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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    April 26, 2017

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Registrations Now Open for All CBAI Group Meetings!
  • Deadline for CBAI Compensation Survey is April 30!
  • House Financial Reform Bill Released
  • Fine Pushes Community Bank Relief on Fox Business
  • Fed’s Powell: Too Many Regulations Rope in Community Banks
  • CBAI and ICBA Support Operational Role for Fed in Real-Time Payments
  • Senate Confirms Sonny Perdue as Agriculture Secretary
  • Small Businesses Still Most Satisfied with Community Banks
  • ICBA Issues White Paper on Housing-Finance Reform
  • Investment News From THE BAKER GROUP
  • Economy Activity Broadly Improving: Beige Book
  • Benchmark Mortgage Rates Dip Below 4 Percent
  • Study: Best Bet for Single-family Construction Loans is Smaller Banks
  • FHLBC Announces Q1 2017 Financial Results and Declares Dividend
  • Best Practices for Fighting Counterfeit Currency
  • Midwest Office Acquires Ridders Business Supply
  • CBAI Legal: Deposit Accounts for Minors
  • CBIS: Consider Plastic-Card Fraud Insurance for Community-Bank Customers
  • Register Today for Early-Bird Pricing for CBAI's 43rd Annual Convention!
  • Flood Violations Session Scheduled for May 2 & 3
  • Community Bank Marketing Conference Set for May 10
  • Call Report Seminar Slated for May 16 & 17
  • Community Bankers School Scheduled for July 16-21

  • Registrations Now Open for All CBAI Group Meetings!

    CBAI leaders and executive staff are visiting 11 locations on the 2017 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, you will hear from one of two experts from SHAZAM Network on either the topic of creating a robbery program at your bank or the topic of developing beneficial relationships with the local media. The opening portion of each Group Meeting will focus on critical legislative and association issues. CBAI President Bob Wingert will provide updates on Association projects and community banking in general, and Senior Vice President of Governmental Relations Kraig Lounsberry will offer 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 & 3 meeting follow a different format). Make plans now to attend! See Group Meetings Schedule. See Group Meetings Agenda. See After Dinner Presenter Information.

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    Deadline for CBAI Compensation Survey is April 30!

    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 2017 CBAI Compensation Survey now and receive the confidential results at no cost. National compensation expert BalancedComp has 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

    Thanks to sponsor IZALE Financial Group, the results are free for CBAI Members that complete the survey. Click Here to begin the Survey. Click Here to print a paper copy of the Survey to use as a worksheet. Click Here for a list of benchmark positions.

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    House Financial Reform Bill Released

    House Financial Services Committee Chairman Jeb Hensarling (R-Texas) released a discussion draft of his updated financial reform bill and scheduled a hearing on the measure for today, April 26. ICBA and state community banking associations have worked closely with Hensarling to include provisions of the ICBA Plan for Prosperity regulatory relief platform in his Financial CHOICE Act, the primary House vehicle for financial regulatory relief in the current Congress.

    Numerous CBAI and ICBA-advocated provisions are in the legislation, which ICBA is reviewing closely, including a repeal of Durbin amendment price controls on debit card interchange. Other ICBA-advocated provisions would reform rules on mortgage lending and data collection and address the Consumer Financial Protection Bureau.

    Community bankers from the C-suite to the frontline can continue building support for comprehensive regulatory relief by signing ICBA’s petition supporting the Plan for Prosperity. Additionally, Hensarling and Treasury Secretary Steven Mnuchin are scheduled to speak at the 2017 ICBA Capital Summit, slated for April 30-May 3 in the nation’s capital. CBAI will have a delegation of more than 30 bankers participating in the Summit. Read More from Committee. Sign the Petition. Read Reuters Article.

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    Fine Pushes Community Bank Relief on Fox Business

    ICBA President and CEO Cam Fine told the Fox Business Network that community banks have been disproportionately harmed by regulatory burdens, which is why ICBA is advocating comprehensive reform through its Plan for Prosperity.

    In an interview on Varney & Co., Fine discussed how regulations are affecting community bank mortgage lending and noted that ICBA’s plan proposes comprehensive reforms to expand economic growth.

    Community bankers and allies can continue building support for regulatory relief by signing ICBA’s petition advocating the Plan for Prosperity, which contains nearly 40 separate legislative recommendations to alleviate excessive burdens and promote lending. Watch the Interview. Sign the Petition.

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    Fed’s Powell: Too Many Regulations Rope in Community Banks

    Too many new regulations have been inappropriately applied to small and medium-sized financial institutions, Federal Reserve Governor Jerome Powell said. Speaking in Washington last week, Powell said policymakers should review financial reforms, broadly raise applicability thresholds, and look for other ways to reduce regulatory burdens on smaller institutions.

    “Many of the statutory provisions and regulations put in place to effect these changes were novel; it is not likely that we would have gotten everything exactly right on the first attempt,” Powell said. “This is a good time to step back and ask what changes have worked and where adjustments should be made.” Read Powell’s Comments.

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    CBAI and ICBA Support Operational Role for Fed in Real-Time Payments

    ICBA applauded the leadership role of the Federal Reserve System in improving the payments system and encouraged the Fed to serve an operational role in the delivery of real-time payments. In an industry letter, ICBA said it supports the Federal Reserve providing central bank settlement capabilities to support faster payments and advocated three additional operational roles for the Fed:

    • using its connectivity among financial institutions to provide all financial institutions access to real-time payments,
    • serving as an operator for real-time payments as it does for checks, ACH payments and wire transfers, and
    • operating a payments directory that could link to financial institutions and other private-sector payments directories.
    CBAI and ICBA believe that, by playing an operational role, the Fed provides safety, integrity and equitable access to all financial institutions, which is why it serves that role for checks, ACH payments and wire transfers. Read Letter.

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    Senate Confirms Sonny Perdue as Agriculture Secretary

    The Senate on Monday of this week confirmed former Georgia Governor Sonny Perdue to be agriculture secretary in President Donald Trump's administration as the farming industry looks to Washington for help amid a downturn in the market.

    Perdue won confirmation on a strong bipartisan vote of 87-11, as several Democrats backed a Trump nominee after razor-thin outcomes for his choices earlier this year. Perdue's cousin, Senator David Perdue, R-Ga., voted "present" but presided over the vote and announced the final tally.

    ICBA and other community banking associations including CBAI have expressed support for his confirmation. In a letter last month, ICBA cited Perdue’s broad experience in government, agriculture and agribusiness. Read More. Read ICBA Letter.

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    Small Businesses Still Most Satisfied with Community Banks

    Successful small-business credit applicants were more satisfied with community banks than any other type of lender, according to a survey from the 12 Federal Reserve Banks. Community banks registered an 80 percent satisfaction score in the survey of borrowers, compared with 78 percent for credit unions, 77 percent for Community Development Financial Institutions, 61 percent for large banks and just 46 percent for online lenders.

    While just 5 percent of successful community bank borrowers were dissatisfied with their experience, online lenders and large banks had dissatisfaction scores of 19 percent and 15 percent, respectively. Community banks and CDFIs had the highest approval rates, at 67 percent and 77 percent, respectively. Online lenders, large banks and credit unions had approval rates of 62 percent, 54 percent and 46 percent.

    The survey follows last year’s version, which also found community banks were the most likely to make a loan and had the highest satisfaction scores. See the Survey Results.

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    ICBA Issues White Paper on Housing-Finance Reform

    ICBA released a white paper this week detailing its principles and recommendations for reforming Fannie Mae and Freddie Mac to support continued access to the secondary mortgage market for community banks. In its white paper, ICBA lays out its principles for GSE reform, including:

    • allowing the government-sponsored enterprises to rebuild their capital buffers,
    • providing competitive, equal and direct access to the market on a single-loan basis and retaining local servicing of those loans,
    • reducing the risks posed to the GSEs by credit-risk transfers, and
    • ensuring an explicit, paid-for government guarantee of GSE mortgage-backed securities and strong oversight from a single regulator.
    ICBA’s white paper also outlines needed administrative and legislative reforms to move forward, encouraging:

    • the Federal Housing Finance Agency to end the GSEs’ net-worth sweep, establish capital-restoration plans, and delay the launch of its Uniform Mortgage Backed Security until the GSEs are recapitalized and released from conservatorship, and
    • Congress to create a catastrophic mortgage insurance fund for GSE securities and change the GSEs to regulated and shareholder-owned financial utilities. Read Release. Read White Paper.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    Markets got a little excited last week when Treasury Secretary Steve Mnuchin said that the administration would “soon” release an ambition tax overhaul plan that would not turn upon the dismantling of the Affordable Care Act. But investors have heard it all before. Good Friday, the Bureau of Labor Statistics (BLS) released unexpected declines in the Consumer Price Index (CPI). The BLS report was not without a nugget of good news. Real Average Weekly Earnings did not fall; they were unchanged. Unfortunately, Retail Sales fell in March. See Baker Market Update.

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    Economy Activity Broadly Improving: Beige Book

    Economic activity increased in each of the 12 Federal Reserve Districts in recent weeks, according to the Fed's Beige Book of regional indicators. Residential construction growth accelerated, and nonresidential construction remained strong. Manufacturing continued to expand, agricultural conditions and consumer spending varied, and energy-related businesses noted improved conditions. Read Federal Reserve Report.

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    Benchmark Mortgage Rates Dip Below 4 Percent

    The benchmark rate for 30-year fixed rate mortgages dropped below 4 percent this week for the first time since November, Freddie Mac said. The 30-year FRM averaged 3.97 percent, down from 4.08 percent last week and up from 3.59 percent this time a year ago. The 15-year FRM averaged 3.23 percent this week compared with 3.34 percent last week and 2.85 percent last year. Read More.

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    Study: Best Bet for Single-family Construction Loans is Smaller Banks

    Homebuilders looking for single-family construction loans may have better luck with small and midsize banks than larger ones, according to a recent report by the National Association of Home Builders.

    The report found that 64% of residential construction loans were made by banks with less than $10 billion of assets. Banks with assets of $100 million to $1 billion generally focus more on making one- to four-family construction loans than commercial loans, the report said.

    "It suggests smaller banks are where the relationship banking aspect of homebuilding is taking place," said Michael Neal, the senior economist for the homebuilders group. Read More.

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    FHLBC Announces Q1 2017 Financial Results and Declares Dividend

    The Board of Directors of the Federal Home Loan Bank of Chicago (FHLBC) announced today that it has increased the dividend declared per share on both sub-classes of capital stock. Based on its preliminary financial results for the first quarter of 2017, the Board declared a dividend of 3.15% (annualized) for Class B1 activity capital stock (an increase of 15 basis points) and a dividend of 1.05% (annualized) for Class B2 membership capital stock (an increase of 20 basis points).

    In addition, the FHLBC expects to report net income of $73 million for the first quarter of 2017 when it files Form 10-Q with the Securities and Exchange Commission next month. Read Release.

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    Best Practices for Fighting Counterfeit Currency

    Cash may no longer be king in the U.S., but millions of dollars in counterfeit bills make their way into the system each year. Fortunately, there are some simple ways community banks can stop scammers in their tracks. Read More.

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    Midwest Office Acquires Ridders Business Supply

    Midwest Office has completed its most recent merger, this time with Ridders Business Supply located in Quincy, IL. Ridders will now be operating under the name of Midwest Office. Paul Ridder, owner of Ridders Business Supply, has been in business since 1972 in the Quincy market. Midwest Office is a preferred service provider of Community BancService Corporation (CBSC). Read News Release.

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    CBAI Legal: Deposit Accounts for Minors

    A March 29, 2017 opinion of the U.S. Court of Appeals for the Seventh Circuit concluded that a mortgagor whose foreclosure case had been resolved in the state court system has very little chance of resurrecting his or her defense to foreclosure by making an appeal to the federal court system. Read Most Recent CBAI LEGAL.

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    CBIS: Consider Plastic-Card Fraud Insurance for Community-Bank Customers

    The most recent monthly Consumer Credit Report shows that credit-card debt has topped the $1 trillion threshold nationally, a level not seen since the Great Recession. Banks hold about 84 percent of that debt, an increase of 78.6 percent from 2012. As community bankers, you have the power to address the primal fear of card fraud and offer protections that ameliorate the threat and give your valued customers recourse in the event they are victims of credit-card fraud. Read More.

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    Register Today for Early-Bird Pricing for CBAI's 43rd Annual Convention!

    Registration is now open for CBAI’s 43rd Annual Convention & Expo, scheduled for September 14-16, 2017, at the Crowne Plaza in Springfield, IL. Expert speakers on the hottest community banking topics fill an education agenda featuring 20 break-out sessions. This year's Opening Breakfast Speaker is John O’Leary. At the age of nine, John created a massive explosion in his home and was burned on 100% of his body. He was given 1% chance to live. His epic story of survival, emotional story-telling, unexpected humor, and authenticity make his presentations truly transformational. Also on the agenda is the Welcoming Reception with BancPac Live and Silent Auction, a jam-packed exhibit hall with more than 90 booths, the Annual Business Meeting Luncheon, and much more. The Closing General Session features Jeff Havens, one of the most in-demand speakers in North America. In his hysterical keynote, Us vs. Them, you'll learn a simpler way of looking at your own generational picture, and you'll also learn how to understand, recognize, and resolve every generational issue facing today's workforce.

    Don't wait! Register today for early-bird pricing at CBAI's annual showcase event! You won't want to miss it! Register Here!

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    Flood Violations Session Scheduled for May 2 & 3

    CBAI presents "Flood Violations," the third quarter of the Community Bankers for Compliance (CBC) program, in two locations this May. Flood violations continue to appear in the news, and related questions continue to be a hot topic on our compliance hotline. As a result, we feel that it is time to return to this regulation to assure that you are following the rule explicitly, both to keep your name out of the news and avoiding writing a check for fines. In the next CBC seminar, we will cover the latest information available as of the presentation date. There is a bill pending in Congress to extend the expiration of the program (currently scheduled for this fall), and to make changes to the area of private flood insurance programs. Given the acrimony of the current situation in Washington and the speed at which Congress accomplishes anything, we may or may not have news on this subject. The subjects for the regulatory update will be determined by circumstances and releases from the various agencies. Unless there are major changes in the next few weeks, the majority of the presentation will be on the flood rule, as little is happening at the current time. Leading this session is Bill Elliott, CRCM, senior consultant and manager of compliance at Young & Associates, Inc.

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    Community Bank Marketing Conference Set for May 10

    CBAI offers the 11th Annual "Community Bank Marketing Conference" on Wednesday, May 10, in Springfield. We are excited to announce that the keynote speaker for this year's event is Jim Marous, co-publisher of The Financial Brand. Marous is THE authority on retail banking, financial-services innovation, and consumer trends. Named as one of the most influential people in banking and a Top-5 Fintech influencer, Marous is internationally recognized as a financial strategist, co-publisher of The Financial Brand, and owner and publisher of the Digital Banking Report. His session, “Reaching the New Digital Customer,” presents a roadmap for the upcoming year on reaching the new digital customer, including strategic priorities, focusing on the most important component for success — data. This year's conference is chock full of expert speakers, timely and pertinent topics, critical information, and networking opportunities. John Verre, president & CEO of Leap Strategic Marketing, LLC, Waukesha, WI, presents “Marketing for Net Checking Growth,” Kathleen Craig, founder and president of HT Mobile Apps, shares “What's Next in Mobile Banking,” and Shawn Dillon and Berin Lacevic from FiTech Payments, Fort Worth, TX, present “Reaching Millennials: How to Capture a New Generation of Business Owner.” The conference also includes two networking sessions and a mini-expo.

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    Call Report Seminar Slated for May 16 & 17

    With ever-changing regulatory and accounting environment, it is important that call-report preparers and reviewers remain up to date. In 2017, many community banks face the implementation of the new call report form FFIEC 051 and the elimination or modification of certain data items. This session includes detailed discussions of each call report schedule as well as the real-life challenges of completing an accurate Call Report. The session includes detailed examples as well as sufficient time for questions and answers. Participants receive a detailed, 200+ page manual that is valuable for future reference. It includes a summary of general instructions and procedures for less-experienced preparers. This seminar covers new accounting updates that will affect banks’ Call Report. Understanding of and compliance with accounting changes is often more difficult than revisions to Call Report schedules. The course is intended for all levels of preparers, experienced and new. The course will validate questions that experienced preparers may have and begin a base of knowledge for the new preparers of the report. Leading this seminar are Amanda C. Garnett, CPA, and David Heneke, CPA, CISA, both principals in the Financial Institution Group of CliftonLarsonAllen LLP in the Peoria, IL, office.

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    Community Bankers School Week Set for July 16-21

    The Community Bankers School, which consists of two, one-week sessions over a two-year period at Illinois Wesleyan University in Bloomington, will allow you to immediately contribute to the overall success of your bank, and give you the knowledge necessary to get ahead. The School features a nationally recognized faculty, an updated curriculum, and timely topics. Topics covered during this intense week for Class I participants include compliance, accounting, commercial and consumer loan documentation, collections, bank security, auditing, investments, and technology, while Class II focuses on management aspects. However, the benefits extend beyond the classroom with outside case studies, an invaluable student notebook with supplemental materials, as well as networking opportunities with peers, instructors, and senior bankers. You will gain a background and experience for broader responsibilities and greater effectiveness, as well as insight into a community bank’s overall operations responsibilities. The 2017 session opens Sunday, July 16, and concludes Friday, July 21. For more details, click on the attached file or visit today! The deadline to enroll is July 1, 2017. Talk to your employer and register today!

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    THROUGH 05/31/2017






    Finer Points Blog

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