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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    April 25, 2018

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • ACTION ALERT! House Outreach Needed Ahead of Congressional Recess
  • Fine: We Have the Power to Finish the Campaign for Regulatory Relief
  • House Passes Community Bank Volcker Rule Exemption
  • Agencies Seeking Tailored CRA Regulations
  • Regulators Propose Phasing in CECL
  • Report on CBAI's 36th Annual Call on Washington
  • House Agriculture Committee Passes Farm Bill
  • FinCEN-mandated Customer Due Diligence Rules Take Effect May 11
  • Investment News from THE BAKER GROUP
  • Fed: U.S. Economic Growth on Track Despite Tariff Concerns
  • Fed’s Dudley Cautions Small Banks on Rate Risk
  • CBAI Group Meeting Registration Now Open for All Group Meetings
  • Blog Highlights Community Bank Small-Business Lending
  • Compensation Survey Deadline IS HERE!
  • ICBA Endorses Miki Bowman for Federal Reserve Board Governor
  • News from the Front 4/16/18
  • Fine Reflects on 15 Years at ICBA in Op-Ed, Speech
  • OCC Assesses $500 Million Penalty Against Wells for Unsound Practices
  • Senator Hatch Calls for Credit Union Transparency
  • Could Your Bank Be Held Hostage?
  • FFIEC Statement on Cyber Insurance and Its Role in Risk-Management
  • BankOnIT Announces Incentive to Help Raise PAC Funds
  • Deadline for Nominations for the Excellence & Innovation BKD Award Is June 1!
  • CBAI LEGAL: Regulators Promote Diversity Self-Assessment
  • CBIS: Fraud-Prevention Tips for Individual and Corporate Customers
  • Register Today for Early-Bird Pricing at CBAI’s 44th Annual Convention & Expo
  • Reg Z: TRID Including All August 1, 2018 Changes Set for May 1 & 2
  • CDD Spring Meeting Slated for May 6 & 7
  • Call Report Preparation Scheduled for May 8 & 9
  • Cybersecurity Threats, Trends and Strategies for Banks Set for May 9 & 10

  • ACTION ALERT! House Outreach Needed Ahead of Congressional Recess

    With Congress in Washington this week ahead of a one-week recess, CBAI and ICBA continue calling on community bankers to contact their representatives and promote the petition drive calling for a House regulatory relief vote.

    ICBA’s action center makes it easy for community bankers (officers, directors, and employees) to urge their representatives to act immediately on S. 2155, which offers relief from mortgage, capital, data-reporting and many other rules and regulations. ICBA has also produced a video on the merits of the regulatory relief measure.

    Meanwhile, community bankers who have not joined ICBA’s petition drive supporting S. 2155 can still make their voices heard. CBAI and ICBA encourage all community bankers to sign the petition and enlist staff, colleagues, directors, friends, and allies to maximize the voice of the community banking profession.

    The Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155)—which President Trump has pledged to sign into law—passed the Senate last month on a bipartisan 67-31 vote. Now is the time for community bankers to break the deadlock in the House and achieve meaningful relief. Contact House Members Today! Sign the Petition Now! See ICBA Video.

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    Fine: We Have the Power to Finish the Campaign for Regulatory Relief

    Community bankers cannot let Congress lose its focus on final passage of meaningful regulatory relief, ICBA President and CEO Cam Fine wrote in a new blog post. Fine wrote that while the ICBA Capital Summit held in early April was perfectly timed with the House debate over regulatory relief, continued outreach is needed to achieve final passage.

    Fine encouraged community bankers to continue the momentum by promoting ICBA’s regulatory relief petition drive and contacting the House via ICBA’s Be Heard grassroots advocacy center.

    “Let’s exercise our collective strength so our calls for passage cannot be ignored,” Fine wrote. “Let’s keep up the push today, tomorrow, and every day until we get this relief to President Trump to be signed into law.” Read Blog Post. Sign Petition. Email House Members.

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    House Passes Community Bank Volcker Rule Exemption

    The House passed CBAI and ICBA-advocated legislation to exempt community banks with less than $10 billion in assets from the Volcker Rule. The Volcker Rule Regulatory Harmonization Act (H.R. 4790), sponsored by Reps. French Hill (R-Ark.) and Bill Foster (D-Ill.), passed on a bipartisan 300-104 vote.

    The legislation was approved by the House as it prepares to take up community bank regulatory relief following Senate passage of S. 2155, which also contains the Volcker Rule provision. See Roll Call Vote.

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    Agencies Seeking Tailored CRA Regulations

    Federal regulators are working to tailor Community Reinvestment Act regulations to recognize differing bank sizes and business strategies, Federal Reserve Governor Lael Brainard said. Speaking recently in Baltimore, Brainard said regulators are seeking clearer, simpler rules as well as greater exam consistency.

    Comptroller of the Currency Joseph Otting told community bankers at the recent ICBA Capital Summit that regulators plan to release a CRA modernization plan in the coming weeks. CBAI and ICBA support higher CRA asset thresholds and clearer, more flexible and more efficient exams. Read Brainard’s Speech. Read More on Otting’s Comments.

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    Regulators Propose Phasing in CECL

    The federal banking agencies proposed revising regulatory capital rules to allow banks to phase in the Current Expected Credit Losses methodology. The proposal would allow banks to phase in the day-one regulatory capital effects of CECL adoption over three years. Comments on this proposal will be accepted for 60 days after publication in the Federal Register. Read More from FDIC. See OCC Release.

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    Report on CBAI's 36th Annual Call on Washington

    The message has been delivered by Illinois community bankers: Now is the time for community-bank regulatory relief!

    Community-banker enthusiasm and anticipation to achieve long-overdue and well-deserved community bank regulatory relief was palpable during the Community Bankers Association of Illinois’ 36th Annual Call on Washington which was held April 8 - 11. CBAI’s Call on D.C. was again held in conjunction with the Independent Community Bankers of America’s (ICBA) Capital Summit. More than 1,000 community bankers from across the country brought their strong message to the nation’s capital. Read More.

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    House Agriculture Committee Passes Farm Bill

    As expected, the House Agriculture Committee passed its draft farm bill on a 26-20 partisan vote last week. Only minor Republican amendments were adopted while Democrats railed against the Agriculture and Nutrition Act of 2018’s (H.R. 2) reforms to the Supplemental Nutrition Assistance Program. Democrats said the bill would not pass the House in its current form, but Chairman Mike Conaway (R-Texas) pledged to deliver a new farm bill on time. The current bill expires September 30. The legislation would make modest changes to current programs while protecting crop insurance and reauthorizing the Agriculture Risk Coverage and Price Loss Coverage programs. The draft bill would raise guaranteed farm loan limits to $1.75 million from $1.4 million, less than the guarantee advocated by ICBA and CBAI. ICBA and the American Bankers Association sent a letter to the committee on banking industry priorities. ICBA’s “Focus on Farm Policy” white paper also contains community banker farm bill recommendations. Read More from Committee. Read Joint Letter. See ICBA White Paper.

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    FinCEN-mandated Customer Due Diligence Rules Take Effect May 11

    ICBA Seeks One-Year Delay in ‘Beneficial Ownership’ Rule

    Beginning this May, new “beneficial ownership” rules take effect that require U.S. federally regulated financial institutions designated as “covered institutions” to establish and maintain written procedures to identify and verify beneficial owners of legal entity customers. CBSC preferred provider Wolters Kluwer has developed an overview outlining the compliance requirements that covered institutions must follow.

    Meanwhile, the ICBA has called on the Financial Crimes Enforcement Network (FinCEN) to delay implementation of the rule. Because FinCEN issued frequently asked questions on the rule just one month before the May 11 compliance deadline, ICBA is requesting a one-year delay. CBAI supports delaying the rule. Read More from Wolters Kluwer. Read ICBA Release.

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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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    Fed: U.S. Economic Growth on Track Despite Tariff Concerns

    “Robust” business borrowing, rising consumer spending, and tight labor markets indicate the U.S. economy remains on track for continued growth, the Federal Reserve reported last week, with the risks of a global trade war the one big outlier.

    In its periodic “Beige Book” summary of contacts with businesses in its 12 regional districts, the Fed said the overall outlook among businesses “remained positive,” but that many were worried about the Trump administration’s use of tariffs. Read More.

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    Fed’s Dudley Cautions Small Banks on Rate Risk

    Federal Reserve Bank of New York President William Dudley said on April 18th that smaller banks, notably community banks, may see rising risk in the face of rising rates. In prepared remarks to a banking conference in New York, he said, “We have observed that some community banks have taken on more interest-rate risk by increasing the maturity of their assets and the average duration of their loan portfolios. It will be important for community banks that are very sensitive to interest rate risk to evaluate the risk management of their loan portfolios.” Read More.

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    CBAI Group Meeting Registration Now Open for All Group Meetings

    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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    Blog Highlights Community Bank Small-Business Lending

    Community banks are known as prolific small-business lenders, but a forthcoming FDIC study suggests they may represent an even bigger piece of the lending pie than previously suggested. A new Go Local blog post examines small-business lending levels and why the community bank business model is well-suited for entrepreneurs. Read More.

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    Compensation Survey Deadline IS HERE!

    Complete by 4/30 to Receive Your FREE Results!

    You’re Not Going to Believe How Easy It Is to Complete!

    Is your bank competing effectively with your peers to attract, reward and retain the top talent in today’s job market? What is your strategy to win the race for qualified leadership and employees?

    Complete the 2018 CBAI Compensation Survey now and receive the results at no cost. National compensation experts BalancedComp have 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
      3. enhance the resulting data's usability
    Survey results remain confidential and free to CBAI member participants, thanks to sponsor IZALE Financial Group. Complete the Survey by 4/30!

    Click Here to Begin the Survey!
    Click Here for a .pdf of the survey to use as a worksheet.
    Click Here for a .pdf of the list of Benchmark Positions.

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    ICBA Endorses Miki Bowman for Federal Reserve Board Governor

    ICBA thanked President Donald Trump for nominating Kansas Bank Commissioner Michelle “Miki” Bowman for the Federal Reserve Board. Bowman would serve a term expiring in January 2020 and fill the ICBA and CBAI-advocated position dedicated to individuals with experience in community banking.

    Before her unanimous approval for state bank commissioner by the Kansas Senate in January 2017, Bowman served as vice president of Farmers & Drovers Bank in Council Grove, Kansas, and she is involved in her family’s cattle and farm operation. She previously worked for former Senator Bob Dole (R-Ks.), the House Transportation and Oversight Committees, the Federal Emergency Management Agency, and the Department of Homeland Security.

    Also nominated for the Fed board was Richard Clarida, an economics professor at Columbia University. If confirmed, he would serve as vice chairman for four years of a term expiring in January 2022. Read ICBA Release. See White House Statement.

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    News from the Front 4/16/18

    The spring legislative session continues in Springfield. One of the milestones of the process is committee deadlines when bills either must be approved by committees in their chambers of origin or the prospects of passage become very difficult. CBAI has had a hand in authoring four legislative initiatives this year, and we are pleased to report that all passed unanimously out of committees. These include changes to the Revised Uniform Unclaimed Property Act, State Banking Act, Savings Bank Act and Installment Sales Contract Act. You can find more information in the latest edition of News from the Front.

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    Fine Reflects on 15 Years at ICBA in Op-Ed, Speech

    ICBA President and CEO Cam Fine reflected last week on 15 years at the helm of the organization in a new American Banker op-ed and in a speech at the Exchequer Club of Washington. Fine, who is retiring May 5, notes in his op-ed the many technological and political changes of the past 15 years, including the challenges of Washington’s rising partisanship.

    In his speech, Fine offered insights on navigating Washington politics while highlighting how he fought throughout his tenure to make a seat for community banks at the policy table. Notably, one of those seats also includes a permanent position for a community banker on the Federal Reserve Board of Governors. Read Fine’s Op-Ed.

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    OCC Assesses $500 Million Penalty Against Wells for Unsound Practices

    The Office of the Comptroller of the Currency (OCC) last week assessed a $500 million civil money penalty against Wells Fargo Bank, N.A., and ordered the bank to make restitution to customers harmed by its unsafe or unsound practices and develop and implement an effective enterprise-wide compliance risk management program.

    The OCC’s action was closely coordinated with an action by the Bureau of Consumer Financial Protection and made possible through the collaborative approach taken by the bureau. Separately, the bureau assessed a $1 billion penalty against the bank and credited the amount collected by the OCC toward the satisfaction of its fine.

    The sheer size of the $1 billion penalty against Wells Fargo accounted for the intense media attention that the punishment drew on Friday. One billion dollars is more than five times as large as the fine imposed on the San Francisco bank at the outset of its regulatory woes in 2016. It is also the largest fine in the nearly seven-year history of the Consumer Financial Protection Bureau. Read OCC Release. Read More. Read AB Article on Wells Fargo’s Future.

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    Senator Hatch Calls for Credit Union Transparency

    Earlier this week U.S. Senate Finance Chairman Orrin Hatch (R-Utah) called for large credit unions to report financial information required of other tax-exempt institutions. Hatch’s proposal comes after National Credit Union Administration (NCUA) Chairman Mark McWatters admitted in a recent letter to Hatch that the tax-exempt industry’s fund insuring credit union deposits would be at risk without taxpayer subsidies. ICBA publicly expressed support for the Senator’s recommendations.

    In a letter to IRS Acting Commissioner David Kautter, Hatch wrote that current laws requiring tax-exempt organizations to file an annual return help ensure they operate within the scope of their tax-exempt purpose. Amid concerns that credit unions have grown beyond their statutory mission of serving people of modest means while profiting from a tax exemption valued at $2.9 billion this year alone, requiring at least some of them to report to the IRS would provide needed information on how these financial firms are using their tax subsidies.

    ICBA, CBAI, and the nation’s community banks will continue working to raise awareness of the credit union industry’s federal tax subsidy and the NCUA’s attempts to drastically increase the powers of these tax-exempt financial firms beyond their statutory limits. Read ICBA Release.

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    Could Your Bank Be Held Hostage?

    Are you confident in the systems and people you rely on in the case of a ransomware attack? Elaboration from CBSC preferred provider BankOnIT Here.

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    FFIEC Statement on Cyber Insurance and Its Role in Risk-Management

    The Federal Financial Institutions Examination Council (FFIEC), on behalf of its members, has issued a joint statement that discusses considerations for financial institutions contemplating the purchase of cyber insurance as a component of their risk-management programs. View the Bulletin.

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    BankOnIT Announces Incentive to Help Raise PAC Funds

    BOIT Will Contribute $200 to CBAI's Community BancPac for each bank CEO who visits BankOnIT’s Oklahoma City facility

    BankOnIT (BOIT), CBSC’s Preferred Provider for managed IT services, announced that it will donate $200 to CBAI’s Community BancPAC for every member-bank CEO who visits BOIT’s Oklahoma City facilities and participates in a CEO roundtable discussion focusing on cyber security. Learn More Here.

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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

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    CBAI LEGAL: Regulators Promote Diversity Self-Assessment

    CBAI's legal staff recently received an inquiry about the federal regulators’ Joint Statement on bank self-assessment of diversity practices and policies. Although the applicable Policy Statement has been on the books for a couple of years, there is apparently still uncertainty about whether the program is voluntary or mandated. Spoiler Alert — it is voluntary. More Details Here.

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    CBIS: Fraud-Prevention Tips for Individual and Corporate Customers

    Community bankers work tirelessly on protecting privacy information entrusted to them by their customers. To assist them, CBIS has outlined some fraud prevention tips you may want to share with individual consumers as well as corporate customers to further protection of their privacy. Access Tips.

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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: TRID Including All August 1, 2018 Changes Set for May 1 & 2

    CBAI is pleased to offer the third quarter of the Community Bankers for Compliance (CBC) program entitled “Regulation Z: TRID Including All August 1, 2018 Changes” in two locations this May. Just when we think we have a regulation learned, the CFPB changes the requirements. This happens frequently, and TRID, unfortunately is no exception. The next CBC session focuses on a review of the entire regulatory text as it impacts TRID. The manual is divided into TRID Timing, the Loan Estimate, and the Closing Disclosure. It includes all changes that can be made any time but must be in place soon. While most of the changes are clarifications, there is some new material to review. We discussed those changes in a previous session, but they were not discussed in the context of the entire regulation. This session accomplishes that goal. We cover each provision of the regulation in detail, with emphasis on the practical implications of the changes. Included is the entire regulatory text and commentary, as well as our discussion of the requirements you must meet. The subjects for the regulatory update are determined by circumstances and releases from the various agencies. Leading this session is Bill Elliott, CRCM, senior consultant and manager of compliance, at Young & Associates, Inc., Kent, OH.

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    CDD Spring Meeting Slated for May 6 & 7

    The CDD Annual Spring Meeting scheduled for May 7, 2018, at the Hyatt Regency at the Arch, St. Louis, is geared toward honing professional and banking skills. The meeting begins with the popular Networking Session where bankers have an opportunity to engage in a roundtable discussion with other bankers sharing their job responsibilities. This is followed by a general session with Jody Holland of Jody Holland Training & Consulting entitled, “Selling with Honor” followed by his session “Hypnotic Selling.” The afternoon agenda features general sessions with Jody Holland on the topics of “Employee Motivation” and “12 Critical Skills of a Manager.” Please encourage your CDD member to register now for these informative educational sessions as well as the opportunity to network with other CDD members.

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    Call Report Preparation Scheduled for May 8 & 9

    This two-day seminar provides your call report preparer(s) with both the fundamental and deep knowledge necessary for efficiently and correctly completing a call report. The team from Wipfli LLP provides a hands-on learning experience through not only the instructions for FFIEC Forms 051/041, but also provides clarity to common reporting challenges. Participants gain a deeper understanding of how the balance sheet schedules support and affect risk-weighted assets and regulatory capital calculations and why it is so important to prepare this schedule accurately. We also give you other insights into strategies for sharing preparation responsibilities, the importance of training a knowledgeable backup, andcurrent and upcoming revisions on the call report. Upcoming changes in accounting pronouncements that will impact the call report and reporting challenges arising from mergers/acquisitions are discussed. Sue Kappel, senior manager, and Sara Mikuta, partner, both of Wipfli LLP, lead this seminar.

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    Cybersecurity Threats, Trends and Proactive Strategies for Financial Institutions Set for May 9 & 10

    As financial institutions become more reliant on technology, it is important that they have a better understanding of their information systems to mitigate and monitor risks. Using basic concepts without using technical jargon, this presentation describes and demonstrates fundamental information-security strategies for protecting your information systems. The primary focus is the Microsoft Windows network. Many of the security principles presented are described in the FFIEC IT Examination Handbook and various interagency guidelines. Leading this seminar is Mark Scholl, partner for Wipfli LLP, who specializes in all aspects of information-security services including information-system security auditing and Internet intrusion-testing services.

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    THROUGH 05/31/2018






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