Community Bankers Association of Illinois
Community Bankers Association of Illinois    Community Bankers Association of Illinois CBAI E-Newsletter Sponsor - SHAZAM
     A Bi-Weekly News Bulletin for CBAI Members                           May 16, 2012 Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • JP Morgan Chase Trading Losses Underscore Need to Downsize Mega Banks
  • Bank Directors Urge Involvement in Government Relations
  • Consultant: “Community Banks Must Separate Themselves from Mega Banks”
  • “TAG” Coverage Vital for Communities
  • ICBA Calls for Regulatory Relief
  • CBAI Urges FinCEN to Adopt Less Burdensome Rule
  • ICBA Urges Changes to USDA Guaranteed Loan Programs
  • Baker Market Update
  • Farmland Values Continue to Appreciate
  • Rural Mainstreet Index Declines but Remains Strong
  • Cultivating the Next Generation of Community Bankers
  • CBAI Members Encouraged to Sound Their Own Horns!
  • Flood Insurance Reauthorization Imperative
  • Second FREE Bank-to-Business Newsletter Now Available!
  • 35 Bankers Participate in MoneyIsland Webinar
  • CBAI Members Speak at Small Business Fair
  • ICBA Bancard Partners with SHAZAM for Credit Card Services
  • Visa Webinar On Portfolio Optimization Set for May 22 and 24
  • CBAI’s 2012 Group Meetings are Underway! Register Today!
  • Community Bankers School Scheduled for July 15-20
  • HSA Cost-of-Living Adjustments Announced for 2013
  • It’s Older Americans Month!
  • Call Report Preparation Scheduled for May 22 & 23
  • Appraisal Review to be Held on May 30 & 31
  • Ag Lenders’ Conference Set for June 6

  • JP Morgan Chase Trading Losses Underscore Need to Downsize Mega Banks

    The stunning revelation last week that America’s largest bank, JP Morgan Chase, incurred a $2 billion trading loss that could go higher has renewed calls for downsizing the nation’s mega banks and restoring the separation between commercial and investment banking activities.
    See AB Report. See WSJ Article. CBAI and ICBA support those positions. Clearly, financial reforms enacted thus far have not resolved the too-big-to-fail problem.

    Financial concentration in America is unprecedented. The six largest mega banks now control nearly 60% of the nation’s banking assets with the remaining 7,200 banks controlling the rest. Propped up by taxpayer bailouts and an accommodative Federal Reserve monetary policy, these same giants are spending an estimated $1.5 million per day lobbying on Capitol Hill to maintain the status quo. One of their main targets is to water down the Volcker Rule which is intended to prevent banks from making risky bets for their own accounts (proprietary trading). See “Make Banking Boring.”

    ICBA President Cam Fine said, “JPMorgan is the latest poster child exposing, once again, what’s so dangerous about too-big-to-fail megabanks—that nobody, not even regulators, can fully control the risks these unprecedentedly large and complex institutions generate.” See Fine Commentary, “No More Surprises.”

    Now the FBI has announced it will examine potential criminal wrongdoing at JP Morgan by focusing on accounting practices and public disclosures about trades that prompted the loss. See New York Times Article.

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    Bank Directors Urge Involvement in Government Relations

    At the annual shareholder’s meeting Greg Ohlendorf, President and CEO of First Community Bank and Trust in Beecher, included a roundtable discussion with two directors who attended the Community Bankers Association of Illinois (CBAI) annual lobbying event in Washington, D.C. FCB&T is a $150 million community bank in the south Chicago suburb of Beecher. The May annual meeting was well-attended by 125 shareholders and members of the community. Ohlendorf, CBAI's 2011-2012 banker of the year, serves as Vice Chairman of the Political Action Committee of the Independent Community Bankers of America (ICBA). Bank directors Brad Coats and Brian Hruska attended CBAI's annual Call on Washington, and wanted to share the experiences with their fellow shareholders and urge greater involvement in the government relations process.
    Read More.

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    Consultant: “Community Banks Must Separate Themselves from Mega Banks”

    In a recent opinion piece in BankThink, financial services consultant and former banker Jim Wells urged community banks to separate themselves from the mega banks or risk becoming the dupes of Wall Street.
    See BankThink Article.

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    “TAG” Coverage Vital for Communities

    Allowing full FDIC coverage of noninterest-bearing transaction accounts to expire would harm the ability of community banks to serve their communities, according to a testimonial from a Missouri community banker. Matthew Laumann, vice president of Farmers & Merchants Bank in High Ridge, Mo., wrote that failing to extend the “TAG” program would lead large depositors to move their money to megabanks to ensure adequate FDIC coverage.

    “The full FDIC coverage allows small independent community banks to continue to compete on some level with the mega banks and also allows us to continue to serve and give back to our immediate communities,” Laumann wrote.

    ICBA and CBAI urge community bankers to
    submit testimonials on how they would be affected if Congress does not extend full FDIC coverage of noninterest-bearing transaction accounts. Full deposit insurance for certain transaction accounts is scheduled to expire on Dec. 31. ICBA will share the testimonials with congressional staff to help lawmakers understand why this coverage is vital to community banks and what will happen if it expires abruptly. Share Your Testimonial.

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    ICBA Calls for Regulatory Relief

    Increasing regulation is jeopardizing the ability of community banks to advance the economic recovery, ICBA told Congress. Testifying before the House Financial Services Subcommittee on Financial Institutions, ICBA community banker Sam Vallandingham of West Virginia said that Congress should implement much-needed reforms that will reduce regulatory burdens and maintain community bank viability.

    “There is of course an important role for compliance, but regulation should be balanced, practical and calibrated to the systemic and consumer risk posed by any given bank,” said the senior vice president and chief information officer of First State Bank in Barboursville, W.Va. “The compliance costs that we are now incurring are vastly out of proportion to any risk we pose.”

    Vallandingham offered specific reforms to ease regulatory burdens, such as legislation to create a more workable appeals process, to implement comprehensive regulatory and tax relief, and to reform the Consumer Financial Protection Bureau.

    Additionally, the chairman of ICBA’s Payments and Technology Committee encouraged lawmakers to extend full FDIC coverage of noninterest-bearing transaction accounts, which will support community bank viability and deter further industry consolidation.
    Read ICBA Release. Read ICBA Testimony. Read More on Transaction Accounts.

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    CBAI Urges FinCEN to Adopt Less Burdensome Rule

    The Financial Crimes Enforcement Network (FinCEN) issued an Advance Notice of Proposed Rulemaking (ANPRM) which would require banks to identify the beneficial ownership of all accountholders.
    Read More.

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    ICBA Urges Changes to USDA Guaranteed Loan Programs

    In congressional testimony last week, ICBA Chairman Jeff Gerhart urged the USDA to make changes to its guaranteed farm and business loan programs as part of the new Farm Bill. The current Farm Bill expires September 30. He also called for retention of current funding levels for the crop insurance program.
    See ICBA Recommendations.

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    Baker Market Update

    “Let them eat cake.” Almost 250 years has passed since Marie Antoinette was credited with uttering this succinct expression of her disdain for the French citizenry. Last weekend the voters of France got a chance to express their disdain for President Sarkozy’s austerity measures by replacing him with Socialist Party candidate Francois Hollande. Perhaps this was their way of saying “We want more cake and we want it now”.
    Read More.

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    Farmland Values Continue to Appreciate

    The AgLetter published by the Federal Reserve Bank of Chicago this month revealed that agricultural land values in the Seventh Fed District (includes the northern half of Illinois) continued their rapid rise with a 19 percent increase in the first quarter of 2012 compared to the first quarter of 2011.

    Agricultural credit conditions also became more favorable overall as both the index for the availability of funds for lending and the index for loan repayment rates reached their highest levels in the survey’s history. However, there was weaker demand for non real-estate loans compared to a year ago as the average loan-to-deposit ratio fell to 66.5 percent, the lowest level in nearly 16 years and 10 percentage points below the average desired by responding bankers.
    See Fed AgLetter.

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    Rural Mainstreet Index Declines but Remains Strong

    Rural Mainstreet Economy Report, administered by Creighton University economics professor Ernie Goss, reflects the findings of a monthly survey of community bank CEOs in a 10-state region of the Midwest. The May Report indicated that the rural economy remains strong with increasing farmland prices (29 percent of sales were for cash) and an improved employment outlook.

    Many CBAI members participate in the survey. Dr. Goss urges all CEOs at agricultural banks to participate. To ensure that the survey does not go into your spam, please make sure that the following email is in your address book:

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    Cultivating the Next Generation of Community Bankers

    In a recent article, ICBA Chairman Jeff Gerhart of Nebraska said, “As community bankers, we each have the responsibility to teach the next generation about community banking. We have that opportunity to pass on what we’ve learned from those who have gone before us.”
    See “Making Your Legacy Last.”

    The great history of community banking dates back to the early 1800s. Local banks have been instrumental in the economic and social development of America, and the nation’s future prosperity is dependent on the continued vibrancy of our community banking system. That’s why CBAI founded the Career Development Division (CDD) 20 years ago. See CDD Purpose.

    In addition, CBAI established the Community Bankers School (CBS) 25 years ago which offers a curriculum for aspiring community bank leaders. More than 1,000 students have graduated from the Community Bankers School, and many are now involved in senior level management at Illinois community banks.

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    CBAI Members Encouraged to Sound Their Own Horns!

      Does your bank offer a unique, successful product or service?
      Is your bank involved in a unique, successful philanthropic project?
      Has your bank initiated a unique, successful civic project?
    If you have answered “yes” to any of these questions, your bank could win the coveted BKD Award! (Your bank does not need to be a client of BKD, LLP to be eligible.)

    To view the brochure,
    please click here.

    To view the application, please click here.

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    Flood Insurance Reauthorization Imperative

    ICBA and other trade groups called on Senate leaders to move quickly to reauthorize the National Flood Insurance Program and avoid a costly lapse in the program on May 31. In a
    joint letter, the groups noted that more than 5.6 million policyholders in 21,000 communities depend on the NFIP as their main source of flood protection, which is particularly important with the onset of hurricane season. The program has been operating on a series of short-term extensions.

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    Second FREE Bank-to-Business Newsletter Now Available!

    CBAI members may now access the electronic May Bank-to-Business newsletter for their commercial customers. This is the second of two FREE electronic newsletters being offered to CBAI members exclusively in Illinois. Very reasonable subscriptions are available for future issues; no long-term contracts are needed. To view the letter from CBAI President Bob Wingert regarding this program,
    click here. To view the May issue, click here.

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    35 Bankers Participate in MoneyIsland Webinar
    Attendees Learned the Benefits of Sponsoring a Financial Literacy Program

    Last month, 35 Illinois community bankers attended a webinar-based demonstration of MoneyIsland, an online financial literacy solution sponsored by The Community Bankers Association of Illinois (CBAI) and BancVue . Held in conjunction with Community Banking Month and Financial Literacy Month, the webinar provided bankers with a live, in-depth tour of this one-of-a-kind educational tool targeted at “tweens” , students between the ages of 8 to 14. Attendees also heard testimonials from three MoneyIsland clients who shared their experiences and described the positive impact the program has had on their respective communities.

    MoneyIsland is an award-winning web-based financial literacy tool that is delivered to students in the classroom through a partnership with the community bank and the schools. Its built-in curriculum addresses three key financial categories: Saving and Spending, Earning and Investing, and Using Credit Wisely. It is licensed by 98 banks across the country, including 8 CBAI member banks, and is fast becoming the leading financial education product of choice for community banks. CBAI members receive special pricing.

    Since its launch in March 2011, MoneyIsland has been named “Best of Show” by Finovate and more recently won the “Instructional Game of the Year” award given by the Institute for Financial Literacy. The program has been implemented in more than 200 school districts and educated 30,000 kids, a perfect platform to position community banks to cross-sell parents, establish banking relationships with the next generation, and gain a competitive advantage.

    CBAI and BancVue plan to schedule another webinar during the month of July. For more information, visit MoneyIsland at or call Steve Prost, BancVue Vice President - Senior Regional Director , at (847) 341-8003.

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    CBAI Members Speak at Small Business Fair

    CBAI member Matt Gambs, President and CEO of Diamond Bank FSB, Schaumburg and associate member Steve Kirby, Vice President/Loan Officer of the Small Business Growth Corporation, Springfield, spoke at a Small Business Fair in Chicago hosted by Congressman Mike Quigley (D-5th).
    Read More.

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    ICBA Bancard Partners with SHAZAM for Credit Card Services

    TCM Bank, N.A., a wholly owned subsidiary of ICBA Bancard, announced last week that it has entered into a referral agreement with SHAZAM, an electronic funds transfer (EFT) network headquartered in Johnston, Iowa. Through this alliance, SHAZAM will refer its participating financial institutions to TCM’s credit card services. TCM provides a spectrum of services, including credit card program consulting, portfolio acquisition and agent bank sponsorship choices. CBAI, through its wholly-owned subsidiary CBSC, is a marketing partner with both ICBA Bancard and SHAZAM.
    Read More.

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    Visa Webinar On Portfolio Optimization Set for May 22 and 24

    Today’s economic, regulatory and customer realities bring the importance of marketing a well-managed suite of products across unique segments of existing customers to a new level. ICBA Bancard invites you to join Visa for an overview of their Portfolio Optimization marketing playbook on May 22nd at 11:00am or May 24th at 2:00pm (Eastern). This playbook provides strategies to optimize the revenue opportunity of existing customers. The following information will be covered:

      • Analysis - Tools, services and approaches to guide issuers in how to size opportunities and identify target consumers for product and marketing strategies
      • Insights - Research that provides insights into customer needs and segment groupings to increase effectiveness of strategies at lower costs
      • Product - Value-added products and services tied to core payment products that enhance customer engagement across channels while minimizing risk
      • Best Practices - Tactics, case studies, and benchmarks to supply issuers with a fact base to help build their go-to-market strategies

    Click here to register.

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    CBAI’s 2012 Group Meetings are Underway! Register Today!

    2012 Group Meeting tour is underway! 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. 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. Then Jim Hillestad or John Immordino of Community BancInsurance Services powered by Nicoud Insurance Services presents, “What You Don’t Know About Your Community Bank’s Insurance Coverage Can Hurt You.” Meetings for Groups 1, 2, 3, 4, 5, 7, 9 & 12 are still to come! Register for the meeting in your area today!

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    Community Bankers School Scheduled for July 15-20

    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. Topics covered during this intense week for Class I participants will include compliance, accounting, commercial and consumer loan documentation, collections, bank security, auditing, investments, and technology, while Class II will focus 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 deadline to enroll is July 1, 2012.

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    HSA Cost-of-Living Adjustments Announced for 2013

    The Internal Revenue Service has announced the annual cost-of-living adjustments for health savings account (HSA) contribution limits for calendar year 2013. These limits apply for qualifying high-deductible health plan (HDHP) deductibles and out-of-pocket maximums. Plan sponsors should verify that their administrative and payroll systems reflect the appropriate limits.
    Read More.

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    It’s Older Americans Month!

    May is Older Americans Month. There's no better time to help seniors switch from paper checks to direct deposit or the Direct Express® Debit MasterCard® card for their Social Security payments. By making the switch now, seniors can cross one thing off their to-do list and avoid possible long waits as the March 1, 2013 deadline approaches. Plus, by taking action now, seniors will help save taxpayers money and immediately receive their payments in a more reliable way.

    It's easy to promote electronic payments for federal benefits and motivate seniors to take this important step. Here's how:

      • Train Your Staff – Share internal campaign messages with your staff and encourage them to help seniors understand the new requirement for all-electronic federal benefit payments.
      • Distribute Information – Display, publish and share campaign fliers, statement messages, newsletter copy, web banners, social media posts and more with the seniors you serve.
      • Help Them Switch –Take a few minutes to visit or call (800) 333-1795 and help people make the switch. They'll need their most recent federal benefit check and bank or credit union information (for direct deposit).
    Click here to order or download free materials.

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    Call Report Preparation Scheduled for May 22 & 23

    A comprehensive seminar, “
    Call Report Preparation” will review each schedule of the quarterly Call Report with emphasis on the extensive 2011-2012 revisions, accounting changes, and regulatory guidance. It will provide basic training for new preparers and a complete coverage of new and complex issues for experienced preparers. This two-day session will address individual bank questions and discuss new and more complex issues. Bankers with responsibility for the entire Call Report should attend both days. The second day, which includes all the lending schedules, will offer training to those with responsibility for only these schedules, with less time out of the bank. Participants will receive a detailed 200-page manual that is valuable for future reference. Judith Alexander Jenkins of Bank Training Services in Houston, TX, leads this seminar.

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    Appraisal Review to be Held May 30 & 31

    All regulatory agencies have increased their expectations regarding a bank’s review of property appraisals. A checklist simply does not suffice anymore, particularly on commercial property appraisals. Banks must gain a better understanding of the appraisal process and of the appraisals it receives. Just because an appraiser is on the bank’s approved appraisal list doesn’t mean the bank should accept his or her work without question or review. Banks are expected to thoroughly review the appraisals, and question the assumptions contained therein when necessary. This seminar will focus on the regulatory requirements and expectations regarding the review of third-party appraisals and in-house evaluations. Both single family dwelling and commercial property appraisals will be discussed. Leading this seminar is Wayne Linder, senior consultant at Young & Associates, Inc., Kent, OH.
    Read More.

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    Ag Lenders’ Conference Set for June 6

    Attend CBAI’s
    2012 Ag Lenders’ Conference to develop the skills and tools to better understand the issues affecting your farm and agribusiness customers and to meet their credit needs. Topics and speakers include economist and futurist Dr. Jay Lehr, who will present “Coping with Volatility on Today’s Farm, Ranch, and Dairy” and “Overcoming Obstacles Through Personal Involvement;” Dr. Michael Boehlje, professor of Agricultural Economics, Purdue University, West Lafayette, IN, who will examine “Lending to Today’s Commercial Farmer: Managing the Risk and Maintaining the Customer;” and a Regulatory Panel. A mini-expo featuring the latest in products and services for ag lenders will also highlight the day.

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