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     A Bi-Weekly News Bulletin for CBAI Members                               July 8, 2015

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Community Bankers Association of Illinois
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  • It's That Time of Year! Donate to the Community BancPac Auction Today!
  • ICBA and CBAI Express Support for Tiered Regulation Measure
  • CBAI Opposes FCA's Farmer Mac Proposal
  • Congressman Quigley Supports Community Bank Input in Policymaking
  • CBAI Urges Grace Period in TRID Implementation
  • Countdown to TRID: It’s Nearly “Go” Time
  • New Video Released on CBAI 401 (k) Multiple Employer Plan
  • Zogby Poll Results Released on Consumer Attitudes about CFPB
  • CBAI Recommends StoneCastle Financial for Community Bank Capital
  • FFIEC Releases Cybersecurity Assessment Tool
  • Investment News From THE BAKER GROUP
  • Pending Home Sales at Nine-Year High
  • ICBA Offers Summary of FDIC’s Proposal on Deposit Insurance Assessments
  • Fannie, Freddie Buying More Loans from Small Lenders
  • OCC's Semi-Annual Risk Perspective Now Available
  • Agencies Issue Updated Host State Loan-to-Deposit Ratios
  • Lien-Protection Insurance Available for Community Banks
  • Entrepreneurs on Worst Advice They Ever Received
  • Free White Paper: Guide to Building Exam-Proof Vendor Management Program
  • Midwest Office: Dress Up Your Bank Entrance with Custom Floor Matting
  • Reserve Your Hotel Room Today for CBAI’s 41st Annual Convention & Expo
  • Take This Week's CBAI Quick Poll
  • Fed Releases 2015 Study on Banking Consumer
  • TRID: One Last Look Prior to Implementation Slated for August 3
  • The Other Reg Z & RESPA Changes & Auditing Reg B Set for August 4 & 5
  • Basic Bank Secrecy Act Institute Scheduled for August 11 & 12


  • It's That Time of Year! Donate to the Community BancPac Auction Today!

    CBAI is excited to begin preparations for Community BancPac’s 24th Annual Silent Auction and 8th Annual Live Auction on Thursday, September 17, 2015, in Nashville, Tennessee. Thanks to many community bankers, this night is always a fun-filled event and one of the highlights of CBAI’s Convention. We hope to make this year’s Auction a successful and memorable event, but we need your help to reach our goal! See Details.

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    ICBA and CBAI Express Support for Tiered Regulation Measure

    Earlier this week ICBA sent U.S. Representative Scott Tipton (R-Colo.) a letter expressing support for the TAILOR Act of 2015 (H.R. 2896). CBAI also supports H.R. 2896 as part of an overall campaign for regulatory relief. The measure promotes tiered regulation of the banking profession and is critical to deterring further consolidation and preserving a competitive financial services marketplace for the benefit of consumers and communities.

    H.R. 2896 would require banking regulators to consider the business model and risk profile of regulated financial institutions and weigh the compliance impact, cost and liability risk of their regulations. It also would require regulators to report to Congress and to review all regulations adopted over the five years prior to enactment. Read ICBA Letter.

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    CBAI Opposes FCA's Farmer Mac Proposal

    CBAI is urging the Farm Credit Administration to withdraw a corporate governance and standards of conduct proposal which would require Farmer Mac board members to have a substantial and visible connection with a voting stockholder. In CBAI's opinion, this provision is an attempt by Farm Credit to require Farmer Mac’s directors to be subject to outside influences and control. CBAI is concerned that this requirement would not contribute to Farmer Mac’s ability to fulfill its mission nor would it promote safety and soundness. Read CBAI Comment Letter.

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    Congressman Quigley Supports Community Bank Input in Policymaking

    Illinois Congressman Mike Quigley (D-5) recently included a requirement in a House Appropriations bill for the Treasury Department to submit a report to the Committee detailing its efforts to collaborate with community banks and hire employees with a background and understanding of community banking. Read More.

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    CBAI Urges Grace Period in TRID Implementation

    July 2, 2015

    The Consumer Financial Protection Bureau (CFPB) has proposed a delay in the implementation of the new TILA-RESPA Integrated Disclosure (TRID) for two months until October 3, 2015. In a July 2, 2015 comment letter to the CFPB the CBAI supported a delay in the TRID implementation and also urged a period of restrained enforcement and liability (a clearly-defined grace period) for banks attempting to comply in good faith with the regulations between the proposed new effective date (October 3, 2015) through January of 2016. Read CBAI Comment Letter.

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    Countdown to TRID: It’s Nearly “Go” Time

    The Consumer Financial Protection Bureau’s announcement in mid-June proposing a shift from August 1 to an October 3 implementation effective date for the TILA-RESPA Integrated Disclosure (TRID) rule may provide a temporary sense of reprieve, if adopted, to those still working diligently toward institutional readiness. But regardless whether an extension period is adopted, the lending industry is facing the harsh realization that time is running out. Read More from Wolters Kluwer.

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    New Video Released on CBAI 401 (k) Multiple Employer Plan

    A short video has just been released that explains the virtues and advantages of community bank participation in the CBAI 401(k) Multiple Employer Plan (CBAI MEP). See Video.

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    Zogby Poll Results Released on Consumer Attitudes about CFPB

    Concern Over Privacy, Spending, and Regulation of Consumer Products Reflected

    Last month a U.S. Consumer Coalition-Zogby Analytics poll found that an overwhelming majority oppose the CFPB’s monitoring of credit card purchases and believe the CFPB should be subject to congressional oversight through the appropriations process.

    In addition, nearly 70 percent said the government should not be able to tell consumers how to spend their money or make financial decisions for their families. Read Report.

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    CBAI Recommends StoneCastle Financial for Community Bank Capital

    Community Bankers Association of Illinois (CBAI) is pleased to announce that StoneCastle Financial has been selected as the newest CBAI Services Partner. Formed in February 2013, StoneCastle Financial is an SEC-registered, closed-end investment company established to serve as a direct investor in community banks seeking capital for growth opportunities, share repurchases, and other refinancing activities. Read More.

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    FFIEC Releases Cybersecurity Assessment Tool

    The FFIEC released the Cybersecurity Assessment tool on June 30, 2015, and regulators are expecting that banks’ board of directors will use this tool to assess their own cybersecurity risks. The intent is for a bank board to be able to recognize the cyber risks they are taking on and what mitigating controls are in place. Banks engaging in more cyber activities or in higher risk areas are expected to be implementing additional risk mitigation controls. CBAI's recommended BankOnIT, which offers the Banker's Private Cloud, has prepared more information on this issue! See BankOnITUSA Blog. Access the Assessment Tool.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    The originally reported 280k new jobs created in May actually turned out to be only 254k. The recent report tells us that 223k new jobs were created in June, but the market was expecting more. See Baker Market Update.

    Baker Economic Brief

    While there has been intense focus on the drama surrounding Greece and the Eurozone, a much bigger problem for the global economy has been brewing in China. Prices on the Shanghai Stock Exchange Index are down roughly 30% in less than a month… an enormous collapse that has wiped out well over a trillion dollars in wealth. See Baker Economic Brief.

    The Baker Group - 3rd Quarter 2015 Conference Call

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    Pending Home Sales at Nine-Year High

    Pending home sales continued to rise in May and are now at their highest level in more than nine years, according to National Association of Realtors. The Pending Home Sales Index rose 0.9 percent from the previous month and 10.4 percent from May 2014. Gains in the Northeast and West were offset by small decreases in the Midwest and South. See National Association of Realtors News Release.

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    ICBA Offers Summary of FDIC’s Proposal on Deposit Insurance Assessments

    ICBA has prepared a new summary of the FDIC’s proposal to revise the model for calculating deposit insurance assessments for insured depository institutions with total assets of less than $10 billion that have been federally insured for at least five years. The proposal would base assessments for these institutions on a model estimating the probability of failure using data from the recent crisis and earlier years. According to the FDIC, these revisions would allow assessments to better capture the risk that an established small bank poses to the Deposit Insurance Fund. The FDIC will collect the same dollar amount of premiums from small banks in the aggregate, but an individual bank’s premium assessment could change based on its risk profile under the revised model.

    Both CBAI and ICBA are studying the FDIC proposal to ensure that revised assessment formulas do not negatively affect community banks and the local customers and communities they serve. “Community banks did not cause the financial crisis, and overly complex or prescriptive formulas are not helpful to an industry that has already been saddled with significant regulatory burden and capital rules,” ICBA said. Read the ICBA Summary.

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    Fannie, Freddie Buying More Loans from Small Lenders

    The percentage of loans purchased by Fannie Mae and Freddie Mac from small lenders grew substantially in 2014, while pricing differences between small sellers and large sellers remained small, the Federal Housing Finance Agency reported last week. The agency also reported that average guarantee fees increased from 22 basis points in 2009 to 58 basis points in 2014.

    The agency announced in April that it is holding g-fees at current levels, with minor adjustments that will result in little or no change for most borrowers. In a September 2014 comment letter, ICBA wrote that all lenders that sell loans to the enterprises should operate on a level playing field and that the FHFA should use g-fees to rebuild GSE capital to promote market stability. See Fannie Mae and Freddie Mac Single-Family Guarantee Fees. See ICBA Comment Letter.

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    OCC's Semi-Annual Risk Perspective Now Available

    Interest rate, underwriting, strategic, compliance, and cybersecurity top the Office of the Comptroller of the Currency’s (OCC) supervisory concerns in its recently released Semiannual Risk Perspective for Spring 2015. The report, which covers risks facing national banks and federal savings associations based on data through the end of 2014, also noted declining revenues and profitability overall in OCC-supervised institutions. Read OCC Semiannual Risk Perspective for Spring 2015.

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    Agencies Issue Updated Host State Loan-to-Deposit Ratios

    The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency today issued the host state loan-to-deposit ratios that they will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. See State Loan-to-Deposit Ratios.

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    Lien-Protection Insurance Available for Community Banks

    The CBIS-Nicoud partnership has teamed with a provider of an established, yet very unique risk-management product that offers lien-position protection as an inexpensive alternative to a title search. This will obviously assist community banks by closing mortgage loans more quickly and provide a much more efficient alternative to title insurance on second-mortgage home-equity loans. Read More.

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    Entrepreneurs on Worst Advice They Ever Received

    Community banking in America is unique to the world. No other nation has a grassroots-based, consumer-responsive, local decision-making financial system like the United States. In addition, it’s a great profession with many rewards for those who choose it as their life’s pursuit.

    Unfortunately, many young people today have no direction as they are disillusioned by conflicting advice. CBAI believes the Miliennial generation should consider the community banking profession as a career choice. In fact, CBAI’s Career Development Division (CDD) was created to nurture and cultivate aspiring community bank leaders.

    Recently, well-known successful entrepreneurs were asked to identify the worst advice they ever received. Click Here for their responses. More on CBAI’s Career Development Division.

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    Free White Paper: Guide to Building Exam-Proof Vendor Management Program

    Download a free copy of this white paper from CBSC-preferred provider Continuity: “The Ultimate Guide to Building an Exam-Proof Vendor Management Program.” This white paper reviews guidance on vendor information gathering, assessing vendor contracts and effective monitoring and mitigation of vendor risk. Additionally, the white paper covers Vendor Management checklists based on FFIEC guidelines, demystifying enterprise-wide vendor management compliance and time-tested, step-by-step procedures that save time and lower risks. Download the Guide Here.

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    Midwest Office: Dress Up Your Bank Entrance with Custom Floor Matting

    Dress Up your Bank Entrance with Custom Floor Matting from Midwest Office. Enhance the appearance of your work place with a commercial grade custom floor mat. Custom floor mats not only dress up any entrance, but they diminish the risk of falls and accidents. This monthly special is guaranteed through July 31, 2015. Contact Kevin Gaffney, Midwest Office, at 217/303-5511 or via email at kgaffney@midwestoffice.com to find the right color, shape, size and imprint for your bank.

    Midwest Office is committed to offering CBAI members the lowest price on commonly-used bank office furniture and supplies. These prices are guaranteed to save your bank money compared to the cost of buying supplies from mail-order vendors and super-stores. REMEMBER: Delivery is always free for CBAI member banks! See Midwest Office Specifications.

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    Reserve Your Hotel Room Today for CBAI’s 41st Annual Convention & Expo

    CBAI’s 41st Annual Convention & Expo is being held September 17-19, 2015, at the Omni Hotel in Nashville, TN. The Omni Nashville Hotel is a glorious, new, four-star hotel. It is close to attractions like the Country Music Hall of Fame, Centennial Park, and LP Field. From shopping to dining, and top music venues to historic sites, there is much to explore in the area. A block of rooms and suites has been reserved for CBAI convention participants at the Omni Nashville Hotel. To assure accommodation availability, reservations should be made at the hotel by September 3, 2015. Room reservations received after September 3, are confirmed on a “space-and-rate available basis.” To reserve your room, call 800/843-6664 and please indicate you are with the Community Bankers Association of Illinois or provide the following code: 091315COMMUNITY. Single & Double Room Rates are $209 + tax. The Omni Nashville Hotel Information. Register to Attend CBAI's Convention & Expo.

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    Take This Week’s CBAI Quick Poll

    Take this week’s Quick Poll on whether or not your bank intends to secure a .BANK domain name. Click Here to view results of previous polls.

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    Fed Releases 2015 Study on Banking Consumer

    The Federal Reserve Board recently released the results of its annual survey which gauges the economic well-being of consumers and their household finances. Included in the findings were the following: 1) 37% of consumers applied for credit (mostly credit cards and auto loans) in the past 12 months compared to 31% in the prior year; 2) nearly 60% are either somewhat or very confident they would be approved for a mortgage loan; 3) approximately three-fourths reported they have at least one credit card, and 56% pay their balances in full every month; and 4) 41% spent less than they made last year while 37% spent what they made. Read Financial Brand Article. See FRB Report.

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    TRID: One Last Look Prior to Implementation Slated for August 3

    As the mandatory implementation date has been extended to October 3, 2015, CBAI has added this seminar regarding all aspects of the new Integrated Disclosure forms. The Integrated Disclosures, including the Loan Estimate (combination of early TIL and GFE) and the Closing Disclosure (combination of final TIL and HUD) have unique issues, including the rules regarding the timing of delivery, and of course, the completion of the forms. The new forms are complex, and require a significant skill set to do so successfully. There are over 150 separate instructions regarding the completion of these forms. This, combined with the new rules regarding delivery, will make this process more difficult for the bank. There will need to be decisions made prior to the delayed mandatory October 3, 2015, start date. For instance – since the Closing Disclosure is now one document, who completes it? Will the bank complete the HUD, or will the title company complete the TIL? And what information needs to be collected when, as the Closing Disclosure must be delivered as early as a week before closing? This course is designed specifically for lenders and processors. However, senior management, auditors, and others involved in the mortgage loan origination process of the bank will gain useful knowledge from this presentation. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance at Young & Associates, Kent, OH.

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    The Other Reg Z & RESPA Changes & Auditing Reg B Set for August 4 & 5

    The fourth quarterly Community Bankers for Compliance (CBC) seminar focuses on the other issues and changes that are taking place on August 1, 2015. In addition, we discuss Regulation B, the latest fair lending information available, and address the regulation in terms of a Regulation B audit designed to protect your bank from Regulation B and fair lending violations. Although the vast majority of the August 1 changes can be found in the Loan Estimate and Closing Disclosure, there were additional items that were included as of August 1 that need to be discussed. While these items are minor when compared to the Integrated Disclosures, they still will play an important role in your compliance program. The presentation includes any model forms that accompany these changes. The balance of the session focuses on both the “nuts and bolts” of Regulation B and the audit steps that you might take to assure that your bank is in compliance with the letter and spirit of the law. We discuss the requirements of the regulation, and provide appropriate techniques to assure that all aspects of the regulation are addressed in the audit. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance at Young & Associates, Kent, OH.

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    Basic Bank Secrecy Act Institute Scheduled for August 11 & 12

    It certainly is no secret that the Bank Secrecy Act (BSA) remains an important topic for banks. The Basic Bank Secrecy Act training is a one and one-half day program designed to provide a thorough grounding in the basics of the BSA. The course assumes that the attendee has a limited knowledge of BSA requirements. Although the Board of Directors is ultimately responsible for BSA, each bank must have a BSA officer who is in charge of the day-to-day BSA program. Attendees leave the program with a basic understanding of the four key elements of an effective BSA compliance program, as well as an understanding of all appropriate reporting standards for the program. We include a brief discussion of the BSA/AML (Anti-Money Laundering) risk assessment. The primary focus of the institute is to assure that all attendees understand the basic requirements for a sound compliance program based on the regulation and core examination procedures. Adam Witmer, CRCM, is a compliance consultant with Young & Associates, Inc., serving client banks in the Midwest.

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