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     A Bi-Weekly News Bulletin for CBAI Members                   March 6, 2013 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • ICBA Introduces Comprehensive “Plan for Prosperity”
  • Study: Mega Bank Earnings Mostly from Taxpayer Subsidy
  • Brown and Vitter Team Up on TBTF Bill
  • REGISTER NOW for CBAI’s 31st Annual Call on Washington April 23-26
  • Congratulations to CBAI Members Appointed to ICBA Committees
  • CBAI Urges Expanded QM Exemptions for Community Banks
  • CBAI to Attend OCC Central District Office Meeting
  • Supreme Court Issues New Foreclosure Rules
  • FHFA Plans New Entity to Replace Fannie and Freddie
  • Illinois House Approves Bill to Remove Duplicative ATM Signs
  • Register Today for CBAI's 29th Annual Capital Conference!!
  • FREE Webinar: Prepare for Upcoming ATM Channel Requirements
  • Bank Earnings Climb in Fourth Quarter
  • Baker Market Update
  • St. Louis Fed Releases Quarterly Farm Survey Results
  • USDA Sets Maximum Rate on Guaranteed Farm Loans
  • Bardo Closing General Session Speaker at CBAI Convention
  • Community Bankers 2013 Top Challenges Reflect a Shift in Sentiment
  • Highlights of Mortgage Protection Program for CBAI Members
  • First Recipient of Community Bankers School Scholarship Announced
  • Notice of Secured Interest in Crops Must Specify Counties
  • Join the Career Development Division Today!
  • ComplianceOne Users Meeting a Big Success
  • Best Practices for Detecting Bank Fraud
  • Nominate Youth Leaders to Attend the Cebrin Goodman Teen Institute
  • Appraisals for Non-Appraisers Scheduled for March 18 & 19, 2013
  • CDD Spring Conference Scheduled for March 19 & 20, 2013
  • Managing Interest Rate Risk and Investments Seminar Set for March 26, 2013


  • ICBA Introduces Comprehensive “Plan for Prosperity”

    Last week the ICBA launched its “Plan for Prosperity,” a comprehensive policy platform for the 113th Congress that promotes a regulatory-relief agenda for community banks and thrifts. The Plan includes a flexible set of legislative priorities designed to ease excessive, redundant and costly regulations. CBAI commends the ICBA for both the content of the Plan for Prosperity and the flexible legislative implementation approach.
    See ICBA Release. See Fact Sheet. See FAQs.

    Legislation has already been introduced as part of the Plan for Prosperity. They include H.R. 749 which eliminates confusing and purposeless privacy notices to customers, H.R. 797 which exempts banks and their employees from the new municipal advisor registration requirement, and H.R. 801 which corrects an oversight in the drafting of the JOBS Act that is denying thrift holding companies the benefits of an increased deregistration threshold. ICBA has also established an online resource for the Plan for Prosperity that will enable community bankers to community support for the various provisions of the platform. See ICBA Online Resource.

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    Study: Mega Bank Earnings Mostly from Taxpayer Subsidy

    Two researchers have concluded that the billions of dollars allegedly earned by the U.S. mega banks in recent years were almost entirely a gift from U.S. taxpayers because they can borrow at lower rates since creditors view them as too big to fail. That’s an implicit taxpayer subsidy that researchers from the International Monetary Fund and University of Mainz have measured at 0.8 percent which equates to $83 billion a year for the 10 largest banks, essentially the same as their stated profits.

    The big banks clearly have no incentive to change the situation. Instead, the mega banks and their trade associations are spending millions of dollars a day to maintain the subsidy, thus continuing the threat of another financial crisis and subsequent government bailout. CBAI and ICBA strongly advocate measures to reduce the risk of taxpayer-funded bailouts including downsizing the mega banks.
    See Bloomberg Article.

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    Brown and Vitter Team Up on TBTF Bill

    Two bipartisan Senators announced last week that they are working on legislation to rein in the big banks and eliminate too-big-to-fail. The unlikely pair, Senator Sherrod Brown, a liberal Democrat from Ohio, and Senator David Vitter, a conservative Republican from Louisiana, agree that taxpayers should not bear the brunt of another massive financial collapse. Momentum is building in Congress to resolve the vexing TBTF issue which CBAI and ICBA have urged for several years.
    See Politico Article.

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    REGISTER NOW for CBAI’s 31st Annual Call on Washington April 23-26

    Please join us for CBAI's 31st Annual Call on Washington which will be held at the Omni Shoreham Hotel, Washington, D.C. Celebrating its 31st year, CBAI bankers from across Illinois will travel to Washington, D.C. and call on their members of Congress and federal regulators 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 Washington Policy Summit. Along with CBAI coordinated events, our entire delegation will attend ICBA's meetings and events.

    CLICK HERE for more information and to register. Please contact davids@cbai.com at 847-909-8341 or jessicas@cbai.com at 800-736-2224 with any questions or comments.

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    Congratulations to CBAI Members Appointed to ICBA Committees

    CBAI congratulates and extends appreciation to the following CBAI members who have been appointed to serve on ICBA committees, councils, and task forces this year:

    Subcommittee on Regulation Review
    Bank Operations & Payments Committee
    Subcommittee on Regulation Review
    Bank Education Committee
    Subcommittee on Regulation Review
    Mutual Bank Council
    Bank Operations & Payments Committee
    FHLBank Task Force
    Subcommittee on Regulation Review
    Mutual Bank Council
    Policy Development Committee
    ICBA Political Action Committee
    Subcommittee on Tax
    Minority Bank Council
    Subcommittee on Regulation Review
    Jim Ashworth, CNB Bank & Trust, N.A., Carlinville
    Kevin Beckemeyer, Legence Bank, Eldorado
    Mike Estes, Fisher National Bank
    Mark Field, Farmers Bank of Liberty
    Todd Grayson, South Central Bank, N.A., Chicago
    Craig Hepner, Twin Oaks Savings Bank, Marseilles
    Rick Jameson, Morton Community Bank
    Gerry Johnson, Grand Ridge National Bank
    Robin Loftus, Security Bank, S.B., Springfield
    Robin Loftus, Security Bank, S.B., Springfield
    Greg Ohlendorf, First Community Bank and Trust, Beecher
    Preston Smith, First National Bank, Mattoon
    Mary Sulser, Buena Vista National Bank, Chester
    Yman Vien, American Metro Bank, Chicago
    Bill Wubben, Apple River State Bank

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    CBAI Urges Expanded QM Exemptions for Community Banks

    CBAI has urged the Consumer Financial Protection Bureau (CFPB) to expand the Qualified Mortgage (QM) exemptions by creating a new category of QMs for community banks which would benefit from a conclusive safe harbor presumption with the ability-to-repay rules.
    Read More.

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    CBAI to Attend OCC Central District Office Meeting

    CBAI representatives will attend an OCC Central District Office Meeting with District Deputy Comptroller Bert Otto, Senior Deputy Comptroller Jennifer Kelly, Ombudsman Larry Hattix and other senior OCC officials in Chicago on Thursday, April 4, 2013.
    Read More.

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    Supreme Court Issues New Foreclosure Rules

    On February 22nd, the Illinois Supreme Court adopted new Rules affecting mortgage foreclosure practices in Illinois.
    Read more.

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    FHFA Plans New Entity to Replace Fannie and Freddie

    Earlier this week the acting director of the Federal Housing Finance Agency (FHFA) Edward Demarco announced that, as part of the agency’s strategic plan, a new business entity will be created between Freddie and Fannie for the purpose of developing a new secondary mortgage market infrastructure. He noted that the new venture will be initially owned and funded by Freddie and Fannie but headed by management that is independent and physically located separate from the GSEs. He added that the objective is to develop a platform that functions like a market utility that could either be sold or used by policy makers as a foundational element of the mortgage market of the future.
    See FHFA Conservatorship Priorities.

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    Illinois House Approves Bill to Remove Duplicative ATM Signs

    Last Thursday, the Illinois House of Representatives approved HB 183 (Lang/Mulroe) and sent the bill to the Senate. CBAI introduced HB 183 to amend the Electronic Fund Transfer Act to remove the requirement to disclose fees on a physical sign on an ATM terminal. Last December, Congress passed and President Obama signed H.R. 4367 to delete the duplicative signage requirement from the Federal Electronic Fund Transfer Act. CBAI introduced HB 183 to mirror the federal action.
    Read More.

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    Register Today for CBAI's 29th Annual Capital Conference!!

    CBAI's 29th Annual Capital Conference is set for Wednesday, April 17, 2013, at The State House Inn in Springfield. Only $99 per institution! One registration fee covers the cost for ALL officers, directors, and employees! After April 6th - $150 per institution. It's important to show strength in numbers, so
    Register Now!

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    FREE Webinar: Prepare for Upcoming ATM Channel Requirements

    CBSC preferred provider Diebold is hosting a FREE four-part
    webinar series titled “Prepare for Upcoming ATM Channel Requirements”. The series is designed to help navigate decisions and equip financial institutions with the information they need to understand impending changes, related timelines and the technologies they need to consider.

    Webinar Series Part One:
    The 411 on Windows 7 ATM Hardware Migration will be held on March 7, 2013.
    Register Now!

    Most ATMs currently run on a Microsoft® Windows XP operating system. It is currently deployed on most Diebold ATMs and has become an industry standard. On April 8, 2014, Microsoft will no longer support Windows XP according to its lifecycle policy, focusing on Windows 7 instead. As a result, operating system upgrades on all ATMs are necessary to ensure you can receive technical support for your terminals and will be a foundation to remaining PCI compliant. For Diebold ATMs, an upgrade to Agilis® 3 and various ATM hardware modules will also be required in order to run Windows 7.

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    Bank Earnings Climb in Fourth Quarter

    According to the FDIC, bank earnings in the fourth quarter of 2012 totaled $34.7 billion, a 37% increase over the previous year. Earnings of $141.3 billion for 2012 were the second-highest ever after $145.2 billion was earned in 2006. Overall, loan balances and deposits also increased.
    See FDIC Release.

    Meanwhile, performance ratios of Illinois banks continued to improve. For example, banks realized an average return on assets of 0.58% in 2012 compared to 0.39% in 2011, while the average return on equity was 5.20% compared to 3.93% the previous year. See FDIC Performance Summary for Illinois.

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    Baker Market Update

    So what’s with all the hubbub over these “equestration cuts”? Everyone likes horses, don’t they? Well, whether that’s true or not, this week marks the official kick - off for the reductions in federal spending growth that were passed into law 19 months ago.
    Read More.

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    St. Louis Fed Releases Quarterly Farm Survey Results

    The Federal Reserve Bank of St. Louis last week released the results of its quarterly survey of agricultural credit conditions within the Eighth District. Responding banks reported that farm income and expenses were higher than a year ago. Also, many bankers indicated that crop insurance helped shield farm income from the impact of last summer’s drought.
    See St. Louis Fed Report.

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    USDA Sets Maximum Rate on Guaranteed Farm Loans

    The USDA last week issued an interim rule that establishes the highest interest rates that lenders can charge borrowers on guaranteed farm operating and ownership loans. The rule sets the maximum allowable spread at 650 basis points above the three-month Libor index for variable rate loans and those fixed for less than five years, and 550 basis points above five-year Treasury rates for loans fixed for five years or more. The USDA is seeking additional comments on the interim rules through June 3, 2013.
    See USDA Release.

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    Bardo Closing General Session Speaker at CBAI Convention

    CBAI is excited to announce that the convention Closing General Session speaker is Stephen Bardo, ESPN analyst and motivational master. His experience on the basketball court at the University of Illinois, Champaign-Urbana, and in the NBA helped forge his fast-paced presentations that provide audiences with tools they can use immediately to achieve greater results in their professions. Bardo is currently a college basketball and First Take analyst for ESPN, as well as a successful author and speaker.

    Don’t miss CBAI’s 39th Annual Convention & Expo, “Community Bankers: Illinois’ Treasure,” scheduled for September 26-28, 2013, at the Crowne Plaza in Springfield. Look for early-bird registration information in March! For more information on Stephen Bardo, please
    click here.

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    Community Bankers 2013 Top Challenges Reflect a Shift in Sentiment

    Over the last three years community bankers have ranked the Regulatory Climate as the #1 challenge. However, the 2013 survey data of CB Resources reflects a clear shift in sentiment. Though the Regulatory Climate is still ranked number 1, performance and operating related challenges and priorities are receiving increased attention.
    Read Survey Results.

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    Highlights of Mortgage Protection Program for CBAI Members

    Patty Tobin of Community BancInsurance Services Powered by Nicoud outlines the mortgage protection products offered by CBIS for the benefit of CBAI members.
    See Highlights.

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    First Recipient of Community Bankers School Scholarship Announced

    The CBAI Foundation for Community Banking is pleased to announce that The First National Bank of Raymond (FNB) has won a two-year scholarship to the Community Bankers School (CBS). The 2013 school term is July 14-19; the school is held annually at Illinois Wesleyan University in Bloomington-Normal.

    FNB was chosen in a blind drawing held at CBAI headquarters. There were 63 banks’ names in the drawing, representing 37 banks. To be eligible for the drawing, a bank must have donated or pledged at least $2,500 to the Foundation; the number of times a bank’s name appears in the drawing is dependent upon the total amount donated or pledged.

    For more information about the CBAI Foundation for Community Banking,
    Click Here, or contact Andrea Cusick, Foundation administrator, at cbaicom@cbai.com.

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    Notice of Secured Interest in Crops Must Specify Counties

    The Illinois Supreme Court has upheld an Appellate Court’s decision that a bank’s notice of secured interest in growing crops must explicitly name the county or counties in which the crops are growing in order for the bank’s notice to be binding on a purchaser of the crops (e.g., a grain elevator), even though the purchaser had received timely notice from the secured bank in advance of the purchase of the crops. For more information, please
    Click Here.

    If you have any questions pertaining to the Court’s decision or if you would like to receive a copy of the Supreme Court’s opinion, please feel free to contact CBAI General Counsel Jerry Cavanaugh at (800)736-2224 or via e-mail.

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    Join the Career Development Division Today!

    The future of community banking depends upon a new generation of bankers and community bank supporters — progressive, energetic, community-minded, and well-informed. The purpose of CBAI's Career Development Division (CDD) is to keep members on the cutting edge of community banking through:

    • Quality Educational Programs
    • Professional Publications
    • Leadership Training
    • Networking Opportunities
    Make an investment in the future of community banking. CBAI's Career Development Division, unique in Illinois, is dedicated to advancing the principles of community banking. For more information and to join CDD, please
    Click Here.

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    ComplianceOne Users Meeting a Big Success

    More than 60 bankers participated in the 2nd annual Wolters Kluwer ComplianceOne users meeting held at CBAI headquarters on February 5th. The sessions were very lively with 95% of those in attendance indicating that the conference was valuable and will help them do their job more effectively. Discussion topics focused on recent and future enhancements, navigational tips, shortcuts and regulatory updates specific to ComplianceOne.

    Wolters Kluwer Financial Services is the market leader in providing compliance, credit, and operational risk management solutions to a variety of financial institutions. The company’s integrated and stand-alone deposit, lending, IRA, and Financial Intelligence solutions can help financial institutions efficiently comply with federal and state regulations.

    For more information, contact Tom Beverly at 888-539-5554, or via email at
    tom.beverly@wolterkluwer.com, or Ben Snyder at 888-637-3330, or via email at ben.snyder@wolterskluwer.com or visit their website at www.wolterskluwerfs.com.

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    Best Practices for Detecting Bank Fraud

    CBAI associate member firm Guardian Analytics has published a comprehensive
    white paper addressing the complex and vexing issue of bank fraud and how to prevent and detect it.

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    Nominate Youth Leaders to Attend the Cebrin Goodman Teen Institute

    The Cebrin Goodman Teen Institute is now accepting applications for summer youth-leadership training conferences for middle- and high-school students at Eastern Illinois University on July 21-25, 2013. The five-day institute teaches teens personal responsibility, decision-making, and how to create positive school and community change in a fun and exciting setting. Teens are faced with many real challenges – this conference is for future leaders who want to make a real difference in their communities and promote healthy choices.

    The Institute is one of the largest and most acclaimed leadership development programs in the country. Scholarship opportunities and applications are available at
    www.os-iti.org. Please contact Marne Fauser at mfauser@iadda.org or 217-528-7335 (ext. 13) to learn more and to nominate youth leaders in your communities!

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    Appraisals for Non-Appraisers Scheduled for March 18 & 19, 2013

    Knowing the fundamentals of the appraisal process is critical to successfully managing the real-estate lending process. This
    course not only takes participants “back to basics” to refresh their understanding of appraisal principles, it offers insight about what's on the horizon and how your institution can gain value from the appraisal process beyond just going through the motions of fulfilling regulatory requirements. Primary objectives of this seminar include taking a closer look at appraisal review; learning techniques for identifying appraisal deficiencies; providing an overview of the updated appraisal and evaluation guidelines; gaining three steps to improve your appraisal management process today; and identifying the basic components and processes used to derive a value indication when performing the cost, sales, and income capitalization approach. Leading this seminar is Ancin Cooley, founder and managing partner of Synergy Bank Consulting, Inc., a risk-management advisory firm dedicated to helping financial institutions optimize their security, compliance, and business performance.

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    CDD Spring Conference Scheduled for March 19 & 20, 2013

    The
    Annual Spring Conference for CBAI's Career Development Division (CDD) is scheduled for March 19-20 at the Marriott Hotel in Bloomington. This conference combines motivational, energetic, and informative general sessions with important messages for today’s community 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 Roxanne Emmerich, a New York Times and Wall-Street Journal best-selling author, who is conducting two sessions entitled, “A How To Create a Thank God It’s Monday! Culture,” and “Hope Is Not a Strategy: A Kick-Butt Plan To Think Big, Pull-Ahead, & Crush It This Year.” Also included are two popular networking sessions, election of officers and the Career Banker of the Year and Economic Educator of the Year awards.

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    Managing Interest Rate Risk and Investments Seminar Set for March 26, 2013

    This popular
    program focuses on the critical importance of investments and asset/liability management in the new regulatory and economic environments. Interest-rate risk, liquidity risk, cash-flow management, and security-selection techniques are discussed, as well as Fed Policy considerations and the interest-rate outlook generally. An integrated approach to balance-sheet risk management is emphasized as a guide for making investment decisions. There are also examples of recommended tools of analysis for security selection. Participants learn about relative value in different sectors of the bond market, and optimal measures of risk and reward. From THE BAKER GROUP, Jeffrey Caughron, associate partner, market analyst, and strategist and Ryan Hayhurst, associate partner and manager of the Financial Strategies Group, lead this seminar. THE BAKER GROUP, Oklahoma City, is a CBSC-preferred service provider of investment and asset/liability management services.

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