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 15, 2011 Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • CBAI Urges CFPB to Exempt Community Banks From New Escrow Requirements
  • FDIC Offers Regulatory Guidance to Banks in Flood-Affected Illinois Counties
  • June 30 Deadline Looms for S.A.F.E. Act Registration
  • Illinois Small Business Tax Credit Expires June 30,2011
  • Register for CBAI’s Convention by June 30 for a Chance to Win Prizes!
  • Community Bankers School Scheduled for July 10-15
  • Second Breach-Related Suit Filed Against Michaels
  • State Treasurer Sponsors Financial Literacy for Women Seminar
  • Baker Market Update
  • ICBA Disappointed in Senate Interchange Vote
  • Bankers Hope to Make Lemonade From Senate Swipe Fee Vote
  • Solutions for Generating Income Despite Regulatory Headwinds: Part 3 of 3
  • BancVue Executives Named Entrepreneurs of the Year
  • Is Your Bank Getting the Lowest Price for Electricity?
  • Help CBAI’s Foundation Build a Pyramid!
  • New Tool Helps Estimate Derivatives Collateral
  • Agencies Seek Comment on Stress Testing Guidance
  • Take 15 Minutes for the Chance to Win Cash
  • Identity Fraud Report
  • Auditing Operations Compliance Scheduled for June 20
  • Appraisal Evaluation Guidance Update Scheduled for June 21 & 22

  • CBAI Urges CFPB to Exempt Community Banks From New Escrow Requirements

    CBAI submitted a comment letter to the Consumer Financial Protection Bureau urging the CFPB to exempt all community banks that hold first mortgage residential loans in their portfolios from escrow account requirements.

    Under a section of TILA which was added to the Dodd Frank Act the Federal Reserve was able to exempt escrow accounts for loans which met certain requirements. The Fed provided for exemptions, but the recommended exemptions were too restrictive. The CFPB (not the Fed) will implement the escrow account requirements when the new Bureau begins operating in July. Our letter urges the CFPB to expand the exemptions to keep community banks lending in their communities.
    Read CBAI's Comment Letter.

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    FDIC Offers Regulatory Guidance to Banks in Flood-Affected Illinois Counties

    On June 8th, one day after a federal disaster area declaration, the FDIC issued Financial Institution Letter 43-2011, offering regulatory relief opportunities and guidance for banks in fourteen southern Illinois counties that have suffered, and the customers of which have suffered, business interruption and financial distress related to storms and flooding.

    The counties covered by the FDIC’s FIL-43-2011 are Alexander, Franklin, Gallatin, Hardin, Jackson, Lawrence, Massac, Perry, Pope, Pulaski, Randolph, Saline, White and Williamson.

    The relief and guidance relates to accommodating distressed borrowers, dealing with negatively impacted municipal securities, receiving extensions on regulatory reporting and publication deadlines, providing for consumer waiver of the Regulation Z three-day right of rescission when the consumer faces a “bona fide personal financial emergency,” and the opening of temporary banking or branch facilities. A copy of FIL-43-2011 can be obtained electronically by
    clicking here or by contacting CBAI General Counsel Jerry Cavanaugh by phone (1-800-736-2224 from within Illinois) or e-mail (

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    June 30 Deadline Looms for S.A.F.E. Act Registration

    The federal S.A.F.E. Act regulations require that bank-employed mortgage lenders be registered with the Nationwide Registry and have secured their “unique identifier” number with the Registry by July 29, 2011.

    To comply with mortgage-related federal regulations, banks first need to register with the Nationwide Mortgage Licensing System (NMLS). From there, each mortgage load originator submits personal information online, such as name, address, finger prints, date of birth, etc., which are used to conduct a criminal background check.

    The S.A.F.E. Act prohibits licensing of lenders that have at any time been convicted of a felony involving fraud, money laundering or breach of trust.

    Once the background check is cleared, lenders are assigned an identification number in the NMLS system, and the registration is complete.

    Those S.A.F.E. Act regulations specifically require that the mortgage loan originator must disclose his or her unique identifier number to a consumer (1) upon request; (2) before acting as a mortgage loan originator; and (3) through the loan originator’s initial written communication with a consumer, whether on paper or electronically.

    In response to CBAI’s request for clarification, Federal Reserve staff explained that written communications described in (3) above are intended to cover communications by a mortgage loan originator with his or her particular customer(s), and not general promotional literature that the bank makes available for general distribution to the public. The Federal Reserve also concluded that although the regulation “does not require institutions to include the unique identifier on loan program descriptions, advertisements, business cards, stationery, notepads, and other similar materials, institutions are not prohibited from doing so.”

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    Illinois Small Business Tax Credit Expires June 30,2011

    Manuel Flores, Director, Division of Banking, reminds bankers that Illinois small businesses have until June 30 to take advantage of a $2500 tax credit against withholding taxes. Small businesses with 50 or fewer employees may be eligible for the credit for any position they create between July 1, 2010 and July 30, 2011. The registration and information site is at

    “The success of small businesses and workers is vital to Illinois’ economic recovery along with helping you to grow your business enterprise and facilitate job creation” said Flores. He added, “If you have any questions or need assistance, please email your contact information to Leslie Fields, Deputy Director, Division of Banking, at and a member of my staff will contact you immediately.”

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    Register for CBAI’s Convention by June 30 for a Chance to Win Prizes!

    Register to attend
    CBAI’s 37th Annual Convention and Expo by June 30, 2011, and be eligible to win valuable prizes, including overnight stays at luxurious Midwest hotels. Scheduled for September 22-24, 2011, at the Hyatt Regency and Frontier Airlines Center in Milwaukee, WI, this year’s convention features timely topics, expert speakers, countless networking opportunities, and fun activities. You won’t want to miss this year’s convention, “Community Banking: Fueled by Loyalty.”

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    Community Bankers School Scheduled for July 10-15

    CBAI is pleased to offer
    The Community Bankers School this July. The Community Bankers School (CBS), which consists of two, one-week sessions over a two-year period at Illinois Wesleyan University in Bloomington, allows participants to immediately contribute to the overall success of your bank, and provides them the knowledge necessary to get ahead. CBS features a nationally recognized faculty, an updated curriculum, and timely topics. Topics covered during this intense week for Class I participants include compliance, accounting, deposit and loan documentation, lending, 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, and networking opportunities with peers, instructors, and senior bankers. Participants gain a background and experience for broader responsibilities and greater effectiveness, as well as insight into a community bank’s overall management responsibilities.

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    Second Breach-Related Suit Filed Against Michaels

    second federal suit has been filed against Texas-based crafts chain Michaels for a point-of-sale skimming attack that affected countless customer accounts.

    In May, after Michaels announced to customers that POS terminals at stores in at least 20 U.S. states had been affected by a POS swapping scheme, Chicago resident Brandi Ramundo filed a federal suit against the crafts retailer, claiming it should have done more to protect its customers' cards from breach and compromise.

    The most recent suit, a five-count class-action suit filed by May Allen of Chicago suburb Libertyville, Ill., takes a different turn, claiming Michaels took too long to notify customers of the breach. In fact, the suite alleges some customers were never directly notified at all by Michaels. Read More.

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    State Treasurer Sponsors Financial Literacy for Women Seminar

    Entitled “Smart Women Smart Money,” the seminar is being held in Springfield June 22nd and is free to the public. Please pass the information along to your female customers.
    Sign Up Now.

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    Baker Market Update

    In reviewing the week that was, it’s difficult to determine who traveled the rockier road; Anthony Weiner or the American economy.
    Read More.

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    ICBA Disappointed in Senate Interchange Vote

    ICBA announced that it is disappointed that the Senate voted down an ICBA-advocated amendment to delay and study the Federal Reserve’s proposed rule on debit card interchange. The amendment, sponsored by Sens. Jon Tester (D-Mont.) and Bob Corker (R-Tenn.), failed on a vote of 54-45.

    “ICBA is extremely disappointed with the Senate’s failure to pass critical debit interchange legislation, which would have protected the pockets of consumers and Main Street America,” the association said in a statement. “ICBA will continue to work all avenues to address the flawed debit interchange law.”

    ICBA has repeatedly told policymakers that an exemption from the Fed rule for community banks with less than $10 billion in assets will not work in the market and that the interchange plan will lead to higher costs and fewer choices for consumers. The association thanks all those who have contacted their senators on this amendment.
    Read ICBA Release. Read Roll Call Vote.

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    Bankers Hope to Make Lemonade From Senate Swipe Fee Vote

    Bankers lost the Senate fight over interchange fees, but they are hoping the vote will help convince the Federal Reserve Board to raise its proposed 12-cent cap.

    A measure by Sen. Jon Tester, D-Mont., to delay the debit interchange rule garnered 54 votes — six shy of the 60 necessary — but still sends a strong signal to the central bank that its December proposal was overly harsh. The banking industry is using the vote tally as a new lobbying tactic against the Fed, noting that a majority of the Senate wants the central bank to revamp its approach.

    Industry estimates have suggested the cap could be raised as high as 20 cents per transaction. It is a significant improvement from a mandated 12-cent cap, but would still be far short of the industry's average charge of 44 cents.
    Read More.

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    Solutions for Generating Income Despite Regulatory Headwinds:
    Part 3 of 3

    Recent regulatory changes, combined with ongoing economic factors, are taking a toll on financial institutions’ income statements. Noninterest income has decreased due to the impact of Regulation E on overdraft income, and a further reduction of noninterest income is expected due to the looming effect of the Durbin Amendment on interchange income. In fact, according to an October 2010 webinar report from the Independent Community Bankers of America, more than 80 percent of financial institutions expect Regulation E to impact their overdraft revenue by 5 to 20 percent.

    Opportunity Financial institutions face an intensifying battle to grow net income as some traditional sources of revenue wane, making a multipronged approach that includes solutions for both growing income and decreasing expenses necessary for success. Part 1 of this Strategy Update series discussed ways to grow noninterest income. Part 2 featured recommendations for growing interest income. And this Strategy Update focuses on ways to decrease expenses.
    Part 3 of 3.

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    BancVue Executives Named Entrepreneurs of the Year

    BancVue, the leading provider of innovative products, dynamic marketing, and data-driven consulting solutions to nearly 1,300 community banks and credit unions around the country, yesterday announced the firm’s top executives, Chairman Don Shafer and CEO Gabe Krajicek, have received the Ernst & Young Entrepreneur Of The Year 2011 Central Texas Award.

    The award recognizes outstanding entrepreneurs who have demonstrated excellence and extraordinary success in such areas as innovation, financial performance, and personal commitment to their businesses and communities.

    Mr. Shafer and Mr. Krajicek were among a group of finalists selected by an independent judging panel made up of previous winners of the award, leading CEOs, and other regional business and community leaders. The two BancVue executives were announced as the region’s outstanding entrepreneurs at a gala event on June 9, 2011 at the Hilton Downtown Austin.

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    Is Your Bank Getting the Lowest Price for Electricity?

    CBAI members receive special discounted pricing and preferred terms on electricity purchased through the CBSC- Ameren Energy Marketing (AEM).


      • 10% discount off standard small business prices.
      • Flexible start dates.
      • Contract terms up to 36 months.
      • Fixed pricing for the term of the contract.
      • Customer Care promise - call toll-free and always speak to a live person.
    According to Michael Grimes, AEM Sales Executive “This is very good time in the market to consider a fixed price for your total electric supply. Due to market conditions, and your CBAI member discount, we are able to provide you with pricing that may save your bank a significant amount of money. While market prices are very favorable at this time, many believe they are poised for a significant increase. There is no better time than now to lock-in a guaranteed low rate. If your bank is currently under contract with another supplier for power you may still be able to lock-in today’s low rates for a future start date.”

    For more information or to receive a no-obligation quote, please contact Michael at:
    Phone: 314.613.9137

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    Help CBAI’s Foundation Build a Pyramid!

    CBAI is building a pyramid of golf balls! On June 30, Bank of Springfield and Midwest Office Supply are two of the firms holding a charity golf outing. This year’s beneficiary is the CBAI Foundation for Community Banking, which endows the 15 annual scholarships CBAI funds for deserving Illinois high school seniors. One of the items for the silent auction is a pyramid made of boxes of logo golf balls (a dozen to a box). If your firm doesn’t have logo balls, send us a box from your favorite golf course.

    Can you help? Send your box(es) of golf balls to CBAI Foundation, 901 Community Drive, Springfield, IL 62703-5184 Attn: Andrea Cusick. Questions? Contact the Department of Communications at 217/529-2265 or

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    New Tool Helps Estimate Derivatives Collateral

    Software is now available from the Federal Reserve Bank of Chicago for use by national authorities, central banks, and interested parties to estimate the aggregate amount of collateral that may be needed to implement financial-reform initiatives in any jurisdiction. Called the Derivatives Collateral Estimation Tool, the software features a complex interactive algorithm into which a wide range of data can be entered to estimate the total amount of collateral that would be required if a regulatory agency were to enact various types of financial reforms affecting exchange-traded and over-the-counter derivatives contracts. The software could also be used to estimate the amount of collateral needed to accommodate future growth, in the absence of any reform initiatives.

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    Agencies Seek Comment on Stress Testing Guidance

    The Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation are seeking comment by July 29 on
    proposed supervisory guidance regarding stress-testing practices at banking organizations with total consolidated assets of more than $10 billion.

    The agencies are issuing the proposed guidance to emphasize the importance of stress testing in equipping banking organizations to assess the risks they face and address a range of potential adverse outcomes. The recent financial crisis underscored the need for banking organizations to conduct stress tests to help prepare for events and circumstances that can threaten their financial condition and viability.

    Building on previously issued supervisory guidance that discusses the uses and merits of stress testing in specific areas of risk management, the proposed guidance provides an overview of how an organization should develop a structure for stress testing. The guidance outlines general principles for a satisfactory stress testing framework and describes how stress testing should be used at various levels within an organization. The guidance also discusses the importance of stress testing in capital and liquidity planning, and the importance of strong internal governance and controls in an effective stress-testing framework.

    While the guidance does not explicitly address the stress-testing requirements outlined in the Dodd-Frank Wall Street Reform and Consumer Protection Act, the agencies anticipate that rulemakings implementing these requirements would be consistent with the principles in the proposed guidance. The agencies also expect the guidance to be consistent with other supervisory initiatives, including those related to capital and liquidity planning. The agencies believe that it is important to establish the principles of stress testing as a background for these future rulemaking activities and supervisory initiatives.

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    Take 15 Minutes for the Chance to Win Cash

    Help ICBA set the record straight with policymakers and ensure our payment priorities are in step with your business objectives. Participate in the
    2011 ICBA Community Bank Survey and receive a complimentary copy of the findings to help benchmark your payment activities and reaffirm your strategic direction. Participants will be entered into one of 11 cash drawings totaling $1,500.

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    Identity Fraud Report

    Although overall fraud rates are down, the need for offering protection still greatly exists. While identity fraud overall has become less frequent in America, the results of the crime have grave repercussions for consumers than they have in past years. Victims of identity fraud, on average, spend more than $630 to restore their good name. This is up from around $390 last year. And, this still translates to identity theft occurring every four seconds and 3.5 percent of Americans over 18 years of age becoming victims.

    Offer your customers the identity fraud protection they deserve – a robust, comprehensive solution that employs a combination of benefits to address each area of risk. Offering an identity-fraud solution from Affinion helps your customers prevent, detect, and resolve identity theft-related issues while helping you strengthen customer acquisition, loyalty, and satisfaction and improve overall customer profitability.

    Don’t let one of your customers become the next identity fraud statistic. Contact Misha Bleymaier at 1-800-251-2148 ext 2492 today for more information on fraud-protection solutions.

    1 Javelin Strategy and Research. 2011 Identity Fraud Survey Report.

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    Auditing Operations Compliance Scheduled for June 20

    The Dodd-Frank law 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. On top of the risk from Dodd-Frank, banks are facing increasing scrutiny regarding overdraft programs of all types. Some are regulatory, such as the December 2010 FDIC pronouncement regarding these programs. Some are legal, as recently banks have been sued concerning overdraft procedures including posting order of debits. To prepare for the coming changes and regulatory pressures, 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 possible 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.
    Click Here to Register.

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    Appraisal Evaluation Guidance Update Scheduled 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 requirement relating to appraisals and evaluations such as appraisal requirement for impaired loans. Topics covered 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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