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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    June 7, 2017

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • House Takes Up CHOICE Act Relief Bill This Week
  • CBAI ACTION ALERT: Urge Illinois Congressional Delegation to Cosponsor CLEAR Act
  • Fine on Fox Business: ICBA Gung-ho for Regulatory Relief
  • REGULATORY UPDATE: FFIEC Releases Update to Cybersecurity Assessment Tool
  • CBAI Attends the FDIC Community Banking De Novo Outreach Meeting
  • ICBA, CBAI and Other State Affiliates Support Lawsuit Against NCUA
  • CBAI and ICBA Support Bill Expanding Holding Company Relief
  • Investment News From THE BAKER GROUP
  • A Regional Breakdown of Where the Fed Sees the Economy
  • MidAmerica National Bank Selects CASH Insight™ to Manage Commercial Lending Risk
  • Community Bankers Unite - It's Auction Time Again!
  • 10 Tips for Young Beginning Farmers
  • CBAI LEGAL: Make Guarantees Bulletproof Re Extensions
  • CBIS: What Community Bankers Should Know About Cryptocurrencies
  • Register Today for Early-Bird Pricing for CBAI's 43rd Annual Convention!
  • Principles for Understanding Your Info Systems Set for June 13
  • Keys to Survival in Fiduciary Administration in the Current Environment Set for June 29
  • Directors' Workshop Scheduled in Three Locations in June & July
  • Community Bankers School Scheduled for July 16-21


  • House Takes Up CHOICE Act Relief Bill This Week

    The House is scheduled to take up the Financial CHOICE Act (H.R. 10) regulatory relief bill this week. The House Rules Committee announced last week that members of the House had until last Friday to submit proposed amendments to House Financial Services Committee Chairman Jeb Hensarling’s (R-Texas) bill. The legislation is supported by CBAI and ICBA and includes reforms to regulations on mortgage lending, call report and data collection.

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    CBAI ACTION ALERT: Urge Illinois Congressional Delegation to Cosponsor CLEAR Act

    CBAI is calling on all Illinois community bankers to urge their members of Congress 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 2016 Convention in Kansas City, and in the Senate by Senators Jerry Moran (R-KS) and Jon Tester (D-MT). The House and Senate versions of the CLEAR Act differ slightly but both provide meaningful regulatory relief for community banks. Read More. Take Action Now!

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    Are you interested in minimizing risk, increasing peace of mind AND saving money? Then look no further than SHAZAM Secure. When you choose SHAZAM Secure for your annual automated clearing house (ACH) exam, you’ll receive all these benefits and much more! SHAZAM Secure’s high-performance security solutions also include risk, regulatory and IT exams; cybersecurity and technical security assessments; and crisis management assessments and training. Keep your institution running smoothly and check out SHAZAM Secure today!



    Fine on Fox Business: ICBA Gung-ho for Regulatory Relief

    ICBA President and CEO Cam Fine told the Fox Business Network that government regulations continue to restrict access to credit for borrowers despite rising credit scores. In an interview on Varney & Co., Fine said regulatory burdens leave only the most creditworthy borrowers with access to mortgage and small-business loans.

    “The judgment of local community bank CEOs has been largely removed from the credit-granting equation,” Fine said. “We are gung-ho on getting rid of all of these regulations that are impeding community bankers from making loans and extending credit to those most in need.” Watch the Interview.

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    REGULATORY UPDATE: FFIEC Releases Update to Cybersecurity Assessment Tool

    The FFIEC released an update to the Cybersecurity Assessment Tool (Assessment) on May 31, 2017. This update aligns the Assessment with prior changes the FFIEC made to its IT Examination Handbook by providing a revised mapping in Appendix A of the Assessment that matches updates made by the FFIEC in 2016 to the Information Security and Management booklet.

    The updated Assessment also provides additional response options, allowing financial institution management to include supplementary or complementary behaviors, practices and processes that represent current practices of the institution in supporting its cybersecurity activity assessment. Member agencies (FDIC, OCC, FRB and NCUA) developed the Assessment in 2015 to help financial institution management determine an institution's risk profile, inherent risks and cybersecurity preparedness. The Assessment provides a repeatable and measurable process that financial institution management may use to measure cybersecurity preparedness over time. See BankOnIT Blog.

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    CBAI Attends the FDIC Community Banking De Novo Outreach Meeting

    The Community Bankers Association of Illinois (CBAI) Vice President Federal Governmental Relations, David Schroeder, attended the Federal Deposit Insurance Corporation (FDIC) Community Banking De Novo Outreach Meeting in Chicago on May 31, 2017. Approximately 50 interested individuals attended this meeting, which was the fifth of six outreach meeting across the country, to learn about the various FDIC initiatives to encourage newly chartered (de novo) bank formation. Read More.

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    ICBA, CBAI and Other State Affiliates Support Lawsuit Against NCUA

    ICBA and a coalition of affiliated state community banking associations including CBAI filed a friend-of-the-court brief strongly supporting the American Bankers Association’s lawsuit challenging the National Credit Union Administration’s field-of-membership rule. The amicus brief shows community banks are united in their opposition to the NCUA’s unlawful attempt to drastically increase the powers of tax-exempt credit unions beyond their statutory limits.

    The NCUA’s October 2016 final rule significantly expands the service areas in which community credit unions can do business, rendering meaningless the statutory standard that limits these institutions to serving a well-defined local community, neighborhood or rural district.

    The lawsuit argues that the rule ignores statutory requirements on membership by concluding that combined statistical areas are presumptively proper fields of membership for community credit unions and that a “rural district” can include vast regions that in many instances include areas that are not rural. The brief from ICBA and its state affiliates says the agency’s deliberate violation of statutory restraints to enlarge credit unions’ geographic reach is part of its ongoing campaign to promote the credit union industry. It urges the court to grant ABA’s motion for summary judgment.

    As ICBA noted in a February 2016 comment letter to the NCUA, the agency’s actions erode any meaningful distinction between tax-exempt credit unions and taxpaying community banks, further undermining any justification for the credit union tax exemption. Read Release. Read Amicus Brief. Read ICBA Comment Letter.

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    CBAI and ICBA Support Bill Expanding Holding Company Relief

    CBAI and ICBA expressed strong support for legislation to raise the consolidated asset threshold under the Federal Reserve’s Small Bank Holding Company Policy Statement from $1 billion to $5 billion. Introduced by Senators Orrin Hatch (R-Utah), Angus King (I-Maine) and Bill Nelson (D-Florida), the Community Bank Relief Act (S. 1284) would allow more holding companies to raise capital, implementing a key provision of ICBA’s Plan for Prosperity.

    While the threshold was raised from $500 million to $1 billion in December 2014 following community bank advocacy, CBAI and ICBA have advocated that it should be significantly higher to recognize the larger average asset size of today’s community banks. Companion legislation introduced in the House would raise the asset threshold to $10 billion, as would the House version of the CLEAR Relief Act. Read ICBA Release.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    The Unemployment Rate fell by a tenth to 4.3%, but we’re all too familiar with the biggest reason for that; the Labor Force Participation Rate fell to 62.7% from 62.9%. The paltry addition of 138k to Non-Farm Payrolls continues the deceleration of job growth, the number of folks not-in-the-labor-force grew by 608k, the non-institutionalized civilian population grew by 179k, the civilian labor force fell by 429k, and the employment/population ratio dropped to 60% from 60.2%. But hey, this is the lowest Unemployment Rate since 2001, so happy days are here again! See Baker Market Update.

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    A Regional Breakdown of Where the Fed Sees the Economy

    The U.S. economy continued to grow at a steady, if sluggish, pace from early April through late May, according to the Federal Reserve’s latest survey of regional economic conditions. That slow pace also helped keep inflation in check, according to comments from the businesses polled by the central bank's 12 regional districts.

    The Chicago Fed Beige Book report noted that growth slowed to a modest pace. Employment, business spending, and manufacturing production grew at a moderate rate, while construction and real estate grew modestly and consumer spending decreased slightly. Prices rose modestly. Conditions were little changed in the financial and agricultural sectors.

    The St. Louis Fed Beige Book report indicated that economic activity has continued to increase at a modest pace, and contacts continue to hold a generally optimistic outlook for overall activity for the remainder of 2017. Reports from auto dealers, however, indicate slowing sales since the previous report; they expect this downward trend to continue into the third quarter. Read CNBC Report.

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    MidAmerica National Bank Selects CASH Insight™ to Manage Commercial Lending Risk

    After using the same financial spreading tool for more than a decade to support its commercial lending business, MidAmerica National Bank’s Senior Vice President of Risk Management, Tom Sandman, suddenly found himself in the market for a new solution. With the bank’s current spreading solution being phased out and with only six months to find a replacement, Sandman began talking to his peers and conducting online research to see what his options were.

    According to Sandman, MidAmerica’s financial spreading needs were threefold. He was searching for a software solution that would provide a consistent spread of customers’ financial statements; calculate cash flow in the standard Uniform Credit Analysis (UCA) format; and easily integrate data into a Word document.

    Sandman’s due diligence led him to Wolters Kluwer’s CASH Insight™ solution, a financial spreading tool that gives commercial lenders the ability to evaluate the financial capacity of prospective borrowers to improve accuracy and make better lending decisions. CASH Insight is one of nine modules available in the CASH Suite. Each module can be purchased and used independently to meet a financial institution’s specific requirements. Read More.

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    Community Bankers Unite - It's Auction Time Again!

    CBAI is excited to begin preparing for our Community BancPac’s 26th annual silent auction and 10th annual live auction. This night is always a fun-filled event and remains one of the highlights of CBAI’s convention. We hope to make this year’s auction a successful and memorable event, but we need your help! CBAI deeply appreciates the PAC donations many of you make each year. However, to continue representing the interests of community banks, we need greater participation for this important cause. There are two options for donations: an actual item (i.e. sports tickets, collectibles, sports memorabilia, electronics, condo/vacation get-a-ways, etc.) or a cash donation. Donated items may be transported to convention or mailed to CBAI for transport. The cash option will allow CBAI staff to purchase popular items for auction and credit your financial institution for the item donation. Be a SUPERHERO and please make a contribution to the auction! Donate Today!

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    10 Tips for Young Beginning Farmers

    When just starting out in farming, the process can be overwhelming. There are many details to keep track of and staying on top of everything can be tough. Here are a few tips for beginning farmers to manage their operation and become more effective. Read More.

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    CBAI LEGAL: Make Guarantees Bulletproof Re Extensions

    A First District Illinois Appellate Court decision constituted a tough lesson for a bank that lost its personal guaranty of corporate indebtedness. Read Most Recent CBAI LEGAL.

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    CBIS: What Community Bankers Should Know About Cryptocurrencies

    Do crypto currencies like bitcoin spell the doom of community banks? Certainly not under any rational gauge of the foreseeable future. Much as some of the world’s most prominent and lavishly wealthy technologists would like to pick you up in a self-driving drone, ferry you to the launch pad and fly you to Mars on a one-way ticket purchased with your virtual currency of choice, the reality is that the role of traditional currency, and the banking system, is safe from existential threat.

    But that does not mean that community bankers should dismiss the potential near-term impact of virtual currencies like bitcoin, or how alternative exchanges are developing, and what potential interface and risk even small financial institutions operating far from the silicon valley may face as more consumers and merchants use and accept virtual currencies as a form of payment. 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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    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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    Keys to Survival in Fiduciary Administration in the Current Environment Set for June 29

    Becky Kelly and Roger Pond discuss a variety of fiduciary issues in “Keys to Survival in Fiduciary Administration in the Current Environment” including: Board and Committee Responsibilities, Fiduciary Expertise, Account Acceptance and Asset Considerations, The Investment Policy Statement, Reg 9, Due Diligence and Managing Risk, and more. Pond and Kelly recently completed a Sheshunoff manual called Trust Department Risk Management - Preparing for an Exam.Both are active in teaching in the Accredited Trust Financial Advisor and Accredited Trust Operations Specialist designations offered through Campbell University and AccuTech University as well as the CTFA and other individually developed fiduciary training programs.Trust officers, associates, and managers as well as trust compliance and audit individuals would all benefit from attending this seminar.

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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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