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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                   April 03, 2013 Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Register Today for CBAI's 29th Annual Capital Conference April 17!!
  • REGISTER NOW for CBAI’s 31st Call on Washington April 23-26
  • Time Is Running Out To Complete the Officer Compensation Survey!
  • Congress Tells Regulators: “Don’t Hurt Community Banks on Capital Rules”
  • Momentum Builds to Resolve Too-Big-To-Fail
  • Reasons Why the Too Big to Fail Problem Will Be Addressed
  • Global Mega Banks Being Investigated for Criminal Activity
  • ICBA’s Fine: Survey Shows Americans Sick of Too-Big-To-Fail
  • Fed Releases Report on Mobile Banking
  • How Sub S Banks Fared in the Fiscal Cliff Deal
  • What Is a Real Illinois Community Bank?
  • Farmer Mac Celebrates 25th Anniversary in 2013
  • Baker Market Update
  • Overdraft Revenue Makes First Climb in Three Years
  • New Service Saves CBAI Member Banks Money and Time!
  • Where Did Your Bank Rank in Q4?
  • KASASA Ad #2 "Any ATM Is Your ATM"
  • Register Today for the First Five Group Meetings
  • Businesses Face New Fee for Employee Benefits Plans Under Health Care Reform
  • Diebold’s Branch-Transformation Seminars Are Coming Your Way
  • Will Your Insurance Partner Protect You Through the Current Trends?
  • CBAI Announces Saturday Night Entertainment at Convention
  • Compliance Institute Lending Session Scheduled for April 9-11, 2013
  • Auditing Regulation Z & RESPA Real Estate Loans Set for April 12, 2013
  • Loan Documentation for Support Staff to be Held April 15-18

  • Register Today for CBAI's 29th Annual Capital Conference April 17!!

    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

    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 at 847-909-8341 or at 800-736-2224 with any questions or comments.

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    Time Is Running Out To Complete the Officer Compensation Survey!

    More than 100 community banks have completed the survey to date, but that’s not enough. We need your bank’s information, as well. CBAI member banks that participate receive the results for FREE (a $300 savings!). Deadline is 4/15.

    To complete the survey online,
    Click Here.

    To complete the survey as a worksheet, Click Here.

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    Congress Tells Regulators: “Don’t Hurt Community Banks on Capital Rules”

    Led by ICBA, community banks are gaining the support of democratic and republican congressmen to urge regulators to provide regulatory relief for community banks on bank capital rules. CBAI and ICBA have implored regulators to exempt community banks from the proposed Basel III capital requirements, and an amendment to do just that was introduced on March 21st by Senator James Inhofe (R-OK).
    See The Hill Article.

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    Momentum Builds to Resolve Too-Big-To-Fail

    Calls to resolve the growing problem of too-big-to-fail mega banks are continuing unabated. Last week FDIC Vice Chairman Tom Hoenig unveiled his plan to end the Wall Street subsidy in a Washington Post editorial. He noted that this form of corporate welfare allows the protected mega banks to profit when their subsidized trading bets pay off, while the safety net acts as a buffer when they lose, shifting much of the cost to the public.

    Hoenig recommends that nonbanking activities such as proprietary trading, market making and derivatives should be placed outside of insured commercial banks. CBAI fully agrees, and a banker delegation will carry that message to Washington later this month during CBAI’s Annual Call on Washington.
    See Washington Post Article.

    Meanwhile, New York Times columnist and MIT economics professor Simon Johnson declared last week, “The debate is over; the decision to cap the size of the largest banks has been made. All that remains is to work out the details.” He cited the current banking crisis in Cyprus as ample evidence that bank size does matter. See New York Times Article.

    Last week the U.S. Senate unanimously approved (99-0) an amendment to the nonbinding Senate budget resolution that the funding advantages of the mega banks must end. In a March 20 news conference, Federal Reserve Bank Chairman Ben Bernanke stated, “Too big to fail is not solved and gone. It’s still here.”

    ICBA’s Fine: “Let’s Break Up the Too-Big-To-Fail Threat”

    This week ICBA President Cam Fine called on Congress and regulators to break up the mega bank oligopoly by downsizing them. He emphasized that virtually every legal restriction and regulatory hoop that community bankers face are the direct result of reckless behavior and wrongdoing by the mega banks and their nonbank “shadow” subsidiaries. Read Fine’s Message.

    The American Bankers Association, however, continued its opposition to breaking up and downsizing the mega banks, claiming “… that banks of all sizes are needed to support our country’s $16 trillion economy.” While the ABA states that no bank should be too-big-to-fail or too-big-to-jail, it offers no real solutions to the problem that resulted in the near collapse of the U.S. economic and financial system in 2008.

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    Reasons Why the Too Big to Fail Problem Will Be Addressed

    Calls to resolve the too big to fail problem have intensified in recent months which has markedly increased the likelihood of Congressional action during this session. Reasons include 1) that fact that the mega banks are being routinely exposed for scandalous and criminal activities; 2) the growing size of the mega banks makes an orderly liquidation impossible in the event of failure; 3) high profile lawmakers, policymakers, and academics are joining the call for downsizing the mega banks; and 4) the inherent unfairness of the double standard treatment of community banks versus mega banks and the implied mega bank TBTF funding advantage.

    CBAI and ICBA have pursued a relentless campaign to resolve the TBTF problem by advocating downsizing the mega banks so they can be better managed, regulated, and resolved.
    See AB Article.

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    Global Mega Banks Being Investigated for Criminal Activity

    JP Morgan Facing Numerous Federal Investigations

    At least eight federal agencies are investigating JP Morgan Chase, the nation’s largest bank, for possible criminal prosecution over whether it lied to investors and regulators about risky wagers that resulted in a multi-billion dollar trading loss.
    See DealBook Article.

    Former FDIC Chairman Sheila Bair wrote in a Wall Street Journal editorial response this week that the risk models of the mega banks give the public a false sense of security about their stability. She wrote that JP Morgan used financial models to camouflage the dangers of the mega bank’s “London Whale” trades.

    European Commission Investigating 16 International Banks for Derivatives Collusion

    European antitrust authorities are moving to charge 16 of the world’s largest banks (including Citigroup, Bank of America, and Wells Fargo) with derivatives collusion, claiming that they sought to stifle competition from exchanges in the market for credit default swaps. See International Business Times Article.

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    ICBA’s Fine: Survey Shows Americans Sick of Too-Big-To-Fail

    A new survey shows that the community banking profession’s push to end the too-big-to-fail plague is gaining momentum among the American public, ICBA President and CEO Cam Fine wrote in his
    latest blog post. According to the Rasmussen Reports survey, 50 percent of U.S. adults said they favor a plan to break up the 12 largest megabanks. The survey found that the number of Americans in favor of breaking up the megabanks is up from an October 2009 poll, in which 43 percent of Americans said that banks considered too big to fail should be broken up into a series of smaller companies.

    In a national news release, ICBA Chairman Bill Loving said the survey shows that Americans understand that the too-big-to-fail problem must be addressed to ensure a more robust economic recovery and to prevent the next financial crisis. Read Finer Points. Read ICBA Release.

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    Fed Releases Report on Mobile Banking

    The Federal Reserve Board last week issued the results of a consumer survey on mobile financial services. Use of mobile phones to access a bank account, credit card, or other financial account increased last year; 87% of the U.S. adult population has a mobile phone, 52% of which are smart phones with internet capability. Last year 48% of consumers with smart phones used mobile banking compared to 42% in 2011.

    The report concluded that the use of mobile banking has increased by more than a third in the past year, and the use of smart phones to make payments at the point of sale has increased even more rapidly.
    See Fed Report.

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    How Sub S Banks Fared in the Fiscal Cliff Deal

    With the signing of the American Taxpayer Relief Act of 2012 (H.R. 8) on January 2, 2013, S Corp banks and their owners now have some certainty about taxes, at least for the foreseeable future. In addition to tax rate preservation (for some), Congress also enacted a number of other "business tax" extensions that were specific to S Corps.
    See More Details.

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    What Is a Real Illinois Community Bank?

    More than 70% of all banks and thrifts chartered in Illinois are members of the Community Bankers Association of Illinois and have met the eligibility criteria as “Real Community Banks.” The primary characteristics of a real Illinois community bank are Local Decisions, Local Commitment, and Local Investment, including the following:

      • Community banks focus attention on the needs of local families, businesses, and farmers.
      • Community banks balance the needs of customers, employees, and shareholders.
      • Community banks use local deposits to make loans to the neighborhoods where their depositors live and work.
      • Community bank officers are accessible to their customers on site with decisions on loans made locally.
      • Community bank employees are deeply involved in local community affairs.
      • Community banks are willing to consider important attributes, such as a person's character, when making loans.
      • Community banks are themselves small businesses, so they understand the needs of small business owners.
      • Community banks' boards of directors are made up of local citizens who want to advance the interests of the towns and cities where they live.

    CBAI is honored to represent the officers, directors, stockholders, and employees of the Real Community Banks in Illinois, not just here in Springfield but also in our Nation’s Capital. CBAI works diligently each and every day to preserve, protect and promote community banking in the State of Illinois! Thanks to all Real Illinois Community Banks that support CBAI and recognize the vital importance of autonomous representation for the interests of Main Street and local neighborhoods.

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    Farmer Mac Celebrates 25th Anniversary in 2013

    In response to the agricultural credit crisis in the 1980s, Congress authorized in 1987 the establishment of the Federal Agricultural Mortgage Corporation (Farmer Mac) with a mandate to create a secondary market for qualified agricultural real estate and rural housing mortgage loans.

    Today, Farmer Mac has nearly 1,100 lender relationships and offers long-term fixed-rate funding and additional lending capacity which alleviates capital pressure on lenders and helps manage risks in the agricultural credit portfolios.
    See BankNews Article.

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    Baker Market Update

    “March Madness” may describe the situation in Cyprus as banks reopened. The European Union bailout package sees creditors and uninsured depositors take a hit which the holdings of small servers remain intact. The Dallas Fed Manufacturing Activity report was surprisingly positive last week, and the Durable Goods report was also good. The Treasury managed to sell new issues of two-year and five-year notes.
    Read More.

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    Overdraft Revenue Makes First Climb in Three Years

    Overdraft revenue at banks, credit unions and thrifts rose last year for the first time since 2009, according to a new report from the economic research firm Moebs Services. Total overdraft revenue ticked up to $32.0 billion in 2012 — up $400 million, or 1%, from the previous year, according to the report. Still, despite regulations that put downward pressure on overdraft revenue, “consumers' use of overdrafts shows no indication of going away, and is actually increasing," Michael Moebs, chief executive officer of Moebs Services, said in a press release.
    See Report.

    A CBSC Preferred Provider, IMPACT Overdraft Solutions are designed to create, protect and sustain overdraft fee income, improve consumer satisfaction and manage overdraft processing with advanced automation. IMPACT provides the components required for successful Overdraft Programs; ATM/Debit Card Opt-In Maximization, FDIC Final Guidance, On-site Implementation, Plan Design, Compliance Documentation and Disclosures, Compliance Guarantee, Consumer Awareness Material, Employee Training, Risk Management Software, Operational Training, and Ongoing Support. CBAI members receive special discounts up to 20%, and a free NSF compliance assessment. Contact Bob Flowers, Jr or Jeff Flowers at (800) 477-9452 for additional information.

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    New Service Saves CBAI Member Banks Money and Time!

    CBAI member banks have reported saving money and administrative time purchasing supplies and printed materials using FUSE, an electronic procurement system created by Systemax and Midwest Office, and recently recommended by CBSC.

    FUSE is a software program that helps bankers better manage supplies and printed product purchasing, delivery, and inventory management. The system aggregates the purchases from various bank departments and branches to achieve a volume discount. Certain printed products may be aggregated with other banks to achieve even greater cost reductions. Those supplies are shipped directly to the appropriate location. Reports inform senior management about inventory status, purchasing trends, costs, and eliminates inventory management problems that we discovered exists in many banks. For example, a bank reported that its branches ordered and maintained supplies with little coordination throughout the organization. As a result, one branch had a supply shortage while another had a surplus. And a few of the items contained the wrong bank logo! FUSE solved those problems and saved the bank money in the process.

    FUSE standardizes the procurement process, ensures best pricing, maintains inventory offsite, and generates low-inventory alerts. Best of all, the system is FREE for CBAI members.

    For more information visit the FUSE web site at or call Brett Jackson, Systemax President, at 800-525-9995 ext. 121.

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    Where Did Your Bank Rank in Q4?

    The fourth quarter Illinois ROE Map is now available for CBAI members! See how your bank stacks up to the competition.
    Read More.

    The Q4-2012 ROE Map was produced and published compliments of Bank Trends, the CBSC Preferred Provider of peer analysis for community banks. Bank Trends makes the tedious task of analyzing your bank’s Call Report data simple and easy at a very low price. Contact Michael Stinson at 877-717-6743 for more information. He can arrange a demonstration and a free no-obligation trial subscription.

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    KASASA Ad #2 "Any ATM Is Your ATM"

    What’s even better than a really big network of surcharge-free ATMs? The freedom to use any ATM across the country, without the fear of racking up fees. Kasasa’s “Any ATM Is Your ATM” spot emphasizes how Kasasa rewards – like nationwide refunds on ATMs – go beyond big-bank convenience, and pay in ways that actually matter. Free Kasasa checking accounts even solve relevant everyday banking issues, like time wasted searching for an ATM with the right logo. It’s just one more simple way Kasasa expands a people-first approach to community banking from coast to coast.
    See Ad.

    Want Kasasa to take your community bank to the next level? Contact Steve Prost via email at steve.prost@bancvue .com, or phone at 847.341.8003.

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    Register Today for the First Five Group Meetings

    Group Meeting registrations are 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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    Businesses Face New Fee for Employee Benefits Plans Under Health Care Reform

    The IRS has issued a final rule that employers who offer various benefit plans must pay a fee to fund the Patient-Centered Outcomes Research Institute (PCORI), which was established by the Patient Protection and Affordable Care Act (PPACA). The fee will be assessed on plan sponsors and issuers of individual and group policies for policy or plan years ending after September 30, 2012. The first year of the fee is due July 31, 2013, and is equal to $1 per covered life per year.

    “Even though this fee may seem insignificant, this is one of many fees that will increase the cost to provide insurance to employees under the PPACA,” said Anita Baker, employee benefit plans managing partner at CliftonLarsonAllen LLP, a CBAI associate member.

    Under the IRS rule, issuers and plan sponsors are responsible for paying the fee, which is treated like an excise tax. A federal excise tax form reporting liability for the fee must be filed by July 31 of the calendar year immediately following the last day of the plan year.

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    Diebold’s Branch-Transformation Seminars Are Coming Your Way

    Save the date!
    Thursday May 2, St. Louis Mo

    This free seminar highlights four key areas:
    1. Key Trends Driving Branch Transformation
    2. What Consumers Are Really Saying
    3. How Financial Institutions Are Responding
    4. Discover Emerging Branch Solutions

    Diebold’s branch-transformation advisors use inside knowledge on today’s technologies and solutions to offer broad insight into how financial institutions are improving both the consumer experience and branch efficiency. Diebold’s subject-matter experts will share ideas to help your bank develop the optimal multichannel approach for engaging with your customers now and well into the future. Contact for additional information.

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    Will Your Insurance Partner Protect You Through the Current Trends?

    Patti Tobin of Community BancInsurance Services addresses trends affecting risk management and security protection for community banks.
    Read More.

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    CBAI Announces Saturday Night Entertainment at Convention

    CBAI is excited to
    announce that the Saturday night entertainment at convention is Lou Gramm, the voice of Foreigner. Gramm was the lead vocalist on all of Foreigner's hit songs, including “Feels Like the First Time,” “Cold as Ice,” “Long, Long Way from Home,” “Hot Blooded,” “Double Vision,” “Urgent,” “Juke Box Hero,” “Break It Up,” and “Say You Will”. He co-wrote most of the songs for the band, which achieved two of its biggest hits with the ballads “Waiting for a Girl Like You,” which spent 10 weeks at number two on the 1981-82 American Hot 100, and “I Want to Know What Love Is,” which was a number-one hit internationally (US & UK) in 1985. Don’t miss CBAI’s 39th Annual Convention, “Community Bankers: Illinois’ Treasure,” scheduled for September 26-28, 2013, at the Crowne Plaza in Springfield. Look for early-bird registration information soon!

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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. There are a number of new regulations that will become effective in January 2014. We provide a brief overview of the 2014 regulations and 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 Set for April 12, 2013

    The real estate loan portfolio is perhaps the riskiest 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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    Loan Documentation for Support Staff to be Held April 15-18

    Loan documentation is a critical component to lending. After the decision to make a loan has been made, the next step is the documentation-closing process, which is essential to avoid loan losses due to poor documentation. Many community banks assign this important responsibility to loan administrators with input from the sponsoring loan officer. If not performed properly, poor documentation can cause loans to be adversely classified, even if the underlying credit is sound or if the loan is performing as agreed. This
    seminar provides participants with a good understanding of the loan-documentation process, specifically, the five steps in the loan documentation process: identifying the borrower, identifying and documenting the collateral, evidencing the debt, attaching the collateral, and perfecting the security interest. Leading this seminar is Jeffery Johnson, president and founder of Bankers Insight Group, Atlanta, GA, who has more than 25 years of experience in the banking field.

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    Compliance Institute



    Deadline April 15

    CBAI Events

    Capital Conference
    April 17
    State House Inn

    Call on Washington April 23-26
    Washington, D.C.

    CBAI Marketing Conference
    May 2
    Crowne Plaza





    Finer Points Blog

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