Connected To Community Banking!
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                     March 19, 2014

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Register Now for CBAI’s 30th Annual Capital Conference!
  • CBAI Bankers Meet with Congresswoman Robin Kelly
  • Most Consumers Blame Merchants for Data Breaches
  • Merchants Should Help Community Banks Cover Fraud Losses
  • ICBA Backs Bill Allowing 'Rural' Designation Reassessment
  • USDA Revises ‘Rural’ Definition
  • Consumer Groups Oppose Clear Relief Act
  • CBAI Urges CFPB to Exempt Community Banks from New Debt Collection Rules
  • Register Now! CBAI's 32nd Annual Call on Washington April 29 - May 2
  • CBAI Calls on FHFA to Increase Loan Limits for the Chicago MSA
  • Baker Market Update
  • Four Expectations from Yellen’s Fed
  • Baker Releases the March 2014 Prepayment Summary
  • Five Fundamentals to Keep Competitive
  • 50 Years in Banking Is Quite an Accomplishment — Shouldn’t It Be Recognized?
  • Small-Business Loan Approvals Increase in February
  • Compiling the Best Data for the ALLL Reserve Calculation
  • What Customers Really Think of Your Credit Card Product
  • Four Easy Ways to Retain Borrowers
  • FREE Quarterly Community-Banking Ads Now Available
  • BankOnIT: Improve Your Efficiency Ratio with Cloud Computing
  • Webinar: What Examiners Expect in a Compliance Management System
  • Residential Real Estate Lending Institute to be Held March 25-27
  • Community Bank Management of Interest Rate Risk & Investments Set for April 2
  • Compliance Institute – Lending Session Scheduled for April 7-10
  • CBAI Announces 2014 Convention Opening Breakfast Speaker


  • Register Now for CBAI’s 30th Annual Capital Conference!

    Your Participation is Important in This Election Year

    On April 9 at the Hilton Hotel in downtown Springfield, community bankers from across the state will meet to address key banking issues and visit with elected officials and candidates for statewide office during CBAI’s 30th Annual Capital Conference.

    Your bank’s participation is important to show strength in numbers and impress upon legislators that community bankers are paying attention to what happens in Springfield and prepared to stand up for what’s in our best interests.

    We’ve made the event very affordable. For just $100 (until March 26), you can register all of your officers, directors, and employees for this annual one-day event. The fee covers lunch, transportation to and from the Capitol, and a reception with heavy hors d’oeuvres!
    More Details Here. Registration Form Here.

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    CBAI Bankers Meet with Congresswoman Robin Kelly

    CBAI bankers met with Congresswoman Robin Kelly (D-02) to discuss issues of importance to Illinois community banks. The March 7th meeting took place at the offices of the Economic Alliance of Kankakee County in Kankakee, Illinois. The topics of discussion included the uneven playing field between community banks, too-big-to-fail banks and financial firms, credit unions, and farm credit lenders; tiered regulation; the future of the housing GSEs (Fannie Mae and Freddie Mac); safeguarding consumer data (data breaches); specific regulatory relief legislation; and local economic development and housing issues.
    Read More.

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    Most Consumers Blame Merchants for Data Breaches

    According to a recent online survey of more than 2,000 respondents conducted by Harris Poll, about 60% said merchants are responsible for data breaches, compared to just 13% who believe the responsibility falls on banks. Another 13% blame the U.S. government.

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    Merchants Should Help Community Banks Cover Fraud Losses

    Retailers should help pay for payment card expenses after a breach if they are shown to have had inadequate security measures in place, ICBA Executive Vice President of Regulatory Policy Viveca Ware told BankInfoSecurity. In a podcast interview, Ware said that community bank expenses can be high following retailer data breaches and that retailers do not have the same level of oversight as financial institutions. “Merchants benefit from the acceptance of payment cards, and they certainly should be responsible for the fallout resulting from breached payment card information,” Ware said. See Podcast Interview.

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    ICBA Backs Bill Allowing 'Rural' Designation Reassessment

    ICBA and CBAI expressed support for legislation to create a process in which individuals could petition the Consumer Financial Protection Bureau to have the rural status of a county reassessed. In a letter to committee Chairman Jeb Hensarling (R-Texas) and Ranking Member Maxine Waters (D-Calif.), ICBA noted that it has serious concerns with the CFPB’s “rural” designation and its negative impact on community bank mortgage lending. The petition process created by H.R. 2672, introduced by Rep. Andy Barr (R-Ky.), would allow for a broader range of evaluation criteria, more accurately identify rural counties and help ensure continued access to mortgage credit in those communities, ICBA wrote. The CFPB’s annual designation of “rural” counties is used to administer mortgage rules such as the ability-to-repay rule’s restriction on qualified mortgage balloon loans, which are protected from heightened legal risk. In addition, the rural designation applies to rules relating to escrow and appraisal requirements for certain higher-priced mortgage loans. See ICBA Letter.

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    USDA Revises ‘Rural’ Definition

    The USDA notified lenders that the definition of “rural” has been revised consistent with technical changes in the farm bill and recent appropriations legislation. This does not affect the Consumer Financial Protection Bureau’s definition of “rural” for its mortgage rules. Read the USDA Notice.

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    Consumer Groups Oppose Clear Relief Act

    Consumer groups are weighing in against certain provisions of the CBAI/ICBA-backed Clear Relief Act. The Center for Responsible Lending (CRL) and other like-minded consumer groups have sent a joint letter to all U.S. Senators opposing the CLEAR Relief Act and more specifically the QM and escrow provisions of that Act. In response, ICBA is pushing back against the consumer groups with its own letter to all members of the Senate.

    With more than a dozen powerful national consumer trade associations that have powerful friends in both the House and Senate, our campaign for regulatory relief has become a pitched battle. See Consumer Groups Letter. See ICBA Response. See Clear Relief Act Provisions.

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    CBAI Urges CFPB to Exempt Community Banks from New Debt Collection Rules

    In a recent comment letter, which was sent in response to an advanced notice of proposed rulemaking, CBAI urged the Consumer Financial Protection Bureau to recognize that community banks do not abuse consumers with unfair debt collection practices and to exempt community banks from any new debt collection rules.

    Regulations already exist regarding fair debt collection practices. More rigorously enforcement of the existing rules against those who are breaking the existing rules is clearly what is needed. The CFPB should demonstrate that these rules are insufficient before proposing any new rules.

    CBAI urged the Bureau to not increase the regulatory burden on community banks and unequivocally ensure that any additional debt collection regulation not “trickle down” and be applied to community banks by their prudential regulators.
    Read Comment Letter.

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    Register Now! CBAI's 32nd Annual Call on Washington April 29 - May 2

    Please join us for CBAI's 32nd Annual Call on Washington which will be held at the Omni Shoreham Hotel, Washington, D.C. CBAI bankers from across Illinois will 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 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 David Schroeder at 847-909-8341 or Jessie Schmidt at 800-736-2224 with any questions or comments.

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    CBAI Calls on FHFA to Increase Loan Limits for the Chicago MSA

    March 18, 2014 In response to the Federal Housing Finance Agency (FHFA) request for input on loan purchase limits, CBAI drew the Agency’s attention to the unique nature of the Chicago-Naperville-Elgin, IL-IN-WI Metropolitan Statistical Area (MSA) and how the one-size-fits-all “high-cost county rule” (HCCR) has resulted in Chicago having a $417,000 conforming loan limit, which is an inequity that has negatively impacted the Chicago-area housing market.

    Conforming loan limits are calculated based on MSA median home value. MSAs are composed of different counties. If one of the counties has a high enough median home value the entire MSA qualifies for the higher loan limit. Many MSAs contain only one or two small homogeneous wealthy counties that increase the loan limit for the entire MSA. The Chicago area has large heterogeneous counties (Chicago’s Cook County for example is the 2nd most populous county in the nation) and therefore does not qualify for a higher loan limit despite having a large number of high-cost owner-occupied units. Given the similarity of the Chicago housing market to many other high-cost metropolitan housing markets, CBAI requested the FHFA immediately use its discretionary authority to implement higher conforming loan limits for the Chicago MSA.

    Planned future efforts to decrease loan limits, to reduce to the government footprint in the mortgage market, when combined with the inequity of the current one-size-fits-all HCCR will result in the worst possible outcome for the Chicago area - future lower limits on a lower base - and will continue to negatively impact the growth and prosperity of the entire region.
    Read Comment Letter.

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    Baker Market Update

    Information received since the Federal Open Market Committee met in January indicates that growth in economic activity slowed during the winter months, in part reflecting adverse weather conditions. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate, however, remains elevated. Household spending and business fixed investment continued to advance, while the recovery in the housing sector remained slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable.
    See Baker Market Update.

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    Four Expectations from Yellen’s Fed

    The Federal Reserve Board has been engaged in policymaking meetings yesterday and today, reviewing economic data and re-evaluating its plan for winding down its stimulus program. Many economists have certain expectations from Yellen's Fed. See CNN Money Article.

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    Baker Releases the March 2014 Prepayment Summary

    Aggregate prepayments in February declined for Fannie and Freddie, continuing a downward trend.
    See Full Report.

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    Five Fundamentals to Keep Competitive


    Veteran lender and workout expert Ed O’Leary recommends five fundamentals to help community banks compete, survive, and prosper. They capture the essence of what community banking is all about. See O’Leary Article.

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    50 Years in Banking Is Quite an Accomplishment — Shouldn’t It Be Recognized?

    Has someone in your bank or a bank director achieved 50 years in banking? You may be surprised to learn that many community bankers achieve that milestone every year!

    If your bank has a director or employee whose professional ties to banking span 50 years, he or she is eligible for recognition with a handsome recognition award from CBAI. If the 50-year anniversary has already passed, an award may be purchased from the association for $200. In addition to the award, individuals celebrating a 50-year anniversary receive coverage in CBAI’s bi-monthly magazine Banknotes, the Illinois Financial Directory & Fact Book, and at the CBAI Annual Convention.

    But, first, CBAI needs to hear about it! Contact the CBAI Department of Communications at 800/736-2224 or
    cbaicom@cbai.com to set-up recognition.

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    Small-Business Loan Approvals Increase in February

    Community-bank approval rates for small-business loans rose in February to 51.4 percent from 50.9 percent the month before, according to the
    Biz2Credit Small Business Lending Index. Approval rates at banks with more than $10 billion in assets rose to 19.1 percent from 17.8 percent. Rates for credit unions and alternative lenders declined.

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    Compiling the Best Data for the ALLL Reserve Calculation

    Banks oftentimes devote much time and attention to the allowance for loan and lease losses (ALLL), knowing it will be subject to intense review during federal examinations. As this calculation is so imperative to a bank or credit union's success, the data collected that drives this calculation is paramount.

    Download this
    whitepaper from CBSC-preferred provider Sageworks to learn:

      • What are the most important data collection elements within the ALLL
      • Ways to gather supporting documentation for qualitative adjustments to FAS 5 calculations
      • How to obtain and extract accurate loan-portfolio information
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    What Customers Really Think of Your Credit Card Product

    Immediately after a new credit card product is launched and in the wallets of cardholders, sentiment begins to build. Both positive and negative experiences generate impressions among both users and prospective cardholders.

    Savvy issuers are measuring that sentiment in a qualitative fashion to drive the card’s market success.
    Read More.

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    Four Easy Ways to Retain Borrowers

    In today’s competitive lending market, you risk losing borrowers to more assertive lenders who promise lower interest rates, higher credit lines, and faster response times. Additionally, high customer turnover also can cause senior bank executives to look unfavorably at a loan officer’s performance. Protect your portfolio by taking these
    four easy steps.

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    FREE Quarterly Community-Banking Ads Now Available

    Your 1st Quarter FREE community-banking ad is now available. If you would like a .pdf of the ad, please contact the CBAI Department of Communications at
    cbaicom@cbai.com or bobbiw@cbai.com.

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    CBAI Connected to Community Banking Is Sponsored
    by The SHAZAM Network

    Protecting your information is crucial in today’s environment. But it can also be a struggle to make sure you’re staying in tune with the industry’s challenging rules and regulations. From IT examinations and risk assessments to managed firewall and intrusion-prevention systems, you can depend on SHAZAM to help you navigate your way to a security program that meets all your needs.
    Visit us online or contact us to learn more.

    BankOnIT: Improve Your Efficiency Ratio with Cloud Computing

    BankOnIT (BOIT) recently had the opportunity to meet with a community bank that has one location and between $250 and $500 million in assets. The bank has a good efficiency ratio of around 50%. Bank management explained their reasoning and commitment to having a single location and rightly believed that this had helped contribute to a good efficiency ratio. BOIT then shared with them an independent analysis that compared their bank to banks of similar size in the same state. Most of the banks had branches and, as expected, had higher efficiency ratios (some MUCH higher); however, two banks in the comparison had LOWER efficiency ratios. Both of these banks were using cloud computing. BankOnIT is a CBSC-preferred provider.
    Read More.

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    Webinar: What Examiners Expect in a Compliance Management System

    Continuity Control, a CBSC and ICBA Preferred Service Provider, is hosting a free webinar at 1 p.m. (Eastern time) Thursday, March 27, titled “Compliance Management System—What are the Examiners Looking for?” to discuss what examiners and auditors expect community banks to have in place for a compliance management system. This is an issue that examiners are holding CEOs and boards responsible for. The webinar will dissect recent enforcement actions citing inadequate CMS and outline steps you can take to bullet-proof your institution.
    Register Now.

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    Residential Real Estate Lending Institute to be Held March 25-27

    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. David Kemp, founder and president of Bankers Management, Inc., a financial management consulting and training firm in College Park, GA, heads the distinguished faculty. Also on the faculty is Adam Witmer, CRCM, compliance consultant with Young & Associates, Inc., in Kent, OH.

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    Community Bank Management of Interest Rate Risk & Investments Set for April 2

    Banks are contending with an extended low-rate environment that has put pressure on margins, challenging bank managers, and enticing some institutions to “reach for yield” in higher-risk assets. Meanwhile, balance-sheet mix changes have raised additional concerns, and regulators are now focusing attention on interest-rate risk like never before. This
    seminar discusses optimal strategies, necessary reporting tools, and recommended processes for management of community-bank investments and interest-rate risk. We will explore trends in the rate environment and bank balance sheets, then suggest strategy and tactics to meet the performance challenges while staying within prudent risk tolerance guidelines. A wide range of issues related to regulatory compliance and prudent management practice will be addressed in this seminar. Directors, CEOs, CFOs, investment officers, portfolio managers, and anyone involved in the financial management of community banks would benefit from attending this seminar. Jeffrey Caughron, associate partner and Ryan Hayhurst, managing director of the Financial Strategies Group, both of THE BAKER GROUP, lead this seminar. THE BAKER GROUP, Oklahoma City, OK, is a CBSC-preferred service provider of investment/asset/liability management.

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    Compliance Institute – Lending Session Scheduled for April 7-10

    The community bank is faced with a bewildering array of ever-changing regulations. While all banks strive to be in compliance, the regulatory requirements can seem overwhelming. Most banks do not have the time or money to build elaborate compliance systems. The problem is getting the right information at the right time and finding a cost-effective approach to managing compliance. It has become clear that there is a need for a basic, introductory class for those compliance officers who are either new to banking or new to their positions. This
    Lending Compliance Institute is designed to provide a comprehensive understanding of the major regulatory compliance regulations that have been determined to be “must knows” for compliance officers. New compliance officers, internal auditors, compliance back-up personnel, and other bank employees who want to be comfortable with the compliance regulations should attend this informative program. Leading this institute are Bill Elliott, CRCM, senior consultant and manager of compliance, and Adam Witmer, CRCM, compliance consultant, both of Young & Associates, Inc.

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    CBAI Announces 2014 Convention Opening Breakfast Speaker

    CBAI is excited to announce the 40th Annual Convention & Expo Opening Breakfast speaker. A dynamic and highly sought-after speaker and leadership expert,
    Tom Flick has delivered more than 3,000 presentations to a “who's-who” list of clients including Microsoft, Starbucks, Hallmark, Boeing, American Express, NASA, Ritz-Carlton Hotels, and the Pentagon. Flick addresses more than 100,000 men and women each year and has garnered a reputation around the world as an authority on leadership, helping organizations develop leaders, leading change effectively, enhancing teamwork, and increasing communications and performance skills. Understanding that people, not programs, help organizations change and grow, he draws on his leadership experience as a former NFL quarterback for seven seasons and his extensive work in corporate America to provide actionable solutions that allow people to become peak performers both personally and professionally. Make plans now to attend CBAI’s 40th Annual Convention & Expo on September 18-20 at the Marriott Downtown in Chicago.

    Please click here to add a reminder to your Outlook calendar for CBAI's showcase event!

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    CBAI




    CBAI
    PROFESSIONAL
    DEVELOPMENT PROGRAMS
    THROUGH 5/10/2014




    › Loan Estimates and Closing Disclosures › Residential Real Estate Lending Institute
    › Community Bank Management of Interest Rate Risk and Investments
    › Compliance Institute – Lending Session
    › Consumer & Commercial Loan Documentation
    › Advanced Operations Conference
    › Fighting Fraud: Recalculating Your Bank’s Roadmap to Reduced Losses
    › Anatomy of an IT Exam
    › Community Bank Marketing Conference
    › The Flood Rules





    CBAI
    TELEPHONE/WEBCASTS THROUGH 4/30/2014







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