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     A Bi-Weekly News Bulletin for CBAI Members                     May 29, 2013 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • ICBA Releases Report on Why TBTF Must End
  • The Myth of Orderly Liquidation for Mega Banks
  • USA Today Editorial Supports TBTF Act
  • Déjà Vu in the Mortgage Securities Market?
  • Sub S Banks and Credit Unions Not Similar on Tax Issue
  • Baker Market Update
  • Bernanke May Have No Good Moves Left
  • Midwest Manufacturing Output Declined in April
  • Farm News Update
  • Fed Reveals Secret Lessons of Successful Small Banks
  • How Did Your Bank Celebrate Community Banking Week/Month in 2013?
  • Register Today for the Remaining Four CBAI Group Meetings
  • KASASA Ad #6: “Two Options”
  • New Wage Reports to Fight Fraud in Unemployment, Medicaid Programs
  • Robbery Safety: A New Approach to an Old Peril Set for June 5 & 6
  • Employment Law Update Scheduled for June 11 & 12
  • The Role of the Head Teller in Your Bank’s Success to be Held for June 12


  • ICBA Releases Report on Why TBTF Must End

    The Independent Community Bankers of America (ICBA) released a report last week that examines the impact of too-big-to-fail (TBTF) financial institutions on the U.S. economy and provides reasons why Congress, regulators, and the American people must take a united and bi-partisan stand against too-big-to-fail to ensure a healthy, robust, and diverse economy.

    The Report addresses common myths that have been used by TBTF paid cheerleaders with clearly understandable facts, including that ending too-big-to-fail would make U.S. banks stronger and more globally competitive - not less.

    The Ending Too-Big-To-Fail report encourages everyone to vigorously peruse practical solutions that will restore a free and safe financial market for financial services.
    See ICBA Release. See ICBA Report.

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    The Myth of Orderly Liquidation for Mega Banks

    Simon Johnson, former chief economist of the International Monetary Fund, recently refuted the notion that current rules and regulations are adequate to resolve failed mega banks without taxpayer support. The Wall Street mega financial firms favor business as usual, and their public relations spin machine is in high gear with a campaign to oppose being downsized, restricted by higher capital requirements, or functionally limited in their high-risk, high-reward investment banking operations.

    Johnson said neither bankruptcy laws, nor the orderly liquidation authority of Dodd-Frank, nor “loss-absorbing” debt and equity would be sufficient to resolve a teetering giant mega bank.
    See New York Times Article.

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    USA Today Editorial Supports TBTF Act

    ICBA and CBAI advocated legislation to take on the too-big-to-fail problem is the kind of aggressive and simple approach that should have been adopted long ago, the
    USA Today editorial board wrote. The bipartisan Terminating Bailouts for Taxpayer Fairness Act (S. 798) would end the subsidization of big banks and eliminate the need for more complex regulations, according to Monday’s editorial.

    S. 798 would implement higher capital levels on the largest megabanks and regulatory relief for community banks to eliminate the too-big-to-fail subsidy. In an American Banker op-ed posted last week, ICBA Chairman-Elect John Buhrmaster wrote that the bill would reduce the likelihood that megabanks would reach the brink of failure and would take an important step toward truly tiered financial regulations.

    ICBA and CBAI strongly support S. 798, and it's easy for community bankers to reach out to their members of Congress in support of the measure. Community bankers can use ICBA's “Be Heard” grassroots website to send customizable emails and tweets to their senators in support of the legislation.

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    Déjà Vu in the Mortgage Securities Market?

    To avert another financial crisis in mortgage securities, the Dodd-Frank Act requires securitizers to keep some skin in the game whereby, for every dollar of loss suffered by mortgage-backed securities investors, at least five cents must be borne by those who securitized the mortgages. However, the law exempts mortgage loans that meet certain tight standards.

    Now the mortgage securities firms are pushing for regulatory changes to eliminate their risk if the securitized loans meet the basic CFPB lending standards. Virtually all mortgages being originated today already meet those standards. Former FDIC Chairman Sheila Bair believes regulators should make it impossible for securitizers to escape having skin in the game.
    See CNN Money Article.

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    Sub S Banks and Credit Unions Not Similar on Tax Issue

    In his recent blog, Northwestern Financial Review editor Tom Bengston pointed out the key distinction between income tax-exempt credit unions and Sub S bank taxation: Because Subchapter S bank owners pay income tax on the bank’s earnings regardless of whether they are retained or paid out as dividends, Sub S banks generate federal income tax revenue while credit unions do not.
    See NFR Blog.

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    Baker Market Update

    In an effort to save government employees some time and trouble, they should know that if they ever want to tap the phones or read the e-mails of the Baker Market Update, they're in for an exercise in boredom. What was not an exercise in boredom last week was following the roller-coaster ride of the Ten Year Treasury Note.
    Read More.

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    Bernanke May Have No Good Moves Left

    The Federal Reserve’s policy of Quantitative Easing has yet to produce an economic recovery. Potentially caught in a Catch 22, Fed Chairman Ben Bernanke acknowledged that a long period of low interest rates has costs and risks, but if the Fed stops buying bonds it could cause economic deterioration. With his term ending next January, some observers believe Bernanke will step down before an exit strategy is devised and implemented.
    See Time Article.

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    Midwest Manufacturing Output Declined in April

    The Chicago Fed Midwest Manufacturing Index decreased by 0.5% in April to a seasonally adjusted level of 95.9 (2007 = 100) after increasing in March.
    See Fed Release.

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    Farm News Update

    ACRE Payments in 2013 Unlikely

    June 3rd is the deadline for enrolling Farm Service Agency farms into Average Crop Revenue Election (ACRE) for 2013, and farmers concerned about low revenues will find ACRE attractive, according to U of I ag economist Gary Schnitkey. However, Schnitkey believes prices low enough to trigger ACRE payments are unlikely.
    See Farm Bureau Article.

    Corn Planting 89% Complete; Soybeans 40% Finished

    According to the USDA, 89% of Illinois corn has been planted which is where it should be for this time of year. However, soybeans are about 13% behind the 53% long-term average. See USDA Report.

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    Fed Reveals Secret Lessons of Successful Small Banks

    It's hard to believe but true: more than 700 banks maintained a pristine Camels 1 rating throughout the six-year period bracketing the financial crisis. There was no cookie-cutter formula for avoiding a performance downgrade from 2006 through 2011. In fact, some of these banks did things unexpected of high performers like operating close to capital minimums or blowing past regulatory limits on asset concentrations.
    See AB Article.

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    How Did Your Bank Celebrate Community Banking Week/Month in 2013?

    CBAI will promote Community Banking Week in Illinois (CBW) 2014 with success stories from CBW 2013. How did your bank celebrate? What worked in your market? How did your customers (and, just as importantly, non-customers) react? What would you have done differently? Please share. Send your success stories to Andrea Cusick, SVP Communications at cbaicom@cbai.com or 901 Community Drive, Springfield, IL 62703 or via fax at 217/585-8738.

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    Register Today for the Remaining Four CBAI Group Meetings

    Four Group Meetings remain on the 2013 schedule. Bankers from more than 200 banks participate in these enjoyable and informative events each year. Three of the remaining meetings, Groups 4, 7, and 9, consist of an optional golf outing and a dinner meeting. The opening portion of each focuses on critical legislative and association issues. CBAI President Bob Wingert provides updates on Association projects and community banking in general, and Senior Vice President of Governmental Relations Kraig Lounsberry offers an up-to-the-minute report of banking-related legislative activities. Then Felix Brandon Lloyd, founder and ambassador of BancVue’s MoneyIsland division, presents “The Power of Financial Education.”

    The Groups 1, 2, & 3 combined meeting consists of breakfast, presentations by Wingert and Lounsberry, and a session with FDIC Deputy Regional Director Cheryl Couch, followed by lunch. See the schedule of Group Meetings that follows and make plans now to attend!
    Register Now!

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    KASASA Ad #6: “Two Options”

    Do your account holders have a real choice when it comes to checking accounts? And if so, is there a meaningful reason to choose one over the other? Kasasa’s “Two Options” radio commercial plays on the frustration that, while most banks offer multiple accounts, there’s no real difference from account to account. Free Kasasa checking and savings accounts include meaningful rewards, like nationwide refunds on ATM fees, really high interest rates, cash back everyday debit card purchases, and more!

    Offer real rewards, not rewards in name only. So account holders can spend or save as they see fit, all with no monthly service fee – giving a real reason to open a new account or even switch banks.
    See Ad.

    Want Kasasa to take your community bank to the next level? Contact Steve Prost via email at steve.prost@bancvue .com, or phone at 847.341.8003. Kasasa is one of the many fine products of BancVue, a CBSC Preferred Marketing Partner.

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    New Wage Reports to Fight Fraud in Unemployment, Medicaid Programs
    Stopping Fraud Before It Starts To Save $100 Million Each Year

    New monthly wage reports will help stop individuals from illegally collecting unemployment insurance benefits while working because officials will have the most up-to-date wage information available, the Illinois Department of Employment Security (IDES) indicates.

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    Robbery Safety: A New Approach to an Old Peril Set for June 5 & 6

    “Suppress this robbery, and prevent the next one” is the philosophy of the innovative SAFECATCH Robbery prevention and preparation program for financial institutions. The FBI-inspired program has revolutionized employee awareness and actions in the markets where it has been implemented. SAFECATCH, an acronym, is a two-pronged
    bank-robbery suppression program. The SAFE prong is a preventive measure; the “CATCH" prong is designed to partner bank employees with law enforcement. Together, they bring together a comprehensive plan which creates an environment that empowers bank employees to make a difference. Jim Rechel, president of The Rechel Group, Inc., a risk-consulting firm headquartered in Cincinnati, OH, presents this timely program.

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    Employment Law Update Scheduled for June 11 & 12

    Effective human-resource management techniques span the entire employment relationship: hiring, performance management, disciplinary action, and employment termination. In the current enforcement environment, fueled by federal and state agencies focused on aggressive initiatives to sue employers, great care must be taken to ensure compliance. Few senior managers fully grasp the direct relationship between cost containment and managerial practices. Avoiding both litigation and liability exposure requires comprehensive attention to the life-span of the employment relationship. This program offers practical advice and best employment practices to help Illinois community bankers take proactive steps to avoid litigation. Best practices designed to avoid litigation also result in human-capital improvements, by identifying, recruiting, training, and directing employees in a manner designed to foster a more directed focus on core banking business. Leonard Sachs and Tracy Litzinger with Howard & Howard PLLC, a business-law firm with offices in Michigan, Illinois, and Nevada, lead this
    seminar.

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    The Role of the Head Teller in Your Bank’s Success to be Held June 12

    Head tellers can make or break what happens in your community bank by positively or negatively influencing your bank's ROI and customers' experiences through their leadership of the teller line and resulting influence bank wide. Head tellers impact a teller's motivation, productivity and the all-important ATTITUDE! Head tellers influence teller retention and the way in which they follow your bank's policies and procedures. Topics covered in this seminar include accountability, negotiable instruments and endorsements training, communication strategies to enhance leadership, and withstanding negative emotions. Facilitating the program is former community banker Mary L. White, WTC Performance Group, who is well known for engaging her audiences and bringing real-world experience to her programs.

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    CBAI


    PROFESSIONAL DEVELOPMENT PROGRAMS THROUGH 06/30/2013

    › Robbery Safety: A New Approach to an Old Peril
    › The Role of the Head Teller in Your Bank’s Success
    › Stress Testing 101 for Community Banks
    › Loan Review Expectations 2013
    › Principles for Understanding, Managing, and Monitoring Your Information Systems
    › Pitfalls of Estate Administration



    TELEPHONE/WEBCASTS THROUGH 06/30/2013

    › When is an Item Payable? Stop Payments, Return Items & More
    › Real Estate Loan Workouts, Foreclosures, Short Sales, & Deficiency Judgements
    › GFE & HUD-1: Current Issues, Current Challenges
    › Collecting Decedents’ Debt
    › Fraud Trends and Prevention When Dealing with Compromised Cards
    › Accepting Powers-of-Attorney on Deposit Accounts
    › Regulator Issues & Update for the Credit Analyst
    › Ability to Repay, Part I – New Rules That Impact Your Policies and Products
    › Detecting Counterfeit Items and Fraudulent ID for the Frontline
    › Pricing Consumer & Commercial Loans for Profitability
    › Bank Opportunities with Small Businesses: Growing Deposits, Loans, & Fee Incomes




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