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     A Bi-Weekly News Bulletin for CBAI Members                               June 10, 2015

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • CBAI Urges a Grace Period in TRID Implementation
  • CBAI Applauds Legislation to Break Up TBTF Banks
  • Record-Setting Fines Still Megabank Pocket Change
  • Taxpayer-funded Bailout Risk is Alive and Well
  • CBAI Emplores Congress to End Credit Union and Farm Credit Tax Subsidies
  • Fed Vice Chairman Fischer: “Bankers Should Be Punished for Financial Crimes”
  • Community Bankers School Set for July 12-17
  • Investment News From THE BAKER GROUP
  • USDA Boosts Fiscal Year 2015 Export Forecast
  • Countdown to .BANK: General Registration Starts on June 23rd
  • It's That Time of Year Again! Donate to the Community BancPac Auction Today!
  • KC Fed to Congress: Lenders Fear Intensifying Farmland Stress
  • Agencies Issue Joint Standards on Diversity Policies and Practices
  • New and FREE Quarterly Newspaper Ads Now Available!
  • CBIS Nicoud: "Safety Is Our First Concern in Risk Management"
  • Top Five Things Your Bank Can Do in 2015 to Prepare for Same Day ACH
  • CBAI Announces Location for 41st Annual Convention Golf Outing
  • CBAI LEGAL: SCOTUS Decides Caulkett Case in Favor of Junior Lienholder
  • Take This Week's CBAI Quick Poll
  • Trust Issues from A to Z To Be Held June 15
  • Relationship-Building for Universal Bankers Slated for June 16
  • Integrated Disclosures for Lenders and Processors Set for June 24-26


  • CBAI Urges a Grace Period in TRID Implementation

    June 3, 2015

    CBAI, in a recent letter to the Consumer Financial Protection Bureau, urged the CFPB to increase the likelihood of a successful implementation of the TILA-RESPA Integrated Disclosure (TRID) by allowing for a period of restrained enforcement and liability (a grace period) for community banks attempting to comply in good faith with the new regulations between the August 1st effective date through year-end 2015.

    Given the complex nature of integrating the forms and a lack of live testing, unintended consequences can undoubtedly be expected which will complicate the home purchase and residential mortgage finance process. In addition, a period of restraint, when combined with a good faith attempt to comply, is not without precedent. CBAI believes the use of a grace period in implementing the TRID is necessary and will be beneficial to consumers and community banks. Read CBAI Letter.

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    CBAI Applauds Legislation to Break Up TBTF Banks

    June 1, 2015

    CBAI expressed thanks in a recent letter to Senator Bernie Sanders (I-VT) for introducing legislation which requires breaking up the nation’s mega banks (S. 1206 – The Too Big to Fail, Too Big to Exist Act). Too-big-to-fail remains one of CBAI’s top Federal Policy Priorities. In a complete statement on this important issue, CBAI concludes that these banks have repeatedly proven, at an incredible cost to community banks and their communities, our financial system, the economy, and American taxpayers, that they are clearly too-big-to-behave and must be downsized. Read CBAI Letter.

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    Record-Setting Fines Still Megabank Pocket Change

    The recent guilty pleas and fines against five of the world’s largest financial institutions demonstrate not that regulators are finally cracking down on megabank crime, but that it’s still business as usual on Wall Street, ICBA President and CEO Cam Fine recently wrote in a new blog post.

    Fine noted that no one who conspired to manipulate interest rates and foreign currency exchange markets was held legally responsible. Further, the nearly $6 billion in fines don’t register much of a blip on the balance sheets of institutions with a combined $7.9 trillion in assets.

    “For community bankers, this just doesn’t compute,” Fine stated. “In our neck of the financial industry, no one is above the law.” Read Fine’s Blog Post.

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    Taxpayer-funded Bailout Risk is Alive and Well

    Despite assertions from regulators that the too-big-to-fail problem has been solved by the advent of living wills and orderly liquidation, banking consultant J. V. Rizzi strongly disagrees. An instructor at DePaul University in Chicago, Rizzi emphasized in a recent article that living wills, which he calls fantasy documents, essentially compel regulators to rely on the honor system with the mega banks. He added that, due to the increasing concentration of assets in the financial system and the complex interconnectedness of the mega banks, another crisis will trigger government intervention to save the system.

    Rizzi recommends implementing a structural solution to reduce the size of the mega banks because hubris and magical thinking will not make the problem disappear. CBAI wholeheartedly concurs. Read Rizzi Article.

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    CBAI Emplores Congress to End Credit Union and Farm Credit Tax Subsidies

    May 28, 2015

    In letters to the Illinois members of the U.S. House Ways and Means Committee (Congressmen Danny Davis, Robert Dold, and Peter Roskam), CBAI asked for their support to end the discrimination against community banks from the unwarranted and harmful tax subsidies given to credit unions and the Farm Credit System.

    Credit unions and the FCS have long-since strayed from their original statutory missions. The number of credit unions exceeding a billion dollars in assets has grown from eight in 1991 to 229 today. They are larger than 89% of all banks in the country and indistinguishable from tax-paying community banks.The Farm Credit System is now a $282 billion (asset) financial institution, roughly equivalent to the country's 13th largest bank, with significant systemic and bailout risk, and is the only GSE to compete (versus working cooperatively) with community banks.

    An end to these highly discriminatory federal tax subsidies will help level the playing field between credit unions, the FCS and tax-paying community banks. Read CBAI Letter.

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    Fed Vice Chairman Fischer: “Bankers Should Be Punished for Financial Crimes”

    Stanley Fischer, Vice Chairman of the Federal Reserve System, stated recently that bankers who have engaged in wrongdoing should be punished. He specifically referred to the Libor and foreign-exchange scandals among the mega banks and the fact that fines alone are an insufficient deterrent to repeat offenders. See Bloomberg Article.

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    Community Bankers School Set for July 12-17

    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 2015 session opens Sunday, July 12, and concludes Friday, July 17. The deadline to enroll is July 1, 2015, so register today!

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    Investment News From THE BAKER GROUP

    Baker Market Update

    Positive aspects of last week’s financial news included the biggest job growth number of the year, new jobs, and a rise in compensation. See Baker Market Update.

    Economic Brief

    The U.S. economy created 280K new jobs last month, according to the Labor Department. This is notably higher than the consensus estimate. See Baker Economic Brief.

    MBS Market Strategies

    Speeds fell for the second month in a row in May, but to a much less severe degree than the April drop. Fannie 30 years fell 0.6 CPR and Freddie 30 years fell 0.5 CPR. Conventional 15 years were basically flat. See MBS Market Strategies.

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    USDA Boosts Fiscal Year 2015 Export Forecast

    The U. S. Department of Agriculture recently increased its 2015 export forecasts, predicting that soybean exports could reach a record 1.8 billion bushels or 9.3 percent more than last year’s record. The USDA also boosted its corn export projections by 75 million bushels for 2015-16. Read USDA Report.

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    Countdown to .BANK: General Registration Starts on June 23rd

    The general availability registration period for the new and more secure Internet domain for the banking community, .BANK, starts on June 23. ICBA, in an alliance with EnCirca, is offering several resources on the .BANK registration process on ICBA’s .BANK informational website. The site features a .BANK flyer and policy documents, a pre-screening sign-up form, informational webinars and additional resources on how to secure a .BANK domain. Learn More.

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    It's That Time of Year Again! Donate to the Community BancPac Auction Today!

    CBAI is excited to begin preparations for Community BancPac’s 24th Annual Silent Auction and 8th Annual Live Auction. Thanks to many community bankers, this night is always a fun-filled event and 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! See Details.

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    KC Fed to Congress: Lenders Fear Intensifying Farmland Stress

    The U. S. House Subcommittee on General Farm Commodities and Risk Management met recently to review the financial health of farm country amid significantly lower commodity prices and declining net farm income. The subcommittee noted that the economic slowdown affects not only farmers and ranchers but also farm equipment dealers, agricultural input suppliers, Main Street businesses and local lenders. The Federal Reserve Bank of Kansas City’s Nathan Kauffman told the panel that there is growing concern among agricultural lenders that the level of financial stress in the sector may intensify over the next six to 12 months. Read FRB Testimony.

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    Agencies Issue Joint Standards on Diversity Policies and Practices

    Federal financial agencies issued a final policy statement establishing joint standards for assessing regulated institutions’ diversity policies and practices. The final standards, which are voluntary, provide a framework for policies and practices covering areas such as organizational commitment to diversity, workforce and employment practices, and supplier diversity.

    The policy statement responds to a 2014 joint letter from a coalition of banking groups including ICBA and CBAI that urged regulators to avoid a one-size-fits-all approach to diversity standards. The policy statement says the agencies focused primarily on institutions with more than 100 employees and encourages entities to use the standards in a manner appropriate to their unique characteristics.

    The interagency policy statement is effective upon publication in the Federal Register. Additionally, the agencies are asking for public comments on the information-collection aspects of the final joint standards. Read Joint Letter. Read Agency Policy Statement.

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    New and FREE Quarterly Newspaper Ads Now Available!

    A free CBAI member benefit, free quarterly newspaper ads have been made available to CBAI members since 2009. To order, contact Andrea Cusick, SVP Communications, 800/736-2224 or cbaicom@cbai.com. See Ad Sample.

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    CBIS Nicoud: "Safety Is Our First Concern in Risk Management"

    Flash flooding that decimated areas near Houston on Memorial Day weekend captured national headlines and served as an important reminder of our guiding principal at CBIS Nicoud.

    As a risk-management partner to Midwestern community bankers, our goal to consult, advise and distribute the most efficient insurance solutions at full capacity is driven by this reality: Insurance considerations in our business are secondary; peoples' safety is foremost. Read More.

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    Top Five Things Your Bank Can Do in 2015 to Prepare for Same Day ACH

    NACHA membership passed Same Day ACH Rules to become effective in September 2016. These Rules changes will have a huge impact on all financial institutions across the country in the upcoming years. Learn More.

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    CBAI Announces Location for 41st Annual Convention Golf Outing

    CBAI’s golf tournament at the 41st Annual Convention and Expo will be held at The Hermitage Golf Club in Nashville, Tennessee. Since 1986, The Hermitage has established itself as the best in Tennessee public golf. With two 18-hole courses, it provides a quality golf experience and welcomes golfers of all levels. The Hermitage Golf Club is proud to be a Certified Audubon Cooperative Sanctuary by Audubon International. The course’s many accolades include being named the number one public golf course in the state by both Golf Digest and PGA.com. Scheduled for September 17-19, 2015, at the Omni Hotel in Nashville, CBAI’s Annual Convention and Expo is a can’t miss for community bankers. Register by June 30, 2015, to receive early-bird pricing! See The Hermitage Golf Club Details. Register for CBAI's Convention Here.

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    CBAI LEGAL: SCOTUS Decides Caulkett Case in Favor of Junior Lienholder

    On June 1, a unanimous United States Supreme Court issued its opinion in the case of Bank of America, N.A. vs. Caulkett . In December of last year, the CBAI Board of Directors authorized the CBAI Associate Member law firm SmithAmundsen LLC to file an amicus brief on behalf of CBAI to represent the interests of community banks throughout Illinois that hold junior mortgages. The Supreme Court’s decision was a victory for CBAI member banks. Details on Caulkett Decision.

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    Take This Week’s CBAI Quick Poll

    Take this week’s Quick Poll on whether or not your bank has considered issuing debit cards in-house with an instant issue device. Click Here to view results of previous polls.

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    Trust Issues from A to Z To Be Held June 15

    This seminar covers a variety of topics. First, it discusses nationwide new cases on the litigation front and how those could affect your business. Next, a Regulatory Update involving areas of concern for the OCC, Fed and State are addressed. One regulatory issue in particular is the oversight required with unique (miscellaneous) assets. Also discussed are the regulatory/compliance expectations for a Reg. 9 Review. Additionally, the speakers ask the group to participate in a discussion involving the new IRS requirement of unbundling fees to give participants an idea of what is being done in Illinois. Finally, document review case studies that help pinpoint what you should be doing by showing some disasters that weren't done properly are discussed. Wealth managers, investment officers, trust officers, trust assistants, financial planners, trust tax specialists, private bankers, trust administrators, as well as audit and compliance officers would benefit from attending this seminar. Leading this seminar are Roger A. Pond and Becky T. Kelly, partners in The Fiduciary Education Center, LLC.

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    Relationship-Building for Universal Bankers Slated for June 16

    As we have seen over the years, branch volumes continue to decline as new technologies enable customers to conduct their banking using other retail banking channels. This change has attributed to the labor cost per teller transaction to increase by 45% over the past 10 years. One of the strategies many banks have implemented is using universal tellers. A universal teller/ banker is typically defined as an employee who can do anything on the teller or customer-services side – a champion of the retail branch. What key skills does it take to become a universal teller/banker? Whether your bank is exploring using universal tellers/bankers, the same skills and tools are key for today's frontline team. This training is designed to provide our retail frontline with useful, “real-world” tools, techniques, and tips. Tellers, head tellers, the retail banking team, and those responsible for developing the retail banking team would all benefit from this seminar. Leading this seminar is 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.

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    Integrated Disclosures for Lenders and Processors Set for June 24-26

    Offered in three locations statewide, this seminar focuses on all aspects of the new Integrated Disclosure forms. The Integrated Disclosures, including the Loan Estimate (combination of early TIL and GFE) and the Closing Disclosure (combination of final TIL and HUD) have unique issues, including the rules regarding the timing of delivery, and of course, the completion of the forms. The new forms are complex, and require a significant skill set to do so successfully. There are more than 150 separate instructions regarding the completion of these forms. This, combined with the new rules regarding delivery, will make this process more difficult for the bank. There will need to be decisions made prior to the mandatory August 1, 2015 start date. For instance – since the Closing Disclosure is now one document, who completes it? Will the bank complete the HUD, or will the title company complete the TIL? And what information needs to be collected when, as the Closing Disclosure must be delivered as early as a week before closing? The manual for this seminar is extensive, and includes all of the regulatory text and commentary, instructions, and other useful information to assist the participants in the completion of these documents. This course is designed specifically for lenders and processors. However, senior management, auditors, and others involved in the mortgage loan origination process of the bank will gain useful knowledge from this presentation. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance with Young & Associates, Inc., Kent, OH.

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