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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    May 11, 2016

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Highlights of CBAI's 32nd Annual Capital Conference Event
  • Community Bankers Take Their Message to Capitol Hill
  • CBAI and ICBA Urge Follow-Up with Congress on Key Bills
  • ICBA to Congress: Credit Union Admits It’s a Tax-Free Bank
  • Register for CBAI's Annual Group Meetings
  • Cam Fine Responds to Jamie Dimon’s Remarks
  • Treasury Proposes Stricter Oversight of Online Lenders
  • FDIC: Most Recent De Novos Healthy
  • Banks Report Tighter C&I, CRE Loan Standards
  • Treasury: Community Banks Are Heart of State Small-Business Initiative
  • Conference of State Bank Supervisors Releases 2015 Annual Report
  • Juggling the Demands of Regulatory Change in 2016
  • FBI Warns Malware Attacks Are Increasing
  • iHELP Giving Away Scholarships to Participating CBAI Member Banks
  • Investment News From THE BAKER GROUP
  • Special $10,000 Offer for CBAI Members Only
  • Preventing Big Mistakes in Branch Design
  • Exploring the Business Potential of Generation Z
  • CBIS Nicoud: Community Banks Must Understand Insurance Protections
  • CBAI LEGAL: Reviewing Safety Deposit Box Openings
  • Stock Up on Bank Statements and Supplies with Midwest Office!
  • Special ISPFMRA Seminar on Farm-Transition Planning Offered
  • June 1 Deadline for Nominations for the Excellence and Innovation BKD Award
  • Register Today for Early-Bird Pricing at CBAI’s Convention & Expo
  • Compliance Institute Lending Session To Be Held May 16-19
  • CDD Spring Conference Scheduled for May 23 & 24
  • Principles for Understanding Your Information Systems Slated for June 1 & 2
  • Universal Banker: Growing Business from Millennials to Baby Boomers Set for June 7


  • CBAI's 32nd Annual Capital Conference Event Highlights

    On Wednesday, April 20, 2016, community bankers from across Illinois gathered in the capital city to meet face-to-face with state legislators, constitutional officers, and regulators on pertinent issues affecting the community bank profession. See Capital Conference Highlights.

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    Community Bankers Take Their Message to Capitol Hill

    More than 60 community bankers, spouses, staff and invited guests came to Washington D.C. for the Community Bankers Association of Illinois’ 34th Annual Call on Washington which was held April 24–27, 2016. Again this year, CBAI’s Call on Washington was held in conjunction with the Independent Community Bankers of America’s (ICBA) Washington Policy Summit, which included hundreds of community bankers and industry advocates from across the country.

    CBAI members shared their views and opinions on issues of importance to Illinois community banks with their federal legislators and banking regulators. The key issues included community bank regulatory relief and tiered regulation, increased access to capital, enhanced data security, and ending the highly discriminatory competitive advantages enjoyed by credit unions and Farm Credit System lenders. See Event Highlights.

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    CBAI and ICBA Urge Follow-Up with Congress on Key Bills

    CBAI and ICBA are calling on community bankers to follow up on the recent CBAI Call on Washington which was held in conjunction with ICBA’s Washington Policy Summit by urging members of Congress to cosponsor important legislation. Community bankers can use ICBA’s Be Heard Grassroots Website to contact their lawmakers to advocate regulatory relief and data-security legislation as well as the repeal of credit union and Farm Credit System tax subsidies. The Be Heard site makes it easy for community bankers and advocates of community banking to connect with their members of Congress and send a personalized message. Contact Your Congressmen Today!

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    ICBA to Congress: Credit Union Admits It’s a Tax-Free Bank

    Another credit union is leveraging its generous tax subsidy to purchase a community bank, ICBA recently told Congress. In a message to key congressional committees, ICBA cited a Wisconsin credit union’s promise to customers of an acquired bank that it will offer all the products and services they’d expect to find at a financial institution.

    “This is an admission, whether intended or not, that a credit union is the functional equivalent of a bank, with one significant difference: credit unions don’t pay taxes at the national, state, or local levels,” ICBA wrote.

    ICBA noted that subsidizing services already provided by taxpaying community banks is bad policy, citing a recent Federal Reserve Bank study that found community banks had the highest lending and satisfaction scores among small-business borrowers. ICBA concluded that Congress should rethink its tax subsidy and consider tax relief for community banks as it pursues comprehensive tax reform. CBAI fully concurs. Read ICBA Message.

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    Register for CBAI's Annual Group Meetings

    CBAI leaders and executive staff are visiting 11 locations on the 2016 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 provides updates on Association projects and community banking in general; and Senior Vice President of Governmental Relations Kraig Lounsberry offers an up-to-the-minute report of banking-related legislative activities. This year’s after dinner topic is “The Financial Technology Revolution,” presented by Michael Peterson, Fitech Payments, Ft. Worth, TX. The wind of change in the payments world is gaining in strength as financial technology’s “fintech” potential to alter how, where and when payments are made – as well as who it is that facilitates them. If your group meeting has not yet been held, then please sign up today. View Schedule and Register Here.

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    Cam Fine Responds to Jamie Dimon’s Remarks

    ICBA President Cam Fine this week responded to recent remarks made by JPMorgan Chase CEO Jamie Dimon on CNBC’s Squawk Box concerning community banks and mega banks. Fine properly noted Dimon’s inability or unwillingness to take responsibility for the economic crisis and the ongoing systemic risk posed by the mega banks deemed too-big-to-fail. See ICBA Statement and Squawk Box Interview.

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    Treasury Proposes Stricter Oversight of Online Lenders

    The Treasury Department is calling for more effective oversight of online marketplace lenders and greater transparency for borrowers and investors. In a highly anticipated white paper, Treasury laid out a vision that generally supports ICBA’s push for a regulatory framework for online marketplace lenders that mirrors that of the banking system.

    In a statement, ICBA said the paper largely agrees with ICBA’s call for a level regulatory playing field for bank and nonbank providers. In fact, Treasury cited a Federal Reserve Bank study showing that small businesses that apply for loans with community banks are more successful and satisfied than those that use online lenders.

    However, ICBA cautioned that Treasury’s support for consumer protections on small-business loans under $100,000 could have unintended consequences on access to credit and must be avoided.

    In addition to more effective oversight, Treasury proposed backup servicing plans, a public transactions registry to improve transparency, partnerships with Community Development Financial Institutions, greater access to government data, and interagency coordination. Read More from Treasury. Read ICBA Release.

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    FDIC: Most Recent De Novos Healthy

    The vast majority of the 1,042 new community banks chartered between 2000 and 2008 survived the financial crisis or were financially healthy when merged with another bank, according to a new FDIC research paper. However, these recent de novos were more financially fragile than established community banks and failed at higher rates, with 133 failing, the report found.

    Failed de novos from this recent period invested heavily in construction and development loans prior to the crisis, according to the agency’s Center for Financial Research. Unlike earlier periods of de novo formation, however, these institutions were more likely to form in less-concentrated and underserved markets.

    While the 133 de novo failures represented 27 percent of all failures from 2008 to 2015, they accounted for just 14.3 percent of total failure costs. The 634 institutions that remained as of third-quarter 2015 held $214 billion in total loans and leases.

    The FDIC report comes after the agency recently reduced from seven to three years the period of heightened de novo supervisory monitoring, which followed years of CBAI and ICBA advocacy. FDIC Chairman Martin Gruenberg said the shorter review period is more appropriate in the current banking environment, in which de novo applications have declined to a “trickle.” See FDIC Research Paper. Read FDIC Release.

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    Banks Report Tighter C&I, CRE Loan Standards

    Banks tightened their standards on commercial-and-industrial and commercial-real-estate loans in the first quarter of 2016, according to the Federal Reserve Board’s survey of senior loan officers. While demand for C&I loans weakened in the first quarter, CRE loan demand strengthened, the Fed reported.

    The survey also found that domestic banks hold fewer loans to oil and gas companies than do foreign banks. Separately, surveyed bankers said they expect refinancings of CRE loans originated in 2006 and held in commercial mortgage-backed securities to have tighter standards than other CRE loans. See Federal Reserve Board's Survey.

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    Treasury: Community Banks Are Heart of State Small-Business Initiative

    Community banks funded 71 percent of loan amounts issued under the State Small Business Credit Initiative, the Treasury Department said at its SSBCI National Conference. In comparison, regional banks funded 15 percent of SSBCI loan amounts, and Community Development Financial Institutions issued 14 percent.

    Treasury acknowledged the importance of community banks and recognized ICBA for its role in supporting the initiative, which was created by the Small Business Jobs Act of 2010. Under the program, Treasury has awarded nearly $1.5 billion for state lending and investing programs. The SSBCI has supported nearly 17,000 small businesses through loans or investments of $8.5 billion, creating or saving an estimated 190,000 American jobs and leveraging investment dollars by eight to one. Read More About the Initiative.

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    Conference of State Bank Supervisors Releases 2015 Annual Report

    The Conference of State Bank Supervisors (CSBS) this week released its 2015 Annual Report. The CSBS provides a national forum for state bank regulators to coordinate supervision, develop regulatory policy, and receive training. CSBS supports the dual regulatory system which is one of CBAI’s key foundational purposes.

    The 2015 Annual Report identifies the CSBS policy positions and its strong support for community banks. CBAI works in close cooperation with the CSBS on several federal regulatory and legislative issues. Read CSBS Release and Annual Report.

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    Juggling the Demands of Regulatory Change in 2016

    CBSC marketing partner Continuity addresses bank compliance trends in 2016 and offers suggestions to deal with them. Read Continuity Article.

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    FBI Warns Malware Attacks Are Increasing

    The FBI announced that it’s seen a dramatic rise in ransomware. These attacks entice users to open an email attachment or click on a link that downloads malware that “locks-up” or encrypts data on a computer, shared files or files on a server that’s accessible from the computer. The attacker then demands payment to unlock the data or provide the decryption key. These infections can be devastating and recovery can be a difficult and timely process. Read BankOnIT Blog.

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    iHELP Giving Away Scholarships to Participating CBAI Member Banks

    As the weather is beginning to heat up, so is the student loan season. With the fall semester just around the corner, demand for student loans peaks during the summer months. CBAI member banks that act now have an opportunity to help students apply for loans and help fund their college education.

    To help generate program awareness, iHELP will award a $500 scholarship and a $250 Visa gift card to a participating member bank every month during the summer. Learn More.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    The 160k increase in April’s Non-Farm Payroll count was well below the 200k market expectation and was accompanied by a net downward revision of 19k for the previous two reports. See Baker Market Update.

    Baker Economic Brief

    The U.S. economy expanded at its slowest pace in two years. Gross domestic product rose at a 0.5 percent annualized rate after a 1.4 percent fourth-quarter advance. The 0.5 percent increase was less than the 0.7 percent median projection and marks the third straight disappointing start to the year. See Baker Economic Brief.

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    Special $10,000 Offer for CBAI Members Only

    Community BancService Corporation, Inc. (CBSC) and its partner Fitech Payments (Fitech) are pleased to announce a new special incentive created exclusively for CBAI member banks:

    Last year, Fitech offered a challenge stating they would provide your bank a proposal that would beat the revenue generated by your current merchant card provider or it would pay your bank $2,500.00 for your time! After completing the analysis of nearly two dozen banks, they were able to increase every bank's revenue. Therefore, they have decided to significantly increase their challenge.

    If you will allow them to complete a residual analysis for you and they cannot increase your revenue without increasing your customers' cost, Fitech will give your bank $10,000!

    There are no gimmicks. Fitech will not change the terms of your merchants' current pricing. They will apply your customers' existing discount rates and your portfolio characteristics to their revenue model and produce a proposal they are confident will increase profits in your merchant program.

    For more information and a no-obligation review of your merchant services program, please contact Michael Petersen at 214-843-2108 or mpeterson@fitech.com.

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    Preventing Big Mistakes in Branch Design

    A comprehensive interview of customers from more than 40 branches and guidance from an expert in branch design identified insights for properly planning branch design or branch remodeling. Read More.

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    Exploring the Business Potential of Generation Z

    Description: In case you haven't noticed, there's a new generation of bank prospects ready for your attention. American's born after 1995 - dubbed Generation Z - are starting to leave the comfort of home for college. Over the next decade, they'll be finding work, getting married, having their own kids and seeking a financial partner to help them fund a proactive lifestyle. Is your bank prepared to fine tune its marketing messages and communications to pursue their business? Read More from Harland Clarke.

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    CBIS Nicoud: Community Banks Must Understand Insurance Protections

    As one presidential candidate recently put it, “The world is on fire.”

    Images of international unrest are unending and present consequences for community bankers and their investment collateral. The scourge of ISIS and its hope to inspire self-starting actors here on American soil has already proven successful with last year’s San Bernardino terrorist attack.

    But maybe an even greater threat to bankers’ investments resides in the threat of mounting civil unrest experienced in the U.S. Think Ferguson, MO., Baltimore, MD., and most recently, the senseless, destructive fracas in the streets of Seattle, which resulted in anticipated significant damages to commercial property. Read More from CBIS Nicoud.

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    CBAI LEGAL: Reviewing Safety Deposit Box Openings

    Although Illinois’ Safety Deposit Box Opening Act has not undergone procedural changes recently, several CBAI member banks have recently submitted Legal Link inquiries regarding the procedures for drilling open a box when the customer-lessee has died. With that in mind, here is a “refresher” on safety deposit box openings. See the Most Recent CBAI LEGAL.

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    Stock Up on Bank Statements and Supplies with Midwest Office!

    Midwest Office can supply your bank with all of its print material. Let Midwest Office be your one stop shop for all your business supply needs. Midwest determines the most efficient and cost effective methods, guaranteeing a valuable partnership that your business can bank on! See Midwest Office Specials!

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    Special ISPFMRA Seminar on Farm-Transition Planning Offered

    Farm Transitions are not a question of IF, but WHEN. Bankers and lenders have clients who need to know the information that will be discussed at this special, intensive one-day seminar from the Illinois Society of Professional Farm Managers and Rural Appraisers. Read More.

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    June 1 Deadline for Nominations for the Excellence and Innovation BKD Award

    Is Your Bank in the Running?

    Nominations are being taken for the 2016 Excellence & Innovation BKD Award Presented by CBAI and the accounting firm of BKD LLP. The award brings recognition to banks with an outstanding, innovative product/service or program. Your bank does not need to be a BKD client in order to enter. Nominations are due at CBAI headquarters no later than June 1. We hope to receive your nomination soon. Learn About the BKD Award. Download Nomination Form.

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    Register Today for Early-Bird Pricing at CBAI’s Convention & Expo

    Register by June 30, 2016, for early-bird pricing at CBAI’s showcase event, entitled “Community Banking Playmakers.” Scheduled for September 15-17, 2016, CBAI’s Annual Convention & Expo makes its first ever stop in Kansas City, MO, at the Marriott Downtown. Offering a thriving creative arts scene, eclectic mix of entertainment, and die-hard sports, it's safe to say there's something for everyone in Kansas City. But you won’t want to miss the 20 timely education sessions with expert information on the hottest topics in community banking today, not to mention an opening keynote with acclaimed public speaker, consultant, and former NFL athlete, Eric Boles. Education only scratches the surface of the convention’s attributes. Nearly 90 exhibit booths featuring the latest products and services are on display in the Exhibit Hall. Countless networking opportunities and social events include the golf outing at Swope Memorial Golf Course and the Saturday dinner dance featuring the Fabulous Motown Revue. Don’t miss out! Take advantage of the significant pricing discount and register by June 30! Early-bird Registration Here.

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    Compliance Institute Lending Session To Be Held May 16-19

    Community banks are constantly faced with a bewildering array of ever-changing regulations. In response to this training need, CBAI is pleased to present the “Compliance Institute – Lending” this May. An introductory course for those compliance officers who are either new to banking or new to their positions, this four-day institute is designed to provide a comprehensive understanding of the major regulatory compliance regulations that have been determined to be “must knows” for all compliance officers. Topics covered include Regulation Z: Truth in Lending, Regulation B and the Fair Housing Act: Fair Lending, Regulation X: Real Estate Settlement Procedures Act, National Flood Insurance Program, Regulation C: Home Mortgage Disclosure Act, compliance management, privacy of customer information, FCRA and Regulation V (lending portion only), and Customer Identification Program (BSA). New compliance officers, internal auditors, compliance back-up personnel, and other bank employees who want to be comfortable with the compliance regulations should attend this informative program. This program is also an excellent “refresher” for experienced compliance personnel. Bill Elliott, CRCM, senior consultant and manager of compliance, and Adam Witmer, CRCM, consultant, both of Young & Associates, Inc., Kent, Ohio, lead this institute.

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    CDD Spring Conference Scheduled for May 23 & 24

    The CDD Annual Spring Meeting scheduled for May 24 at the Hyatt Regency at the Arch, St. Louis, is geared toward honing professional and banking skills. In addition to the educational offerings, this year's meeting includes a fun and great networking opportunity at Busch Stadium on May 23, 2016, where the entertainment for the evening is a Cardinals/Cubs Baseball Game! The Spring Meeting features general session speaker Beth Ziesenis with the sessions “Nerd Know-How: A Day in the Life of a Nerdy Community Banker” and “Nerds Unite! Tech Tools & App Exchange Session.” Please encourage your CDD member to register now for these informative educational sessions; as well as the opportunity to network with other CDD members. If you do not have an employee involved in CDD, we are offering an opportunity for non-CDD members to come see what the Spring Meeting and CDD has to offer; therefore, we are offering a discounted rate of $239 per person to attend this year's Spring Meeting.

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    Principles for Understanding Your Information Systems Slated for June 1 & 2

    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. Mark Scholl, partner for Wipfli LLP, leads this program. He specializes in all aspects of information-security services including information-system security auditing and Internet intrusion-testing services.

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    Universal Banker: Growing Business from Millennials to Baby Boomers Set for June 7

    With reduced in-branch transactions and customer visits and increase in technology, less traditional teller functions are needed. No longer can a frontline team member say: “It's not my job!” Today's frontline team is shifting from traditional positions (tellers, new-account representatives, financial service representatives, etc.) to a multi-tasking, “universal” banker. Today's customer base is shifting from the traditional, visit the bank twice a week, to quick response, electronic banking relationships with the bank. This workshop focuses on the essentials for today's universal banker in providing exceptional service, making referrals, and building profitable relationships from millennials to baby boomers. All bank employees in customer-contact positions throughout the bank including, frontline staff, branch managers and marketing directors would benefit from attending. Leading this seminar is Dianne Barton, founder and president of Performance Solutions, Inc., Kennesaw, GA, a training and consulting company that specializes in providing solutions to the key challenges facing community banks today in attracting, selling, and servicing their customers.

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