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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 14, 2014

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Committee Passes CBAI and ICBA-Advocated Regulatory Relief Bills
  • Three Actions to Help Decipher CFPB’s Mortgage Regulations
  • Excessive Regulation Detracts from Financial Literacy
  • IDFPR Division of Banking to Hold Town Hall Meeting
  • Big Banks Are Riskier than Ever, Says FDIC Vice Chair
  • IMF Chief: Too-Big-To-Fail Not Resolved
  • Did You Know? Bailouts are Likely for Insurance Companies and Student Loans
  • Community Banks Earned $4.4 Billion in First Quarter
  • Rural Mainstreet Economy Strengthens in May
  • Baker Market Update
  • Two New, Gold-Level Donors to the CBAI Foundation for Community Banking
  • ICBA: Don’t Drive Community Banks Out of Mortgage Servicing
  • Why Are Banks Not Backtesting Their ALLL?
  • What Today's CEO Needs to Know About the Threats They Don't See
  • Banks Should Act Now on Mobile Payments
  • Free Webinar: The Benefits of In-branch Instant Card Issue
  • FDIC Studies Implications of Rural Depopulation for Community Banks
  • Janet Yellen’s Six Life Lessons
  • Federal Reserve Banks to Host Town Halls on Improving the U.S. Payment System
  • Email Design Best Practices
  • CBAI Launches New On-Line Registration System
  • Register Today for Early-Bird Pricing at CBAI’s 40th Annual Convention!
  • 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


  • Committee Passes CBAI and ICBA-Advocated Regulatory Relief Bills

    The House Financial Services Committee approved three ICBA-advocated bills last week to relieve community banks from excessive regulatory burdens. The bills were approved on recorded votes two weeks after the committee advanced them on voice votes.

    The Committee approved:

      • H.R. 4521, which would exempt community bank portfolio loans from new escrow requirements and raise the small-servicer exemption threshold from 5,000 to 20,000 loans, on a 43-16 vote,
      • H.R. 4466, which would require federal financial regulators to consider whether proposed regulations are duplicative or inconsistent with existing regulations before issuing them, on a 34-25 vote, and
      • H.R. 2673, which would provide that any residential mortgage held in portfolio by the originator is a qualified mortgage, on a 36-23 vote.

    CBAI and ICBA have strongly advocated the bills, which are inspired by ICBA’s
    Plan for Prosperity regulatory relief platform. The associations will continue working to advance these and other regulatory relief measures on the House floor and in the Senate.

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    Three Actions to Help Decipher CFPB’s Mortgage Regulations

    Howard & Howard Attorneys PLLC recommends three actions to better decipher CFPB’s mortgage regulations: 1) use the annotated forms to pinpoint and research the underlying text of each requirement, 2) document decisions that will demonstrate good faith efforts to comply and help streamline the audit and quality control process, and 3) team up with trusted partners including counsel.
    See Howard & Howard Article.

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    Excessive Regulation Detracts from Financial Literacy

    For a personal perspective, see the
    attached article by Gabe Krajicek of BancVue, CBSC preferred provider.

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    IDFPR Division of Banking to Hold Town Hall Meeting

    The IDFPR Division of Banking will host a Town Hall meeting for Illinois community banks on Tuesday, June 10, in Springfield. The meeting will run from 1 PM to 3PM and will discuss the future of community banking and the challenges of running a community bank in the current regulatory and economic environment. Please
    Click Here for more information and to RSVP.

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    Big Banks Are Riskier than Ever, Says FDIC Vice Chair

    In an
    interview, Tom Hoenig says that, in many ways, the U.S. financial system has not fully incorporated the lessons of the most recent financial crisis.

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    IMF Chief: Too-Big-To-Fail Not Resolved

    Chastises Mega Banks for Questionable Ethics

    Christine Lagarde, managing director of the International Monetary Fund, said this week, “The industry still prizes short-term profit over long-term prudence, today’s bonus over tomorrow’s relationship.” She expressed support for further restrictions on speculative activity by mega banks.
    See USA Today Article.

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    Did You Know? Bailouts are Likely for Insurance Companies and Student Loans

    In his recent Mainstreet Economy Report, economist Ernie Goss identified two more taxpayer bailouts looming on the horizon: insurance companies and student loans. He noted that Section 1342 of the Affordable Care Act forces taxpayers to make insurers whole from losses they incur selling policies below costs on the ObamaCare exchanges through 2016.

    In addition, student loan debt has doubled to $1.1 trillion since 2007. By the end of 2013, enrollment in the government plans, which allow students to rack up big debts and jettison the unpaid balance regardless of amount after a set time period, has surged to more than 40 million debtors. Goss pointed out that, as a result of federal government over feeding, universities have increased tuition at a rate twice that of medical care, and three times that of all consumer prices over the past decade.
    See Report.

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    Community Banks Earned $4.4 Billion in First Quarter

    Number of Problem Banks Fell for 12th Straight Quarter

    The FDIC today released performance data for all insured institutions for the first quarter of 2014. For the first time in its Quarterly Banking Profile, the FDIC included a new section that reports on the performance of community banks (6,234 or 93 percent of all institutions). Although net income at community banks of $4.4 billion was down $67 million (1.5 percent) from a year earlier, the percentage decline was far less than the 7.6 percent decline in earnings reported by the industry overall.

    In addition, the number of problem banks fell from 467 to 411 during the quarter.
    See FDIC Release.

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    Rural Mainstreet Economy Strengthens in May

    After moving below growth neutral in February, the Rural Mainstreet economy has moved above the 50.0 threshold for three straight months, according to the May survey of bank CEOs in a 10-state area. Overall, the Rural Mainstreet Index (RMI), which ranges between 0 and 100, with 50.0 representing growth neutral, increased to 55.6 from 53.2 in April.

    Dr. Ernie Goss, Professor of Economics at Creighton University, said “Currently the Rural Mainstreet economy is adding jobs at a pace well above the long-term average. Furthermore, the region’s employment has returned to pre-recession levels.”

    For a second straight month Illinois’ RMI increased, rising to 55.8 from April’s 53.3. The Illinois farmland-price index rose to 42.3 from April’s 36.2. The state’s new-hiring index improved to 59.6 from April’s 57.4.
    See Mainstreet Economy Report. See Survey Details.

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    Baker Market Update

    After much debate with a colleague on the appropriateness of the term “dinner” during your second meal of the day, I must admit defeat. Apparently, it is perfectly acceptable to have dinner at noon. As my father-in-law says, “The Internet Has Officially Killed the Beauty of Debate”.
    See Baker Market Update.

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    Two New, Gold-Level Donors to the CBAI Foundation for Community Banking

    Legence Bank, Eldorado and BKD, LLP have become the newest, Gold-level sponsors of the CBAI Foundation for Community Banking. BKD’s commitment is a combined effort among Gary Genenbacher, Kraig Ritter, Bob Swartz, and the BKD Foundation.

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    ICBA: Don’t Drive Community Banks Out of Mortgage Servicing

    ICBA called on federal banking regulators not to impose stricter mortgage-servicing regulations on community banks. ICBA wrote that community banks should not be penalized for serving the loans they originate for their customers.
    Read ICBA Comment Letter.

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    Why Are Banks Not Backtesting Their ALLL?

    Banks backtest their ALLL in order to monitor model performance and adjust or revise it over time. But according to a recent poll, almost 50 percent of banks aren’t currently backtesting.
    What’s the hold up?

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


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    What Today's CEO Needs to Know About the Threats They Don't See

    The FFIEC hosted a web conference recently for approximately 5,000 chief executive officers and senior managers from community financial institutions, highlighting the need to enhance financial institutions’ cyber security. The FFIEC offered this webinar to raise awareness about the pervasiveness of cyber threats, to discuss the role of executive leadership in managing these risks, and to advice of actions being taken by the FFIEC.

    As the cyber threat risk grows, so too does the amount of regulatory emphasis devoted to information technology. Regulators are especially devoting additional attention to the efforts community banks are making to mitigate cyber security risks. BankOnIT is perfectly positioned to help client banks with both the security and regulatory issues they face in this area. BankOnIT is a CBSC preferred provider of Bankers Provider Cloud services.
    Read BankOnIT Article.

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    Banks Should Act Now on Mobile Payments

    While start-ups and tech giants have piloted mobile payment solutions over the past few years, more banks have sat on the sidelines waiting to see which, if any, of these efforts will gain traction. Most saw no need to rush in. Only a fraction of bank customers use mobile payments – the early adopters who have the right phones and who seek out willing retailers.
    Read More.

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    Free Webinar: The Benefits of In-branch Instant Card Issue

    Presented by Harland Clarke, a CBSC preferred vendor, the webcast will present research findings and trends in the domestic card market. Harland executives will also present Card@Once® which enables your staff to issue new debit, credit and ATM cards to your account holders from inside your branch — instantly. Instead of waiting days for a new card to arrive in the mail, your account holders receive a personalized card in minutes.
    Register Now.

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    FDIC Studies Implications of Rural Depopulation for Community Banks

    Community banks in rural areas with declining populations are performing relatively well, according to the FDIC Quarterly article on trends in rural depopulation which found that growth and succession remain important challenges for these institutions.

    The paper noted that more than 1,000 community banks with a total of $150 billion in assets are headquartered in rural counties with declining populations. The FDIC found that these banks have experienced relatively strong financial performance due to their concentration on lending to the agricultural sector, which has outperformed other business segments during and after the recent recession.

    The FDIC said community banks have demonstrated continued resilience and value in the American financial system. The article concludes that the biggest obstacles for bankers in rural areas with declining populations are sustaining growth amid a shrinking customer base and finding qualified management to fill vacancies.
    See FDIC Release. Read FDIC Quarterly Article.

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    Janet Yellen’s Six Life Lessons

    Last week Federal Reserve Board Chair Janet Yellen offered some advice to New York University’s 2014 graduating class. They were described as six life lessons, all of which are appropriate for any stage of life.
    See Yellen Article.

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    Federal Reserve Banks to Host Town Halls on Improving the U.S. Payment System

    The Federal Reserve Banks encourage payment industry stakeholders to register for
    one of six public “Payment System Improvement Town Halls” hosted at Reserve Banks across the country in June. The Town Halls are open to the public and will feature leaders from the Federal Reserve Banks facilitating discussion on potential strategies for addressing gaps and opportunities in the U.S. payment system, including speed, security, B2B, settlement, international, and more.

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    Email Design Best Practices

    Most email inboxes are full of sales promotions, newsletters, and customer communications of all shapes and sizes. So what makes you read one, and trash another? Sometimes the reason is that you like the sender. But many times, you engage with an email because it’s been designed to catch your attention, and make you want to read more.

    There are some best practices you can follow to help you catch your recipient’s attention, and entice them to read more.
    See Article.

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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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    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
    seminar.

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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 Set 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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