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 15, 2009 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • CBAI Weighs in on Financial Restructuring
  • Bair and Bernanke Push for “Systemic Risk” Fees on Giant Banks
  • Justice Investigating Credit Default Swaps
  • FHLB President Feldman Briefs CBAI Leadership on Bank’s Condition
  • Federal Reserve Banks Assess Economic Recovery
  • ICBA Testifies on Community Bank Lending
  • Wolters-Kluwer Offers Web-Based Training on FHA Lending
  • ICBA Meets with Lawmakers on Reg Reform
  • OTS Issues Guidance on New Credit Card Law
  • Plan Now for the 15th Annual CBAI/BAKER Investment Seminar and Golf Outing
  • BAKER Market Update
  • CBAI Members Save More Than $300,000 with Midwest Office Supply
  • Register for CBAI’s 35th Annual Convention by July 31 and Be Eligible for Prizes!
  • CBSC Service Makes Good Things Happen to Bad Checks!
  • Register Today for CBAI’s Community Bank Directors’ College
  • What is DLP and Why is it Important to My Bank?
  • New Books for Bank Customers Promote Financial Education
  • STUDY: How Financial Institutions Use Twitter


  • CBAI Weighs in on Financial Restructuring

    CBAI issued an
    Action Alert this week to urge Congress to support financial services regulatory reforms that will reduce systemic risk and protect consumers but not harm community banks in the process. CBAI members are asked to contact their members of Congress and urge them to support regulatory reforms that include systemic risk oversight and FDIC authority to unwind failing mega banks instead of propping them up with tax dollars.

    As part of this regulatory reform agenda, CBAI is urging members of Congress to co-sponsor and support H.R. 2897 (See CBAI’s letter to Congress). HR 2897 would create a new systemic-risk fund that would be funded by an additional fee on federally insured systemic risk institutions. The measure would also change the FDIC premium assessment method to base future assessments on total assets minus tangible equity as opposed to domestic deposits. CBAI urges community bankers to also contact their congressmen to urge support for HR 2897 (See CBAI’s Action Alert on HR 2897). The chief sponsor of HR 2897 is Congressman Luis Gutierrez (D-Chicago), and CBAI has expressed its appreciation to Congressman Gutierrez for his leadership and sponsorship of this important measure.

    However, not all of the reform proposals are positive. House Financial Services Committee Chairman Barney Frank has introduced The Consumer Financial Protection Agency Act of 2009 (HR 3126) which was included in the Obama Administration blueprint on Financial Restructuring. CBAI opposes the creation of this new agency.

    This agency would have broad new authority over financial products such as mortgages and credit cards, grant new authority to the Federal Trade Commission over banking, and create an outside advisory panel to monitor emerging banking practices. It would also separate consumer policy and enforcement from bank safety and soundness enforcement and increase the burdens on community banks that are already overburdened by regulatory oversight. CBAI and ICBA believe Congress needs to focus on solving the problems created by the too-big-too-fail banks and not create more problems for community banks that did not engage in the risky practices that caused this current economic crisis.

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    Bair and Bernanke Push for “Systemic Risk” Fees on Giant Banks

    Long-advocated by CBAI and ICBA, the FDIC and Federal Reserve are now urging tougher measures to curb the size and complexity of the nation’s largest banks that have been deemed “too-big-to-fail” including assessment of “systemic risk” fees. Only the community banking lobby is pushing for these fees. If banks decide to engage in high-risk activities, then they should pay a premium. In recent interviews FDIC Chairman Sheila Bair said, “What we have suggested is financial disincentives for size and complexity.” Meanwhile Fed Chairman Ben Bernanke said restricting the size of banks is a “legitimate” option.
    More information.

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    Justice Investigating Credit Default Swaps

    The market for credit default swaps, prime contributors to the near-collapse of our financial and economic system, is now under investigation by the U.S. Justice Department. These unregulated insurance contracts between companies ballooned almost seven-fold within seven years to about $62 trillion by the end of 2007. Unregulated trading of the contracts created a complex web of interconnected and interdependent companies. Congress plans to regulate the massive over-the-counter derivatives market.
    More.

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    FHLB President Feldman Briefs CBAI Leadership on Bank’s Condition

    Matt Feldman, President and CEO of the Federal Home Loan Bank of Chicago (FHLBC), met with the CBAI board of directors on Thursday, June 18, 2009, to provide an update on the financial condition and future direction of the bank. The bank’s first quarter net loss of $39 million resulted from improved net interest income being more than offset by the impact of other-than-temporary impairment (OTTI) on its private label mortgage-backed securities and losses from derivative and hedging activities. However, Feldman noted the bank continues to comply with all regulatory capital requirements and has the highest ratio of retained earnings to assets among the FHLBs.
    More.

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    Federal Reserve Banks Assess Economic Recovery

    Several Federal Reserve District Banks have recently provided their perspectives on the U.S. economy. They all agree that the recession is almost over, but they offer mixed opinions regarding the pace of recovery.
    See Chicago FRB. See St. Louis FRB. See Kansas City FRB.

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    ICBA Testifies on Community Bank Lending

    ICBA Executive Committee member Jack Hopkins testified July 8 at the
    Senate Banking Subcommittee on Financial Institutions hearing on the role of the nation’s community banks in lending in rural areas during the current economic crisis. Hopkins discussed ICBA policy recommendations to keep credit flowing, including supporting the administration’s proposals to address systemic risk and providing additional funds for USDA direct and guaranteed farm loans.

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    Wolters-Kluwer Offers Web-Based Training on FHA Lending

    Gain the knowledge for a successful FHA program! Sign-up for Wolters-Kluwer's web-based training today!
    Click here for more information.

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    ICBA Meets with Lawmakers on Reg Reform

    ICBA continues to represent the community banking profession in the regulatory reform debate in critical meetings with members of Congress. This week, ICBA officials met with Democratic members of the House Financial Services Committee to convey community-bank positions on the Administration’s plan, followed by a joint briefing with other financial trade groups. Today, ICBA Chairman Mike Menzies testified before the Committee on the regulatory reform plan.

    To help community banks take part in the debate, ICBA launched a new Web page with a variety of resources dedicated to the Administration’s proposed reforms. ICBA offers a customizable letter to Congress, a position paper and summary of the plan, and a new ICBA summary of the Consumer Financial Protection Agency Act — the administration’s draft legislation provided to Congress.
    Visit ICBA Reg Reform Web page. Access Customizable Letter. Read ICBA Position Paper. Read ICBA Summary of Reg Reforms. Read ICBA Summary of Consumer Financial Protection Agency Act.

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    OTS Issues Guidance on New Credit Card Law

    On July 14, 2009, the Office of Thrift Supervision issued a letter to the CEOs of the institutions it regulates urging them to consider “look back” provisions in the new credit card law. While the provisions don’t take effect until August of 2010, OTS encouraged institutions to begin preparing now to comply with the law.
    More.

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    Plan Now for the 15th Annual CBAI/BAKER Investment Seminar and Golf Outing

    Given the current recession and volatile financial markets, bankers face complex challenges in successfully managing their investment portfolios. At this session, Dr. Lacy Hunt, an internationally-known economist, and Jeff Caughron, a Baker associate partner, will discuss strategies to optimize returns while using the bond portfolio as a tool for managing liquidity risk, cash flows, and interest rate risk. After the seminar, please join CBAI and Baker for a complimentary golf outing. For your convenience, this free seminar and golf outing will be held on two dates and at two locations:

    Monday, July 27, 2009, at Bolingbrook Golf Club, Bolingbrook, Illinois, and again on, Monday, August 3, 2009, at Sunset Hills CC, Edwardsville, Illinois.

    For more information and to register, please download, complete, and fax the attached brochure to Skoshi at Baker at 405-415-7366.
    Click here for details.

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    BAKER Market Update

    Yields fell across the Treasury curve this week; jobless claims fell more than expected; wholesale and retail prices for June are expected to rise.
    More.

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    CBAI Members Save More Than $300,000 with Midwest Office Supply
    Savings is the Largest in Program’s Seven Year History!

    Community BancService Corporation, Inc. (CBSC)
    announced today that 130 CBAI members banks that participate in the CBSC/Midwest Office Supply Program saved more than $300,000 on the purchase of office supply products and furniture during the annual period ending 6/30/09, the largest savings in the history of the program, and more than any other single service recommended by the Association.

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    Register for CBAI’s 35th Annual Convention by July 31 and Be Eligible for Prizes!

    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.” The convention begins by discussing the transformation that is going on in America, concentrates on new ways that the best minds in community banking are finding to reckon with this new economy, and advances to the latest in bank products and services. By registering for the convention by Friday, July 31, you will become eligible to win great prizes inspired by the “Survive and Thrive” theme. For more information on this year’s convention or to register, please visit
    www.cbai.com today!

    For a description of the July prize drawings, please click here.

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    CBSC Service Makes Good Things Happen to Bad Checks!

    Check Resultz, a CBSC marketing partner, collects bad checks electronically via ACH at no cost to the business or the bank. And the bank earns a share of the fee paid by the bad check writer!
    Learn more about Check Resultz.

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    Register Today for CBAI’s Community Bank Directors’ College

    The Community Bank Directors’ College was developed in close conjunction with both state and federal regulators, and is designed to teach individuals how to become a more effective, capable, and supportive member of a bank’s board of directors. The primary goal of the College is to graduate directors that return to the bank more active, more knowledgeable, and more decisive. The Directors’ College is offered once every two years and provides a thorough understanding of bank operations and bank directors’ responsibilities. The College is recommended for both new and seasoned bank directors, and it is structured as two, two-day sessions offered on an annual basis. The second session, which may be attended as a stand-alone course, is being held at the Hilton Hotel in Lisle, Illinois, August 11-12.

    For more information, please
    click here.

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    What is DLP and Why is it Important to My Bank?

    Banks are data-driven, where transactions and customer data flow through many points of the institution. The dynamic and complex nature of today's bank IT systems makes securing sensitive information extremely difficult. Despite developing security policies and providing security training, employees will accidentally send an email containing confidential information such as account numbers, social security numbers, and PIN numbers, without realizing that the data needs to be encrypted during transmission. For more information on developing a robust data leak prevention (DLP) solution, please
    click here.

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    New Books for Bank Customers Promote Financial Education
    Help Improve Financial Literacy in Illinois

    The High School Money Book provides high-quality information on personal finance for high-school students. A Parent’s Guide to Wills & Trusts is a comprehensive and valuable resource for parents and grandparents. Plus, one dollar from the sale of every book is donated to the CBAI Foundation for Community Banking, which endows the 15 scholarships offered every year to high-school seniors. For more information,
    click here.

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    STUDY: How Financial Institutions Use Twitter

    Financial institutions are among thousands of organizations that use Twitter to communicate with their audiences. Some banks use it hourly while others use it sporadically. The purpose of this
    research is to identify the primary uses of Twitter by financial institutions to better understand what information they deem important enough to share.

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