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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                            April 29, 2015

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Community Banks Pushing Key Reforms This Week
  • Dubious Regulators Need to See Compliance Burden for Themselves
  • CSBS Vice Chairman Calls for Right-Sized Regulatory Framework for Community Banks
  • Bloomberg: How to Help Community Banks
  • CBAI's 31st Annual Capital Conference Highlights
  • Four Ways to Win Customers Over From Mega Banks
  • Kroll Releases “Large & Small Bank Performance During the Financial Crisis” Report
  • Group Meeting Registration Now Open for Groups 1, 2, 3, 4, 5, 6, 8, 9, 10, 11, 12, & 13!
  • Investment News From THE BAKER GROUP
  • Federal Reserve Statement Cites Weak Economic Growth
  • ICBA Video Tells Community Bank Story
  • Provider of Credit-Risk Management Solutions Partnership Renewed
  • FFIEC Releases Two Statements on Cybersecurity
  • SBA Presents Lender Forums
  • Stop Procrastinating! Compensation Survey Final Deadline is TOMORROW!
  • Could Your Bank Benefit from a Workplace-Wellness Program?
  • Majority of Shoppers Prefer Near-field Communication
  • SSBCI Distributes 82% of Funding for Illinois Small Businesses
  • CBAI Legal: Mortgage Lenders Eligible for Overtime Under FLSA
  • Take This Week's CBAI Quick Poll
  • CBAI Announces Closing Speaker at 41st Annual Convention & Expo
  • CBAI Is Now Offering Bundled Webinar Solutions for Your Training Needs!
  • Integrated Disclosures Slated for May 13-14
  • The Future of the ALLL and Stress Testing Scheduled for May 19-20
  • Call Report Seminar To Be Offered May 19-20

  • Community Banks Pushing Key Reforms This Week

    CBAI Call on Washington/ICBA Policy Summit Now Underway

    More than 1,000 community bankers from across America, including 35 CBAI members, are now in Washington to lobby for regulatory relief and other measures. ICBA President and CEO Cam Fine identified the top advocacy priorities at this week’s ICBA Washington Policy Summit. Fine noted in a Morning Consult op-ed that community bankers are advocating regulatory relief, consistent data-security standards, and an end to credit union and Farm Credit System tax exemptions.

    “With community bankers on Capitol Hill this week, Washington should heed their calls,” Fine writes. “After all, nobody knows Main Street better than community bankers.” Read Fine’s Op-Ed.

    Community Bankers Back Home Can Also Call on Congress

    Meanwhile, community bankers back home can support their colleagues in Washington by calling on their members of Congress to cosponsor regulatory relief legislation. Contact Congress Now.

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    Dubious Regulators Need to See Compliance Burden for Themselves

    While banking regulators are ambivalent as to whether or not community banks are overregulated, the evidence is overwhelming, ICBA’s Chris Cole wrote in American Banker. Citing independent studies, ICBA surveys and anecdotal evidence, Cole noted that excessive regulation has a tangible impact on local consumers and communities nationwide.

    Cole called on the banking regulators to conduct their own study on regulatory burden during the current Economic Growth and Regulatory Paperwork Reduction Act process. A comprehensive on-site survey of the community banking profession could conclusively prove to the regulators the adverse impact of excessive regulation on community banks. See American Banker Article.

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    CSBS Vice Chairman Calls for Right-Sized Regulatory Framework for Community Banks

    Charles G. Cooper, Commissioner of the Texas Department of Banking and Vice Chairman of the Conference of State Bank Supervisors, testified last week on behalf of CSBS on regulatory burdens facing community financial institutions. During his testimony, Cooper discussed the concept of regulatory right-sizing, a process by which state regulators aim to supervise an institution in a manner appropriate for its size, complexity, and risk profile.

    “Regulators must constantly improve the way we conduct supervision to ensure a balanced approach,” said Cooper. “Many times it is not the law or the regulation itself that creates excessive regulatory burden, but the interpretation and the supervisory techniques utilized. One-size-fits-all supervision that has unintended negative consequences should be curtailed.”

    Cooper also discussed how state and federal regulators work together to improve supervisory efficiency. “Regardless of charter or agency, we are all in this together,” said Cooper. “We are stewards of the entire financial services ecosystem. We must ensure that sound judgment and appropriate flexibility are central to our supervisory approach.”

    CBAI is a strong advocate of the dual regulatory system of state and federal chartering and supervision and appreciates the support of CSBC for regulatory relief for community banks. Read Commissioner Cooper’s Testimony.

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    Bloomberg: How to Help Community Banks

    A recent Bloomberg editorial notes that regulatory relief for community banks is a worthy goal, but Congress isn’t pursuing it the right way. See More.

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    CBAI's 31st Annual Capital Conference Highlights

    On Wednesday, April 15, 2015, community bankers from across Illinois gathered in Springfield to meet with state legislators on key community banking issues. This popular annual event kicked-off with a key-note address by State Treasurer Michael Frerichs. The Treasurer acknowledged the vital role of community banks in economic growth and job creation, and referenced his positive personal experiences with local community banks. Governor Bruce Rauner attended the legislative reception later in the day. See Highlights.

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    SHAZAM® BOLT$™, the mobile app that alerts cardholders to potential fraud has gotten even better! Now your cardholders can make person-to-person (P2P) payments and use GPS technology to locate nearby ATMs! This is just one more way SHAZAM continually works help you succeed. Learn More.

    Four Ways to Win Customers Over From Mega Banks

    The CEO of CBAI marketing partner BancVue offers four ways a community bank can get people to switch over from a mega bank. Gabe Krajicek utilizes data from the 2015 Consumer Banking Insights Study conducted online by Harris Poll to identify the key steps to attract new customers. Read More.

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    Kroll Releases “Large & Small Bank Performance During the Financial Crisis” Report

    Last week the Kroll Bond Rating Agency (KBRA) released a research report entitled “Large & Small Bank Performance During the Financial Crisis.” The report makes the following key points:

    • While the largest banks were not allowed to collapse during the downturn due to the Too Big-to-Fail doctrine, forty percent of the top ten domestic banking institutions (forty-four percent by asset size) essentially failed and required stronger institutions or the U.S. government to intervene.
    • Banks with assets below $1 billion represented the largest number of failures in absolute terms, while banks with assets between $1 and $10 billion in assets failed in the highest proportion of their peer group. This failure rate was a small fraction of the Megabank failure rate noted above.
    • Asset size is not a predictor of financial strength: with the exception of the Megabanks, which were clearly the weakest, it appears that banks in various size ranges experienced similar trends during the downturn with varying intensities, but no group was significantly stronger than the other during the downturn. As the Too Big-to-Fail doctrine has lost support and community banks continue to bolster their management and infrastructure based on lessons learned during the financial crisis, asset size will not be a predictor of financial strength or survivability in future downturns.
    For several years CBAI has urged Congress to enact reforms to end too-big-to-fail. The sheer size and complexity of mega banks must be addressed together, or another financial crisis involving a taxpayer bailout will likely happen again.

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    Group Meeting Registration Now Open for Groups 1, 2, 3, 4, 5, 6, 8, 9, 10, 11, 12, & 13!

    CBAI leaders and executive staff are visiting 11 locations on the 2015 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 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. Then after dinner Phil Walter, regional sales manager for Welch Systems, Inc., will present “Evolving Your Branch to Achieve Peak Performance.” Registration is now open for Groups 1, 2, 3, 4, 5, 6, 8, 9, 10, 11, 12, & 13, so register today! See the Group Meeting Schedule.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    Information received since the Federal Open Market Committee met in March suggests that economic growth slowed during the winter months, in part reflecting transitory factors. The pace of job gains moderated, and the unemployment rate remained steady. A range of labor market indicators suggests that underutilization of labor resources was little changed. See Baker Market Update.

    MBS Market Strategies

    The MBA’s survey of refinance applications this year have experienced a whirlwind of “fits and starts”. January’s applications surged 136% to the highest reading since June 2013, providing a 15-30% increase in speeds from March. Refis in February quickly retraced about half that volume followed by a slight 16% increase last month. Refi applications in April are down about 5% as rates have inched higher. See MBS Market Strategies.

    Economic Brief

    Real GDP eked out a tiny 0.2% growth pace in the first quarter according to the U.S. Commerce Department. This is a major downshift from the 2.2% pace in Q4 2014, and notably lower than the consensus estimate of 1.0%. The GDP price index came in at -0.1%, also below consensus and the lowest level since the trough of the recession. See Baker Economic Brief.

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    Federal Reserve Statement Cites Weak Economic Growth

    The Federal Reserve System’s Federal Open Market Committee released a policy statement today (April 29th) that pointed to weaknesses in the U.S. labor market and overall economy, suggesting that the central bank may have to wait until the third quarter to begin raising rates. The economy grew at an anemic 0.2 percent annual rate in the first quarter, according to the U.S. Commerce Department, well below economists’ expectations for 1.0 percent growth. See Reuters Article. Read Federal Reserve Release.

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    ICBA Video Tells Community Bank Story

    ICBA recently released a new video titled “Who Are the Nation’s Community Banks?” which features ICBA staffers discussing the history and prevalence of community banks and their importance to local communities. See Video.

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    Provider of Credit-Risk Management Solutions Partnership Renewed

    Community BancService Corporation (CBSC) has renewed its agreement with Sageworks, a leading financial-information company that provides credit-risk management solutions to financial institutions. Sageworks, a CBSC Marketing Partner since 2008, serves as the preferred provider of allowance for loan and lease loss (ALLL), stress testing and credit-analysis software to CBAI members.

    For more information about Sageworks, contact Jami Princ, senior account executive – risk management solutions, via email at or phone at 866-603-7029.

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    FFIEC Releases Two Statements on Cybersecurity

    Regulators continue to emphasize that bank CEOs and directors must understand the risks they are undertaking with regard to cyber security. On March 30, the FFIEC released two statements outlining detailed steps that banks should use to guard against and recover from cyber attacks. Read More.

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    SBA Presents Lender Forums

    Lender Forums are a series of informational sessions designed for commercial lenders, offering presentations and updates from various Government financing organizations. Topics will include the SBA One, LINC, Veteran Advantage Program, and Upcoming SBA Training Opportunities. Organizations presenting at the forums include the U.S. Small Business Administration, SBA 504 Corporations, Illinois Small Business Development Centers, and SBA Microlenders. Learn More.

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    Stop Procrastinating! Compensation Survey Final Deadline is TOMORROW!

    The absolute, final, no-kidding date by which to submit your responses to the CBAI Officer Compensation Survey is Thursday, April 30, 2015.

    FREE results of the 26th Annual CBAI Officer Compensation Survey will be mailed to CBAI member banks that participate. Don’t be left out!

    For a .pdf of the survey to use as a worksheet, Click Here.

    To complete the actual survey, Click Here.

    For questions, contact Andrea Cusick, SVP Communications, at

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    Could Your Bank Benefit from a Workplace-Wellness Program?

    Workplace-wellness programs have evolved over the past decade and can result in positive health outcomes for employees and ultimately lower the cost of sponsoring a health care plan for employers. Learn More.

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    Majority of Shoppers Prefer Near-field Communication

    Near-field communication (NFC) technology, which allows shoppers to make transactions, exchange digital content and connect electronic devices with a touch of their screen, is striking a chord with American consumers.

    Mobile phone users prefer NFC technology to competing alternatives, such as Bluetooth Beacons, Quick Reference (QR) codes and browsers. In fact, a recent NFC Forum survey found among those polled, 76 percent were happy with their NFC experience. That’s compared to a 53-percent satisfaction rate for QR codes. Read SHAZAM Blog.

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    SSBCI Distributes 82% of Funding for Illinois Small Businesses

    The Illinois State Small Business Credit Initiative (SSBCI) distributed 82 percent of its current funding disbursement available for small-business lending and investment through December 31, 2014, according to the U.S. Treasury Department’s quarterly SSBCI report.

    Nationally, the SSBCI program has disbursed $1.1 billion of the total SSBCI allocation to participating states since the program began in 2010. Recycled SSBCI funds have been steadily increasing, with over $65 million in total state recycled SSBCI funds as of December 31, 2014. The new report also found that states accelerated their use of SSBCI funds in 2014, with a 41 percent increase in the amount reaching small businesses or investment funds over the past year. The release of the report follows a proposal in President Obama’s fiscal 2016 budget to extend the program with an additional $1.5 billion.

    The report summarizes the 2014 fourth-quarter results from the 47 states, five territories, the District of Columbia and municipalities in three states that received federal SSBCI funds. The program is expected to help spur new private sector lending and investment in small companies by leveraging $10 in private capital for every dollar of federal support by the program’s end. Access the State-By-State Quarterly Results. SSBCI Resource Center.

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    CBAI Legal: Mortgage Lenders Eligible for Overtime Under FLSA

    The March 9 release of the United States Supreme Court’s opinion in the case of Perez vs. Mortgage Bankers Association might create an H.R. nightmare for banks, mortgage companies and other businesses that have lenders on their staffs. If you are not already aware of this case, the Supreme Court paved the way for loan officers to be eligible for overtime under the federal Fair Labor Standards Act. See Details.

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    Take This Week’s CBAI Quick Poll

    Take this week’s Quick Poll on whether or not your bank has registered with Visa or MasterCard to allow its credit or debit cardholders to use Apple Pay. Click Here to view results of previous polls.

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    CBAI Announces Closing Speaker at 41st Annual Convention & Expo

    CBAI is pleased to announce that the Closing General Session Speaker at the 41st Annual Convention & Expo, scheduled for September 17-19, at the Omni Hotel in Nashville, TN, is Dr. James Bullard, president and CEO of the Federal Reserve Bank of St. Louis. President Bullard participates in the Federal Open Market Committee (FOMC) and directs the activities of the Bank’s head office in St. Louis and its branches in Little Rock, AK, Louisville, KY, and Memphis, TN. An economist, Dr. Bullard joined the Bank in 1990. His research has appeared in numerous professional journals, including the American Economic Review, the Journal of Monetary Economics, Macroeconomic Dynamics and the Journal of Money, Credit and Banking. A peer reviewer for many periodicals, he currently serves as co-editor of the Journal of Economic Dynamics and Control. In his session, “The U.S. Economy and Monetary Policy,” Dr. Bullard addresses topics including regulatory relief, tiered regulation, and Too-Big-To-Fail. More Information on Dr. Bullard. Early-Bird Registration Here.

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    CBAI Is Now Offering Bundled Webinar Solutions for Your Training Needs!

    CBAI is pleased to offer a bundled webinar solution tailored to today's community banker and your training needs. Now you can have affordable, easy-to-use training customized specifically for your bank. An exclusive agreement with Financial Education and Development, Inc., provides CBAI members with Bank TrainingNET, a comprehensive catalog of nearly 50 webinars on a wide variety of “evergreen” topics that allows you to create a customized education program for employees in every department. This training package is your all-in-one training solution because you select only the topics your bank and employees need. By selecting topics from the list of pre-recorded webinars in bundles of 10, you can save up to 30 percent! Your customized training website is accessible via desktop or mobile devices and available 24 hours a day for up to one year. Training categories include collections, compliance, directors, frontline and new accounts, human resources, IT, lending, operations, security and fraud, and senior management. Learn More.

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    Integrated Disclosures Slated for May 13-14

    The May 2015 Community Bankers for Compliance (CBC) Program focuses on the issues created by the new integrated disclosures. This seminar addresses all aspects of the new forms. The Integrated Disclosures, including the Loan Estimate (combination of early TIL and GFE) and the Closing Disclosure (combination of final course, the rules regarding completion of the forms) are covered. The new forms are complex to complete, and require significant oversight to do so successfully. This, combined with the new rules regarding delivery, make this process more difficult for the bank. There will need to be decisions made prior to the mandatory August 1, 2015, start date. This seminar deals with the various issues, and helps to prepare the attendees for the decision-making process. The manual for this seminar is extensive, and includes all of the information required to make appropriate decisions. It also includes all of the regulatory text and commentary, instructions, and other useful information to assist the participants in the completion of these documents. This session is geared toward the compliance officer. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance at Young & Associates, Kent, OH.

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    The Future of the ALLL and Stress Testing Scheduled for May 19-20

    The estimation of the allowance for loan and lease losses (ALLL) has been a part of a bank's accounting process for a long time, but it has taken on increased importance and attention over the last several years thanks to increased regulatory scrutiny, challenges documenting and defending the allowance, and the pending release of the FASB's CECL model. Further, stress testing isn't a new concept, but recent mandates from regulatory bodies have placed a renewed emphasis on it. This seminar is designed to provide bank executives involved in the ALLL and/or stress testing with a clearer understanding of both. The presentations are interactive so participants can not only learn from the speakers, but also their peers. In addition to the presentations, there is dedicated time for peer group roundtable discussions. Topics covered include justifying and documenting qualitative factors; common FAS 114 / ASC 310-10-35 challenges; how to prepare for the FASB's CECL model; types of stress testing and how to use results; and more. Offered in two locations, this seminar is led by Robert Ashbaugh and Tim McPeak, senior risk management consultants at Sageworks, Inc.

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    Call Report Seminar To Be Offered May 19-20

    This two-day seminar is intended for all levels of preparers, experienced and new. It validates questions that experienced preparers may have and begins a base of knowledge for the new preparers of the report. Annual training is highly recommended by bank regulators. In the ever-changing regulatory and accounting worlds, the educational requirements for Call-Report preparers is as intense as ever. Preparers must remain current on new accounting pronouncements and their implementation in addition to additional reporting requirements of the regulatory agencies as part of the Call Report. This session includes detailed discussions of each schedule as well as real-life challenges of completing an accurate Call Report. The session also includes case studies as well as sufficient time for questions and answers. Leading this seminar are Neil Falken, principal-in-charge of CliftonLarsonAllen's Banking Group, and Amanda C. Garnett, CPA, manager in the Financial Institution Group of CliftonLarsonAllen LLP, in the Peoria office.

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    THROUGH 06/30/2015






    Finer Points Blog

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