Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois Community Bankers Association of Illinois
 
     A Bi-Weekly News Bulletin for CBAI Members                  March 24, 2010 Graphic
Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • Community Banking Response to Senate Reg-Reform Plan
  • Federal Regulators Address ICBA Convention Attendees
  • You Can Make a Difference: Come to CBAI's Washington Visit!
  • ICBA Announces 2010 Policy Priorities
  • Poll Finds Support for Tighter Wall Street Regulation
  • Update on Proposal to Amortize CRE Loan Losses
  • ICBA to Treasury: Remedy GSE Preferred Shareholders Now
  • Federal Agencies Issue Statement on Funding and Risk Management
  • Fed Issues Final Rules on Gift Cards
  • Key Ag Issues for Community Bankers
  • Sub S Bank Regional Conference Set for June 8 in Chicago
  • FDIC Releases Banking Profile for Fourth Quarter
  • Baker Market Update
  • Economic Updates
  • CBAI Member Survey Question
  • Last Call for 2010 Community Banking Week Materials
  • Register Today for CBAI’s 36th Annual Convention!
  • Shazam Launches Antifraud Service
  • Farmland Values Remains Steady Across Illinois
  • ICBA Bancard Celebrates 25 Years
  • Community Bank Directors’ Workshop Scheduled for April 5-7
  • Interest-Rate Risk and Investment Management Set for April 12-13
  • NEW Advanced Operations Conference Scheduled for April 13


  • Community Banking Response to Senate Reg-Reform Plan

    Draft regulatory-reform legislation released by Senate Banking Committee Chairman Christopher Dodd (D-Conn.) has some positive provisions, but community bankers are concerned with several proposals included in the measure. Dodd’s draft legislation, which is expected to be marked up by the committee next week, would implement an ICBA-advocated systemic-risk regulator, create a mechanism for the FDIC to resolve troubled financial firms that pose systemic risks and establish a prefunded dissolution fund for the nation’s largest financial firms. However, ICBA has concerns with the FDIC assessment base as proposed in the draft legislation. ICBA supports basing FDIC premiums on total assets (minus tangible equity), rather than domestic deposits. However, Dodd’s proposal would have the FDIC base premiums on assets minus tangible capital and long-term unsecured debt. The assessment base would not be defined statutorily, which would allow the FDIC to avoid any favorable changes to the assessment base.
    Read More from Dodd. Read ICBA Special Coverage. Read ICBA Release.

    Back to top

    Federal Regulators Address ICBA Convention Attendees

    All the top federal banking regulators addressed the nearly 3,000 attendees at the ICBA convention in Orlando last week. Federal Reserve Chairman Ben Bernanke said, “I know that community banks, with their special strengths, can flourish in a system that provides fair competition; indeed, many of you have stepped up during a difficult time to provide credit to support the economic recovery. To create a more competitive system, as well as a safer one, we need to end the too-big-to-fail problem once and for all.”
    See Bernanke’s Full Speech.

    FDIC Chairman Sheila Bair noted, “During the final quarter of 2009, loans and leases at the largest banks – those with over $100 billion in assets – fell by 2.8 percent… The smallest banks – those with assets less than $100 million – actually increased their loans by more than half of one percent. While so many big banks keep pulling back, you are hanging in there, doing your best to support the credit needs of our struggling economy.” See Bair’s Full Speech.

    Acknowledging complaints about harsh exams, Comptroller of the Currency John Dugan said, “… it is critical that examiners strive continually for professional judgment that is balanced... we have to be equally careful not to overreact and make problems worse by acting too precipitously or being more stringent than we need to be.” See Dugan’s Full Speech.

    Acting OTS Director John Bowman declared, “…the thousands of community banks like yours in cities, towns and rural areas around this country have almost nothing in common with megabanks like Bank of America, JP Morgan, Wells Fargo and Citigroup… The vast differences involve not only scale, but also complexity, risk management, lines of business and daily operations. At a community bank, concerns often focus on interest rate risk – not on derivatives or complex computer models.” See Bowman’s Full Speech.

    Back to top

    You Can Make a Difference: Come to CBAI's Washington Visit!

    Major financial reform legislation is being debated in Washington that will affect the future of community banking forever. We need community bankers to join us in our nation's capital next month to voice our positions. We can influence change for the better! REGISTER TODAY for the 28th Annual CBAI Washington Visitation, April 25- 27, Renaissance Mayflower Hotel, Washington, D.C.
    Click here for more information. Please contact Megan Stieren or Jessie Schmidt at 217/529-2265 with questions or comments.

    Back to top

    ICBA Announces 2010 Policy Priorities

    During its annual convention in Orlando last week, the Independent Community Bankers of America announced its legislative and regulatory priorities for 2010. The policy positions were crafted by the ICBA Policy Development Committee and subsequently approved by the ICBA Board of Directors. CBAI president Bob Wingert served on the committee. The top priorities focus on financial reform, including ending too-big-to-fail, support for separating commercial and investment banking, basing FDIC assessments on assets minus tangible capital, establishing a systemic risk resolution fund to be funded by the giant banks, and applying consumer regulations on the unregulated shadow banking industry.
    See Synopsis.

    Back to top

    Poll Finds Support for Tighter Wall Street Regulation

    A new poll from Harris Interactive found that 82 percent of respondents believe that Wall Street should be regulated more strictly. While 59 percent of respondents believe that Wall Street is absolutely essential, 61 percent disagreed that what is good for Wall Street is good for the country.
    Read Poll Results.

    Back to top

    Update on Proposal to Amortize CRE Loan Losses

    As noted in previous Newsletters, CBAI continues to urge Congress to adopt a measure to allow banks to amortize commercial real estate loan losses over a period of up to 10 years. Getting traction, however, as been difficult as regulators are resistant. In a recent post on Bank Lawyer’s Blog, the merits of this proposal are well articulated. The article points out that CBAI’s vice president of federal governmental relations, David Schroeder, is serving a “point man” for community bankers and trade association representatives that support this measure. Illinois Congressman Luis Gutierrez (D-Chicago) has agreed to sponsor the proposal, and CBAI is attempting to obtain a Republican co-sponsor to get it introduced.
    See Article.

    Back to top

    ICBA to Treasury: Remedy GSE Preferred Shareholders Now

    ICBA urged Treasury Secretary Timothy Geithner to promptly remedy the status of Fannie Mae and Freddie Mac preferred shareholders. In a letter to Geithner, ICBA said it is imperative that preferred shareholders of the government-sponsored enterprises are made whole to bolster capital and lending levels. ICBA said the abrupt conservatorship of Fannie and Freddie needlessly devalued preferred shares for more than 1,000 community banks, which purchased the shares at the encouragement of their bank regulators. Citing former Treasury secretary Henry Paulson’s new book, On the Brink, ICBA said there is no doubt the government deceived and ambushed community banks.
    Read Letter.

    Back to top

    Federal Agencies Issue Statement on Funding and Risk Management

    The federal banking agencies, in conjunction with the Conference of State Bank Supervisors (CSBS), released a
    policy statement on their expectations for sound funding and liquidity risk management practices. This policy statement, adopted by each of the agencies, summarizes the principles of sound liquidity risk management issued previously and, when appropriate, supplements them with the "Principles for Sound Liquidity Risk Management and Supervision" issued in September 2008 by the Basel Committee on Banking Supervision.

    Back to top

    Fed Issues Final Rules on Gift Cards

    The Federal Reserve this week issued final rules to restrict the fees and expiration dates for gift cards and general-use prepaid cards. The rules prohibit dormancy, inactivity and service fees of gift cards unless the consumer has not used the certificate or card for at least one year, no more than one such fee is charged per month, and the consumer is given clear and conspicuous disclosures about the fees. Expiration dates for funds underlying gift cards must be at least fie years after the date of issuance, or five years after the date when funds were last loaded. The final rules are effective August 22, 2010.
    See Fed Rule.

    Back to top

    Key Ag Issues for Community Bankers

    There has been a flurry of agricultural activity in recent weeks, and here's a
    breakdown of the top news and information on the agricultural front.

    Back to top

    Sub S Bank Regional Conference Set for June 8 in Chicago

    The Subchapter S Bank Association will hold a one-day regional conference in June 8, 2010, at the Hyatt Regency O’Hare Hotel. This special session will address “Maximizing Performance in Tough Times,’ a “Legislative and Regulatory Update,” and “Employee Stock Ownership Plans for S Corporation Financial Institutions.” For more information and to register,
    click here.

    Back to top

    FDIC Releases Banking Profile for Fourth Quarter

    On March 24, 2010, the FDIC published its Quarterly Banking Profile for the final quarter of 2009. Overall, banks and thrifts combined earned a net income of $914 million, and the pace of deterioration in asset quality slowed.
    See Full Report.

    Meanwhile, all insured institutions in Illinois, which totaled 630 on December 31, collectively lost $558 million in 2009. Nearly 29% of all institutions were unprofitable, up from 22% a year ago. See Illinois Performance Summary.

    Back to top

    Baker Market Update

    The Federal Reserve Open Market Committee opted to retain language in their March 16th statement that expressed the anticipation of low interest rates for “an extended period”.
    More.

    Back to top

    Economic Updates

    Job Revisions Downward/Economic Activity Slowed

    The Federal Reserve Bank of Chicago this week released an economic report concluding that job cuts both nationally and regionally have been steeper than anticipated.
    See Report. The Chicago Fed National Activity Index, released on March 22, 2010, indicated that economic activity slowed in February, primarily due to weakness in the consumption and housing category of the index. See CFNAI Report.

    Economy Mixed in St. Louis Zone Report

    The Federal Reserve Bank of St. Louis reported that economic activity in the St. Louis zone, which includes southern Illinois, was mixed with signs of improvement in certain areas. Overall lending activity was relatively unchanged. See Zone Report.

    Back to top

    CBAI Member Survey Question

    The issue of whether or not banks should be allowed to pay interest on business checking accounts is again under consideration in Congress. CBAI would appreciate your position on the following question:
    "Should banks be permitted to pay interest on business checking accounts?"
    Yes No

    Back to top

    Last Call for 2010 Community Banking Week Materials

    It’s not too late to order your FREE media materials. Contact the CBAI Department of Communications today (800/736-2224,
    cbaicom@cbai.com, or bobbiw@cbai.com).

    Back to top

    Register Today for CBAI’s 36th Annual Convention!

    It's hard to think about Louisville, Kentucky, without mentioning “the most exciting two minutes in sports.” The Kentucky Derby at Churchill Downs is the first leg of the prestigious Triple Crown for thoroughbred horses. As we begin a new decade, CBAI is once again placing its bets on a sure winner. Join us at
    CBAI's 36th Annual Convention and Expo, “Community Banking: The Odds-On Favorite,” on September 30 - October 2, 2010, at the Galt House in Louisville.

    Back to top

    Shazam Launches Antifraud Service

    The Shazam electronic funds transfer network has introduced a fraud-prevention service that enables debit card issuers to block specific transactions.
    More.

    Back to top

    Farmland Values Remains Steady Across Illinois

    The limited amount of land for sale, along with current returns and the safety of farmland as an investment, kept farmland values steady across the state in 2009. This is according to the
    2010 Farmland Values and Lease Trends Report issued recently at the Illinois Land Values Conference.

    Back to top

    ICBA Bancard Celebrates 25 Years

    ICBA Bancard, the nation's premier provider of payment services exclusively for community banks, celebrated its
    25th anniversary during the ICBA National Convention and Techworld, held in Orlando, Fla., from March 17-21. Bancard is the 28th largest credit card issuer in the nation and the only issuer that exclusively represents community banks. CBSC, the member services subsidiary of CBAI, recently agreed to recommend and promote ICBA Bancard.

    Back to top

    Community Bank Directors’ Workshop Scheduled for April 5-7

    CBAI will offer
    “Director Responsibility in a Changing World” in three locations this April. The one-day program is designed to provide today’s director with the tools and knowledge to carry out their duties. The program focuses on management and asset quality. Most banks that get into trouble fall short in these areas. A poor CAMEL rating in these two areas will also impact earnings and capital. In these circumstances, a board must often rely on “outside advisors” to properly respond to Administrative Regulatory Orders. Leading this seminar is David Kemp, president of Bankers Management, Inc., College Park, GA, a nationally-recognized company in financial services training and bank consulting.

    Back to top

    Interest-Rate Risk and Investment Management Set for April 12-13

    CBAI is pleased to offer
    “Interest-Rate Risk and Investment Management” in two locations this April. This 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. Leading this seminar are Jeffrey Caughron and Ryan Hayhurst, THE BAKER GROUP, Oklahoma City, OK.

    Back to top

    NEW Advanced Operations Conference Scheduled for April 13

    CBAI will offer the
    Advanced Operations Conference, designed to help educate community-bank operations personnel on issues specific to the operations of your community bank. Participants will benefit from expert speakers, pertinent and informative topics, and networking with peers. A mini-exposition featuring the latest products and services benefiting the community bank and its marketing efforts also highlights the day. This conference is designed for operations officers, CEOs, and anyone involved in the operations of your community bank. Topics covered include a “Legal Update” (focusing on subpoenas, levies, and garnishments) with Jerry Cavanaugh, CBAI general counsel; “Future of Check Processing” presented by John Mills of BKD, LLP; “Fraud and Debit Card Issues” with Liz Little of SHAZAM®, Inc.; and “How To Deal with All the Compliance Changes,” “Reports for the Board of Directors: What Do They Want and Need?” and “How To Do More with Less in Today's Economy” by Tim Tedrick of Lindgren, Callihan, Van Osdol & Co., Ltd.

    Back to top

    CBAI

           

    CBAI's PROFESSIONAL DEVELOPMENT PROGRAMS THROUGH 04/30/2010



    TELEPHONE/WEBCASTS THROUGH 04/15/2010




    OTHER CBAI EVENTS THROUGH 04/30/2010


    Community Banking Week in Illinois, April 4
    - 10. For a free kit, contact the CBAI Department of Communications: bobbiw@cbai.com or cbaicom@cbai.com.

    CBAI 2010 Group Meetings, April 19 – June 15

    28th Annual CBAI Washington Visitation: April 25-27, Renaissance Mayflower Hotel, Washington, D.C.

    CBAI Officer Compensation Survey Deadline: April 30. Complete your survey and get FREE results (CBAI members only, non-member participants pay just $300 for results)


    Finer Points Blog


    CBAI
    RECOMMENDED SERVICES



    CBAI
    INSURANCES



    CBAI
    FOUNDATION



    CBAI
    PUBLICATIONS







    800.736.2224 (IL) | 217.529.2265 | www.cbai.com

    DISCLAIMER:The association is not responsible for and has no control over the subject matter, content, information, or graphics when viewing links attached to this association's site. If you do not wish to receive e-mails from Community Bankers Association of Illinois (CBAI), 901 Community Drive, Springfield, IL 62703, through CBAI in the future, please click here. - OR - If you would like to be removed from the CBAI e-mail database, please click here.

    © 2010 Community Bankers Association of Illinois. All Rights Reserved.