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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    April 11, 2018

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Register Now for CBAI's 34th Annual Capital Conference!
  • ICBA Launches Regulatory Relief Petition Drive
  • Rule Issued to Exempt CRE Transactions $500,000 or Less from Appraisal Requirements
  • Community Banking Tax Reform Update
  • CFPB Asks Congress to Limit Its Authority
  • CBAI Group Meeting Registration Now Open for Groups 1, 2, 4, 7, 8, 9, 10 & 12
  • Compensation Survey Deadline Extended to April 30!
  • NY Fed Begins Publishing LIBOR Alternatives
  • Treasury Recommends ICBA and CBAI-Advocated CRA Reforms
  • Investment News from THE BAKER GROUP
  • Mid-America Economy Ends First Quarter on High Note
  • Weather Freezes Early Planting Progress in Illinois; Forecast Dicey
  • USDA: Farm Loans Near Record in 2017
  • FHLB Chicago April Newsletter Released
  • New Banks on the Horizon
  • Millennials Want It, Banks Have It: Money Management Advice
  • Federal Reserve to Study Payments Fraud and Security Vulnerabilities
  • Deadline for Nominations for the Excellence & Innovation BKD Award Is June 1!
  • Solving Real Problems with Technology
  • Reduce Your Purchasing Costs as Much as 35%
  • CBIS: Senate Passes Relief for Community Bankers—Don’t Pop the Champagne Yet!
  • Register Today for Early-Bird Pricing at CBAI’s 44th Annual Convention & Expo
  • Reg Z University Scheduled for April 16-18
  • Deposit Documentation Slated for April 24-26
  • Community Bank Marketing Conference Set for April 25


  • Register Now for CBAI's 34th Annual Capital Conference!

    Your Advocacy Is Crucial for Next Wednesday's Event

    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 next 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 cost is just $150 per institution. REGISTER TODAY!

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    ICBA Launches Regulatory Relief Petition Drive

    CBAI Urges All Members to Participate!

    Last week ICBA launched a nationwide petition drive urging the House of Representatives to immediately pass substantial community bank regulatory relief. Following the Senate’s strong bipartisan passage of the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155), ICBA and CBAI want to continue the momentum and ensure relief is not derailed at the last minute.

    ICBA President and CEO Cam Fine said, “Immediate House passage of community bank relief is needed to continue the momentum and ensure bipartisan support for relief is not derailed at the last minute. President Trump has pledged to sign S. 2155 into law, so we cannot afford further delay or inaction.”

    CBAI urges all Illinois community bankers, staff members, and bank directors to join this important petition drive and enlist customers and community banking allies in the effort. Sign the Petition Today! Read Fine’s Message.

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    Rule Issued to Exempt CRE Transactions $500,000 or Less from Appraisal Requirements

    Last week the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency issued a final rule that increases the threshold for commercial real estate transactions requiring an appraisal from $250,000 to $500,000.

    The final rule responds, in part, to concerns financial representatives raised that the current threshold level had not kept pace with price appreciation in the commercial real estate market in the 24 years since the threshold was established and about regulatory burdens during the Economic Growth and Regulatory Paperwork Reduction Act review process completed in March 2017. Read Release.

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    Community Banking Tax Reform Update

    On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act (TCJA) into law. The TCJA represents one of the most significant revisions to the Internal Revenue Code (IRC) in more than 30 years. Many provisions took effect January 1, 2018, and the TCJA will affect community banks.

    In the attached article, BKD touches on the most important tax reform provisions that will affect community bankers. Read More.

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    The SHAZAM BOLT$ mobile app has been enhanced with features including a secure and faster way to log in through Fingerprint access, a Remember Me check box so users won’t have to type in their usernames each time, and the ability to view account balances without logging in with the Quick Balance feature. Learn More and Enroll Today!



    CFPB Asks Congress to Limit Its Authority

    The Consumer Financial Protection Bureau called on Congress to make four changes to the Dodd-Frank Act to reform the bureau. In its first semi-annual report under Acting Director Mick Mulvaney, the CFPB recommended that Congress:

    • fund the bureau through congressional appropriations,
    • require legislative approval of major rules,
    • ensure that the CPFB director answers to the president in exercising executive authority, and
    • create an independent inspector general at the bureau.
    Mulvaney noted in his opening message, “As has been evident since the enactment of the Dodd-Frank Act, the Bureau is far too powerful, and with precious little oversight of its activities.” Read More in CFPB Annual Report.

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    CBAI Group Meeting Registration Now Open for Groups 1, 2, 4, 7, 8, 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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    Compensation Survey Deadline Extended to April 30!

    Participating CBAI Members Receive Free Results!

    The deadline for Completion is now April 30, 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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    NY Fed Begins Publishing LIBOR Alternatives

    The Federal Reserve Bank of New York today has begun publishing three new reference rates based on overnight repurchase agreement transactions secured by Treasury securities. The publication of the Secured Overnight Financing Rate, Broad General Collateral Rate, and Tri-Party General Collateral Rate are part of the Fed’s transition from U.S. dollar LIBOR to alternative reference rates. ICBA represents community banks on the Fed’s reconstituted Alternative Reference Rates Committee, which was formed to ensure a successful transition. Read More from NY Fed. See ICBA Release.

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    Treasury Recommends ICBA and CBAI-Advocated CRA Reforms

    The Treasury Department released recommendations to modernize the Community Reinvestment Act following calls by ICBA and its state affiliates including CBAI to update CRA regulations and practices. The Treasury memorandum includes community bank-advocated recommendations to update CRA assessment areas, improve examination clarity and flexibility, and promote more timely and efficient exams.

    In its January letter to Treasury on modernizing CRA, ICBA also urged higher asset thresholds to reflect the growth of the community banking profession and subjecting tax-exempt credit unions to CRA. ICBA’s letter followed a previous meeting with Treasury on CRA modernization. Read Treasury Recommendations. Read CRA Letter.

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    Investment News from THE BAKER GROUP

    Baker Market Update

    As improbable as it seems, the Roseanne Volatility Index (RVI) has roiled credit and equity markets alike as analysts and pundits grapple with the potential societal and cultural implications. Adding to the week’s disquiet is the prospect of trade war escalation as China and the U.S. continue to exchange threats of out-tariffing the other guy. See Baker Market Update.

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    Mid-America Economy Ends First Quarter on High Note

    Jobs, Inflation and Exports Very Healthy

    The March Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Arkansas to North Dakota, jumped to a very strong reading pointing to healthy growth for the next three to six months.

    The Business Conditions Index, which ranges between 0 and 100, expanded to a robust 62.1 from February’s strong 59.7. This is the 16th straight month the index has remained above growth neutral 50.0 and is the highest reading since June of last year, pointing to improving growth for the region over the next three to six months. Read More.

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    Weather Freezes Early Planting Progress in Illinois; Forecast Dicey

    There’ll be no early start to the planting season this year in Illinois. Cold, wet conditions that froze planters in their tracks to start the month could continue in the weeks ahead.

    After a dry start to winter, February and March were the fourth-wettest on record, with an average of 8.69 inches of precipitation (including rainfall and water content of snow), according to Jim Angel, state climatologist with the Illinois State Water Survey.

    “We’d feel better if some of the crop was in the ground. But with conditions right now, I’m not upset we don’t have any,” said Dennis Bowman, University of Illinois Extension crop systems educator. “Unfortunately, the weather is not looking good in the near-term forecast.” Many farmers could understandably start to feel anxious about fieldwork delays, but Bowman noted it’s too early to push the panic button. Read More.

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    USDA: Farm Loans Near Record in 2017

    The USDA’s Farm Service Agency said farmers accessed nearly $6 billion in new farm loans last year, either directly or guaranteed through commercial lenders. Following the near-record year, the FSA said it was assisting more than 120,000 family farmers with loans totaling just over $25 billion. Read More.

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    FHLB Chicago April Newsletter Released

    The Federal Home Loan Bank of Chicago recently released its April Community First Newsletter which features its 2017 Annual Report and updates on the Downpayment Plus program and Competitive Affordable Housing program among other information. Read Newsletter.

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    New Banks on the Horizon

    De novo activity thaws as "idle talent" returns to profession

    De novo activity is picking up across the country, with banking veterans finding opportunities in market gaps left by a decade of community bank consolidation. Twelve de novo applications have been submitted in the past year, seven just in 2018. CBAI has consistently urged regulators to make changes to the bank chartering process that will encourage new entrants. Read More.

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    Millennials Want It, Banks Have It: Money Management Advice

    A young financial reporter says that many millennials, like her, don’t consider their bank to be the center of their financial world. She believes that this is where banks, particularly community banks, are missing a key opportunity. To woo millennials, she suggests providing them money management advice via mobile banking apps. If community banks give millennials the advice they are asking for — information on how to save, invest, buy homes, open businesses and plan for a financially abundant future — then they will reap the benefits of selling services that produce significant interest income. Read More.

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    Federal Reserve to Study Payments Fraud and Security Vulnerabilities

    The Federal Reserve recently announced that work will begin this month on a new study that will measure fraud and associated costs in the U.S. payments system and identify the causes and contributing factors to fraud. The study is part of the Federal Reserve's ongoing effort to improve and support payment security throughout the industry, as outlined in the Federal Reserve Next Steps in the Payment Improvement Journey. Read More.

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    Deadline for Nominations for the Excellence & Innovation BKD Award Is June 1!

    Nominations are being taken for 2018 Excellence & Innovation BKD Award Presented by CBAI in Illinois and the accounting firm of BKD LLP. The purpose of the award is to bring recognition to banks with an outstanding, innovative product/service or program. Your bank does not need to be a BKD client to enter. Nominations are due at CBAI headquarters no later than June 1.

    Click Here to learn more about the award. Click Here to download a Nomination Form. Questions? Contact the CBAI Department of Communications at 800/736-2224 or cbaicom@cbai.com.

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    Solving Real Problems with Technology

    As lenders face more regulations forcing strict data-collection requirements, the challenge to consistently provide optimal customer service remains. Banking faces unprecedented challenges amid regulatory changes, increased emphasis on personal liability and a shifting economic reality. Read More.

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    Reduce Your Purchasing Costs as Much as 35%

    “As community banks continue to grow and prosper, managing the procurement and delivery of supplies, furniture and printed material becomes a greater challenge. The Midwest Select Program has proven to help community bankers gain greater control of the process while reducing purchasing costs as much as 35%. Want another reason to choose Select? Midwest Office supports community banking like no other supplier," said Michael W. Kelley, President, Community BancService Corporation. Read More.

    Visit MyMidwestSelect.com or contact Kevin Gaffney 217-303-5511 at kgaffney@midwestoffice.com for details.

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    CBIS: Senate Passes Relief for Community Bankers—Don’t Pop the Champagne Yet!

    What would it all mean for your bank’s insurance program? The bill has many other provisions designed to alleviate community banks’ compliance burdens. For the insurance market, regulatory relief follows a general rule of thumb. An easing regulatory climate generally lowers a bank’s risk exposure—presuming prudent lending practices are maintained. Lower risk and prudent lending standards keep capacity in the market and insurers continue to compete aggressively to write professional lines business. Read More.

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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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    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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    Deposit Documentation Slated for April 24-26

    The objectives of this seminar are to define the governing rules, regulations and laws affecting deposit documentation; explain how the rules, regulations, and laws directly affect day-to-day operations and customer interactions; and show attendees how they can apply what they learn to new circumstances and situations. Each of these regulations, laws or guidelines have aspects that relate to the initial disclosures, but the emphasis of this class is on the how and why. Many activities of tellers and customer-service representatives are driven by these regulations, but too often circumstances can make it difficult for those employees to apply the regulations because they don't know the details. This seminar describes the requirements, explains in a straightforward manner the basic principles, and then draws on real-life experiences to explore how to apply those principles. Tellers, head tellers, new-account representatives and anyone opening accounts or dealing with customers on the deposit side benefit from this seminar. Tim Tedrick CRCM, CRP, and partner at Wipfli LLP in Sterling, Illinois leads this seminar.

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    Community Bank Marketing Conference Set for April 25

    The 2018 Community Bank Marketing Conference is designed to help you answer your bank's marketing department's most burning questions. The keynote speaker is Becki Drahota, CEO of Mills Marketing, Storm Lake, IA. Her first session, “Fintechs, Neobanks, and Beer Garages – How to Stay Relevant in Today's Environment,” helps you find out what they are and figure out whether you should fear them, fight them or join them to help your bank grow. In her closing session, “How to Make Your Marketing Relevant and Responsive to the Bottom Line,” Drahota focuses on where you should spend your bank's marketing time and effort. Other topics include “Bankruption,” which examines tactics on how to enhance your digital strategy with John Waupsh, chief innovation officer at Kasasa, Austin, TX, and “Reaching the Younger Generation Through Online Advertising and Social Media” with Katelyn Stadel, digital marketing manager, and Kaley Hix, business development representative of MCS Advertising, Peru, IL. The agenda also includes two Marketing Roundtable Sessions, which allow participants to interact and learn from each other on specific marketing topics of their choosing.

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