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 13, 2012 Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • CBAI: Easy Decision to Side with Community Banks
  • Burkett Joins CBAI as VP of Member Services
  • No More Welfare For (Wall Street) Banks
  • CBAI Member Named to Special Supreme Court Committee on Foreclosures
  • Call Senators Durbin and Kirk to Protect Crop Insurance in the Farm Bill
  • State Associations Call for Extending Deposit Coverage
  • July 1 Effective Date for New Repossession Licensing Law
  • ICBA: Credit Union Liquidation Speaks Volumes
  • CFPB Releases Enforcement Rules
  • USDA Seeks Applications for Grants to Help Rural Businesses Create Jobs
  • Fed Releases Basel III Summary for Community Banks
  • CBAI FedPac Needs Your Support - Let’s Play Ball!
  • CBAI Foundation Scholarship Winners Unveiled
  • The Baker Group Springfield Seminar Set for August 6
  • Baker Market Update
  • Guidance for Evaluating Capital Planning and Adequacy
  • 25th Community Bankers School Set for July 15-20
  • Thinking Outside the Checkbox: Sleek New Package Ushers In New Era of Check Packaging and Storage
  • Credit Risk Management Institute Scheduled for June 26-27
  • Advanced Compliance Institute Set for June 27-28

  • CBAI: Easy Decision to Side with Community Banks

    Last week the Illinois Bankers Association publicly criticized CBAI, the Illinois Credit Union League, and the Illinois League of Financial Institutions for supporting a bill that would have been universally beneficial for all members of those three associations. Why? Because the bill also included additional foreclosure fees for banks larger than $10 billion in assets. SB 3522 contained provisions to 1) expedite the process for judicial foreclosure of vacant and abandoned property, 2) eliminate a threat to the validity of mortgages in bankruptcy cases, and 3) exempt banks under $10 billion in assets from additional fees relating to residential foreclosures.

    Despite these positive provisions for community banks, the IBA sided with the mega banks (Bank of America, JP Morgan Chase, Citibank and others) in opposition to SB 3522 by contending that it discriminated against large banks. Only five banks chartered in Illinois exceed $10 billion in assets. Vigorous lobbying in the session’s final hours resulted in the bill passing the House with bi-partisan support only to be stalled in the Senate when the Spring Session adjournment deadline arrived at midnight on May 31. As a result, these issues remain unresolved, and a golden opportunity was squandered. Vacant and abandoned properties constitute a serious social problem, and the issue will likely return later this year. CBAI will be fully engaged in developing a solution that is in the best interests of community banks.
    See CBAI’s End of Session Report.

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    Burkett Joins CBAI as VP of Member Services

    Springfield, Illinois (June 13, 2012) - The Community Bankers Association of Illinois (CBAI) is pleased announced that Andy Burkett has joined Community BancService Corporation, Inc. (CBSC) as Vice President of Member Services for Downstate Illinois. Burkett comes to the Association with more than 30 years of experience in community banking and bank data processing.
    Read Release.

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    No More Welfare For (Wall Street) Banks
    The FDIC and the taxpayer are the underwriters of too much private risk taking.


    I have a proposal to strengthen the U.S. financial system by simplifying its structure and making its institutions more accountable for their mistakes. Put simply, my proposal would help prevent another 2008-style crisis by prohibiting banking organizations from conducting broker-dealer or other trading activities and by reforming money-market funds and the market for short-term collateralized loans (repurchase agreements, or repos). In other words, Glass-Steagall for today.

    Those opposed to taking these actions generally focus on two themes. First, they say that if Glass-Steagall—enacted in 1933 to separate commercial and investment banking—had been in place, the crisis still would have occurred.
    Read More.

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    CBAI Member Named to Special Supreme Court Committee on Foreclosures

    William Smith, General Counsel of HomeStar Bank in Manteno, a CBAI member institution, has been named to the Special Supreme Court Committee on Mortgage Foreclosures. The Committee held a public hearing in Chicago on June 8th on proposed recommendations for improving the loss mitigation process for mortgage foreclosure proceedings in Illinois.
    Read More.

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    Call Senators Durbin and Kirk to Protect Crop Insurance in the Farm Bill

    The Senate is debating the 2012 farm bill this week. Included in the approximately 100 amendments there are several that could harm community banks by reducing crop insurance and funding. There is also an amendment that would limit farmers’ access to USDA guaranteed farm real estate loans through the use of term limits.

    These proposed amendments would likely have several unintended consequences for ag bankers and their farm customers. Making crop insurance protection unaffordable would cause producers to reduce participation, resulting in a higher risk pool of insured producers, higher loss ratios over time, and increased premium rates for those who remain in the program.

    click here for talking points. We are encouraging all Illinois community bankers (not just our ag bankers) to call Senator Durbin’s office at 202-224-2152 and Senator Kirk’s office at 202-224-2854 and ask them to oppose the harmful amendments to the farm bill. Please call today. Thank you!

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    State Associations Call for Extending Deposit Coverage

    A coalition of 32 state community-banking associations joined the call for Congress to extend full coverage of noninterest-bearing transaction accounts before it expires at year-end. In a
    joint letter to members of the House and Senate, the community banking organizations wrote that failing to extend the coverage would harm small businesses and disrupt the nation’s financial and economic recovery.

    “Because the global banking system and the economic recovery remain fragile, expiration of full insurance coverage for transaction accounts carries the risk of abrupt dislocation of funds and other unintended consequences for the financial sector, particularly community banks,” the associations wrote.

    Community bankers can make their voices heard on this much-needed extension with a customizable letter to Congress to urge an extension and a custom op-ed to raise awareness of the issue. Read ICBA Release. Contact Congress Today. Access Custom Op-Ed.

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    July 1 Effective Date for New Repossession Licensing Law

    A new Illinois law and corresponding rules of the Illinois Commerce Commission (“ICC”) heighten licensing requirements and regulation of persons and firms that engage in the repossession business. Effective July 1, 2012, it is illegal for a repo agency or its employee to repossess personal property, including a vehicle, unless the agency and its employees are licensed under the new Collateral Recovery Act (Public Act 97-576). Violators may be subject to both fines levied by the ICC and criminal charges. The new law does not apply to a financial institution that uses its own employee to conduct a “self help” repossession.

    The ICC will maintain a roster listing the names and addresses of licensees.

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    ICBA: Credit Union Liquidation Speaks Volumes

    Friday’s liquidation of Telesis Community Credit Union shows the dangers of allowing tax-exempt credit unions to expand their member business lending, ICBA said in a statement. Regulators placed the $301 million-asset credit union into liquidation after determining it was insolvent and had no prospect for restoring viable operations on its own. The National Credit Union Administration was appointed liquidating agent.

    “The credit union’s risky loans, which included a failed Orlando, FL, shopping center, led directly to its failure and liquidation,” ICBA said in the statement. “This should be a lesson to those advocating H.R. 1418/S. 2231, which would further expand credit unions’ business-lending authority.”
    Read ICBA Statement. Read More on Liquidation.

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    CFPB Releases Enforcement Rules

    Consumer Financial Protection Bureau released three final rules and one interim final rule on procedures and practices related to enforcing federal consumer financial laws. The three final rules deal with the agency’s investigative and adjudicative processes as well as interactions with state law enforcement authorities. The interim final rule implements the Equal Access to Justice Act, which provides that certain prevailing parties in administrative proceedings can recover attorney fees and expenses.

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    USDA Seeks Applications for Grants to Help Rural Businesses Create Jobs

    Agriculture Secretary Tom Vilsack announced this week that USDA is accepting applications for grants to help promote sustainable economic development and job creation in rural communities.

    "Cooperative enterprises often lead economic growth and job creation in rural areas," Vilsack said. "USDA is offering grants to help organizations start cooperatives, expand existing ones or help develop business opportunities in rural areas."

    USDA is offering Rural Cooperative Development Grants (RCDG) to non-profit corporations and institutions of higher education. The grants also may be used to conduct feasibility studies, create and implement business plans, and help businesses develop new markets for their products and services.
    See News Release.

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    Fed Releases Basel III Summary for Community Banks

    A summary of the Basel III capital rules for community banks is included in the Federal Reserve’s proposed rule. The agency said the addendum presents a summary of the proposed rule that is more relevant for banking organizations that are not subject to the market risk rule or the advanced approaches capital rule. The summary says that it is designed to help community banks navigate the proposed rule, though the agencies expect and encourage all institutions to review the proposed rule in its entirety.
    Read Summary.

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    CBAI FedPac Needs Your Support - Let’s Play Ball!

    Baseball season has begun and so has CBAI FedPac’s Fundraising season.
    Where: Busch Stadium in St. Louis
    When: Thursday, July 26, 2012 at 12:45 p.m.
    Who: St. Louis Cardinals vs. Los Angeles Dodgers
    Why: To keep community banking in the game
    How: Contact Jessie Schmidt today at 800/736-2224 to secure your tickets

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    CBAI Foundation Scholarship Winners Unveiled

    A student from Albion took the top prize of $1,000 per year for up to four years of education. To see the names and sponsoring banks of the other high-school seniors who won $1,000 scholarships and non-monetary honorable mentions.
    Read More.

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    The Baker Group Springfield Seminar Set for August 6

    All In-Depth Program Financial institutions managers will come away with sound ideas for using the bond portfolio as an effective tool in managing liquidity, cash flows, and interest rate risk. Attendees will also gain insight into the remarkable changes that the banking industry is experiencing in the current market environment. Topics include:

      Current Economic Conditions and Fed Policy Outlook
      Pre-Exam Interest Rate Risk Checklist
    Don't delay,
    click here to register! Registration deadline - August 1, 2012.

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    Baker Market Update

    Contrary to what one may have seen in other reports, this week’s biggest rally did not take place on Wall Street. Nope. Not by a long shot; a long, three-point shot. That distinction belongs to Oklahoma City’s Thunder basketball team with their defeat of the venerable San Antonio Spurs. Their come-from-behind victory on Wednesday night earned them the title of Western Conference Champions and secured them a spot in the NBA Championship. Thunder Up!
    Read More.

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    25th Community Bankers School Set for July 15-20

    The Community Bankers School, which consists of two, one-week sessions over a two-year period at Illinois Wesleyan University in Bloomington, prepares students to immediately contribute to the overall success of their banks, and imparts the knowledge necessary to get ahead. Topics covered during this intense week for Class I participants includes 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. Students gain solid experience for broader responsibilities and greater effectiveness, as well as insight into a community bank’s overall operations responsibilities. The deadline to enroll is July 1, 2012. For more information or to register, please
    click here.

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    Guidance for Evaluating Capital Planning and Adequacy

    bulletin summarizes the Office of the Comptroller of the Currency’s (OCC) expectations for national banks and federal savings associations (collectively, banks) regarding capital adequacy and provides guidance on capital planning. This bulletin also discusses the OCC’s processes for evaluating a bank’s capital planning and adequacy, and, as appropriate, the various actions the OCC may take to ensure a bank’s capital planning process and capital level remain adequate for its complexity and overall risks. It also rescinds Office of Thrift Supervision CEO Memorandum 380, “Capital Management,” March 15, 2011.

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    Thinking Outside the Checkbox: Sleek New Package Ushers In New Era of Check Packaging and Storage

    Sometimes an old way of doing things is so ingrained that we can't conceive of another method. That is, until an innovation comes along, so intuitive, that it's hard to believe we ever functioned without it.

    Consider the tried-and-true checkbox: It's a decades-old packaging system to which your account holders scarcely give a second thought. Yet check packaging is undergoing a revolutionary sea change. Just as you can't imagine buying a television without a remote, it won't be long before your account holders can't imagine receiving their checks without Harland Clarke’s CheckFolio™.
    More Information.

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    Credit Risk Management Institute Scheduled for June 26-27

    Many banks which historically enjoyed good credit performance are now confronted with significant credit problems. The impact of the economic downturn and other external factors has been dramatic. In addition, we have discovered that much of what we thought was good lending was not! What should we do now going forward that could minimize the risk in the loan portfolio? What should we expect to hear from regulators? This
    two-day program provides tools and best practices to help you and others better predict future credit performance while minimizing your loan portfolio risk. Topics covered on day one include effective credit administration; well-defined credit culture; importance of credit policy; hiring and training the right people; credit underwriting and risk assessment; characteristics of an effective credit committee; and utilizing credit risk management to identify risk in the credit portfolio. Day two addresses effective loan portfolio management; calculating and maintaining the ALLL; determining when a loan should be a TDR; prudent workout strategies in today’s environment; and review of regulatory guidance in the appraisal management process. Leading this institute are Jeffery Johnson, president and founder, and David Sawyer, both of Bankers Insight Group, Atlanta, Georgia.

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    Advanced Compliance Institute Set for June 27-28

    The school is designed for the experienced compliance officers and others who have a good working knowledge of the federal compliance regulations and who want to upgrade their skills in the detection and diagnosis of compliance issues, as well as their ability to influence others to solve compliance problems facing the bank. This course does not discuss individual regulations, but focuses on compliance management. This
    two-day institute trains attendees to recognize and assess regulatory problems facing their banks and take the next step to resolve these problems. Bankers learn how to develop process models, assess compliance risk, determine weaknesses in controls, create controls to prevent and detect problems, manage a compliance monitoring program, and influence others to implement solutions. Leading this institute is Bill Elliott, senior consultant and manager of compliance with Young & Associates, Inc., Kent, OH.

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    ACT Appraisal




    July 15-20, Illinois Wesleyan University, Bloomington

    CBAI FedPac Cardinals-Dodgers Ballgame Fundraiser
    July 26, St. Louis, MO
    Contact Jessica Schmidt, or 800/736-2224 for more information.

    Finer Points Blog





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