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                                June 1, 2011 Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • State Legislature Adjourns Early This Morning
  • CBAI Leadership Bankers Attend OCC Banker/Regulator Forum
  • ICBA Campaign for Community Banks Getting Traction
  • Communities First Act Offers Real Solutions
  • Banks and Thrifts Earn $29 Billion in First Quarter
  • Midwest Economy Levels Off
  • Baker Market Update
  • It's Not too Late to Step up to the Plate - Join us at Busch Stadium for a Grand Slam FedPac Fundraiser
  • CFPB’s Warren Aims to Level Playing Field for Community Banks
  • CBAI Foundation is Beneficiary of Charity Golf Outing
  • Video and Mobile Internet Usage Exploding
  • CBAI Groups 1, 2, 3, 4, 7 and 9 Group Meetings Still to Come!
  • Three Steps to Evaluate Pooled Loans Methodology in Estimation of ALLL
  • Seven Dysfunctions of Low-Performing Banks
  • Recent Disasters Remind Banks To Have an Effective Disaster-Recovery Plan
  • Illinois Planting Progress Continues
  • "Insider Threat – Don’t Look the Other Way" Set for June 7
  • "Auditing Operations Compliance" Scheduled for June 20
  • "Appraisal Evaluation Guidance Update" Set for June 21 & 22

  • State Legislature Adjourns Early This Morning

    Community Bank Victory: SB 16 Held in House

    The Illinois General Assembly adjourned early this morning without voting on
    SB 16, which would have authorized every Illinois municipality to impose onerous maintenance ordinances on lenders or mortgagees that own or have a secured interest in abandoned property including registration requirements, fees, and fines. The measure, if enacted, would have had a negative effect on underwriting mortgage loans. Its defeat is a credit to the grassroots lobbying involvement of Illinois community bankers.

    Community bankers first campaigned against SB 16 in April during CBAI’s Capital Conference. The CBAI governmental relations team was informed by many legislators that their local bankers had reached out to them and that the message was being heard loud and clear.

    Despite intense lobbying from proponents of the bill, which included the Governor, the City of Chicago, the Illinois Municipal League, and AARP, the sponsor of the bill was unable to attain 60 “aye” votes in the House and elected not to call it for a vote. Instead, the House passed SJR 30 which creates a Task Force to study the mortgage foreclosure issue.

    This issue is not going away, and CBAI expects to be involved in meetings throughout the summer regarding mortgage foreclosures. CBAI will continue to advocate for community banks as this issue progresses.

    Legislature Passes Budget

    The new state budget is higher than last year’s budget and was balanced by delaying payment of billions of dollars in unpaid bills until the current fiscal year. Allocations for schools and human services were trimmed. See Statehouse Report.

    Lawmakers Address Education Reform and Redistricting

    The General Assembly approved education reforms by linking student performance to teacher promotion, tenure, or lay-off; and making it tougher for unions to strike. The Democratic-controlled legislature also approved a redistricting plan that poses considerable challenges for Republicans. See Report.

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    CBAI Leadership Bankers Attend OCC Banker/Regulator Forum

    CBAI Chairman Michael Estes, President of The Fisher National Bank; Chicago Regional Vice Chairman Todd Grayson, EVP of South Central Bank, N.A., Chicago; and David Schroeder, CBAI VP of Federal Governmental Relations, participated in a day-long Banker/Regulator Forum sponsored by the Office of the Comptroller of the Currency (OCC) at the Hyatt Regency in Chicago on May 26, 2011. The featured speaker was Acting Comptroller of the Currency John Walsh.
    Read More.

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    ICBA Campaign for Community Banks Getting Traction

    ICBA’s high-profile advocacy campaign to reduce regulatory burdens on community banks is getting the attention of major media. Last week the New York Times featured a front-page article on ICBA’s aggressive efforts to reduce excessive regulations, most notably the interchange rules scheduled to go into effect in July.
    See NYT Article.

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    Communities First Act Offers Real Solutions

    The Communities First Act of 2011 (H.R. 1697) provides meaningful regulatory and tax relief for community banks. Drafted by the ICBA, the CFA contains a plethora of beneficial changes including allowing highly-rated community banks to file a short-form call report in two nonsequential quarters each year, and authorizing community banks to amortize CRE loan losses and OREO over 10 years for regulatory capital purposes. CBAI also strongly supports this prudent measure.
    See Cam Fine Article.

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    Banks and Thrifts Earn $29 Billion in First Quarter

    The FDIC recently announced that insured institution profits climbed 66.5% in the first quarter compared to a year ago, marking the seventh consecutive quarter that earnings registered a year-over-year increase and the best quarterly result since the second quarter of 2007. The average return on assets rose to .87 percent from .53 percent last year.

    In addition, loss provisions declined by more than 50% compared to a year ago, and the Deposit Insurance Fund balance neared positive territory which Chairman Bair predicted will turn positive by June 30.
    See FDIC Release.

    The thrift industry itself posted a $1.4 billion profit in the first quarter as troubled assets continued to decline. See OTS Release.

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    Midwest Economy Levels Off

    The Chicago Federal Reserve Bank’s Midwest Economy Index slightly increased in April due primarily to manufacturing gains. However, the construction, service, and consumer spending sectors experienced slight declines compared with the previous month.
    See Report.

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    Baker Market Update

    With renewed debt concerns in Europe and lackluster economic growth, U.S. Treasuries are headed for their second weekly gain.
    Read More.

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    It's Not too Late to Step up to the Plate - Join us at Busch Stadium for a Grand Slam FedPac Fundraiser

    Your support for the CBAI Governmental Relations effort is critical. Don't balk at this opportunity. FedPac is dedicated to exclusively representing the interests of Illinois' community banks. Please help assure that we have a standing room only crowd in our private suite at Busch Stadium.
    Click here to sign up!

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    CFPB’s Warren Aims to Level Playing Field for Community Banks

    In congressional testimony last week, the Consumer Financial Protection Bureau’s Elizabeth Warren said a major part of the new bureau’s mission is to help level the playing field for smaller lenders. She noted that the current regulatory environment threatens the future of community banking, which would harm American families.
    See Warren Testimony.

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    CBAI Foundation is Beneficiary of Charity Golf Outing

    CBAI Members Can Participate

    The CBAI Foundation for Community Banking has been named the beneficiary of the 2011 Caddyshack Open Golf Outing, scheduled for June 30th at Piper Glen in Springfield. The event sponsors, which include the Bank of Springfield and Midwest Office Supply, select a worthy cause to support each year. The CBAI Foundation endows 15 scholarships each year to deserving Illinois high school seniors.

    CBAI members can support the Foundation by organizing a foursome, becoming a hole sponsor, and donating to the Caddyshack Silent Auction. For more information and to register,

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    Video and Mobile Internet Usage Exploding

    According to Cisco’s annual Visual Networking Index, internet usage is growing so rapidly that, four years from now, total traffic volume will be the equivalent of downloading every movie ever made. Traffic generated by mobile devices in 2010 was triple the size of all Internet traffic in 2000. Last year, video comprised the majority of consumer Internet traffic for the first time.
    See CNN Money Article.

    Consumers are increasingly relying on the Internet to obtain and receive information. Community banks must keep abreast of these consumer trends and provide banking services accordingly. During CBAI’s Spring Group Meetings, representatives of BancVue, a CBAI marketing partner, discuss innovations in Internet banking services including creation of a personal financial management site that enables customers to aggregate all of their financial information at single location.

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    CBAI Groups 1, 2, 3, 4, 7 and 9 Group Meetings Still to Come!

    Group Meetings not only consist of an optional golf outing, dinner, an association update by CBAI President Bob Wingert, and a report on legislative activities by Kraig Lounsberry, CBAI senior vice president of governmental relations, they also include an after-dinner presentation on a hot topic. This year’s presentation features Don Shafer or Gabe Krajicek from BancVue on the topic of “Redefine the Customer Banking Experience, While Generating Non-Interest Income.” Both speakers have received rave reviews from Group Meeting attendees. You won’t want to miss this timely, insightful, and energizing presentation. Register to attend a Group Meeting near you today!

    For testimonials, please click here.

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    Three Steps to Evaluate Pooled Loans Methodology in Estimation of ALLL

    The biggest challenges that many financial institutions face in the estimation of the Allowance for Loan and Lease Losses (ALLL) are related to the estimations of the General Reserves under ASC 450-20 (FAS5). While there may be no single best method to determining losses inherent in the pools, there are three steps institutions must take to adequately calculate the pooled loans portion of the ALLL and minimize regulatory criticism.
    Read Article.

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    Seven Dysfunctions of Low-Performing Banks
    By Roxanne Emmerich

    While most banks focus on what they should do, few seriously evaluate what they should not do or allow. Awareness of the common characteristics of low-performing banks can keep you from falling victim to any of these practices before you join the group. So what are the most common mistakes of low-performing banks? (Emmerich was the keynote speaker at CBAI’s fifth annual Community Bank Marketing Conference on May 12, 2011, in Springfield).
    Read Article.

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    Recent Disasters Remind Banks To Have an Effective Disaster-Recovery Plan

    The recent tornadoes in Missouri created devastation difficult to comprehend. Banks, unlike some other businesses, are required to have detailed written plans designed to minimize damage from natural disasters and to implement recovery plans for employees, infrastructure and IT systems.

    Many banks have not properly tested disaster recovery plans for every critical business unit. Failure to have an acceptable plan in place has become a frequently cited regulatory violation. Recovery Solutions, a CBSC marketing partner since 2009, provides a suite of comprehensive business continuity planning and compliance services that will meet the unique needs of community banks while satisfying regulator expectations.

    The professionals at Recovery Solutions have developed a
    Business Continuity Plan Self-Assessment. This assessment contains ten questions that can help your bank evaluate its disaster preparedness.

    For a no-obligation consultation about your bank’s disaster recovery plan, contact Rick Lavin, president, Recovery Solutions, at 630/479-0202, or at:

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    Illinois Planting Progress Continues

    The Illinois Ag Statistics Service announced this week that 94% of the state’s corn is planted and 80% has emerged. Nearly 60% of the soybean crop is now planted with 30% emerged.
    See Article.

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    "Insider Threat – Don’t Look the Other Way" Set for June 7

    The moral hazards of bailouts and the economic climate are not just topics for intellectual debate and academic pontification. Both conditions have an impact on individuals who work at your institution and, when combined with the powerful influence of the rationalization process, some employees make the decision to embezzle to satisfy their needs. Are you doing what you need to understand the perils, minimize the conditions, prevent what you can, discover those you cannot, and respond appropriately when it occurs? Discover the conditions which attract embezzlement and effective steps to minimize the risk to your organization. Learn to look for the signs of employee theft and embezzlement, and the steps to prevent a colony of embezzlers from destroying your business. Also learn the prevention steps every business should be utilizing to manage the risk of internal theft. James D. Rechel, president of The Rechel Group, Inc., which specializes in security intervention solutions, leads this

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    "Auditing Operations Compliance" Scheduled for June 20

    The Dodd-Frank Act will impact your operations area in the months and years ahead. There will be specific changes to Regulation CC, and the new Consumer Financial Protection Bureau is generally given the right to change any of the operations regulations as it sees fit. Banks are also facing increasing scrutiny on overdraft programs. To prepare for the coming changes, banks should take steps to revisit the operations side of the bank and perform adequate auditing procedures to ensure that all of these regulatory areas are current and correct. This
    seminar assists you in performing these audits and making appropriate corrections so the bank will be in the best position to address the inevitable changes that will occur over the next couple of years. This seminar is conducted by Bill Elliott, senior consultant and manager of compliance at Young & Associates, Inc. of Kent, Ohio, a nationally-recognized compliance consulting firm specializing in community banks.

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    "Appraisal Evaluation Guidance Update" Set for June 21 & 22

    CBAI is pleased to offer
    “Appraisal Evaluation Guidance Update” in two locations this June. This seminar not only focuses on both the internal appraisal program requirements under the 2010 Guidance, but also the understanding of appraisal and evaluation content and other regulatory requirements relating to appraisals and evaluations such as for impaired loans. Topics include the appraisal and evaluation program, the type of collateral valuation documentation required, appraisal development and report content, evaluation development and content, validity of appraisals and evaluations, reappraisal requirements, problem real estate credits, and portfolio collateral monitoring requirements. This seminar is designed for personnel from loan administration, underwriting/credit analysis, and all general loan personnel. Leading this seminar is S. Wayne Linder, senior consultant at Young & Associates, Inc., Kent, Ohio.

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    Community Bankers School – July 10-15, Illinois Wesleyan University, Bloomington

    Finer Points Blog





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