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     A Bi-Weekly News Bulletin for CBAI Members                   March 20, 2013 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Register Today for CBAI's 29th Annual Capital Conference!!
  • REGISTER NOW for CBAI’s 31st Call on Washington April 23-26
  • Regulatory Relief at Heart of ICBA’s Plan for Prosperity
  • New Senate Report Fuels Too-Big-To-Fail Debate
  • AG Holder: Too-Big-To-Fail Hinders Wall Street Prosecutions
  • Fisher Reasserts Call for Downsizing Mega Banks
  • ABA Backs Mega Banks by Questioning They Receive Taxpayer Subsidy
  • As The Wall Street World Spins
  • Baker Market Update
  • Economists: Fed Won’t Halt Easing Until 2014
  • Midwest Office Buys Missouri Firm
  • Introducing Kasasa Ads
  • Community Banks and the Importance Cyber Security Coverage
  • Federal District Court Overturns Unfavorable Conveyances Act Decision
  • Encourage Tax Time Payments With Plastic
  • FREE Webinar: Prepare for Upcoming ATM Channel Requirements
  • Webcast: Best Practices for an Effective Onboarding Strategy
  • Register Today for the First Five Group Meetings
  • Managing Interest Rate Risk and Investments Seminar Set for March 26, 2013
  • Residential Real Estate Lending Institute Scheduled for April 2-4, 2013
  • Compliance Institute Lending Session Scheduled for April 9-11, 2013
  • Auditing Regulation Z & RESPA Real Estate Loans Scheduled for April 12, 2013


  • 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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    REGISTER NOW for CBAI’s 31st Call on Washington April 23-26
    Room Deadline March 22


    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 to call on their members of Congress and federal regulators to address 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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    Regulatory Relief at Heart of ICBA’s Plan for Prosperity

    Last week community banker Bill Loving of West Virginia
    addressed the ICBA convention delegation as the association’s new chairman and announced a new robust platform for the 113th Congress. He declared, “Regulatory relief is job No. 1, and I promise you we will not let up until Congress and the regulators understand that overregulation of community banks will destroy the very economies and jobs we seek to grow.”

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    New Senate Report Fuels Too-Big-To-Fail Debate

    Last week the U.S. Senate released a tough report that accuses mega bank executives of misleading investors and regulators, especially the nation’s largest bank, JPMorgan Chase, over its infamous “London Whale” trade which surfaced in May of 2012. The report claims that CEO Jamie Dimon and the bank hid losses of more than $6 billion from regulators and mischaracterized high-risk trading as hedging.

    In a Senate hearing on Friday, Senator John McCain noted, “This bank appears to have entertained, even embraced, the idea that it was too big to fail.” Former Federal Reserve Bank examiner Mark T. Williams concluded that this report makes breaking up the big banks a viable idea.
    See Yahoo Article. See DealBook Article.

    CBAI and ICBA again urged lawmakers to downsize and split up the mega banks to reduce systemic risks and restore accountability in our financial system. See ICBA Release.

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    AG Holder: Too-Big-To-Fail Hinders Wall Street Prosecutions

    Testifying before the Senate Judiciary Committee earlier this month, U.S. Attorney General Eric Holder confirmed that the size of the mega banks inhibits Justice Department prosecutions. Cam Fine, ICBA President, concluded that the mega banks operate above the law and receive favorable treatment both economically and in our justice system. He called on policymakers to redouble their efforts to downsize and split up the financial goliaths to restore sanity and accountability in our financial system.
    See ICBA Release.

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    Fisher Reasserts Call for Downsizing Mega Banks

    In his remarks before the Conservative Political Action Conference, the President of the Federal Reserve Bank of Dallas reasserted his call for Congress to end the problem of banks that are too big to fail. Richard Fisher, an outspoken advocate of balancing the playing field between Wall Street and Main Street, recommends limiting the federal safety net to traditional commercial banks and not to nonbank affiliates among other reforms. He said, “Implicit government policy has made the megabank institutions exempt from the normal processes of bankruptcy and creative destruction. Without fear of failure, these banks and their counterparties can take excessive risks.”
    See Fisher Speech.

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    ABA Backs Mega Banks by Questioning Their Receive Taxpayer Subsidy

    The American Bankers Association joined with other financial services associations that lobby on behalf of mega banks to question the validity of an International Monetary Fund study which found that the six largest U.S. banks enjoy a taxpayer subsidized advantage worth $83 billion a year.
    See Bloomberg Article. See IMF Study.

    The other associations joining with the ABA in support of the mega banks include the Financial Services Roundtable which represents only the 100 largest financial firms in America, and the Financial Services Forum which represents only the 20 largest banks in America. See Joint Release.

    With Wall Street firms receiving a barrage of well-deserved bad press, the mega firms have commenced a major spin campaign against downsizing and limits on risk-taking by calling on support from all of the organizations that front for them, including the American Bankers Association. Once again, the emperor has no clothes.

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    As The Wall Street World Spins

    In a guest blog this week, ICBA’s Terry Jorde comments on the Wall Street spin machine which is now in high gear to counter efforts to break up the too big to fail banks. She stated, “Let’s get out of the spin cycle. The fact is that the too-big-to-fail banks are too big to manage and too big to regulate. And despite attempts by Wall Street and its apologists to muddy the waters, the crystal-clear truth is that too-big-to-fail distorts the financial markets, puts taxpayers at risk and leads to stricter regulations on the entire banking system. Megabanks must be downsized and restructured so the nation’s community banks and the communities they serve are not hung out to dry.”
    See Jorde’s Comments.

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    Baker Market Update

    Information received since the Federal Open Market Committee met in January suggests a return to moderate economic growth following a pause late last year. Labor market conditions have shown signs of improvement in recent months but the unemployment rate remains elevated.
    Read More.

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    Economists: Fed Won’t Halt Easing Until 2014

    According to a survey of 46 economists last week, the Federal Reserve will probably start reducing its $85 billion in monthly bond buying in the first half of next year. The unprecedented quantitative easing is expected to be gradually reduced.
    See Bloomberg Article.

    The Baker Group, CBAI’s preferred institutional broker/dealer firm since 1983, provides expert and experienced investment advice for community banks across the nation. CBAI recommends that CBAI members confer with Baker regarding their investment portfolios, asset/liability management, and duration monitoring. Contact Terry McElwee, Partner; Ken Judd; or Jason Vlcek in Springfield at 888-333-7704.

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    Midwest Office Buys Missouri Firm

    Midwest Office of Springfield has completed acquisition of an office-supply company in Missouri.

    The purchase of BJ Office Products in St. Joseph brings Midwest Office to five locations. It also is Midwest’s first out-of-state outlet, President Steve DeMarco said Friday. BJ Office Products had been in business 34 years.
    Read Article.

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    Introducing Kasasa Ads

    Beginning this week, CBAI will release a series of television and radio ads created by Bancvue, its preferred partner of KASASA and reward checking programs. A new ad will appear in each issue of CBAI’s bi-weekly enewsletter and on the CBAI home page. These entertaining ads emphasize the cultural differences between mega-banks and community banks.
    Please contact us if you would like more information about how KASASA can energize your retail banking program. Meanwhile, please enjoy the first ad.

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    Community Banks and the Importance Cyber Security Coverage
    By Patti Tobin

    Panelists from the Business Insurance 2013 Risk Management Summit in New York report that cloud-based storage greatly increases cyber security exposures. Cloud computing is viewed as a low-cost alternative to in-house data management; however, don’t neglect the financial and legal exposure from outsourcing the protection of corporate and customer information.
    Read More.

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    Federal District Court Overturns Unfavorable Conveyances Act Decision

    On February 28th, federal judge Michael McCuskey of the United States District Court for the Central District of Illinois reversed the decision of a bankruptcy court judge last year in which the bankruptcy court judge had concluded that Section 11 of Illinois’ Conveyances Act requires that a recorded mortgage must include the interest rate and maturity date of the underlying promissory note in order for the mortgage to survive a challenge by a Trustee in bankruptcy.

    In ruling that the mortgage terms recited in Section 11 of the Conveyances Act represented a discretionary safe harbor rather than a mandate, Judge McCuskey cited for support recently enacted legislation initiated by CBAI that amended the Conveyances Act in a manner consistent with his February 28th opinion. Any CBAI member can request a copy of Judge McCuskey’s opinion in the case of Crane vs. The Gifford State Bank from CBAI General Counsel Jerry Cavanaugh or CBAI Paralegal Levette Shade by calling CBAI (800-736-2224) or e-mailing Jerry at
    jerryc@cbai.com or Levette at levettes@cbai.com.

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    Encourage Tax Time Payments With Plastic

    There’s still time to encourage cardholders to pay their federal taxes with your plastic and boost your bank's fee income in the process. Visa and Master Card offer FREE turnkey creative and messaging to help promote the convenience and security of paying your taxes with your community bank branded credit or debit card.

    Note: Your username and password will be needed to access the Master Card Marketing center and Visa Online Web sites.

  • Download Master Card's promotional materials.
  • Download Visa's promotional materials.
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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. Register Now!

    Webinar Series Part Three:
    The 411 on EPP7 Upgrades and PCI 3.0 Guidelines will be held on March 21, 2013
    .

    Part three of Diebold’s Operation 411 webinar series is focused on Encrypting PIN Pad Version 7 (EPP7) upgrades and PCI 3.0 guidelines. Encrypting PIN Pads have been required on ATMs for some time as a means of maintaining the security of a terminal user’s PIN, but have evolved over time to provide increasingly complex security. In order to remain PCI compliant, ATMs purchased and installed or moved after April 2014 will need to have a new, more robust EPP, known as EPP7, which will be released for network certification in mid 2013.

    Webinar Series Part Four:
    The 411 on Developing a Proactive Plan to Streamline the Management of These Changes Via One Upgrade Strategy will be held on March 28, 2013
    .

    Part four of Diebold’s Operation 411 webinar series will provide a recap of impending changes, related timelines and the upgrades or implementation of new technologies you need to consider to meet your channel goals. Diebold subject matter experts will be answer questions and discuss the importance of implementing a holistic and proactive plan to ensure you remain compliant and competitive in the coming years.

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    Webcast: Best Practices for an Effective Onboarding Strategy

    CBSC preferred partner Harland Clarke developed a series of educational videos and power point presentations designed to help Community banks attract and retain profitable customers.
    View Topics.

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    Register Today for the First Five Group Meetings

    Group Meeting registration is now open for Groups 6, 8, 11, 12, & 13! CBAI leaders and executive staff are visiting 11 locations on the 2013 Group Meeting tour this spring. Bankers from more than 200 banks participate in these enjoyable and informative events each year. Consisting of an optional golf outing and a dinner meeting, Group Meetings also provide an excellent opportunity to get the latest information on key banking issues and catch up with friends and peers. The opening portion of each Group Meeting focuses on critical legislative and association issues. CBAI President Bob Wingert provides updates on Association projects and community banking in general; and Senior Vice President of Governmental Relations Kraig Lounsberry offers an up-to-the-minute report of banking-related legislative activities. Then Felix Brandon Lloyd, founder and ambassador of BancVue’s MoneyIsland division, presents “The Power of Financial Education.” See the
    schedule of Group Meetings that follows and make plans now to attend! Registration information on the remaining six Group Meetings will be available soon!

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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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    Residential Real Estate Lending Institute Scheduled for April 2-4, 2013

    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 are Adam Witmer, compliance consultant with Young & Associates, Inc., in Kent, OH, and Jeanne Scheurer, who joined the State Bank of Lincoln in the loan department 22 years ago.

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    Compliance Institute Lending Session Scheduled for April 9-11, 2013

    An introductory
    course for those compliance officers who are either new to banking or new to their positions, this institute is designed to provide a comprehensive understanding of the major regulatory compliance regulations that have been determined to be “must knows” for all 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, as well. As you know, there are a number of new regulations that will become effective in January 2014. We provide a brief overview of the 2014 regulations. We also complete an in-depth review of the new HPML escrow rules which are being implemented as of June 1, 2013. Topics covered in this three-day institute also include Regulation Z: Truth in Lending, Fair Lending, Regulation B, the Fair Housing Act, the Real Estate Settlement Procedures Act, National Flood Insurance Program, Regulation C: Home Mortgage Disclosure Act, compliance management, privacy, the Fair Credit Reporting Act, and the Customer Identification Program (BSA). Bill Elliott, senior consultant and manager of compliance, and Adam Witmer, CRCM, consultant, both of Young & Associates, Inc., Kent, Ohio, lead this institute.

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    Auditing Regulation Z & RESPA Real Estate Loans Scheduled for April 12, 2013

    The real estate loan portfolio is perhaps the most risky area of all consumer regulatory compliance. Auditing this portfolio takes considerable knowledge and time. However, if the bank has not assured that the lending staff (and software) is in compliance with the federal laws and regulations, the risks of civil money penalties and other negative consequences increase dramatically. The goal of this
    course is to equip bankers with the skills necessary (or improve existing skills) to complete the task of reviewing the Regulation Z and RESPA components of consumer real estate loans. While the presenter discusses portions of the relevant regulations, the focus of this seminar is on the practical application of the information in the review process. As a result, this seminar is best suited for those individuals who have a working knowledge of the regulations, rather than individuals who are brand new to lending compliance subjects. It is ideally suited for compliance officers and compliance auditors. This seminar covers the new escrow rule under Regulation Z that is effective in June 2013. However, the 2014 changes are not covered, as the auditing function tends to look “backward” at what has been done rather than “forward.” Leading this seminar is Bill Elliott, senior consultant and manager of compliance at Young & Associates, Inc., Kent, OH.

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