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

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • CBAI and ICBA Seeking Signatures on Plan for Prosperity Petition
  • Register Now for CBAI's 35th Annual Call on Washington!
  • Regulatory Burden Holding Back Small-Biz Lending, Report Finds
  • Trump Orders Agency Regulatory Reform Task Forces
  • Register Today for CBAI's Capital Conference on April 5th!
  • Community Bank Net Income Rises in Q4
  • CBAI Urges FDIC to Support Chartering De Novo Community Banks
  • Investment News From THE BAKER GROUP
  • Midwest Farm Credit Conditions Continue Downward Trend
  • Make Plans Now to Attend CBAI’s 2017 Group Meetings!
  • CBAI LEGAL: Federal Court Slams B of A, Denies $900,000 Fraud Restitution
  • Showcase Your Bank with the Most Powerful Form of Advertising!
  • CBIS Nicoud: Common Sources of Civil Money Fines or Penalties
  • E-Sign Quiz Offers Insights
  • Dell Deals Available to Community Banks and their Staffs and Customers
  • Your Peers Are Completing the CBAI Compensation Survey – Don’t Be Left Out
  • Maintain Competition and Routing in Payments
  • Safe-Deposit Procedures to be Held March 15 & 16
  • Seminar for the Community-Bank Attorney Set for March 17
  • Asset/Liability Management Seminar Scheduled for March 21
  • Residential Real-Estate Lending Institute Slated for March 28-30

  • CBAI and ICBA Seeking Signatures on Plan for Prosperity Petition

    CBAI and ICBA are calling on community bankers, employees and customers to join the push for meaningful regulatory relief by signing a petition supporting the Plan for Prosperity. The Plan offers policymakers a comprehensive regulatory relief blueprint to promote localized lending and job growth.

    Show policymakers in Washington the power of community bankers and their allies. Signing the petition allows the profession to stand up and speak up on behalf of community banks, local communities, and the American economy. Sign the Petition Today!

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    Register Now for CBAI's 35th Annual Call on Washington!

    This Congressional Session holds more potential for meaningful regulatory relief than any other in the past 30 years. We need your participation in a grassroots campaign by attending CBAI's 35th Annual Call on Washington which will be held at the Grand Hyatt Washington from April 30 to May 3, 2017.

    CBAI bankers from across Illinois will travel to Washington, D.C. and call on their members of Congress to support issues of importance to Illinois community banks. YOUR VOICE DOES MAKE A DIFFERENCE! Now is the time to get involved.

    Again this year our Call on Washington will be held in conjunction with the ICBA's 2017 Capital Summit. Along with CBAI coordinated events, our entire delegation will attend ICBA's meetings and events.

    CLICK HERE for more information and to register.

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    Regulatory Burden Holding Back Small-Biz Lending, Report Finds

    Small-business lending has decreased among banks of all sizes since the financial crisis, and regulatory burden is among the most prominent reasons, according to a new Federal Reserve Bank of Dallas paper. The paper says U.S. commercial bank small-business loans have fallen 15 percent from their pre-crisis high.

    The paper from financial analyst Kelsey Reichow says that small-business loans comprised 35 percent of community loans in 2016, compared with a rate of 2 percent at larger banks. The paper notes that the fixed costs associated with regulatory compliance make burdens disproportionately expensive for community banks. Read More.

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    Trump Orders Agency Regulatory Reform Task Forces

    President Donald Trump last week signed an executive order requiring every federal agency to establish a Regulatory Reform Task Force to eliminate red tape. Each task force will evaluate existing regulations and identify costly and unnecessary regulations for repeal or modification.

    Previous executive orders require agencies to identify two federal regulations for elimination for every new regulation they issue and direct the Treasury Department to work with federal agencies to review regulations implemented in response to the 2008 financial crisis. Read Executive Order.

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    SHAZAM offers a wide array of training topics to keep you and your staff up to date and informed on products and services in the financial services industry. With more than 80 years of combined experience, the SHAZAM training team is well prepared and educated. From a regional seminar about debit card fraud, ATM operations and chargebacks to an on-site training for a topic of your choice, rely on our team as your training experts! Learn more about SHAZAM’s training services today!

    Register Today for CBAI's Capital Conference on April 5th!

    Your Advocacy Is Crucial

    For one day every year, CBAI member bankers make their voices heard face-to-face with lawmakers at the state Capitol. CBAI's 33rd Annual Capital Conference will be held Wednesday, April 5 at the Wyndham Springfield City Centre (formerly the Hilton Hotel). The day begins with a legislative briefing and luncheon. This year's guest keynote speaker is newly elected Illinois Comptroller Susana Mendoza. After lunch, with key talking points in hand, our constituency moves to the State Capitol to meet with regulators and legislators. The day is capped off with a reception for bankers, legislators and regulators at the top of the Wyndham which affords sweeping views of the Capital City. This is an opportunity you don't want to miss!

    REGISTER NOW! The Early Bird Special is ONLY $100 per institution!

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    Community Bank Net Income Rises in Q4

    Community banks reported a $508 million (10.5 percent) increase in net income in the fourth quarter, according to the FDIC’s Quarterly Banking Profile. The 5,461 institutions identified by the FDIC as community banks experienced a $22.4 billion rise in total loan and lease balances in the fourth quarter and a $115.7 billion gain over the past 12 months. Net operating revenue rose $1.6 billion (7.6 percent) from the fourth quarter of 2015 to $23 billion.

    Overall, all FDIC-insured institutions reported a 7.7 percent rise in net income, mainly attributable to a 7.6 percent increase in net interest income. Of the 5,913 reporting institutions, 59 percent reported year-over-year quarterly earnings growth.

    The FDIC’s Problem Bank List declined from 132 to 123 during the fourth quarter, the smallest number in more than seven years. The Deposit Insurance Fund’s reserve ratio continued its rise, growing from 1.18 percent to 1.20 percent during the quarter. Read FDIC Release. See Illinois Bank Performance Summary.

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    CBAI Urges FDIC to Support Chartering De Novo Community Banks

    In a February 17, 2017 comment letter to the Federal Deposit Insurance Corporation (FDIC) regarding its proposed new Application Handbook for newly chartered banks, CBAI expressed support for Chairman Martin Gruenberg’s recent statement that, “Newly chartered (de novo) community banks are vitally important to maintaining a strong, growing, evolving and vibrant banking profession.”

    CBAI stated that the proposed FDIC Application Handbook contains a useful roadmap for those interested in deposit insurance for a proposed new bank charter. CBAI noted, however, that the absence of a useful roadmap was not the barrier to obtaining deposit insurance and the dearth of de novo banks during the past seven years. The lack of new charters was apparently the result of a decision by the FDIC, despite a formal position to the contrary, to require new bank charter applicants to prove they were virtually failure-proof rather than just having a reasonable likelihood of succeeding.

    An obvious example was a requirement that extended the de novo period to seven years for examinations, capital maintenance, and other requirements. Last year the FDIC reduced the requirement to three years which, when combined with the Chairman’s recent comments and additional resources (including the Application Handbook), hopefully signals a sincere change in the position of the FDIC towards approving applications for deposit insurance for de novo charters.

    CBAI looks forward to a resumption of many new banks being chartered each year to help maintain the community banking profession. Read CBAI Comment Letter to the FDIC.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    In her role as Fed Chairperson, it’s easy to forget that Janet Yellen is also a mother. In that context, the “fairly soon” reference in the recently released FOMC Minutes (they should be called hours) makes perfect sense. Mom, when can we go to the park? Fairly soon. Mom, when’s dinner going to be ready? Fairly soon. Mom, when are you going to raise rates again? Fairly soon. And that, in the time-honored tradition of mothers everywhere, could mean anything. See Baker Market Update.

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    Midwest Farm Credit Conditions Continue Downward Trend

    According to the latest survey of agricultural bankers in the St. Louis Eighth Federal Reserve District, fourth-quarter farm income declined from the previous year, continuing the downward trend reported in the past several surveys. Lower incomes continue to push down farmers’ household and capital spending. Bankers also reported that agricultural land values and cash rents moved in tandem with farm income in the fourth quarter, with values and rents falling from the previous year for quality farmland and ranch or pastureland.

    Meanwhile, agricultural land values in the Chicago Seventh Federal Reserve District suffered a third consecutive annual decrease, yet the 1 percent decrease for 2016 was smaller than the 3 percent declines for the previous two years. “Good” farmland values in the fourth quarter of 2016 were down 1 percent from the third quarter, according to 192 survey respondents from District banks. Nearly 60 percent of the survey respondents expected farmland values to be stable during the January through March period of 2017, while 40 percent expected farmland values to decrease in their local areas. See St. Louis Fed Report. See Chicago Fed Report.

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    Make Plans Now to Attend CBAI’s 2017 Group Meetings!

    CBAI leaders and executive staff are visiting 11 locations on the 2017 Group Meeting Tour this spring. Bankers from nearly 200 banks participate in these enjoyable and informative events each year. For this year’s after-dinner presentation, you will hear from one of two experts from SHAZAM Network on either the topic of creating a robbery program at your bank or the topic of developing beneficial relationships with the local media. The opening portion of each Group Meeting focuses on critical legislative and association issues. CBAI President Bob Wingert will provide updates on Association projects and community banking in general, and Senior Vice President of Governmental Relations Kraig Lounsberry will offer an up-to-the-minute report of banking-related legislative activities.

    Consisting of an optional golf outing and a dinner meeting, each Group Meeting provides an excellent opportunity to get the latest information on key banking issues and catch up with friends and peers. (Note: The Groups 1, 2 & 3 meeting follow a different format). Make plans now to attend! See Group Meetings Schedule. See Group Meetings Agenda. See After Dinner Presenter Information.

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    CBAI LEGAL: Federal Court Slams B of A, Denies $900,000 Fraud Restitution

    In a February 10 opinion, the U.S. Court of Appeals for the Seventh Circuit overturned a trial judge’s decision to award $900,000 to Bank of America after finding that the bank was complicit (at least reckless) in the making of fraudulent mortgage loans in 2007and early 2008. Read Most Recent CBAI LEGAL.

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    Showcase Your Bank with the Most Powerful Form of Advertising

    Take advantage of Midwest's Print & Promotional Products Division and gain access to thousands of products that can be customized, personalized and created for all of your business needs. We will work one on one with you to ensure a seamless experience when choosing between multiple products and getting the best quality and pricing available.

    Whether you are looking for marketing material to keep internally, or products for an upcoming social event or golf outing; Midwest Office can help bring together your brand and target audience to create memorable experiences that help grow your business. Using branded merchandise helps to engage, incentivize and inspire your audience by generating leads, building relationships and increasing market visibility. See Flyer for exclusive CBAI offer plus $50 off $300+ order!

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

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    CBIS Nicoud: Common Sources of Civil Money Fines or Penalties

    More than three years ago, the FDIC issued an advisory statement, clarifying a prohibition on director and officer policy riders that cover civil monetary penalties assessed on a bank’s leadership through administrative or civil action brought by regulators.

    While not a new subject, clarity of this restriction remains important topic for community banks. Read More from CBIS Nicoud.

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    E-Sign Quiz Offers Insights

    E-signature technology has quickly evolved, offering a competitive advantage to grab and retain customers. According to a Forrester report, the financial services sector conducts more e-signature transactions than any other industry. CBSC Preferred Provider Wolters Kluwer offers an e-signature quiz to help community banks find out how their use of e-signature stacks up. Take the Quiz.

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    Dell Deals Available to Community Banks and their Staffs and Customers

    CBAI and ICBA members have access to significant savings on Dell products to help their community banks stay competitive, innovate and serve customers even better. Community bankers can save on Dell products for themselves, their staff and their homes, and even offer these special discounts to their customers. An additional 10 percent off is available for select Precision Workstations and PowerEdge Servers. Shop Dell Discounts.

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    Your Peers Are Completing the CBAI Compensation Survey – Don’t Be Left Out

    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 confidential 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

    Thanks to sponsor IZALE Financial Group, the results are free for CBAI Members that complete the survey.

    Click Here to begin the Survey. Click Here to print a paper copy of the Survey to use as a worksheet. Click Here for a list of benchmark positions.

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    Maintain Competition and Routing in Payments

    The debate over regulating the payments industry has become more important than ever with vigorous activity around regulatory rollback and repeal. Preventing price fixing and regulatory overreach in the banking profession are important considerations, but preserving the interest of community banks and credit unions should be at the heart of the debate. See what Paul Waltz, president and CEO of SHAZAM, Inc. has written to address this subject. Read More.

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    Safe-Deposit Procedures Scheduled for March 15 & 16

    Are your internal safe deposit procedures now in compliance with all state and federal security regulations and do you follow correct day-to-day operating procedures? This timely and comprehensive presentation contains important information about your “Most Frequently Asked” operations and compliance questions. It covers the SCRA, USA Patriot Act, Suspicious Activity Reporting, Bank Protection Act, OCC, FDIC, NCUA and ADA regulatory requirements, plus recommended procedures for renting, surrendering, box access, key control, deceased renters, living trusts, payable-on-death accounts, delinquent boxes, record retention, unclaimed property and many other legal and operation issues. Leading this seminar is David McGuinn, president and founder of Safe Deposit Specialists, a former banker with 45 years of safe-deposit experience.

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    Seminar for the Community-Bank Attorney Scheduled for March 17

    To help community-bank attorneys obtain the latest information regarding the myriad of legislative, legal, and regulatory mandates facing community banks, as well as to meet the Supreme Court of Illinois-ordered requirements for Minimum Continuing Legal Education (MCLE), CBAI developed this comprehensive one-day education session entitled, “Seminar for the Community-Bank Attorney.” This seminar utilizes the expertise of a number of attorneys who specialize in banking law related topics. CBAI has been approved for 5.5 hours of MCLE credit. Any attorney who sits on a community bank board of directors, acts as legal counsel to a community bank, or has an interest in these topics would benefit from attending. This seminar provides an update on recent legislation and case law affecting financial institutions, cybersecurity, other Illinois banking statutes, and an employment law update. Leading these sessions are Jerry Cavanaugh, general counsel, Community Bankers Association of Illinois, Springfield, IL; Stan Orszula, partner, Barack Ferrazzano Financial Institutions Group, Chicago; and Aimee Delaney, partner, Hinshaw & Culbertson LLP, Chicago.

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    Asset/Liability Management Seminar Scheduled for March 21

    We are still in the early days of the nation's new political administration, but the anticipation of new economic policies and their implementation by new policymakers have stirred up high hopes for greater growth, more inflation, and along with those things, higher interest rates. Will the new administration's policies help produce these results while also lowering taxes and reducing burdensome regulations? Many questions remain unanswered and despite the watershed improvements in consumer confidence and business optimism, the longed for outcomes are far from foregone conclusions. This program describes the potential risks posed by this new set of economic prospects and discusses ways for community banks to best prepare for them. Discussions also include topical regulatory and reporting issues related to interest rate risk, along with the types of analysis necessary for regulatory compliance. A changing economic environment also means potential changes to strategic investment portfolio considerations and the changing relative values among security selection alternatives. Specifically, new considerations for mortgage-backed security characteristics and the possible effect of tax rate changes on the muni market will be highlighted. This discussion includes some of the possible ways that community bank portfolio managers can best prepare for not only the risk that rates will rise, but also the risk that they won't. Lester Murray associate partner and Drew Simmons senior vice president at The Baker Group leads this program.

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    Residential Real-Estate Lending Institute Slated for March 28-30

    This three-day mini-institute provides the real-estate lending professional with a solid foundation for managing and producing a quality mortgage portfolio. This hands-on institute 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. All of these should result in increased earnings from the mortgage portfolio. The “new” underwriting findings are also discussed. Topics covered include regulatory compliance, loan application and interviewing, secondary mortgage market, lending to self-employed borrowers, underwriting, closing documentation, construction financing and site visit, loan originations, appraisals, and loan processing. David Kemp, founder and president of Bankers Management, Inc., College Park, GA, and Aaron Lewis, consultant with Young & Associates, Inc., Kent, OH, lead this institute.

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    THROUGH 04/25/2017






    Finer Points Blog

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