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                 April 9, 2008 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • Chicago FHLB Announces Termination of Merger Discussions
  • Bullard Appointed President of St. Louis FRB
  • AG Banks Under Pressure as Grain Elevators Face Margin Calls
  • Projected Record Crop Values and Farm Income
  • National Weather Service Forecasts Above Normal Rains Thru Mid-April
  • Flood Guidelines Seminar Scheduled for May 6 & 7, 2008
  • Treasury Plan Would Allow Commercial Firms to Own Banks
  • Baker Market Update
  • CSBS Blasts Treasury Regulatory Restructuring Plan
  • Big Banks Report Large Derivative Losses in Fourth Quarter
  • Fed Says Recession Possible
  • Home Prices Fall in 21 Cities Amid Foreclosures
  • Affinion Launches BreachShield Solutions To Help Businesses Manage All Stages of a Data Breach
  • SARs Indicate Mortgage Fraud
  • Experience the Art of Bank Planning


  • Chicago FHLB Announces Termination of Merger Discussions

    The Federal Home Loan Bank of Chicago announced on April 7, 2008, that merger discussions with the Dallas FHLB have been terminated. The Bank also announced that its President, Mike Thomas, will step down on April 11, 2008. A search committee has been formed to recruit a successor within the next six weeks.
    Press Release.

    The Bank also announced that a plan will be developed in the next 90 days to operate the Bank on a stand-alone basis. Member Letter.

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    Bullard Appointed President of St. Louis FRB

    The Federal Reserve Bank of St. Louis has appointed James B. Bullard, Ph.D., as its new president. Bullard assumed his new position on April 1, 2008, and succeeds William Poole who retired on March 31. Bullard was vice president and deputy director of research for monetary analysis in the Bank’s research division. The appointment followed an extensive search by the Bank’s board and approval by the Board of Governors of the Federal Reserve System.
    Read more.

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    Ag Banks Under Pressure as Grain Elevators Face Margin Calls

    Illinois’ agricultural banks carrying lines of credit or other financing for grain elevators are carefully watching commodities markets as elevators face margin calls on their futures contracts. CBAI recently accompanied bank officers of one Illinois bank in a dispute with the Illinois Department of Agriculture over whether equities contracts are deemed “ grain assets” in the case of a failed elevator. The
    attached article from the Wall Street Journal describes the growing problem in the agricultural community.

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    Projected Record Crop Values and Farm Income

    Rising crop prices are expected to drive the value of this year’s U.S. agriculture production 17 percent about last year’s $176 billion record, according to a USDA
    report. Net income for U.S. farmers is forecast to total $92.3 billion this year which is 4.1 percent higher than last year and 51 percent above the average of $61.1 billion for the past decade.

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    National Weather Service Forecasts Above Normal Rains Thru Mid-April

    Corn planters won’t be rolling across Illinois anytime soon, according to the latest 8-14 day outlook from the National Weather Service. It calls for warmer temperatures, but continued wet conditions across all of Illinois through mid-April. The Illinois Ag Statistics Service says winter wheat is generally doing well in most areas of the state as the condition was rated 1 percent very poor, 5 percent poor, 30 percent fair, 57 percent good, and 7 percent excellent. Oats planted has reached 4 percent, which is below the five-year average of 16 percent.

    Wet and cold weather has affected nearly the entire state causing fieldwork delays and stress for cattle in soggy feedlots and pastures.

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    Flood Guidelines Seminar Scheduled for May 6 & 7, 2008

    This seminar discusses the bank’s compliance with all of the flood determination, flood insurance, and force-placed flood insurance rules and regulations. The session reviews all portions of the mandatory purchase guidelines that apply to financial institutions in a format that the bank can use after the seminar is completed. The focus of the seminar is on the practical applications for banks. It is designed to aid you and your bank in the proper application of these regulations, and to help assure that your bank has done everything possible to avoid violations within your institution.

    This seminar is scheduled for May 6, 2008, at the Crowne Plaza in Springfield and May 7, 2008, at the Holiday Inn Select, Naperville. For more information,
    click here.

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    Treasury Plan Would Allow Commercial Firms to Own Banks

    The Treasury’s blueprint for regulatory restructuring would permit commercial firms such as Wal-Mart to own and operate banks. ICBA and CBAI have long advocated against mixing banking and commerce and have led the campaign to close the industrial loan company (ILC) loophole. The proposal underscores the importance of Congress passing the ILC bill this year. For the complete article,
    click here.

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    Baker Market Update

    The U.S. economy lost 80,000 in March, further indicating a possible recession. Economists were expecting payrolls to decline by only 50,000 last month.
    Click here to read more.

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    CSBS Blasts Treasury Regulatory Restructuring Plan

    The Conference of State Bank Supervisors (CSBC) reacted to the Treasury proposal by recommending that the Treasury go back to the drawing board. CSBS President Neil Milner said the plan would take states out of financial regulation and destroy the dual banking system. He also stated, “This plan appears to promote consolidation and concentration of risk to untenable levels.” For the full statement,
    click here.

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    Big Banks Report Large Derivative Losses in Fourth Quarter

    Large U. S. banks lost nearly $10 billion in trading cash and derivative instruments in the fourth quarter of 2007, according to the OCC. Derivatives contracts are concentrated in the five largest banks which hold 97 percent, and nearly 100 percent are held by the 25 largest banks.
    Read more.

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    Fed Says Recession Possible

    Federal Reserve Chairman Ben Bernanke informed the Joint Economic Committee on April 2 that it appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly. He noted, however, that economic activity should strengthen in the second half of 2008. He admitted that the recent turbulence in financial markets has increased uncertainty in economic forecasts. The Chairman said he expects inflation to moderate in the coming quarters.

    Regarding Bear Stearns, Bernanke said a default by the investment firm could have been extremely difficult to contain as it would have cast doubt on the financial positions of some of Bear Stearns’ thousands of counterparties.

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    Home Prices Fall in 21 Cities Amid Foreclosures

    Home prices fell in 21 U.S. cities in January, led by Sacramento and Las Vegas, as banks sold foreclosed homes a bargain prices. For the full story,
    click here.

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    Affinion Launches BreachShield Solutions To Help Businesses Manage All Stages of a Data Breach

    So far this year, there have been 141 data breaches affecting more than 7.1 million people, according to the Identity Theft Resource Center. At least 38 states have enacted legislation that mandates businesses must disclose when a breach occurs, which makes management and protection a critical issue. Following a breach, BreachShield™ allows businesses to react quickly, notify their customers immediately and help them defend against identity theft.
    Click here for more details.

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    SARs Indicate Mortgage Fraud

    In an analysis published by the Financial Crimes Enforcement Network on April 3, the number of suspicious activity reports (SARs) indicating possible mortgage fraud increased by 42 percent in 2007. “FinCEN’s analysis indicates that the financial community is becoming increasingly adept at spotting and reporting suspicious activities that may indicate mortgage fraud,” said FinCEN Director James H. Freis Jr. The greatest increases in SARs indicating possible mortgage fraud were: Illinois – 76%, and California – 71%.
    Read more.

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    Experience the Art of Bank Planning

    Affordably priced, the Community Bank Site Market Analysis and Branch Planning Service provides CBAI members with demographic and competitive profiles in a matter of minutes!

    David Schroeder, president of American Enterprise Bank in Buffalo Grove said, "In addition to evaluating potential branch sites, we use the reports to support marketing strategies in our existing markets. It's a great strategic planning tool." For more information,
    click here.

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    CBAI
    UPCOMING EVENTS   
    CBAI's PROFESSIONAL DEVELOPMENT PROGRAMS THROUGH 5/10

    › Consumer Loan Documentation

    › Commercial Loan Documentation

    › Information Technology From Risk Assessment to the Exam
    › Marketing Conference: Marketing for Greater Profitability

    › Third Quarter Compliance Meeting: Flood Guidelines

    › Branching Seminar

    › Principles of Understanding, Managing & Monitoring Your Information Systems

    TELEPHONE/WEBCASTS THROUGH 5/10

    › Regulatory Hot Buttons for De Novo Banks

    › BSA Risk-Assessment Check-up

    › Loan Participations for Community Banks

    › Core-Processor Evaluation & Selection

    › How To Be a Notary Without Being Sued

    › Opening Fiduciary Accounts

    OTHER NOTEWORTHY EVENTS

    CBAI 18th Annual Officer Compensation Survey Deadline EXTENDED TO 4/18

    CBAI Group Meetings 4/21 - 6/24

    CBAI's 26th Annual Washington Visitation, Mayflower Renaissance Hotel, Washington, D.C. 4/29 - 4/30

    CBAI Marketing Conference, Crowne Plaza Hotel, Springfield 4/30/a>

    CBAI's 34th Annual Convention:
    "Hometown Heroes," Crowne Plaza Hotel, Springfield 9/11 - 9/13




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