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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    July 5, 2018

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Farm Bill Passes the U.S. Senate
  • CBAI and ICBA-Backed SBA Bill Signed into Law
  • ICBA Opposes NCUA Rule Issued Amid Court Challenge
  • CBAI Urges Improvements to the FHLB’s Affordable-Housing Program
  • Details on Cannabis Banking Safe Harbor
  • Investment News from THE BAKER GROUP
  • Rural Economic Index Trending Up
  • Results of the 2018 CBAI Compensation Survey Now Available
  • CSBS: Proposal to Reduce Capital Requirements Could Disrupt Financial Stability
  • Donate to the Community BancPac Auction Today!!
  • CBIS: What Community Banks Need to Know About USAA’s Claims of Patent Infringement
  • Support for Real-time Payments Increases Among Banks
  • Op-Ed: Retailers Must Take Precautions to Protect Data
  • Five Benefits of Automation in Lending: Make it Right, Right Now
  • How Banks Can Ride Tech Wave and Keep Personal Touch
  • St. Louis Fed President Bullard Reflects on 10 Years at the Helm
  • Chicago FDIC's Division of Depositor and Consumer Protection 2Q18 Newsletter Released
  • OnCourse Learning Partners with Inspired eLearning to Expand Security Awareness
  • Registration Deadline Extended to July 10 for Community Bankers School
  • Privacy, Fair Credit Reporting Act and Regulation V Set for July 31 & August 1
  • Training the Credit Analyst Slated for August 13-15


  • Farm Bill Passes the U.S. Senate

    The United States Senate passed its version of the Farm Bill with a strong bi-partisan 86-11 vote. Both Illinois Senators Durbin and Duckworth voted in favor of the Bill. Previously the U.S. House passed the Agricultural and Nutrition Act of 2018 (H.R. 2) on a vote of 213 to 211, with all Illinois Republicans voting in favor, and all Illinois Democrats voting against, passage. The Bill now moves to a conference committee for negotiations to resolve the differences between the two versions. CBAI, which has long been active in advocating for a strong farm bill, encourages the conferees to successfully resolve their differences and implement the legislation by the September 30th expiration of the current farm bill. Read More.

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    CBAI and ICBA-Backed SBA Bill Signed into Law

    President Donald Trump signed into law pro-community bank legislation to strengthen the Small Business Administration 7(a) program. The bipartisan Small Business 7(a) Lending Oversight Reform Act (H.R. 4743) includes targeted reforms to ensure the program continues safely expanding the reach of lending and credit services to a broader range of borrowers who would not qualify for a conventional loan.

    The new law allows the SBA to lift the cap on general business loans if it is reached, strengthens the SBA Office of Credit Risk Management and Lender Oversight Committee, and codifies the SBA’s “Credit Elsewhere Test.” Read ICBA Release.

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    ICBA Opposes NCUA Rule Issued Amid Court Challenge

    ICBA expressed strong opposition to a National Credit Union Administration field-of-membership rule issued weeks after parts of the rule were vacated by a federal judge and continue to be litigated in court. The NCUA rule would further expand the service areas in which community credit unions can do business. CBAI supports the ICBA’s position on this issue.

    The rule allows credit unions to use a “narrative statement” to apply for membership fields with no population limits. It follows a March ruling by D.C. District Court judge Dabney Friedrich that vacated provisions automatically qualifying combined statistical areas with fewer than 2.5 million people as local communities and increasing the population limit for rural districts to 1 million people. See Release. Access NCUA Rule.

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    CBAI Urges Improvements to the FHLB’s Affordable-Housing Program

    In a June 12, 2018 letter to the Federal Housing Finance Agency (FHFA), CBAI provided its observations and recommendations regarding proposed amendments (Proposal) to the Affordable Housing Program (AHP). Unfortunately, the FHFA’s Proposal recommends a top-down approach that promotes several national housing priorities that may not align with the housing priorities and needs within the various FHLB districts and makes the AHP more complex, less flexible and less transparent. Read More.

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    THE SHAZAM BLOGS ARE UP AND RUNNING — HAVE YOU SUBSCRIBED?
    After months of research, planning and hard work behind the scenes, we’re excited to share our blogs with you. Subscribe to our SHAZAM Blog to stay up-to-date on industry news and trends with perspectives from nationally recognized experts. Make sure you also subscribe to our daily blog, In Good Company, for business development and growth strategies authored by SHAZAM’s executive vice president and chief sales and marketing officer, Steve Heston. Subscribe Today!




    Details on Cannabis Banking Safe Harbor

    A new ICBA blog post details CBAI and ICBA-supported legislation that would establish a safe harbor from federal sanctions for financial institutions that serve cannabis-related businesses in states where cannabis is legal.

    ICBA’s Aaron Stetter wrote that the Secure and Fair Enforcement Banking Act (H.R. 2215 and S. 1152) would enhance public safety and address regulatory compliance concerns by opening the traditional banking system to cannabis-related businesses.

    “Cash-only businesses, especially those with a high volume of revenue, pose significant safety risks,” Stetter wrote. “The SAFE Banking Act would help eliminate this risk in states where cannabis is already legal.” Read the Blog Post.

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    Investment News from THE BAKER GROUP

    Baker Market Update

    This week may be short on days with markets closing Wednesday for Independence Day, but it’s not short on news. Over the weekend, Canada began collecting tariffs on a variety of U.S. products from beef to maple syrup as the trade dispute becomes ever more war-like. See Baker Market Update.

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    Rural Economic Index Trending Up

    Creighton University’s index of the rural economy was above growth-neutral in June for the fifth straight month, the longest stretch since July 2015. The Rural Mainstreet Index dipped slightly to 56.1 from 56.3 in May, but it indicated an upward trend due to positive economic growth and improving commodity prices. Creighton’s Ernie Goss said the negative impacts of recent trade skirmishes has yet to show up in the survey results.

    The June RMI for Illinois declined slightly to 57.0 from 57.2 in May. The farmland-price index increased to 43.0 from 42.5 in May. The state’s new-hiring index rose to 59.4 from last month’s 57.7. Jim Eckert, president of Anchor State Bank in Anchor, reported, “Central Illinois was very dry in April and May, however 3-6" of general rains came last week. Crops look good, but subsoil is low, and we will require timely rains to insure a good crop.” Illinois’ Rural job growth over the last 12 months was 1.8 percent. Read More.

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    Results of the 2018 CBAI Compensation Survey Now Available

    The wait is over! The results of the 2018 CBAI Compensation Survey are now available. And, once again, participants received the results for free, thanks to sponsor IZALE Financial Group.

    CBAI is confident that community bankers will be very pleased with the report, professionally prepared by BalancedComp. Pages are linked for ease of navigation. Compensation is indexed by city of participant. And the analysis provided is more complete than ever before. Thanks go out to nearly 200 community bankers who took the time to complete the Survey. Non-participant CBAI members can purchase the results for $300. Contact Andrea Cusick, CBAI SVP Communications, at cbaicom@cbai.com or 800/736-2224.

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    CSBS: Proposal to Reduce Capital Requirements Could Disrupt Financial Stability

    CSBS announced last week that it opposes the proposal issued by the Federal Reserve Board and Office of the Comptroller of the Currency to reduce the “enhanced supplementary leverage ratio” (eSLR) requirement for large U.S. banks. CBAI concurs with CSBS that such a move could threaten the nation’s financial stability, reduce the resiliency of the U.S. banking system, and, indirectly create risks for community banks. Read CSBS Comment Letter.

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    Donate to the Community BancPac Auction Today!!

    The CBAI Governmental Relations team is preparing for Community BancPac’s 27th Annual Auction. Thanks to the generosity and thoughtfulness of many of you, this night is always a fun-filled event as it kicks off the opening night of CBAI’s Annual Convention. We are excited and hope to make this years’ auctions a successful and memorable event. That said, we can always use your help.

    Can you think of items your fellow community bankers would love? Sports tickets, high end wines, collectables, excursions and experiences? There are two ways you can donate them to the auction. You can simply purchase an item and donate it or you can donate cash and the GR team will do the shopping for you. Either way, you will get credit for your donation in the official auction guide.

    Community BancPac is also building a pyramid of golf balls. Do you have a dozen golf balls to donate? Even better if they come with your bank’s logo. Access Community BancPac Auction Donation Form. Learn How to Donate to the Pyramid of Golf Balls.

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    CBIS: What Community Banks Need to Know About USAA’s Claims of Patent Infringement

    USAA, the Texas-based insurer and bank that counts more than 12 million active-duty military, veterans and their families as customers, wants to get paid for what it says is its proprietary technology. More than a decade ago, USAA developed technology to allow its members to make bank deposits remotely through smart phones.

    That technology now powers the remote-deposit-capture applications used by banks, small and large, throughout the country, says USAA, which claims it owns more than 50 patents protecting its right to seek licensing fees from banks that offer RDC.

    In 2014, USAA and Mitek, a San Diego-based provider of mobile-phone technology provided to banks and other financial institutions, settled a series of claims in which both companies alleged patent infringement on the other. Neither party admitted liability, and neither party made a payment to the other, according to a statement issued by Mitek.

    Since then, USAA has been taking the carrot approach with banks, reportedly sending out letters to banks and even meeting with some face-to-face, to advance the prospect of licensing agreements for what it says is its technology. Perhaps USAA has not been getting the reception for which it hoped. In June, the bank filed a lawsuit against Wells Fargo, alleging patent infringement under intellectual-property law. Read More from CBIS.

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    Support for Real-time Payments Increases Among Banks

    More U.S. banks are awaking to the idea that supporting real-time payments (RTP) could add value not just to their customers, but to their revenues. A new report titled “2018 Global Payments Insight Survey: Cross-Vertical,” from ACI Worldwide and Ovum released today shows that 86% of banks expect to see improvements in their customer service as a result of real-time payments. To put that number in context, last year only 61% believed that to be true. Read More.

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    Op-Ed: Retailers Must Take Precautions to Protect Data

    Retailers need to commit to doing right by their customers by deploying proven technologies like EMV chip readers and contactless payment terminals to protect customers’ data, writes ICBA’s executive vice president for policy and political operations, Aaron Stetter in a new Digital Transactions op-ed.

    Stetter noted the recent data breach at Saks Fifth Avenue and its sister company, Lord & Taylor and said retailers should “consider the enormous ripple effect that takes place in the wake of their massive breaches,” including the cost borne by financial institutions and the anxiety and inconvenience to consumers. Read Stetter’s Op-Ed.

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    Five Benefits of Automation in Lending: Make it Right, Right Now

    Technology is putting everything on autopilot these days – even cars are beginning to drive themselves. From manufacturing to marketing, automation and cloud-based computing are changing the way we work and driving better outcomes for businesses and consumers. The revolution in automation is also driving changes in loan origination, helping banks improve loan quality and decision-making, reduce costs, and fight fraud.

    Borrowers want speed and ease, which requires moving from paper-based processes to digital origination and servicing capabilities. Balancing borrower expectations against the requirements of compliance and risk management can be challenging, but there are several upsides. A Fiserv executive offers five benefits of automation in lending. Read More.

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    How Banks Can Ride Tech Wave and Keep Personal Touch

    A former California mega banker who’s now a community banker offers ways community banks will continue to effectively compete by prudently blending technology and personal customer attention. Read More.

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    St. Louis Fed President Bullard Reflects on 10 Years at the Helm

    From Crisis to Recovery

    St. Louis Federal Reserve Bank President James Bullard recently reflected on his 10-year anniversary at the helm, including the lessons learned over this period, which has been anything but ordinary. By the time he stepped into the role in April 2008, the financial crisis was already underway. Bullard addresses some of the key themes and policy positions over his first 10 years. Read More.

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    Chicago FDIC's Division of Depositor and Consumer Protection 2Q18 Newsletter Released

    Chicago Region’s Division of Depositor and Consumer Protection has released its newsletter for the second quarter of 2018. In this issue, it provides considerations for automated overdraft programs and one-time debit/ATM procedures, introduce a new reboot for the FDIC’s Money Smart for Adults program, provide background regarding the use of American Community Survey data in Community Reinvestment Act examinations, and highlight some upcoming Community Affairs events throughout the Chicago Region. See Newsletter.

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    OnCourse Learning Partners with Inspired eLearning to Expand Security Awareness

    OnCourse Learning Financial Services has announced a partnership with Inspired eLearning, an award-winning, security-awareness, training-solution company. Financial institutions now can benefit from OnCourse Learning’s expanded catalog of online regulatory-compliance courses and cybersecurity-training offerings. Critical security topics now available through OnCourse Learning include Security Awareness Essentials, Phishing, Social Engineering, Email Security, Incident Reporting, Privacy and GDPR (General Data Protection Requirement) for U.S. & EU. OnCourse Learning is a preferred services partner of CBAI. See Updates.

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    Registration Deadline Extended to July 10 for Community Bankers School

    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 2018 session opens Sunday, July 15, and concludes Friday, July 20. The deadline to enroll has been extended to July 10, 2018. Talk to your employer and register today!

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    Privacy, Fair Credit Reporting Act and Regulation V Set for July 31 & August 1

    CBAI is pleased to offer the fourth quarter of the Community Bankers for Compliance program. We are all aware of headlines and the continuing issues regarding the privacy of customer information. While banks have generally not been the source of the breaches, we still must deal with the fallout that is the result. This quarter's CBC session discusses our response to these breaches in three areas – our own privacy rules and requirements (Regulation P), our responsibility to assist the credit bureaus and their records under the Fair Credit Reporting Act, and our direct corporate responsibilities under the FCRA as set forth in Regulation V. We cover each of the regulations in detail, with emphasis on our responsibilities vis-a-vis these information breaches. Included are any changes to Regulation P that are announced prior to the seminar. These changes have been promised for a while but have yet to be issued. As we are aware of the content of the changes, we include all relevant information. The subjects for the regulatory update are determined by circumstances and releases from the various agencies. Compliance officers should attend this session. In addition, all personnel with responsibilities for customer privacy, credit reporting, and error resolution of credit issues should attend. Senior management, auditors, and others should also consider joining us for this session. Leading this institute Bill Elliott, CRCM, senior consultant and manager of compliance, Young & Associates, Inc.

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    Training the Credit Analyst Slated for August 13-15

    As community banks grow and strive to become high-performing financial institutions, the need to cultivate and develop a portfolio of commercial borrowers increases also. Credit analysis is an essential part of this process as banks strive to develop solid commercial relationships. This is a three-day seminar designed to address the needs of beginning credit analysts and to reinforce the credit skills of current credit analysts. It teaches how to write effective and comprehensive credit analyses which highlight the important trends shown on the financial spread sheet. Other analytical tools that are covered include cash-flow analysis, break-even analysis, ratio analysis, financial projections, and sensitivity analysis. The objective of this course is to provide credit analysts with analytical skills that can be put to immediate use upon their return to their banks. Participants learn to use proven analytical tools which enable them to assess the degree of risk prior to recommending approval of declination of a credit request. Another objective of this course is to improve the documentation of commercial loan files which reduce losses and are viewed favorable by the regulatory community. Leading this course is Jeffery Johnson, president and founder of Bankers Insight Group, Atlanta, Georgia.

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