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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    May 24, 2017

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • CBAI ACTION ALERT: Urge Illinois Congressmen to Cosponsor CLEAR Act!
  • FDIC’s Hoenig Cites Consolidation Dangers
  • Special Bankers-Only Discount to Attend Cubs vs Cards at Wrigley on June 2!
  • IDFPR and CBAI Invite You to Free Cyber Security Conference June 6 in Chicago
  • President Signs Cybersecurity Executive Order
  • Wanna Cry? No Tears Here - BankOnIT’s Got You Covered!
  • Investment News From THE BAKER GROUP
  • Rural Mainstreet Index Climbs to Highest Level in Almost Two Years
  • CBAI Urges the CFPB to Ease Community Bank HMDA Requirements!
  • CBAI Endorses First Data’s Digital-Banking Solution
  • Branches Still Matter According to J.D. Power Study
  • 94% of Illinois Community Banks were Profitable in Q1 2017
  • The Power of Banking with Purpose
  • Three Quarters of Americans Don’t Know What Their Bank Does
  • Checking Account Growth – It’s Go Time!
  • CBIS: Does Your Bank's Insurance Protect Against Patent Infringement Lawsuits?
  • Register Today for Early-Bird Pricing for CBAI's 43rd Annual Convention!
  • Deposit Documentation to be Held June 6-8
  • Principles for Understanding Your Info Systems Set for June 13
  • Directors' Workshop Scheduled in Three Locations in June & July
  • Community Bankers School Scheduled for July 16-21


  • CBAI ACTION ALERT: Urge Illinois Congressmen to Cosponsor CLEAR Act!

    The Community Bankers Association of Illinois (CBAI) is calling on all Illinois community bankers to urge their members of the Illinois Congressional delegation to cosponsor H.R. 2133 and S. 1002, the Community Lending Enhancement and Regulatory Relief Act of 2017 (the “CLEAR Act”). This important legislation has been introduced in the House by Congressman Blain Luetkemeyer (R-MO), who spoke at CBAI’s 2106 Convention in Kansas City, and in the Senate by Senators Jerry Moran (R-KS) and Jon Tester (D-ID). Take Action NOW! See Plan for Prosperity.

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    FDIC’s Hoenig Cites Consolidation Dangers

    FDIC Vice Chairman Thomas Hoenig stated that excessive regulatory burdens have exacerbated the dangerous consolidation of the banking industry into fewer and fewer hands. In a speech on May 12th, Hoenig cited trends that have compounded industry consolidation, including the regulatory response to the 2008 financial crisis.

    Hoenig said the U.S. financial system that remains heavily subsidized, increasingly concentrated, and less competitive than at any time in recent history. He has proposed a new regulatory regime that would partition nontraditional bank activities into separately managed and capitalized affiliates.

    CBAI and ICBA have repeatedly stated that regulation-driven consolidation poses risks to the financial system must be addressed by adoption of a legislative platform that provides regulatory relief, economic development and job creation, bolsters community banking, and supports the establishment of de novo institutions. Read Hoenig’s Speech. Read ICBA Prosperity Plan.

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    Special Bankers-Only Discount to Attend Cubs vs Cards at Wrigley on June 2!

    In recognition of the 30th Anniversary of CBAI's Group Meetings, CBAI is offering a special bankers-only discount to attend the Group 1, 2 & 3 Meeting at Wrigley Field on June 2. CBAI has reserved special seating in Wrigley Field’s Bleacher Suite for a continuation of the St. Louis Cardinals and the Chicago Cubs rivalry – ANY CBAI MEMBER MAY ATTEND. Buy your first ticket at $250, and pay only $125 for each additional ticket!

    Whether you are Cub fan, Cardinal fan, or just a baseball fan, this is a unique opportunity see a game from Wrigley's famous bleachers and enjoy an all-inclusive private suite! As the season heats up and one of baseball's greatest rivalries goes into full gear, you'll have the best seat in the house. So get your staff together and take advantage of this special one-time offer!

    Registration begins at 11:30 a.m., with lunch and a brief meeting, followed by the ball game at 1:20 p.m. Enjoy unlimited beer, wine, non-alcoholic drinks, and Chicago’s favorite sandwiches, hot dogs, appetizers, snacks, and more! Join with fellow community bankers to cheer on your favorite team.

    Tickets are limited, so register soon to reserve your seats for a perfect view of one of baseball’s greatest rivalries! Event Information. Register for Group Meeting.

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    SHAZAM Core Services represents the latest advancements in core banking software. SHAZAM’s Cardinal Core is a single, holistic non-modularized platform for data processing. Everything is included with the base core system, saving you time and money. You’re not required to use prescribed ancillary systems or partners and we don’t have exclusivity clauses. We’ll work as your partner, to provide you a high level of flexibility so you can select the applications you want to use and best fit your needs. Learn more about SHAZAM Core Services today!



    IDFPR and CBAI Invite You to Free Cyber Security Conference June 6 in Chicago

    The IL Department of Financial and Professional Regulation, in partnership with realty- and banking-related associations, are offering a free Cyber Security Conference centering on cyber-security issues related to the real-estate closing process. The event will be held June 6 from 9:00am to 12:00pm at the James R. Thompson Center in downtown Chicago. See Announcement. See Agenda.

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    President Signs Cybersecurity Executive Order

    President Donald Trump signed an executive order to strengthen the cybersecurity of federal network and critical infrastructure. Among its directives, the order charges the federal government with assessing existing capabilities that may be available to help critical infrastructure in their cybersecurity efforts. These entities include large financial services companies, energy companies and other businesses that, if disrupted, could cause economic, health or national security concerns. Read Executive Order. Read ICBA Summary.

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    Wanna Cry? No Tears Here - BankOnIT’s Got You Covered!

    BOIT Threat Mitigation Shield Protects Banks from the WannaCry Ransomware

    The recent ransomware attack known as WannaCry, which has impacted more than one million businesses worldwide, is an example of the evolution of typical ransomware attacks. Ransomware is malicious software that installs itself on a machine (the software could come from a malicious link, attachment, download, etc.) and then exploits a vulnerability to lock up files until the victim pays a ransom. Paying the ransom doesn’t always guarantee the hacker(s) responsible will unlock the data.

    BankOnIT’s Threat Mitigation Shield is a multi-layered security approach developed exclusively by BankOnIT to help proactively protect banks against cyber threats including the WannaCry ransomware attack. BankOnIT is a CBSC preferred partner. Read More.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    Geopolitical risks are something that investors have always had to deal with. The concern is usually focused upon events that occur on foreign shores. Recently, the shores in question are the banks of the Potomac. Controversies swirling around the administration continue to build toward an uncertain crescendo amid growing perceptions that a variety of entanglements may further sidetrack President Trump’s ambitious agenda to breathe life into what some see as a flagging economy. See Baker Market Update.

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    Rural Mainstreet Index Climbs to Highest Level in Almost Two Years

    After dropping below growth neutral for 20 straight months, the Creighton University Rural Mainstreet Index moved above the 50.0 threshold for May according to the latest monthly survey of bank CEOs in rural areas of a 10-state region (including Illinois) dependent on agriculture and/or energy.

    The Index, which ranges between 0 and 100, climbed to 50.1 from 44.6 in April. May’s reading was the highest recorded reading since July 2015. The last time the overall index was at or above growth neutral was August 2015. The May RMI for Illinois increased to 49.2 from 41.3 in April. The farmland-price index fell to 29.4 from April’s 30.5, while the state’s new-hiring index advanced to 55.1 from last month’s 51.1. Read More.

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    CBAI Urges the CFPB to Ease Community Bank HMDA Requirements

    In a May 25, 2017 comment letter to the Consumer Financial Protection Bureau (CFPB), CBAI urged the Bureau to ease the HMDA requirements for community banks. The CFPB finalized the new HMDA rules in October of 2015, but has proposed technical corrections to clarify certain requirements.

    In addition to several new recommendations, CBAI also renewed its prior recommendations for the Bureau to scale back the number of additional data fields and not go beyond the Dodd-Frank requirements. CBAI also recommended that the Bureau at least double the error thresholds given the greater number of data fields and the resulting increased likelihood that unintentional errors will occur; and urged an increase in the loan-volume threshold for HMDA reporting to 1,000 closed-end mortgages and 2,000 open-end lines of credit.

    Other recommendations included adopting guidance similar to the CFPB’s TRID implementation whereby examiners initially should not find fault in compliance so long as the bank is making a good faith effort to comply with the new regulations; urging the Bureau to be especially mindful of the Government Monitoring Information challenges for community banks and apply the good faith effort standard in determining the initial compliance for community banks; and increasing the implementation period by one year for those banks that require extra time for implementation, but those banks that are fully prepared and implement sooner should be permitted to do so without fear of penalty for earlier compliance if errors occur after good faith efforts to comply. Read CBAI Comment Letter.

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    CBAI Endorses First Data’s Digital-Banking Solution

    CBAI, through its business-services subsidiary, CBSC, has endorsed First Data’s digital-banking solutions. First Data is a global leader in commerce-enabling technology and is now the preferred digital-banking partner for CBAI.

    “First Data recently launched its ‘Digital Banking Reimagined’ solutions, which provide financial institutions of all sizes a way to connect with their consumers in a modern, intuitive, and seamless way,” said Mike Duke, CBSC vice president. “Our members can benefit from the solutions and the redesigned mobile and web experiences that First Data is helping financial institutions deliver to today’s connected consumer.”

    First Data’s digital banking solutions provide a single platform to support consumers, small businesses, and corporations across the U.S. The white-label integration allows financial institutions to keep their own branding, while giving a customized, secure and convenient way for users to manage and track their finances, without a major backend lift. Read More.

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    Branches Still Matter According to J.D. Power Study

    As retail banks continue to brace for the digital future, branches are still having a significant effect on customer satisfaction across all customer age groups, according to the J.D. Power 2017 U.S. Retail Banking Satisfaction Study released in late April. “There is no question that banks need to get the digital experience right in order to attract and retain customers; however, the branch continues to play an important part of the overall customer experience,” said Jim Miller, senior director of banking at J.D. Power. “The trend is particularly noteworthy among Millennials who represent the future of banking, and consistently demonstrate that overall satisfaction is higher among customers who use both the branch and mobile banking. Banks can’t choose between the two channels; rather, they must focus on how the two work together.” Read More.

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    94% of Illinois Community Banks were Profitable in Q1 2017

    BankTrends, the CBAI’s preferred provider for Call Report data and peer analysis, has just released first-quarter numbers and below is a performance summary for Illinois community banks.

    • On a pretax ROA basis, 94% of Illinois banks were profitable in the first-quarter of 2017
    • For the 460 Illinois banks with less than $10B in assets, median Pretax ROA was 0.98% in Q1
    • Median Pretax ROE was 9.06% during the quarter and median Net Interest Margin was 3.31%
    • Year-over-year median loan balances increased 4.1%; median Loans-to-Deposits ratio was 73.1%
    • Median Noncurrent Loans ratio was 0.77%
    • Median Noninterest Income to Earning Assets was 0.47%; median Noninterest Expense to Earning Assets was 2.77%. See Rankings Map.

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    The Power of Banking with Purpose

    One of the major drivers of success in financial services is the ability to define an organization's purpose and make this the foundation for a strong top-down culture.

    The importance of a well-defined, articulated and acted upon purpose has never been more important for a financial services organization. A well defined purpose is both achievable and aspirational. It provides a value that is meaningful.

    In an in-depth BCG analysis of the link between purpose and performance it was found that a deeply ingrained purpose correlated strongly with ten-year total shareholder returns. In other words, when organizations view purpose as instrumental to success, and employees are encouraged to embrace purpose, good things happen financially. Read More.

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    Three Quarters of Americans Don’t Know What Their Bank Does

    Americans expect their banking provider to actively help them make better financial decisions, but most institutions are falling way short. For starters, only one in four Americans say they understand the basic suite of products and services their bank offers. And it's not for lack of interest. Four out of five consumers say their financial institution should be sending them more information than they are currently receiving. Steps can be taken to address the issue. Read More.

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    Checking Account Growth – It’s Go Time!

    It’s go time! New account activity peaks spring through fall, so now is the time to put your acquisition strategies in place. Client data for Velocity Solutions shows a consistent national trend each year with new account openings. The new account activity increases in early spring, the momentum created by tax returns and nicer weather. A second peak occurs between June and September, followed by the lowest period of activity in November and December. Right now, the first spike in activity is happening, so it’s time to make sure systems are in place and strategies are aligned to get more than your fair share of new accounts. Read More.

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    CBIS: Does Your Bank's Insurance Protect Against Patent Infringement Lawsuits?

    Last year, American Banker magazine reported that in 2011, American companies were forced to shell out $29 billion in litigation and settlement costs as a result of patent-troll litigation. Last year, there were 3,608 patent-troll lawsuits filed in the United States.

    As community banks incorporate new technology, they are becoming prime targets for patent-trolls. We know of at least one CBAI member bank that has received letters from two law firms alleging patent infringement. Read More.

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

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

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

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    Deposit Documentation to be Held June 6-8

    The objectives of this seminar are to define the governing rules, regulations, and laws affecting deposit documentation; explain how the rules, regulations, and laws directly affect day-to-day operations and customer interactions; and show attendees how they can apply what they learn to new circumstances and situations. Each of these regulations, laws, or guidelines have aspects that relate to the initial disclosures, but the emphasis of this class is on the how and why. Many activities of tellers and customer-service representatives are driven by these regulations, but too often circumstances can make it difficult for those employees to apply the regulations because they don't know the details. This seminar describes the requirements, explains in a straightforward manner the basic principles, and then draws on real-life experiences to explore how to apply those principles. Tellers, head tellers, new-account representatives, and anyone opening accounts or dealing with customers on the deposit side would all benefit from attending this seminar. Tim Tedrick CRCM, CRP, and partner at Wipfli LLP in Sterling, IL, leads this seminar.

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    Principles for Understanding Your Info Systems Set for June 13

    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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    Directors' Workshop Scheduled in Three Locations in June & July

    Being a member of a community bank's board of directors is a challenging and rewarding experience. The community bank director has duties to the institution, its stockholders, and its depositors. And, he or she has responsibilities to the public-at-large. To meet these duties and responsibilities, a director must be knowledgeable and active. Thus, we invite you to join CBAI and the FDIC for the Directors' Workshop. Representatives from the FDIC discuss hot banking topics to make this comprehensive, one-day conference a must-attend. Topics covered include Corporate Governance and Succession Planning with Robert Warren; Preparing for Your Examination with Gerald Anderson, Bill Doering, and Angela School; Cybersecurity with Leslee Martin; an Economic Update; Compliance Risk Assessments with Patrick Ryan, Bill Doering, and Angela School; Concentration Risk Management with Gerald Anderson and Ashlee Chapman; and Interest Rate Risk with Deanna Willemsen. All speakers are representatives of the FDIC.

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    Community Bankers School Week Scheduled for July 16-21

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

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