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 29, 2011 Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • Fed Raises Debit Fee Cap to 26 Cents
  • CBAI's Ohlendorf Testifies Before House Small Business Subcommittee
  • CFPB Seeks Banker Input on Mortgage Loan Disclosure Forms
  • St Louis Fed: Most Community Banks Will Pay Lower FDIC Premiums
  • Do Mega Banks Have a Future?
  • Big Banks' Bellyaching about Capital Levels Is Galling
  • Elizabeth Warren Discusses Financial Accountability with Dan Rather
  • CBAI FedPac Fundraiser was a "Grand-Slam"!
  • CBAI Member Makes Compelling Case for Community Banks
  • ICBA President Fine Comments on "Anniversary Notes"
  • ICBA Chairman Sal Marranca Discusses "The Lending Squeeze"
  • FDIC Encourages Banks to Lend to Creditworthy Small Businesses
  • CSBS Urges OCC to Extend Preemption Comment Period by 60 Days
  • Quinn to Sign Illinois Budget on Thursday
  • Community Bankers School Scheduled for July 10-15
  • Baker Market Update
  • Rural Mainstreet Index Increases Slightly
  • Register for CBAI’s 37th Annual Convention and Win Trip of Your Dreams!
  • UCC Searching & Filing Webinar: What's Ahead for Community Banks
  • Practical Risk Management for Community Banks Set for July 19 & 20
  • Principles for Understanding, Managing, and Monitoring Your Information Systems Scheduled for July 26 & 27

  • Fed Raises Debit Fee Cap to 26 Cents

    The Federal Reserve Board today approved a
    final draft rule to increase the cap for debit interchange fees to 26 cents, thereby more than doubling the initial proposal of 12 cents. The increase was based on estimated issuer costs required to complete a transaction plus an additional allowance of 5 cents for fraud losses.

    Banks will also receive extra time to comply with the rule, which was due to go into effect July 21. Now banks will have to comply with the new limits on October 1. Since the Senate failed to adopt a proposal to delay implementation of the fee cap earlier this month, CBAI and ICBA have urged the Federal Reserve to raise the cap, and the Fed’s decision is most welcomed.

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    CBAI's Ohlendorf Testifies Before House Small Business Subcommittee

    Greg Ohlendorf of Beecher testified in Washington, D.C., before the House Small Business Subcommittee on Economic Growth, Tax and Capital Access. The Hearing entitled "The Dodd-Frank Act: Impact on Small Business Lending" was chaired by Illinois Congressman Joe Walsh (R-8th) and examined the regulatory structure for financial institutions, including the new provisions of the Dodd-Frank Act and regulations being proposed to implement the Act that have the greatest impact on small financial institutions and small business lending.

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    CFPB Seeks Banker Input on Mortgage Loan Disclosure Forms

    In May, during CBAI's 29th Annual Washington Visitation, CBAI members met with Elizabeth Warren, the Special Assistant to the President responsible for organizing the Consumer Financial Protection Bureau (CFPB). Professor Warren noted CFPB's priority for developing a single mortgage loan disclosure form for consumers to use when shopping for residential mortgage loans. The CFPB is seeking input from bankers on a prototype version of a single and simpler residential mortgage disclosure form. Please
    CLICK HERE to view the prototype form and provide your valuable comments to the CFPB.

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    St Louis Fed: Most Community Banks Will Pay Lower FDIC Premiums

    According to the St. Louis Fed, FDIC assessments will be lower for banks under $10 billion in all seven states in the Eighth District. Community banks will experience a 4.5-basis-point average decrease in assessment fees, which totals approximately $237 million: an $18 million decrease in Arkansas, $76 million in Illinois, $26 million in Indiana, $22 million in Kentucky, $20 million in Mississippi, $46 million in Missouri and $29 million in Tennessee. CBAI and ICBA lobbied intensively last year to enact this important provision.

    Nationally, community banks will experience a more than $1 billion decrease in assessment fees with the FDIC’s new assessment methodology. In general, the smallest community banks, those with less than $100 million in total assets, will experience the biggest decline (a 5.1-basis-point decrease on average). The largest community banks, those with between $1 billion and $10 billion in total assets, will experience, on average, a 4-basis-point decline.

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    Do Mega Banks Have a Future?

    In a recent speech in Washington, D.C., the President of the Federal Reserve Bank of Kansas City called into question the future of mega banks and made a strong case for limiting their size and scope.

    Tom Hoenig declared, "Much of the Dodd-Frank discussion revolves around the economic distortions and disruptions caused by the largest and most complex financial companies, the so-called systemically important financial institutions, or SIFIs.

    As we consider the topic of SIFIs, let me ask the following questions: How can one firm of relatively small global significance merit a government bailout? How can a single investment bank on Wall Street bring the world to the brink of financial collapse? How can a single insurance company require billions of dollars of public funds to stay solvent and yet continue to operate as a private institution? How can a relatively small country such as Greece hold Europe financially hostage? These are the questions for which I have found no satisfactory answers. That’s because there are none. It is not acceptable to say that these events occurred because they involved systemically important financial institutions.

    Because there are no satisfactory answers to these questions, I suggest that the problem with SIFIs is they are fundamentally inconsistent with capitalism. They are inherently destabilizing to global markets and detrimental to world growth. So long as the concept of a SIFI exists, and there are institutions so powerful and considered so important that they require special support and different rules, the future of capitalism is at risk and our market economy is in peril."

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    Big Banks' Bellyaching about Capital Levels Is Galling

    Community Banking activist Rusty Cloutier, in a recent article in BankThink, criticizes the mega banks for their audacity to complain about highter capital requirements in light of their role in the recent financial crisis.

    Cloutier said, "The questions being raised about the largest banks in America having to have more capital are shocking to most small banks. We have had to live with these capital requirements for years and all we had heard was that the large bank model was less risky. Of course, the last few years have proved that to be a bigger fairy tale than a Walt Disney movie.

    Now if they were arguing that they wanted all banks to have lower capital levels, I could understand their case better. But I just don't remember them ever asking federal regulators to lower the capital requirements on community banks." CBAI wholeheartedly agrees.

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    Elizabeth Warren Discusses Financial Accountability with Dan Rather

    In an enlightening interview, CFPB's Elizabeth Warren discusses with Dan Rather the need for greater transparency, accountability and restrictions on too-big-to-fail banks. She criticizes Treasury for not firing the CEOs of the TBTF banks.

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    CBAI FedPac Fundraiser was a "Grand-Slam"!

    A big thanks to bankers, associate members, and staff for stepping up to the plate and supporting CBAI FedPac at a recent fundraising event!
    CLICK HERE for highlights.

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    CBAI Member Makes Compelling Case for Community Banks

    Jack Schultz, a director of Midland States Bank in Effingham and CEO of Agracel, Inc., recently published a poignant article citing the importance of community banks to our nation's prosperity and the dangers of financial concentration.
    See Article.

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    ICBA President Fine Comments on "Anniversary Notes"

    “Unless you’ve been marooned on a Pacific island for over a year without your smartphone, you know this month marks the first anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act. No one associated with the financial services world (including regulatory agencies) is baking birthday cakes — we are all just way too busy.”

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    ICBA Chairman Sal Marranca Discusses "The Lending Squeeze"

    “I’m going to admit what every community banker knows firsthand, but what too many Washington policymakers still, four years after the financial crisis, don’t seem to grasp with sufficient seriousness or urgency: it’s much tougher to lend money today than ever before.”

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    FDIC Encourages Banks to Lend to Creditworthy Small Businesses

    The FDIC continues to encourage banks to lend to creditworthy small businesses. As
    reported in the Summer 2011 issue of Supervisory Insights, the guaranty that accompanies a Small Business Administration (SBA) loan is increasingly attractive to institutions looking to expand lending opportunities. However, banks need to develop specialized expertise before becoming involved in SBA lending. "SBA Lending: Insights for Lenders and Examiners" reviews the SBA products lenders most often use as well as the associated technical underwriting, servicing, and liquidation requirements. Requests for print copies should be e-mailed to

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    CSBS Urges OCC to Extend Preemption Comment Period by 60 Days

    In a June 22, 2011 letter to the OCC, CSBS President and CEO Neil Milner expressed concern about the inadequacy of the 30-day comment period for the proposed preemption revisions to Part 7 of Title 12 of the Office of the Comptroller of the Currency’s regulations regarding preemption for national banks. He urged the OCC to extend the comment period by 60 days.

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    Quinn to Sign Illinois Budget on Thursday

    Illinois Gov. Pat Quinn may sign the 2012 state budget Thursday, but the spending plan is not a one-and-done deal.

    Quinn, who introduced a nearly $36 billion budget, said he is not happy with the $33.4 billion spending plan that Illinois lawmakers sent him, and he wants more spending in education and human services.

    But while Quinn can shift around money in the budget, he cannot order more spending, said state Rep. Sara Feigenholtz, D-Chicago. "The governor has some limitations when he is acting on the budget," said Feigenholtz. "He cannot add. He can only (order) line-item reductions."

    But Republicans remain skeptical of any attempt to spend more.

    State Sen. Matt Murphy, R-Paletine, said that if Illinois is ever going to roll back this year's 67-percent personal income tax increases, then the state needs to start living within its means.

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    Community Bankers School Scheduled for July 10-15

    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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    Baker Market Update

    Information received since the Federal Open Market Committee met in April indicates that the economic recovery is continuing at a moderate pace, though somewhat more slowly than the Committee had expected.
    Read More.

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    Rural Mainstreet Index Increases Slightly

    The June overall index for the Rural Mainstreet economy moved above growth neutral 50.0 for an eighth straight month, according to a survey of community bank CEOs in a 10-state region including Illinois.
    See Survey Results.

    This survey represents a snapshot of the rural economy based on regular survey responses from community bank presidents and CEOs serving rural areas of the Midwest. CBAI supports this periodic assessment of the agricultural and rural economy. In the near future, CBAI rural banks will receive information regarding the Rural Mainstreet Index survey with the request to become a regular participant in the survey which is conducted monthly and requires about five minutes to complete.

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    Register for CBAI’s 37th Annual Convention and Win Trip of Your Dreams!

    This year’s
    grand prize at CBAI’s 37th Annual Convention & Expo is a fantastic vacation to wherever you choose! Whether you prefer to lie on a tropical beach, take in the sites of a bustling big city, or set sail on a cruise, you can finally take the trip you’ve always imagined! All full banker registrants are eligible to win this dream vacation, worth $3,000. The prize is awarded at the Saturday Night Dinner Dance featuring the Pink Flamingos, and you must be present to win. Scheduled for September 22-24 at the Hyatt Regency and Frontier Airlines Center in Milwaukee, WI, this year’s convention is not only your opportunity to win a fantastic get-away. “Community Banking: Fueled by Loyalty,” provides numerous networking opportunities, expert speakers on the hottest topics for community bankers, access to new products and services from nearly 100 vendors, and fun and exciting social activities. Don’t miss out! Register today!

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    UCC Searching & Filing Webinar: What's Ahead for Community Banks

    CBSC and its business partner
    CSC announce a new free webinar for CBAI member banks. Scheduled to begin at 1:00 p.m., on Wednesday, July 13, 2011, this webinar will present changes to upcoming amendments to UCC Article 9 and relevant court cases. You will also learn how community banks are responding to these changes by shifting away from standalone searches and filings to comprehensive portfolio management options. Plus, discover how to ensure accurate UCC filings every time; conduct “360-degree” searches to find hidden liens; and track unauthorized terminations, corporate status changes, debtors’ bankruptcy filings, and more!

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    Practical Risk Management for Community Banks Set for July 19 & 20

    CBAI is pleased to offer
    “Practical Risk Management for Community Banks” in two locations this July. An increasing emphasis on risk management, an expanding regulatory compliance burden, and a dizzying array of technology and information security threats has made managing risk in banking more challenging than ever. This fast-paced, informative seminar will review past challenges and move beyond the crisis management mode to discussions regarding how managers and risk officers can help their banks deal with these new challenges. Pragmatic approaches for developing a risk management culture that does more than just appease the regulators will also be provided which allows risk to be managed in a more focused, effective manner than ever before, enabling the bank to differentiate itself, seize the initiative, and chart a course to growth, profitability, and success in the future. Leading this seminar is Ken Proctor, director of risk management for Abound Resources. During his 38-year banking and consulting career, Proctor has served as an internal consultant with a major regional bank, held positions in the auditing departments of two southeastern regional commercial banks, and worked as a public accountant.

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    Principles for Understanding, Managing, and Monitoring Your Information Systems Scheduled for July 26 & 27

    “Principles for Understanding, Managing, and Monitoring Your Information Systems” will be offered in both Springfield and Lisle. As financial institutions become more reliant on technology, it is important to have a sound understanding of information systems to mitigate and monitor risks. Using basic concepts without technical jargon, this presentation describes and demonstrates fundamental information security strategies for protecting 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. Some of the key topics covered in the one-day seminar are information security concepts, data communications, network security management, security monitoring, and network audit tools. Leading this seminar is Mark Scholl, partner for WIPFLi LLP. He specializes in all aspects of information security services including information system security auditing and Internet intrusion testing services.

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

    Finer Points Blog





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