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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    March 28, 2018

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • House Regulatory Relief Push Underway During Congressional Recess
  • House Committee Advances Community Bank Relief Bills
  • Register Today for CBAI's 36th Annual Call on Washington
  • CSBS and State Regulators Applaud Passage of S. 2155
  • Fine: Come to Washington to Finish the Job
  • New ICBA Chairman: Build on Our Foundation
  • NEWS FROM THE FRONT: State Governmental Relations Update
  • CBAI's 34th Annual Capital Conference Registration is Underway
  • Group Meeting Registration Is Now Open for Groups 1, 2, 4, 7, 9, 10 & 12
  • Complete the 2018 CBAI Compensation Survey Today
  • Investment News from THE BAKER GROUP
  • Rural Economic Index Continues Upward Momentum
  • FDIC Releases Q4 State Profiles
  • Regulators Plan Less Burdensome Exams
  • CBAI Meets with OCC’s Office of Innovation
  • Opinion: Housing Market Needs Government Guarantee
  • ICBA Debuts Video Celebrating Community Banking
  • CBIS: Providing Community Banks Risk-Management Solutions
  • CBAI LEGAL: More “Qs & As”
  • Complimentary 2018 HMDA Webinar, Hosted By Wolters Kluwer HMDA Experts
  • Millennial Workers Can Help Community Banks Compete
  • Little Change in Illinois Farmland Values
  • Register Today for Early-Bird Pricing at CBAI’s 44th Annual Convention & Expo
  • Lenders’ Comprehensive Guide to Mortgage Loan Compliance Set for April 3 & 4
  • Auditing Fair Lending and FCRA to Be Held April 5
  • Technology Is Changing Everything Slated for April 10
  • Reg Z University Scheduled for April 16-18


  • House Regulatory Relief Push Underway During Congressional Recess

    With Congress now home for a two-week recess, CBAI is urging community bankers to call their district congressional offices in support of regulatory relief. ICBA’s Grassroots Action Center makes it easy for community bankers to reach out to House members on behalf of meaningful relief.

    Following the recent U.S. Senate passage of the bipartisan S. 2155, CBAI and ICBA are urging the House to quickly address regulatory relief when lawmakers return in April. Contact Your U.S. Representative Now!

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    House Committee Advances Community Bank Relief Bills

    Last week the House Financial Services Committee passed several regulatory relief bills, including measures inspired by ICBA’s Plan for Prosperity which is supported by CBAI.

    The Volcker Rule Regulatory Harmonization Act (H.R. 4790), sponsored by Representative French Hill (R-Ark.), would exempt community banks with less than $10 billion in assets from the Volcker Rule. The Small Bank Exam Cycle Improvement Act of 2018 (H.R. 5076), sponsored by Representative Claudia Tenney (R-N.Y.), would expand eligibility for the 18-month exam cycle to institutions with less than $3 billion in assets.

    Both bills passed on strong bipartisan votes and reflect provisions in S. 2155. The committee markup came as the House prepares to take up community bank regulatory relief following Senate passage of S. 2155. Read Committee Release.

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    Register Today for CBAI's 36th Annual Call on Washington

    CBAI's Call on Washington will be held April 8-11, 2018, at the Grand Hyatt Washington. This is an annual lobbying trip organized by the CBAI. For 35 years, community bankers from across Illinois have been traveling to Washington, D.C., to express their positions on issues to their Members of Congress.

    Call on Washington will again be held in conjunction with ICBA’s 2018 Capital Summit. Along with CBAI's coordinated events, Illinois’ entire delegation is also invited to attend ICBA’s meetings and events.

    The timing of this year's Call on Washington couldn't be better as legislators debate the meaningful regulatory relief provisions of S.2155. Community bankers need to continue to lobby Congress to push this bill over the finish line. See More Details and Register Here.

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    CRISIS MANAGEMENT TRAINING — PROTECT YOUR GOOD NAME
    Have you finalized your 2018 training plan? This is a great opportunity to prepare your organization to move out of disaster mode quickly and toward a resolution with SHAZAM Media Relations Training. Or, educate your community and invite business owners, city officials and law enforcement to participate in our Crisis Management skimming and card-cloning presentation. Spots are filling quickly, contact SHAZAM today.




    CSBS and State Regulators Applaud Passage of S. 2155

    State financial regulators helped support the passage of S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, bipartisan legislation that will provide greatly needed relief for community banks. The Conference of State Bank Supervisors (CSBS) on March 12, CSBS wrote a letter to Senate Banking Committee Chairman Mike Crapo (R-Idaho) supporting S. 2155 and urging its quick passage. Highlights of S. 2155 are as follows:

    • Qualified mortgage status will encourage community banks to lend more to prospective homebuyers;
    • Appraisal relief will help rural Americans in the homebuying process;
    • Reciprocal deposits will be treated as a stable source of funding that keeps large deposits local; and
    • Volcker rule relief will allow community banks to legitimately hedge risk.
    Read CSBS Letter.

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    Fine: Come to Washington to Finish the Job

    With the political realities in Washington posing a threat to meaningful regulatory relief, community bankers must continue working to finish the job, ICBA President and CEO Cam Fine wrote in a new blog post. Fine called on community bankers to be heard on this important issue by attending next month’s 2018 ICBA Capital Summit.

    Scheduled for April 8-11 in the nation’s capital, the ICBA Capital Summit allows community bankers to meet face-to-face with their members of Congress and staff.

    “It ain’t over until it’s over,” Fine wrote. “Community bankers enjoy a pristine reputation in Washington and across the nation, but to finally achieve meaningful relief to support local economic growth, we’re going to have to keep working for it.” Read Fine’s Blog Post. (NOTE: CBAI’s Annual Call on Washington dovetails with the ICBA’s Capital Summit). Register Here.

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    NEWS FROM THE FRONT: State Governmental Relations Update

    The Illinois General Assembly has taken a break for the primary election and Easter holiday. When it returns, it will be in for eight straight weeks of session leading up to the expected May 31 adjournment. Many important issues remain on the table including changes to the Revised Uniform Unclaimed Property Act, CBAI legislative initiatives, and a state budget for the 2018-19 fiscal year. More details about legislation under consideration are contained in the latest edition of NEWS FROM THE FRONT.

    The CBAI governmental relations team has also compiled a recap of the March 20 primary election results. See Most Recent NEWS FROM THE FRONT.

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    CBAI's 34th Annual Capital Conference Registration is Underway!

    Your Advocacy Is Crucial

    For one day every year, CBAI member bankers make their voices heard face-to-face with lawmakers at the State Capitol. The 34th Annual Capital Conference will be held Wednesday, April 18, 2018 at the Wyndham Springfield City Centre (formerly the Hilton Hotel). The day begins with a legislative briefing and luncheon. After lunch, with key talking points in hand, our constituency moves to the State Capitol to meet with regulators and legislators. The day is capped off with a reception for bankers, legislators and regulators at the top of the Wyndham, which affords sweeping views of the Capital City. This is an opportunity you don't want to miss!

    The Early-bird special is ONLY $100 per institution. After April 1, 2018, the cost will be $150 per institution. REGISTER TODAY!

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    Group Meeting Registration Is Now Open for Groups 1, 2, 4, 7, 9, 10 & 12

    CBAI leaders and executive staff are visiting 11 locations on the 2018 Group Meetings Tour this spring. Bankers from nearly 200 banks participate in these enjoyable and informative events each year. For this year’s after-dinner presentation, Sara Nielsen, senior vice president of technology and compliance at BankOnIT, discusses managing technology risk. The opening portion of each Group Meeting will focus on critical legislative and association issues. CBAI President Kraig Lounsberry provides updates on Association projects and community banking in general, and Senior Vice President of Governmental Relations Jerry Peck offers an up-to-the-minute report of banking-related legislative activities.

    Consisting of an optional golf outing and a dinner meeting, each Group Meeting provides an excellent opportunity to get the latest information on key banking issues and catch up with friends and peers. (Note: The Groups 1 & 2 meeting follows a different format.) Make plans now to attend!

    As a reminder, at the CBAI Annual Convention in September, the membership voted for changes in the structure of CBAI Groups. For efficiency, the former Groups 2 and 3 were combined, which occasioned changes in the numbering of all CBAI Groups with the exceptions of 1 and 2. See Group Meeting Schedule. See After-Dinner Presentation and Agenda. See New Group Configuration.

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    Complete the 2018 CBAI Compensation Survey Today

    Participating CBAI Members Receive Free Results!

    The deadline for Completion is April 16, 2018. BalancedComp, a national compensation expert, is partnered with CBAI to:

      1. ease the process of participating - possible to complete in under 30 minutes;
      2. increase the survey's relevance to today's banking environment; and
      3. enhance the resulting data's usability.
    Survey results remain confidential and FREE to CBAI member participants, thanks to sponsor IZALE Financial Group.

    To complete the 2018 CBAI Compensation Survey, CLICK HERE now.

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    Investment News from THE BAKER GROUP

    Baker Market Update

    When FDR once told the nation that the only thing to fear was fear itself, he left out the part about “fear itself” being plenty scary all on its own. And, “fear itself” is non-denominational. Doesn’t matter if it’s fear of a trade war, fear of a real war, or fear of the Fed; fear is scary. When investors become frightened, they sell the things that scare them, like stocks, and they buy the things that don’t scare them as much, like bonds. See Baker Market Update.

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    Rural Economic Index Continues Upward Momentum

    Creighton University’s index of the rural economy slipped in March, but it remained above growth-neutral for a second straight month. It was the first growth streak since mid-2015 for the Rural Mainstreet Index (RMI), a monthly survey of bank CEOs in rural areas. While economic growth is trending upward, weak agriculture commodity prices continue holding it back.

    The March RMI for Illinois climbed to 58.4 from 54.4 in February. The farmland-price index rose to 47.3 from 46.1 in February. The state’s new-hiring index advanced to 65.8 from last month’s 58.1. Jim Eckert, president of Anchor State Bank in Anchor, Illinois, reported, “Recent commodity price increases have helped the mood of our farmers. Our area is somewhat dry and good spring rains will be essential for a good 2018 crop.” See Index Report.

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    FDIC Releases Q4 State Profiles

    The FDIC released its state profiles for the fourth quarter of 2017. The FDIC State Profiles are formatted as a quarterly data sheet summary of banking and economic conditions for all 50 states, Puerto Rico, and the U.S. Virgin Islands.

    Illinois institutions overall experienced a year-over-year decline in past due loans and slight increases in Tier 1 capital, net interest margin, and median net loans to assets. Read More. See Illinois Profile.

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    Regulators Plan Less Burdensome Exams

    Federal regulators last week said they will take steps to reduce the burden of supervisory exams as part of an Examination Modernization Project. The Federal Financial Institutions Examination Council members said they will highlight and reinforce regulator communication objectives, shift more exam work offsite, continue tailoring exams based on risk, and improve electronic file transfer systems. The plan also reinforces examiner guidance about the importance of being clear and transparent to community bankers during exams. Read FFIEC Release.

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    CBAI Meets with OCC’s Office of Innovation

    The Community Bankers Association of Illinois' David Schroeder, Senior Vice President Federal Governmental Relations, participated in the Office of Comptroller of the Currency’s (OCC) Office of Innovation Office Hours event in Chicago on March 21, 2018. The meeting with the OCC was timely and very informative considering the many new developments in financial technology (fintech) which are being driven by consumer expectations. Fintech is rapidly moving into every area of financial services and it is critically important for community bankers to be aware of fintech opportunities and challenges and incorporate them into their community banks’ strategic planning. Read Article.

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    Opinion: Housing Market Needs Government Guarantee

    An advocate for comprehensive reform of the government-sponsored enterprises to build a long-term, sustainable housing finance system has expressed concern that some policy makers are calling for the recapitalization and release of Fannie Mae and Freddie Mac without an explicit government guarantee.

    David Stevens, president of the Mortgage Bankers Association (MBA), believes that approach would decimate the ability of community banks and smaller lenders to participate in secondary mortgage market and likely drive many of them out of the mortgage business.

    Stevens noted that the MBA has long advocated for an explicit government guarantee on the securities to level the playing field and allow smaller institutions to compete with larger banks that have deep balance sheets to back their investments. He said it would also allow smaller lenders to offer competitive rates, benefiting consumers directly, because outside investors would have confidence that the loans are ultimately backed by the U.S. government, thus increasing liquidity in the secondary mortgage market. He added that the explicit government guarantee should not be extended to the guarantors responsible for issuing the securities. Read More.

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    ICBA Debuts Video Celebrating Community Banking

    ICBA has created a new video to highlight the important role community bankers play in their hometowns as part of next month’s Community Banking Month celebration. View the Video.

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    CBIS: Providing Community Banks Risk-Management Solutions

    CBIS has been made aware of an insurer leaving the outsourced insurance tracking and placement-services market this year. The entire insurance-tracking process (mail, monitoring, placement and escrow functions) can be transferred to preferred CBAI vendors. With two offices dedicated to this service, CBIS can bring compliant, cost-efficient solutions that significantly reduce internal workload – plus, track any and all collateral that secure your loan agreements. Read More.

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    CBAI LEGAL: CBAI LEGAL: More “Qs & As”

    In the “Members Only” area of CBAI’s website, the CBAI Legal Department maintains a “Legal Link Library” consisting of information that is hopefully beneficial to CBAI Member banks. New questions and answers that will be added under the Frequently Asked Questions tab in the Legal Link Library are previewed in this CBAI LEGAL column. Read More.

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    Complimentary 2018 HMDA Webinar, Hosted By Wolters Kluwer HMDA Experts

    CBSC Endorsed Partner, Wolters Kluwer is hosting a complimentary 90-minute webinar, “HMDA 2018 Focus: CMS, Data Integrity and Fair Lending Implications” from 1-2:30 p.m. CDT, Thursday, April 19.

    Four critical areas will be covered:

    • HMDA Compliance Management Systems
    • Data Integrity
    • Fair Lending Analytics
    • What is on the horizon
    Visit Here for a deeper dive into the agenda. You will not want to miss this webinar! Register Today!

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    Millennial Workers Can Help Community Banks Compete

    According to Chris Peterson of Q2 Holdings, community banks and millennials could be destined for each other. He notes that community banks have inherent purpose: They strengthen their communities and local businesses and build relationships with members of the community in ways big banks can’t. It’s the kind of purpose-driven career many millennials seek.

    Peterson recommends that community banks allow entry-level employees to participate in cross-departmental decisions about platform conversions and let them sit in on brainstorming sessions on topics like how to improve the digital banking experience. Equally important is affording them opportunities to grow managerial or leadership skills and technical skills. Younger workers want to contribute. Read More.

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    Little Change in Illinois Farmland Values

    Prices being paid for high quality Illinois farmland, as well as cash rents have stayed essentially flat for the past 12 months according to the 2018 Illinois Farmland Values and Lease Trends Report released by the Illinois Society of Professional Farm Managers and Rural Appraisers. The Report is based on an annual survey of the Society’s members and others allied to the industry and reflects activity from 2017. Order Report Here. See Full News Release.

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    Register Today for Early-Bird Pricing at CBAI’s 44th Annual Convention & Expo

    Registration is now open for CBAI’s 44th Annual Convention & Expo, scheduled for September 27-29, 2018, at the Hyatt Regency St. Louis at The Arch. Expert speakers on the hottest community banking topics fill an education agenda featuring 20 break-out sessions. This year's Opening Breakfast Speaker is Kevin Brown, whose unconventional path to business and personal success taught him that winning in business and in life requires anything but conventional thinking. His resume includes an eclectic mix of career stops that ultimately led him to the purchase of a franchise at the age of 17. After a career in franchising that spanned 30 years, Brown retired from corporate America to pursue his passion for effecting positive change for as many people and organizations as possible with his presentation, “The Hero Effect™ - Creating a Culture of Heroes at Every Level.” Also, on the agenda are the Welcoming Reception with BancPac Live and Silent Auction, a jam-packed Exhibit Hall with nearly 90 booths, the Annual Business Meeting Luncheon, and much more. The Closing General Session speaker is Lieutenant Colonel Robert Darling. Handpicked to work for the White House Military Office, Airlift Operations Department, it was in that capacity that Lt. Col. Darling supported the President, Vice President, and National Security Advisor in the President's Emergency Operations Center (PEOC) on September 11, 2001.

    Don't wait! Register today for early-bird pricing and receive a significant discount to attend CBAI's annual showcase event! You won't want to miss it! Register Here!

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    Lenders’ Comprehensive Guide to Mortgage Loan Compliance Set for April 3 & 4

    During the last few years, both Congress and the various federal regulators have crafted revisions to many of the regulations that have been a part of our lending lives. This has resulted in many additional regulatory issues in every mortgage loan transaction. As a result, lenders have been struggling to determine what they should do to ensure that they not only make a safe and sound loan for the bank, but do so in a manner that will not create regulatory difficulties. This two-day seminar covers all the aspects of mortgage compliance that a lender should know, including current rules and recent changes. Leading it is Bill Elliott, CRCM, senior consultant and manager of compliance, Young & Associates, Inc.

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    Auditing Fair Lending and FCRA to Be Held April 5

    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., College Park, GA, and Aaron Lewis, consultant with Young & Associates, Inc., Kent, OH, lead this institute.

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    Technology Is Changing Everything Slated for April 10

    Customers expect unrivaled service, and you want to provide it. As the digital revolution redefines banking and branch utilization evolves, the perils of robbery and new threats present themselves daily. This new program provides pioneering ideas for those responsible for your bank’s safety and security. This session incorporates bank-robbery suppression concepts that create an environment that empowers all bank employees to make a difference, while introducing attendees to new threats and opportunities brought about by evolving technology. This program is intended for those with management responsibility for their banks’ security and is delivered in a manner such that branch-management personnel learn new approaches to preventing robberies and other personal-safety threats. Leading this seminar is Jim Rechel, founder of The Rechel Group, Inc., Cincinnati, OH.

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    Reg Z University Scheduled for April 16-18

    It is no secret that regulations in general continue to expand. This is especially true for Regulation Z. The Regulation Z commentary alone consists of more than 372,000 words. As the complexity has increased, the ability for banks to comply has become more and more compromised. In response, we are offering this course to discuss all aspects of the regulation. A brief course no longer is possible – a three-day course is now required to cover all facets of Regulation Z. The manuals (which will be extensive) are broken out by the loan type, and information that pertains to different loan types will be repeated in each manual as needed. This makes it easier for the student to use the manuals for reference after the seminar. The course consists of lecture and discussion, along with time devoted to questions and answers. We begin with closed-end obligations and conclude with open-end obligations. Topics covered include Reg Z basics, consumer non-real estate loans, consumer real-estate loans, consumer home-equity lines of credit, and consumer credit cards. (Credit cards was scheduled as the final subject in the second session so that banks that do not have a credit-card portfolio can end their day a little earlier). Leading this program are Bill Elliott, CRCM, senior consultant and manager of compliance, and Dale Neiss, CRCM, consultant, both of Young & Associates, Inc., Kent, OH.

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