A safe harbor exception is available for banks if the rule results in an "undue burden", but it should only be implemented after consulting legal counsel and on an interim basis.
    Read More.

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    Baker Market Update

    Nice surprises were in store last week concerning of jobless claims, housing starts, and inflation.
    Read More.

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    Chicago Fed’s AgLetter Cites Continuing Strong Farm Economy

    Farmland values for 2011 climbed 22 percent in the Chicago Federal Reserve District – the largest increase since 1976, due primarily to rapid price growth in major crops, key livestock, and dairy products. Credit conditions also improved as the index of non-real estate farm loan repayment rates surged. The USDA, however, predicted net farm income to decline to $91.7 billion in 2012, or 8.2 percent from 2011.
    See AgLetter.

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    Rural Mainstreet Index Holds Steady

    The Rural Mainstreet Index remained steady this month with farm income the main driver. The Index is derived from a monthly survey of community bank CEOs in 10 Midwestern states including Illinois.
    See February Survey Results.

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    How Does the Compensation in Your Bank Stack Up?

    “I have used the CBAI Compensation Survey for many years. The information is the best source of data for comparative compensation of bank personnel.” – Ron Minnaert, President & CEO, State Bank of Graymont

    Developed by community bankers for community bankers, it’s easy to use and highly confidential as all data goes directly to the accounting firm of Eck, Schafer, & Punke, LLP. To complete the 2012 CBAI Officer Compensation Survey,
    Click Here.

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    CBSC Comments on BancInsure Downgrade

    Last month, A.M. Best Company downgraded the financial strength rating for BancInsure from B++ (Good) to B (Fair). This is the second time in the past year that BancInsure has been downgraded.

    We have been advised by the Federal Home Loan Bank of Chicago (FHLBC) that this change affects community banks that participate in its Mortgage Partners Finance (MPF) Program. Participating banks are required to maintain fidelity insurance and mortgagee’s errors and omissions (E&O) insurance with carriers that are rated B+ or better by A.M. Best or affiliated with Lloyd’s of London. We are also aware that underwriting guidelines from Freddie Mac are more restrictive than the MPF Program. Additionally, the Commercial Bank Examination Manual, Section 4040.1, requires that “banks should consider the financial strength and claims paying capacity of the insurance underwriter” when selecting carriers.

    While the CBSC board of directors continues to monitor BancInsure’s financial performance, we encourage CBAI member bankers to review their insurance coverages and, if applicable, their FHLBC and Freddie Mac agreements to determine if they need to take prompt action concerning their insurance policies.

    Meanwhile, officials from Nicoud, our insurance services partner, is meeting with client banks to assess their coverage and carriers, and to develop individual plans to address any concerns. If you have questions regarding your bank’s insurance program, please contact John Immordino, Patti Tobin, or Jim Hillestad at Nicoud Insurance at 217-546-6900 or CBSC President, Mike Kelley at 217-529-2265.

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    Are Community Banks Preparing for Baby Boomer Retirement?

    Of the 75 million people born during the Baby Boom that began after World War II (1945 to 1962), the initial wave has now begun to retire. They control the majority of the wealth in the U.S., and their retirement will cause an unprecedented demographic change as they sell assets to fund retirement.

    According to financial consultants and researchers, banks need to focus more attention on the right products and services to provide retiring Boomers.
    See Article.

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    CBSC Endorses Student Financial Literacy Program for CBAI Members

    Community BancService Corporation, Inc. (CBSC), the business services subsidiary of CBAI, has partnered with BancVue to promote MoneyIsland, an interactive computer game intended to teach students banking and money management skills.
    Read More.

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    Bancography Demographic Trends Report Available for 2012

    Each year Bancography, delivers demographic and competitive information to assist banks in their strategic-planning efforts. Click on “
    Outlook 2012: Deposit and Demographic Trends” to see a review of deposit growth and demographic trends for large- and mid-sized U.S. markets.

    The document examines the latest FDIC, NCUA and demographic statistics and provides comparative data on deposit growth, income growth, branch concentration and other measures. There are also a number of tactical recommendations for marketing and branch planning in the year ahead.

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    CBSC, Southwest Renew Agreement for Flood Zone Determinations

    Community BancService Corporation, Inc. (CBSC), the business services affiliate of CBAI, the only state association that exclusively serves Illinois community banks, announced today that it has extended its agreement with Southwest Financial Services (SFS) of Cincinnati, Ohio, as a CBSC Preferred Provider. The new three-year agreement will allow CBAI members to continue receiving exclusive member discounts on the purchase of flood zone determination services and provides for future price reductions.
    Read More.

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    2012 CBAI Convention General Session Speaker Announced

    The General Session Speaker at CBAI’s 38th Annual Convention & Expo is Steve Ford, who has enjoyed a successful acting career for more than 25 years appearing in more than 800 hours of film and television productions. Today, Ford travels nationally as a motivational and inspirational speaker for corporate events and conventions, sharing memories of his family's stay in the White House and his years in Hollywood. His unique presentations inspire people to be open to change and transformation because he speaks to the whole person, including both career and family. He currently serves on the board for The President Gerald R. Ford Museum and The Gerald R. Ford Foundation. He is the third son of former President and Mrs. Gerald R. Ford. Scheduled for September 20-22, CBAI’s annual convention, “Building for Tomorrow,” will be held at the Hyatt Regency at The Arch in St. Louis, MO. More information will be available soon.

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    Deposit Documentation Scheduled for March 5-8

    CBAI offers “
    Deposit Documentation” in four locations this March. Tellers, head tellers, new account representatives, and anyone opening accounts or dealing with customers on the deposit side will benefit from attending this seminar. The objectives of this seminar are to define the governing rules, regulations, and laws affecting deposit documentation; explain how the rules, regulations, and laws directly affect day-to-day operations and customer interactions; and show attendees how they can apply what they learn to new circumstances and situations. Tim Tedrick, CRCM, CRP, and executive officer at Wipfli LLP in Sterling, leads this seminar.

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    CBAI Marketing Groups Scheduled for March 6 & 7

    CBAI’s
    Marketing Groups provide opportunities for community bank marketing professionals to meet quarterly to discuss timely issues with their peers. The benefits are numerous. Members form lasting relationships with non-competing marketing professionals, solve pressing problems, obtain access to highly-respected industry experts, improve marketing practices in the bank, and bring back new resources and ideas from every meeting. Topics for discussion may include strategic planning, cross-selling techniques, design and layout secrets, budgeting, incentive programs, target marketing, non-traditional bank competition, surveys, and market research. The Groups are facilitated by Lori Philo Cook of InnovoMarketing, who has more than 20 years’ experience in bank marketing.

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    Residential Real-Estate Lending Institute Set for March 19-21

    This
    three-day mini-institute provides real-estate lenders with a solid foundation for managing and producing a quality mortgage portfolio. It includes exercises in buying and selling mortgages in the secondary markets, a visit to a construction site, and analysis of the tax return of a self-employed borrower. The institute’s objective is to assist the participants in three areas: improved customer service, more efficient processing and servicing, and stronger underwriting. Topics covered on day one include regulatory compliance, the secondary mortgage market, loan applications and interviewing, and closing documentation. Day two covers lending to self-employed borrowers, underwriting, construction financing and site visit, and loan origination. Day three includes how to analyze appraisals and loan processing. Heading up the faculty is David Kemp, founder and president of Bankers Management Inc. in College Park, GA. Bill Elliott, senior consultant with Young & Associates of Kent, OH, a nationally recognized, compliance-consulting firm for community banks, co-leads this institute.

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    CDD Spring Conference to be Held March 21-22

    The
    CDD Annual Spring Conference and Mini-Exposition is scheduled for March 21-22 at the Hilton Hotel in Springfield. This conference combines motivational, energetic, and informative general sessions with important messages for today’s banker, as well as six breakout sessions with practical solutions and ideas that can be immediately implemented at the bank, and a fun-filled social event. Conference highlights include Scott Friedman, a certified speaker professional and motivational humorist from Golden, CO, who is conducting two sessions entitled, “A Funny Thing Happened on the Way to the Sale,” and “Employee Innovation for Turbulent Times.” The mini-exposition, following the Business Meeting Luncheon, features a fabulous dessert table and networking opportunities with vendors.

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    CBAI
    ACT Appraisal

    PROFESSIONAL DEVELOPMENT PROGRAMS THROUGH 4/15/2012


    TELEPHONE/WEBCASTS THROUGH 3/31/2012


    CBAI EVENTS
    CBAI’s Career Development Division Spring
    Conference & Exposition

    March 21-22, 2012 – Hilton Hotel, Springfield

    CBAI'S 2012
    Capital Conference

    April 17, 2012 – Hilton Hotel, Springfield

    CBAI’s 30th Annual
    Call on Washington

    April 24-27, 2012 – Gaylord Resort and Convention Center, National Harbor, Maryland



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