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 25, 2009 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • Comments Needed on Mark-to-Market Proposals
  • Call to Action Continues on FDIC Special Assessment!
  • CBAI's David Schroeder Attends White House Roundtable
  • Federal Regulators Address ICBA Convention
  • Community Bankers School Website Launched
  • CBAI's 27th Annual Washington Visitation May 11-13, 2009
  • CBAI Reaches Out to Illinois Lawmakers
  • CBAI’s 25th Annual Capital Conference April 22, 2009
  • Baker Market Update
  • ICBA Calls for End to Too-Big-To-Fail Banks
  • CBAI and ICBA Ask Regulators to Stop Harsh Field Exams
  • Prepare for Growth at the 2009 SHAZAM EFT Forum
  • FDIC Extends the TALP Debt Guarantee Component
  • Two Largest Corporate Credit Unions Seized by Regulators
  • New Program Helps Bank Directors Save Money!
  • Illinois Farmland Values Expected to Decline
  • Chicago Fed Index Shows Weak but Improving Economic Activity
  • St. Louis Fed Releases Economic Activity Report
  • Compliance Institute --- Lending Session


  • Comments Needed on Mark-to-Market Proposals

    Both CBAI and ICBA urge community bankers to submit comments on two
    FASB proposals by the April 1 deadline. Proposed changes to FASB Statement No. 157 provide further guidance on determining whether or not a market for a financial asset is active and a transaction is distressed for fair value measurements. Proposed revisions to FASB Statement No.115 and EITF Issue No. 99-20 change the determination of other-than-temporary-impairment (OTTI) and the total amount recognized in earnings when there are credit losses on debt securities. A suggested letter to FASB and a Fact Sheet are attached.

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    Call to Action Continues on FDIC Special Assessment!

    CBAI’s call to action remains in effect to convince the FDIC not to levy a special assessment on community banks. Thanks to thousands of emails and letters from community bankers, the FDIC said it will reduce the assessment from 20 to 10 basis points if Congress increases the FDIC’s line of credit with the Treasury from $30 billion to $100 billion. Legislation has been introduced to permanently increase the limit to $100 billion.

    CBAI and ICBA strongly believe that community banks should not pay any special assessment. Instead, the too-big-to-fail banks that largely caused the nation’s economic crisis with their excessive risk-taking should replenish the FDIC fund. It’s noteworthy that only the community banking lobby is articulating this position and also urging Congress to break up the TBTF banks so they do not pose a systemic risk. The ABA and its state affiliates are apparently unwilling to assign responsibility to the TBTF institutions.

    ACTION #1: CBAI urges all officers and directors of community banks to communicate the following positions to the FDIC before April 1, 2009:

      • Community banks, which did not cause the economic crisis, should not pay any special assessment.
      • The FDIC should ask Congress for the authority to levy special assessments on the TBTF banks that caused the financial meltdown.
      • The FDIC should tap its line-of-credit with the Treasury.
      • If all banks are assessed, then the FDIC should assess premiums based on total assets rather than domestic deposits, which would rightfully place greater responsibility on the TBTF banks.

    To send a personal email to FDIC Chairman Sheila Bair, please click on
    comments@fdic.org to open the link, or you can access CBAI’s special link at http://capwiz.com/cbai/issues/alert/?alertid=12832021 to send a suggested letter that can be amended.

    ACTION #2: CBAI also asks all community bank officers and directors to correspond with their U.S. Representative and U.S. Senators with the following recommendations:

      • Community banks, which did not cause the economic crisis, should not pay any FDIC special assessment.
      • Authorize the FDIC to levy a special assessment only on the too-big-to-fail banks that are largely responsible for the financial and economic meltdown as a result of their excessive risk-taking and greed.
      • Support an increase in the FDIC’s line of credit from the current $30 billion to $100 billion.
      • If all banks are assessed, then urge the FDIC to assess premiums on the basis of total assets rather than domestic deposits; the TBTF banks would then be responsible for a larger portion of the assessment.
      • Urge the Financial Accounting Standards Board (FASB) to give banks the option to spread any special assessments over four years.

    Click on http://capwiz.com/cbai/issues/alert/?alertid=12831826 to send emails to your Congressmen; the content can be revised as desired. If you haven’t already done so, also urge Congress to break up the TBTF banks so they do not pose a systemic risk.

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    CBAI's David Schroeder Attends White House Roundtable

    FDIC and ICBA leaders met with President Obama and Treasury Secretary Geithner at the White House last week to introduce new ICBA-advocated initiatives to help unfreeze small-business lending and the secondary markets for Small Business Administration loans. ICBA Chairman Cynthia Blankenship, ICBA President and CEO Cam Fine, and CBAI member banker David Schroeder, president and CEO of American Enterprise Bank and a past chairman of CBAI, also participated in the roundtable discussion and press conference. For more,
    click here.

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    Federal Regulators Address ICBA Convention

    Nearly 50 Illinois community banks were represented at last week’s ICBA convention in Phoenix and listened to positive comments from federal regulators.
    Fed Chairman Ben Bernanke noted that most community banks are well capitalized and will continue to be strong competitors for many years. He cited deposit growth in community banks as consumers and small businesses move to safety.

    FDIC Chairman Sheila Bair said the long-term outlook for community banks is good, and the FDIC is looking at basing assessments on assets rather than domestic deposits which would increase assessments on the largest banks and reduce assessments on community banks, a position recommended by CBAI and ICBA. Bair also declared that steps must be taken to end too-big-to-fail by limiting the size, complexity, and concentration of banks. She noted that large banks also need higher capital requirements and greater regulatory oversight.

    Meanwhile, OTS Acting Director Scott Polakoff expressed support for amending accounting rules on other-than-temporary-impairments (OTTI). He said only a portion of impairments representing credit losses should be reflected in earnings, and non-credit losses should not reduce earnings or regulatory capital. CBAI developed a sound relationship with Director Polakoff when he served as Regional Director of the FDIC’s Chicago office.

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    Community Bankers School Website Launched

    The Community Bankers School (CBS) recently launched its brand new website,
    www.thecommunitybankersschool.com. Information regarding faculty, curriculum, admission, and registration are included on the site. Consisting of two, one-week sessions over a two-year period at Illinois Wesleyan University in Bloomington, CBS will allow you to immediately contribute to the overall success of your bank, and give you the knowledge necessary to get ahead. It gives students the most up-to-date thinking on core principles of community banking: compliance, operations, consumer credit, documentation, asset/liability management, marketing, management principles, and much, much more. CBS features a nationally recognized faculty, an updated curriculum, and timely topics. The 2009 session opens Sunday, July 12, and concludes Friday, July 17.

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    \ CBAI's 27th Annual Washington Visitation May 11-13, 2009

    CBAI’s 27th Annual Washington Visitation is scheduled for May 11-13, 2009 -
    Register today!

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    CBAI Reaches Out to Illinois Lawmakers

    Since fall of 2001, CBAI has been part of a consortium of Midwest community-banking associations and bankers’ banks (including Independent Bankers’ Bank, Springfield) in contributing to a quarterly publication intended specifically for an audience of state legislators. Called Lawmakers’ Review and published by the professional staff of NorthWestern Financial Review (NWFR), this magazine educates and informs law-makers about the concerns of community bankers, the banks’ efforts to serve their communities, and legislative remedies where applicable. To view the latest issue of Lawmakers’ Review,
    click here.

    If you have an idea for an article, please contact NWFR Editor Tom Bengston at Tom@NFRcom.com or CBAI SVP Communications Andrea Cusick at cbaicom@cbai.com.

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    CBAI’s 25th Annual Capital Conference April 22, 2009

    CBAI's 25th Annual Capital Conference is scheduled for April 22, 2009.
    Early Bird Registration $150 Per Bank! Register today!

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    Baker Market Update

    Fed Keeps Target Range of Zero-0.25%; Will Now Buy $300B in Treasuries.
    Click here to read more.

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    ICBA Calls for End to Too-Big-To-Fail Banks

    ICBA Immediate Past Chairman Terry Jorde called on policymakers to address excessive concentration in the banking sector to prevent giant institutions from ever threatening the stability of the overall financial system again. At a
    House Financial Services Committee hearing on systemic risk, Jorde called for tighter supervision of too-big-to-fail institutions, new systemic-risk premium assessments and the orderly break-up of systemic-risk institutions over a five-year period.

    She also called on lawmakers to avoid even greater potential hazards with systemic risk in the future by continuing to uphold the separation of banking and commerce by closing the industrial loan company loophole. And she said banking regulations should be extended to currently unregulated financial firms.

    “Congress need not waste time rearranging the regulatory boxes to change the system of community bank regulation,” said Jorde, of Cando, N.D., before the House Financial Services Committee. “The failure occurred in the too-big-to-fail sector.”

    Jorde said that because the nation’s more than 8,000 community banks stuck to common-sense business practices and stayed away from the risky practices of Wall Street institutions that led to the financial crisis, the vast majority remain well-capitalized. Read ICBA Release.

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    CBAI and ICBA Ask Regulators to Stop Harsh Field Exams

    In response to the concerns of many community bankers throughout Illinois and the nation, CBAI and ICBA have urged regulators to address overreaching and overzealous field exams that are restricting lending activity. In fact, ICBA provided
    testimony in Congress today to explain the consequences of overly restrictive examination practices on credit availability. The testimony also suggested changes to the FDIC’s special assessment and mark-to-market accounting rules.

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    Prepare for Growth at the 2009 SHAZAM EFT Forum

    Preparing your institution for EFT growth will be more important than ever during the upcoming year. At this year’s EFT Forum, SHAZAM will provide the tools needed to help prepare for this new growth. Keynote speaker, Jim Welch, will share his knowledge of the next generation of EFT users and examine the seven critical generational customer insights that will drive current and future business growth. Registration information and more,
    click here.

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    FDIC Extends the TALP Debt Guarantee Component

    The Board of Directors of the FDIC has voted to extend the debt-guarantee portion of the Temporary Liquidity Guarantee Program (TLGP) from June 30, 2009 through October 31, 2009, and to impose a surcharge on debt issued with a maturity of one-year or more beginning in the second quarter to gradually phase-out the program.
    Click here, to read more.

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    Two Largest Corporate Credit Unions Seized by Regulators

    The credit union industry is encountering material losses and failures as a result of the mortgage meltdown. On Friday, March 20, 2009, federal credit union regulators seized the two largest corporate credit unions in the nation which incurred severe losses in mortgage-related bonds. Even greater losses are predicted for other corporate credit unions. Located in California and Kansas, respectively, the two giants have combined assets of about $57 billion, and their seizure will likely cost the credit union insurance fund an estimated $6 billion. All other insured credit unions will have to replenish the funds with an estimated 100-basis-point assessment which could have a dramatic adverse impact on credit union earnings and stability.

    Meanwhile, credit union regulators and the national credit union association are seeking financial relief from the U.S. Treasury to help spread the assessments over a longer period of time. CBAI is very perturbed that the credit union industry may now turn to the American taxpayer for financial relief when they don’t pay any corporate income taxes. The time has come to tax all credit unions that have no common bond.
    More information.

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    New Program Helps Bank Directors Save Money!

    In fulfillment of its mission to help strengthen the bottom lines of community banks for the benefit of the communities they serve, Community BancService Corp., Inc. (CBSC) is proud to introduce a program that will help reduce costs for the board members of CBAI member banks. Midwest Office Supply, CBSC’s preferred provider of office products and furniture, has developed a
    program that enables the board members of CBAI member banks to purchase office supplies and furniture at deeply discounted prices that had been available exclusively to CBAI member banks.

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    Illinois Farmland Values Expected to Decline

    Farm managers and rural appraisers
    predict a decline in farmland values this year which would be the first decline in more than two decades. Factors cited were the recession and lower grain prices.

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    Chicago Fed Index Shows Weak but Improving Economic Activity

    The
    National Activity Index of the Federal Reserve Bank of Chicago, a weighted average of 85 indicators of national economic activity, showed improvement in three of the four broad categories of indicators in February – employment, production, and consumption and housing. Only the sales, orders, and inventories indicator failed to improve in February compared to January.

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    St. Louis Fed Releases Economic Activity Report

    Economic activity in the St. Louis Federal Reserve District continued to weaken over the past two months with declines in consumer spending, manufacturing activity, commercial and residential construction, and employment.
    See Report.

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    Compliance Institute --- Lending Session

    As the Community Bankers for Compliance Program has evolved, we have identified a need for a basic, introductory class for those compliance officers who are either new to banking or new to their positions in the area of lending compliance. To meet this need, CBAI has created a comprehensive lending compliance program designed to provide a detailed understanding of the major regulatory lending compliance regulations that have been determined to be “must knows” for compliance officers. This institute scheduled for April 7-9, 2009 at CBAI Headquarters in Springfield is designed for new compliance officers, internal auditors, compliance backup personnel, and other bank employees who want to be comfortable with the compliance process should attend this informative program.

    This institute is lead by Bill Elliott, senior consultant and manager of compliance, and Bryan Bradley, CRCM, senior consultant, both of Young & Associates, Kent, Ohio.

    Register today! For more information, please
    click here.

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    CBAI

           

    CBAI's PROFESSIONAL DEVELOPMENT PROGRAMS THROUGH 4/30/09



    TELEPHONE/WEBCASTS THROUGH 4/28/09



    OTHER EVENTS THROUGH 4/28/09


    3/25-26 CBAI’s Career Development Division Spring Conference, DoubleTree Hotel, Bloomington

    4/20 CBAI Group 6 Meeting, Soangetaha Country Club, Galesburg

    4/22 CBAI Marketing Conference, Crowne Plaza, Springfield

    4/22 CBAI Capital Conference, Hilton Hotel, Springfield

    4/27 CBAI Group 13 Meeting, Stone Creek Golf Course, Makanda

    4/28 CBAI Group 11 Meeting, Roland Barkau Memorial Golf Course, Okawville


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