Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois Community Bankers Association of Illinois
 
     A Bi-Weekly News Bulletin for CBAI Members                        July 1, 2009 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • Congressional Contacts Needed Now on Two Key Issues
  • Deadline Today for Sweep Arrangements Disclosure
  • Supreme Court Upholds State’s Rights on Preemption Case
  • Baker Market Update
  • Home Prices Decline at Slower Pace; Consumer Confidence Falls
  • Call Report Data Required by July 30
  • General Assembly and Governor Continue to Squabble on State Budget Plan
  • CBAI’s 35th Annual Convention & Expo Offers Timely Education Sessions & Largest Exhibit Hall Ever
  • Last Chance To Register for the Community Bankers School
  • Agencies Announce Notice of Proposed Rulemaking for CRA
  • Regulators Issue Host State Loan-to-Deposit Ratios
  • Sageworks Develops New Credit-Risk Product
  • Survey Finds Commercial Cash Management Opportunities for Community Banks
  • Fed Modifies Emergency Funding Facilities
  • CBAI Scholarship Presentations


  • Congressional Contacts Needed Now on Two Key Issues

    Regulatory Reform Proposal

    CBAI and ICBA urge community bankers to contact their congressmen when they are home for the Fourth of July recess regarding President Obama’s financial restructuring proposal. While CBAI and ICBA support those provisions that address systemic risk, maintain multiple regulators and charter choice, and close the ILC loophole, congressmen should be encouraged to maintain the thrift charter and ensure that any new regulatory agency provides meaningful consumer oversight without burdening community banks.

    ICBA has prepared a
    position paper that community bankers can distribute to members of Congress. In addition, ICBA has developed a summary of the regulatory reform plan. Community bankers can also send a customizable letter to their congressmen.

    FDIC Deposit Insurance Reform

    CBAI and ICBA also ask community bankers to urge their respective U. S. Representative to cosponsor the Bank Accountability and Risk Assessment Act of 2009 (H. R. 2897) which was recently introduced by Congressman Luis Gutierrez (D-Chicago). The measure broadens the assessment base for FDIC deposit insurance premiums and creates separate systemic-risk premiums for too-big-to-fail banks. For talking points on the measure, click here. Community bankers need to contact their congressmen as soon as possible. For contact information, click here.

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    Deadline Today for Sweep Arrangements Disclosure

    Beginning today, banks must prominently disclose in all sweep account contracts and account statements whether swept funds are “deposits” within the meaning of 12 U.S.C. 1813(l). If swept funds are not deposits, then the institution must further disclose the status of such funds if the institution failed (i.e., general creditor status or secured creditor status).

    For existing sweep accounts, disclosures must be made within 60 days of July 1, and then at least annually thereafter. For new or renewing sweep account contracts, the disclosure requirements begin immediately.
    See FDIC’s Final Rule.

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    Supreme Court Upholds State’s Rights on Preemption Case

    On June 29, 2009, the U. S. Supreme Court ruled that the Comptroller of the Currency does not have absolute enforcement discretion over national banks. The 5-4 decision determined that state attorneys general have the right to enforce state banking laws on federally chartered banks operating within their jurisdictions as long as proper judicial proceedings are followed. However, state attorneys general cannot examine national banks and they cannot subpoena information from national banks without approval from a judge.
    Read CSBS Statement. Read OCC Statement. See Court Decision.

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    Baker Market Update

    Fed Keeps Rates Unchanged; Sees Low Fed Funds "for an Extended Period."
    For details.

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    Home Prices Decline at Slower Pace; Consumer Confidence Falls

    The S&P/Case-Schiller Home Price Index recorded a 0.6% decline in home prices from March to April, compared to a 2.2% drop in the prior month. The slower pace caused some analysts to conclude that a turnaround may have begun, although the foreclosure rate is still increasing.
    See Article.

    Meanwhile, the Conference Board’s Consumer Confidence Index retreated in June to 49.3 from 54.8 in May, reflecting growing pessimism about the job outlook.

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    Call Report Data Required by July 30

    Regulatory agencies
    released guidance asking banks to complete second-quarter call reports as soon as possible, and the deadline for submission of the call report in July 30. To access the forms, click here.

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    General Assembly and Governor Continue to Squabble on State Budget Plan

    Despite the fact that Governor Quinn called a special session last week and addressed a joint session of the General Assembly yesterday, the Governor and legislative leaders are still at odds on both an operations budget and a capital budget for the state’s fiscal year which began today.
    Click here for further information on the gridlock in Springfield.

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    CBAI’s 35th Annual Convention & Expo Offers Timely Education Sessions & Largest Exhibit Hall Ever

    Scheduled for September 24-26 at the Renaissance Hotel in Schaumburg, CBAI’s 35th Annual Convention and Expo provides the information and insight you need to “Survive and Thrive.” With 20 break-out sessions, including a track geared toward directors, the education at this year’s convention features some of the hottest and most timely topics in banking today. Speakers from around the country provide expertise on topics from regulatory issues, to thriving in today’s credit market, to gaining new customers, and much, much more! Plus, this year’s Exhibit Hall is CBAI's largest ever with 112 booths! Packed full of the latest products and services for community banks, visit the Exhibit Center and keep abreast of new information, products, and services, improve purchase management and business development, compare prices and products more effectively, and save time by seeing all vendors in one location. To register, please visit
    www.cbai.com today!

    For a description of the education break-out sessions, please click here.

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    Last Chance To Register for the Community Bankers School

    Register today for the 2009 Community Bankers School (CBS)! CBS consists of two, one-week sessions at Illinois Wesleyan University, located in Bloomington, IL. The 2009 session opens Sunday, July 12, and concludes Friday, July 17. Now sponsored by the Independent Community Bankers of America, the Community Bankers School provides broad exposure to important elements of community banking. It gives students the most up-to-date thinking on core principles including compliance, operations, consumer credit, documentation, asset/liability management, marketing, management principles, and much, much more. Plus, it gives attendees a vast range of specific banking skills and techniques that can contribute immediately to their banks' overall success. Take control of your career and apply for the Community Bankers School today. With a well-rounded curriculum, the best instructors in the country, and a 20-year reputation of excellence, CBS is your fastest way to get ahead.

    For more information, please visit the new website at
    www.thecommunitybankersschool.com today!

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    Agencies Announce Notice of Proposed Rulemaking for CRA

    The federal bank and thrift regulatory agencies have
    proposed revisions to regulations implementing the Community Reinvestment Act (CRA) to require the agencies to consider low-cost education loans provided to low-income borrowers when assessing a financial institution’s record of meeting community credit needs.

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    Regulators Issue Host State Loan-to-Deposit Ratios

    On June 29, 2009, the Federal Reserve, FDIC, and OCC issued the host state loan-to-deposit ratios that the regulators will use to determine compliance with Section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. Banks are prohibited from establishing or acquiring branches outside their home states primarily for deposit production. The compliance process includes a loan-to-deposit ratio screen that compares a bank’s statewide loan-to-deposit ratio to the host state loan-to-deposit ratio for banks in a particular state.
    See Release. See Updated Ratios.

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    Sageworks Develops New Credit-Risk Product

    Input from community bankers aided Sageworks in creating an integrated exception management solution at the loan level to help banks reduce risk in their portfolios.
    For more information.

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    Survey Finds Commercial Cash Management Opportunities for Community Banks

    Community banks that hone cash management offerings see jump in fee income

    A backlash against the largest financial institutions is creating a prime opportunity for community banks to attract commercial deposits, according to results from an April 2009 survey conducted by CBAI associate member Abound Resources, Inc. The survey of 55 CEOs at community banks in the U.S. ranging in size from $100 million to $3 billion found that 54% have experienced an increase in fee income from commercial depository services in the last six months and 87% believe they can increase commercial fee income. While community banks see great promise in commercial deposits, the survey finds that there remains untapped potential in commercial cash management (also known as "treasury management" or "business banking") for most institutions. For more information, and a link to a complimentary whitepaper entitled "Why You're Not Making Money on Cash Management Services and What To Do About It,"
    click here.

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    Fed Modifies Emergency Funding Facilities

    The
    Federal Reserve announced it is extending several liquidity programs through early 2010 because market functioning remains impaired in many areas. It also noted it is reducing the size and changing the terms of other facilities due to some improvements in financial conditions.

    The Fed extended through Feb. 1, 2010, an alphabet soup of emergency funding facilities to back money market mutual funds, commercial paper and other markets, as well as its swap lines with other central banks. It also kept the expiration date for the TALF at Dec. 31, 2009, and trimmed the size of upcoming Term Auction Facility auctions.

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    CBAI Scholarship Presentations

    Several CBAI member bankers provided the CBAI Foundation with
    pictures of their 2009 Scholarship presentations. Earlier this year high school seniors that were sponsored by CBAI member institutions participated in an essay writing contest offered by the Foundation. Congratulations to all!

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