Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                               July 13, 2011 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • Bernanke Says Default Would Be Catastrophic
  • CFPB Outlines Big Bank Supervision Program
  • Fed Releases List of Banks Subject to Interchange Regulations
  • S.A.F.E. Act Mortgage Lender Registration Deadline Approaches
  • House Bill Would Replace GSEs with Government Corporation
  • Baker Market Update
  • CBAI Built a Pyramid (Three Actually)!
  • Mobile Banking Expanding Rapidly
  • Become a Go Direct® Community Ambassador!
  • Practical Risk Management for Community Banks Set for July 19 & 20
  • Principles to Manage, and Monitor IT Systems Set for July 26 & 27
  • Training the Credit Analyst Scheduled for August 3 & 4


  • Bernanke Says Default Would Be Catastrophic

    In testimony today before the U.S. House Financial Services Committee, Federal Reserve Chairman Ben Bernanke told Congress that failure to raise the federal budget debt ceiling would precipitate an economic catastrophe.
    See Bernanke’s Testimony.

    If Congress doesn’t raise the ceiling by August 2, the Treasury won’t be able to pay an estimated 40% of its bills, including possibly social security and military pay. Bernanke also noted that the U.S. economy is at a crossroads and revealed a willingness to provide additional stimulus such as another round of Fed acquisition of U.S. Treasuries. See CNN Money Article.

    Meanwhile, minutes of the June 21-22 Federal Open Market Committee, released yesterday, indicated a lack of consensus as to whether or not additional stimulus is necessary or justified. See Washington Post Article.

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    CFPB Outlines Big Bank Supervision Program

    On July 21, 2011, the CFPB will begin examining the 111 financial institutions larger than $10 billion in assets. Community banks below that level are exempt from CFPB exams.

    In a
    Press Statement yesterday, the CFPB provided details concerning the scope of supervision, staffing, and examination procedures.

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    Fed Releases List of Banks Subject to Interchange Regulations

    The Federal Reserve has published the lists of banks that are subject to and exempt from the new debit card interchange fees. All debit card issuers (including affiliates) with assets of less than $10 billion are exempt from the provisions.
    See List of Exempt Illinois Banks. CBAI remains concerned that, despite the recent increase in the cap, community banks could be adversely affected by the price controls.

    The lists are designed to help payment card networks and others determine which issuers exempt. The standards become effective October 1st. ICBA is sponsoring a free audio conference tomorrow (July 14) on the interchange rules at 1:00 p.m. CDT. See Conference Information.

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    S.A.F.E. Act Mortgage Lender Registration Deadline Approaches

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

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    House Bill Would Replace GSEs with Government Corporation

    Legislation introduced this week by Reps. Gary Miller (R-Calif.) and Carolyn McCarthy (D-N.Y.) would establish one secondary market facility to purchase single- and multi-family residential mortgages from approved lenders. Under
    H.R. 2413, the facility would be a government corporation financed by private capital and would assume the assets and role of Fannie Mae and Freddie Mac. It would be prohibited from owning more than 50 percent of the market share. No similar bill has been introduced in the Senate. ICBA advanced its position on housing-finance reform in recent testimony and in a statement to the Senate Banking Committee. At a recent Capitol Hill news conference, ICBA and a coalition of other trade groups urged regulators to provide for a broad “qualified residential mortgage” exemption to ensure creditworthy borrowers have access to credit.

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    Baker Market Update

    The Labor Department announced that the U.S. added just 18,000 payrolls in the month of June, much lower than economists’ expectations.
    Read More.

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    CBAI Built a Pyramid (Three Actually)!

    The board of directors of the CBAI Foundation for Community Banking extends its thanks to all of the bankers, banks, and associate members who helped to make the 26th (Non)-Annual Caddyshack Open successful in its fund-raising for the Foundation. Special thanks to Caddyshack sponsors Midwest Office Supply, Bank of Springfield, Giganti & Giganti Fine Jewelry, and Staff Carpet for selecting the Foundation as its 2011 beneficiary. CBAI members helped to create three pyramids for the silent auction portion of the event: a Titlest Pro V pyramid; a Titlest NXTpyramid; and a pyramid of assorted boxes of golf balls. The combined total earned was $920.

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    Mobile Banking Expanding Rapidly

    In the fourth quarter of 2010, 30 million Americans accessed their bank, credit card, or brokerage account from a mobile device, up 54 percent from the previous year. According to a 2010 survey conducted by ICBA and Plante & Moran, 15 percent of community banks offer mobile banking services to their customers, and another74 percent plan to make it available by mid-2012.
    See Plante Moran Article.

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    Become a Go Direct® Community Ambassador!

    Your participation in the U.S. Department of the Treasury’s Go Direct Community Ambassadors program is more important than ever! The Treasury Department recently announced that all federal benefit and non-tax payments will be paid electronically, which means ALL federal benefit recipients will need to switch to an electronic payment option before March 1, 2013.

    By promoting direct deposit for federal benefit payments, your financial institution will:
      • Gain recognition from the U.S. Department of the Treasury;
      • Be part of the Treasury Department’s effort to pay all federal benefits electronically;
      • Help seniors, veterans and others make a smooth transition to direct deposit before the official deadline; and
      • Retain current customers or members and potentially gain new ones.
    It’s easy to participate! This year, financial institutions simply need to fill out and submit an online commitment form stating that their financial institution commits to support the campaign. After that, the financial institution needs to spread the message about direct deposit by completing campaign activities anytime between June 2011 and January 2013. A campaign representative may ask you to share more information about these campaign activities. Take these two simple steps:

    After completing your commitment online, your financial institution will receive a certificate of participation and access to other materials, including a web banner and newsletter copy. You will receive an official, electronic certificate of completion from the Treasury Department after the program ends in 2013! For more details or to order free materials, visit www.GoDirect.org.

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

    CBAI offers
    “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. In this fast-paced, informative seminar, a review of past challenges is presented, then the seminar moves beyond the crisis-management mode to discussions of how managers and risk officers can help their banks deal with these new challenges. Learn pragmatic approaches for developing a risk-management culture that does more than just appease the regulators. Leading this seminar is Ken Proctor, director of risk management for Abound Resources, who has a 38-year banking and consulting career.

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    Principles to Manage, and Monitor IT Systems Set for July 26 & 27

    CBAI presents
    “Principles for Understanding, Managing, and Monitoring Your Information Systems” in Springfield and Lisle. As financial institutions become more reliant on technology, it is important that they have a better understanding of their information systems to mitigate and monitor risks. Using basic concepts without using technical jargon, this presentation describes and demonstrates fundamental information security strategies for protecting your 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.

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    Training the Credit Analyst Scheduled for August 3 & 4

    This August, CBAI is pleased to offer
    “Training the Credit Analyst.” Designed for credit officers with little or no experience, this two-day seminar teaches participants how to write effective and comprehensive credit analyses which highlight the important trends shown on the financial spread sheet. Topics include identifying financial-statement components, recognizing latent notes, and performing ratio and cash-flow analyses. Preparing financial projections by utilizing sensitivity analysis, identifying factors which may impact the ability to repay debt obligations, and understanding how to grade a loan after analysis is completed are also covered. Leading this seminar is Jeffery Johnson, president and founder of Bankers Insight Group, Atlanta, GA.

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