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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                            May 14, 2014

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • CBAI’s 32nd Annual Call on Washington Highlights
  • U.S. House Passes Regulatory Relief Measures
  • House Panel Approves Three Community Bank Regulatory Relief Bills
  • Bipartisan and Bicameral Support for the CLEAR Act Grows!
  • Fed Chair Yellen Advocates Tiered Regulations
  • Fed Governor Tarullo Also Calls for Tiered Regulatory System
  • Fine: Too-Big-To-Jail Talk is Cheap
  • Hoenig: Regulators Must Work Through Living Will Challenges to End Bailouts
  • Warren Comes Out Swinging Against Wall Street
  • OCC Reports Improved Performance of Midwest Community Banks
  • Register Today for CBAI’s Annual Group Meetings
  • CBAI and ICBA Support Bill to Require Community Banker on Fed Board
  • Baker Market Update
  • CBAI Launches New On-Line Registration System
  • Register Today for Early-Bird Pricing at CBAI’s 40th Annual Convention!
  • Instant-Issue Debit Cards Gaining in Popularity
  • Legal Link News from the Bench: IRS Tax Levy Versus Bank’s Right of Setoff
  • Free Flood-Zone Determination Trial Offer Available to CBAI Members
  • D&O Policy and the Business-Judgment Protection
  • Free Webinar: Go Paperless to Maximize Your Board Communications
  • Compliance for Lenders Seminar Scheduled for May 20 & 21
  • BSA Graduate School Scheduled for May 22-23
  • Call Report Seminar Scheduled for June 3 - 4
  • Today’s Head Teller Seminar to be Held June 10
  • Employee Benefits Sessions Scheduled for June 10 & 11

  • CBAI’s 32nd Annual Call on Washington Highlights
    Congressional Support Continues to Grow for Community Banking

    Nearly 60 Illinois community bankers, spouses and invited guests gathered in Washington, D.C. for CBAI’s 32nd Annual Call on Washington which was held on April 29 – May 2, 2014. The record number of participants shared their perspectives on important issues with congressmen and regulators on behalf of all Illinois community banks. Art Wilmarth, George Washington University Law School Professor and Executive Director of its Center for Law, Economics & Finance, and long-time friend of CBAI said, “The perspective of community banks has never been more urgently needed on Capitol Hill and in the regulatory agencies.”

    CBAI’s Call on Washington was held in conjunction with the Independent Community Bankers of America’s (ICBA) Washington Policy Summit, which included more than 1,000 community bankers and industry advocates. Key issues including regulatory relief/tiered regulation, housing finance reform, and ending the credit union and Farm Credit System tax subsidies were highlighted at meetings between community bankers and their members of Congress and federal regulators.
    Read More.

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    U.S. House Passes Regulatory Relief Measures

    Bills are Part of ICBA Plan for Prosperity

    The U.S. House passed two regulatory relief measures on May 5th that benefit community banks. HR 3329 increases the qualifying asset threshold of the Small Bank Holding Company Policy Statement from $500 million to $1 billion and allows small savings and loan holding companies to be covered by its provisions. The legislation is intended to make it easier for community financial institution holding companies to raise capital.

    HR 2672 creates a process for individuals to petition the CFPB to have the rural status of a county reassessed. The bill is designed to allow a broader range of evaluation criteria, more accurately identify rural counties, and help ensure continued access to mortgage credit in those communities.

    These welcomed actions took place one week after more than 1,000 community bankers gathered in Washington to meet with elected officials on regulatory relief issues. CBAI and ICBA are now urging the U.S. Senate to take up and quickly pass both bills.
    See ICBA Release.

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    House Panel Approves Three Community Bank Regulatory Relief Bills

    The House Financial Services Committee last week advanced three CBAI/ICBA-advocated bills to relieve community banks from excessive regulatory burdens. The bills are inspired by ICBA’s Plan for Prosperity regulatory relief platform.

    The Committee voted to advance:

      • H.R. 4521, which exempts community bank portfolio loans from new escrow requirements and raise the small-servicer exemption threshold from 5,000 to 20,000 loans,
      • H.R. 4466, which requires federal financial regulators to consider whether proposed regulations are duplicative or inconsistent with existing regulations before issuing them, and
      • H.R. 2673, which provides that any residential mortgage held in portfolio by the originator is a qualified mortgage.
    The Committee votes followed full House votes approving separate ICBA-advocated bills designed to help community banks raise capital and lend in their communities (see previous article).

    Additionally, last week’s House activity comes one week after CBAI’s Call on Washington which was held in conjunction with ICBA’s Washington Policy Summit, a grassroots event that drew more than 1,000 community bankers and industry advocates to the nation’s capital for meetings with policymakers.
    Read ICBA Release.

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    Bipartisan and Bicameral Support for the CLEAR Act Grows!

    Bipartisan and bicameral support is growing for the Community Lending Enhancement and Regulatory Relief Act (CLEAR Relief Act of 2013, H.R. 1750/S. 1349) with Illinois Senator Mark Kirk (R) and Congressman John Shimkus (R-15th) and Randy Hultgren (R-14th) recently cosponsoring this important legislation. Currently the CLEAR Act has 23 cosponsors in the Senate and 151 cosponsors in the House.
    Read More.

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    Fed Chair Yellen Advocates Tiered Regulations

    On May 1st Fed Chair Janet Yellen addressed the ICBA’s Washington Policy Summit which was her first appearance before a financial institution association since taking on her new role on February 1, 2014. She indicated that the central bank will tread lightly on community banks and get tough on mega banks.

    Yellen said the Fed will tailor oversight of community banks to ensure they don’t face an unfair burden. CBAI and ICBA have advocated tiered regulations based on bank size and complexity for several years and welcomed the Fed Chair’s commitment to the concept.
    See Nasdaq Article.

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    Fed Governor Tarullo Also Calls for Tiered Regulatory System

    Speaking last week at a banking conference at the Federal Reserve Bank of Chicago, Fed Governor Daniel Tarullo said the U.S. needs a tiered bank regulatory system that treats community banks different than mega banks.
    See Medill Reports Article.

    ICBA President Cam Fine agreed with Governor Tarullo and urged amending existing statutes to exclude community banks from the Volcker Rule and the incentive compensation requirements of the Dodd-Frank Act. See Bizjournals Article. Read Tarullo’s Address.

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    Fine: Too-Big-To-Jail Talk is Cheap

    Fine: Too-Big-To-Jail Talk is Cheap U.S. Attorney General Eric Holder’s recent declaration that there is no such thing as too-big-to-jail does not mesh with reality, ICBA President and CEO Cam Fine wrote in his latest blog post.

    Fine noted that Holder’s statement directly contradicts congressional testimony he gave last year, and there are no results to back up Holder’s current claims. “If federal prosecutors want us to believe that they are not shy about taking on Wall Street for its role in the financial crisis that still haunts us to this day, then they should prove it,” Fine wrote. “Because all I’m hearing is just more talk.”
    Read Fine’s Blog Post.

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    Hoenig: Regulators Must Work Through Living Will Challenges to End Bailouts

    For the market to serve as disciplinarian and for bankruptcy to be a viable means for resolving the largest financial firms, these firms must be eligible for bankruptcy, FDIC Vice Chairman Tom Hoenig said. He emphasized that regulators must vigorously implement living will processes authorized in the Dodd-Frank Act.

    Hoenig added that there are various challenges to applying living wills, but it is better to work through such difficulties than to endure another severe crisis and bailout.

    He noted that while megabanks remain too large, leveraged, complicated and connected to be placed into bankruptcy when they fail, regional and community banks are smothering under layers of new regulations even though they are not too big to fail.
    Read More.

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    Warren Comes Out Swinging Against Wall Street

    U.S. Senator Elizabeth Warren (D-Ma.) recently released her new book titled “A Fighting Chance” which castigates the big banks for their undue influence. She stated, “They cheated American families, crashed the economy, got bailed out and now the big five banks are 38% bigger than they were in 2008.” She added that they “…still swagger through Washington, blocking reforms and pushing around agencies. They still break the law and no one goes to jail. That is wrong.”

    A proponent of community banking, Warren is considered by many political observers as a potential candidate for the White House.
    See AB Article.

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    OCC Reports Improved Performance of Midwest Community Banks

    The OCC yesterday reported that the financial condition of community national banks and thrifts in its nine-state Central District improved in 2013 as banks focused on strengthening risk management systems to boost performance.

    The report stated that more than 85 percent of the nearly 500 community national institutions in the District are top-rated as 1 or 2 on the five-point scale, while the number of problem banks fell to 72 compared to the peak of 146 in 2011. In addition to improved risk management practices, the OCC cited improvements in the real estate market and general economy.
    See OCC Release. See Central District Fact Sheets.

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    "CBAI Connected to Community Banking" Is Sponsored
    by The SHAZAM Network

    Give your customers secure, convenient, and quick access to their accounts when you partner with SHAZAM for your debit-card services! With PIN and signature debit, business debit, health-savings -account cards, and more, the SHAZAM Network has solutions to ensure you meet all your customers' needs.

    Register Today for CBAI’s Annual Group Meetings

    CBAI leaders and executive staff are visiting 11 locations on the 2014 Group Meeting tour this spring. Bankers from nearly 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, a representative from SHAZAM® Network will present “Changing Trends in Electronic Funds Transfer.” Registration is still open for Groups 4, 5, 7 & 9, as well as for the Groups 1, 2, & 3 Meeting, which consists of a lunch, meeting, and golf outing. For the Group Meeting schedule and to register,
    Click Here.

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    CBAI and ICBA Support Bill to Require Community Banker on Fed Board

    Last week U.S. Senator David Vitter (R-La.) introduced legislation to require at least one member of the Federal Reserve Board of Governors to have experience as a community banker or community bank supervisor. The bill’s bipartisan cosponsors include Senator Mark Kirk (R-Il.).
    See ICBA Release.

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    Baker Market Update

    After newly crowned NBA Most Valuable Player Kevin Durant thanked each of the Oklahoma City Thunder’s season ticket holders by name during his acceptance speech on Tuesday, it made Janet Yellen’s testimony before the Congressional Joint Economic Committee seem like a study in brevity.
    See Baker Market Update.

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    CBAI Launches New On-Line Registration System

    On May 1st, CBAI launched a new on-line registration system for its education and special events programs. This easy-to-use registration option allows community bankers to go to CBAI’s website and quickly sign up for education events, live or webinar, as well as CBAI’s Annual Group Meetings. After completing the on-line form, the registration is confirmed via e-mail, including program details, directions to the event, and a printable invoice or credit card receipt. Other registration options, including faxing or mailing a registration form and calling in a registration, are still available; however, an e-mail address is required to complete all registrations. On-line registrants will receive an e-mail confirmation and payment invoice or receipt regardless of the registration option selected.
    See More.

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    Register Today for Early-Bird Pricing at CBAI’s 40th Annual Convention!

    Registration is now open for CBAI’s 40th Annual Convention & Expo, scheduled for September 18-20, 2014, at the Marriott Downtown in Chicago. Expert speakers on the hottest community banking topics fill an education agenda featuring 20 break-out sessions. Dynamic and highly sought after speaker and leadership expert Tom Flick takes the stage for the Opening Breakfast and shares his passion for raising more effective leaders through his unique gift to connect with the listeners’ hearts as well as their heads. Golfers are treated to a beautiful, classic-style course with an amazing history of championship golf in Flossmoor Country Club. Also on the agenda is the Welcoming Reception with BancPac Live and Silent Auction, a jam-packed exhibit hall with 100 booths, fun partner’s programs exploring the exciting city of Chicago, a Closing General Session, and much more.

    CBAI's annual showcase event closes with the unforgettable music of the seventies, including Hollie Vest as Tina Turner, Quentin Flagg and Bill Downey as The Blues Brothers, and Stayin’ Alive, the number-one Bee Gees tribute band in the world. Don’t miss CBAI’s 40th anniversary celebration, “Looking to the Past to Plan for the Future.”
    Register now for early-bird pricing through June. Please click here to add a reminder to your Outlook calendar for CBAI's showcase event!

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    Instant-Issue Debit Cards Gaining in Popularity

    Instant-issue debit cards are quickly gaining popularity in today’s financial marketplace. A number of factors are fueling this trend, including the desire for an enhanced customer experience, competitive pressures, the need for incremental revenue and cost reduction.

    A debit card is a symbol of purchasing power. It is the consumer’s most frequent point of interaction with their bank account. Handing someone their card in person has a tremendous positive psychological impact. For all the benefits online and mobile banking solutions offer, instant issue cards is one convenience available only at physical branch locations.

    Harland Clarke’s Card@Once is your financial institution's comprehensive solution for secure, in-branch card personalization and instant issue debit and credit cards. The Card@Once instant issue solution enables your bank staff to distribute personalized, fully functioning cards onsite - so your account holders receive their new or replacement card in minutes instead of days. Harland is a CBSC Preferred Provider for checks and marketing products.
    Learn More.

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    Legal Link News from the Bench: IRS Tax Levy Versus Bank’s Right of Setoff

    The vast majority of “News from the Bench” (NFTB) articles that will appear in the CBAI e-newsletter describe recent judicial opinions of relevance to community banks. However, CBAI General Counsel Jerry Cavanaugh will occasionally sprinkle in a “classic” opinion that has some age on it but that still reflects current and relevant law applicable to bank operations. In this e-newsletter, Cavanaugh reflects on a 1988 federal Court of Appeals opinion that marked the territory of an IRS tax levy as having priority over a bank’s legitimate but yet-to-be-exercised right of setoff on a delinquent borrower’s deposit account.
    See NFTB.

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    Free Flood-Zone Determination Trial Offer Available to CBAI Members

    The Federal Emergency Management Agency's (FEMA) web-site lists 170 companies that are in the business of providing flood-determination services. So how does a lender determine which company to use? Bankers often rely on references and recommendations from other users. Occasionally, bankers may agree to use two or more providers during a trial period, which gives them the opportunity to compare prospective companies. That is why CBSC asked Southwest FS (SFS), its preferred partner for flood zone determination certification services, to provide CBAI member banks with a free trial offer. For a limited time, CBAI member banks that are not SFS clients, may order up to 20 free flood-zone-determination certificates.
    Here’s how it works.

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    D&O Policy and the Business-Judgment Protection

    Traditionally, when directors and officers are sued, they’ve been shielded by “the business-judgment rule,” a case-law derived doctrine that says even the most questionable, or flat-out bad decisions made by directors and officers are protected from claims of negligence, because those directors and officers are “clothed with the presumption of being motivated in their conduct by a bona fide regard for the interests” of the banks they oversee. One of the many upshots of the banking crisis is the calling into question of this, perhaps the core legal principal shaping D&O policies and protections. Courts around the country, and in Illinois, are signaling that directors and officers of community banks may not have such latitude going forward. Community BancInsurance Services, powered by Nicoud Insurance, is a CBSC preferred provider.
    Read Article.

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    Free Webinar: Go Paperless to Maximize Your Board Communications

    Learn how hundreds of community bankers have gone paperless and improved their communication with their board of directors at the same time. CSI, CBSC’s preferred provider for electronic board portal services, is hosting a free webinar entitled, “Go Paperless to Maximize Your Board Communications.”

    Date: Thursday May 29, 2014
    Time: 2:00PM CT – 3:00PM CT

    In the past, board of director communications have been limited by the paper process. Technology, including tablets, has transformed the possibilities when it comes to maximizing board communications, enabling members to work more efficiently than ever before while ensuring compliance with regulations.

    In this webinar you will learn:

      • The latest portal technologies being used to improve board communications
      • How directors can gain 24/7 access to online board materials
      • How to run paperless board meetings using tablet technology
      • What to look for when it comes to features that improve communication, including online voting, policy management and more
    For more information, and to see CSI Secure Connect in action,
    Click Here to register for this free educational webinar!

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    Compliance for Lenders Seminar Scheduled for May 20 & 21

    The compliance officer is responsible for administering your bank’s compliance program including policies and procedures. Each employee of the bank has a duty to have a working knowledge of the compliance issues that pertain to his or her assigned position description. And this year is a major challenge, as the regulators have added a mere 3,500 pages of material regarding the Dodd-Frank Act changes to lending which makes the lender’s job even more difficult. The challenge is to ensure that lending personnel have the right information at the right time. This one-day program,
    Compliance for Lenders, provides an overview of the current “hot-button” changes that are part of the lender’s responsibilities; up-to-date information on other compliance issues and other developments in bank regulations that relate to lending; and a brief review of the new Loan Estimate (combination GFE and Early TIL) and the new Closing Disclosure (combination of the Final TIL and HUD-1) that will be the big issue for 2015. Leading this seminar is Bill Elliott, CRCM, of Young & Associates, Inc.

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    BSA Graduate School Scheduled for May 22-23

    This two-day program is designed for BSA professionals who are competent in the core requirements of Bank Secrecy Act rules and provides a higher level of lecture, training, and interactive discussion regarding the challenges of developing and managing an effective BSA program. Topics include advanced BSA elements, developing a BSA program, managing a BSA program, and a roundtable discussion. As part of this two-day course, the class will learn to manually design an effective BSA program. This is accomplished through the study of workflow charts based on a case study example of an imaginary financial institution. The attendees then analyze their own financial institutions and start to design programs, through the utilization of workflow charts, for their own organizations. Another portion of this course involves a roundtable discussion. All assignments are based on the lecture material, followed by hands on analysis completed in a group format, and/or guided general class discussion. The class is most effective for those individuals who have a reasonable working knowledge of the BSA regulation. Leading this school is Adam Witmer, CRCM, compliance consultant with Young & Associates, Inc. For more information and to register,
    Click Here.

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    Call Report Seminar Scheduled for June 3 - 4

    In the ever-changing regulatory and accounting worlds, the educational requirements for Call-Report preparers is more intense than ever. Preparers must remain current on new accounting pronouncements and their implementation in addition to the 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. The presenters are available to answer Call-Report questions on an ongoing basis. Neil Falken and Amanda Garnett of CliftonLarsonAllen LLP, lead this

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    Today’s Head Teller Seminar to be Held June 10

    This training is designed to provide our head tellers and experienced tellers with useful, "real-world" tools, techniques, and tips for managing the teller function. Money laundering? Balancing? Privacy? Providing exceptional service? Customer Identification? Security? Referrals? Loss prevention? Bank policies and procedures? Are your tellers confident and prepared when meeting these challenges in today's ever-changing banking environment? On a daily basis, the teller team must be supervised, led, and motivated to meet these challenges. 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, leads this program.
    Register Now.

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    Employee Benefits Sessions Scheduled for June 10 & 11

    In today's competitive environment it is essential to retain and reward your employees, bank executives, and directors for their contributions to your bank's success. This
    program provides information on the CBAI 401(k) Multiple Employer Plan (MEP), improving benefits for bank executives, key employees, and directors; the changing landscape of Health Care Reform in Illinois; and employee documentation, discipline, and discharge. Several expert speakers lead this seminar, including Mark Hogan, regional director, and Kevin Killiam, national sales director, both of Pentegra Retirement Services; Mike Mahorney, benefits advisor with CBIS Nicoud Insurance; Doug Marshall, partner, Hinshaw & Culbertson LLP; James Rozinsky, vice president of Spectrum Insurance; and Nathan White, AIF®, financial consultant with Midwestern Securities Trading Company.

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    THROUGH 5/30/2014






    Finer Points Blog

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