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Community Bankers Association of Illinois
Community Bankers Association of Illinois    Community Bankers Association of Illinois CBAI E-Newsletter Sponsor - SHAZAM
     A Bi-Weekly News Bulletin for CBAI Members                                    July 18, 2018

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Regulatory Agencies Issue Interim Guidelines on EGRRCPA
  • CBAI Opposes Postal Service Banking Proposal
  • Romero Rainey: Open Your Eyes to Credit Union Tax Exemption
  • Low-Volume Lenders Exempt from HMDA Reporting Requirements
  • Investment News from THE BAKER GROUP
  • Mid-America Economic Index Remains Healthy
  • Producer Price Gain Highest in Six Years
  • Illinois Treasurer Announces the Community Uplift Program
  • Crop Conditions Remain Good Despite Recent Heat Stress
  • Boston Federal Reserve: Mobile Continues Overtaking Checks
  • Why AI Is The Future Of Community Banking
  • CSI: Community Banks Zap the Tech Gap
  • What Disclosures Do You Need on Social Media?
  • Liberty Bank Selects Econocheck’s Secure Checking to Grow Club-Account Program
  • A Bank Organizer's First Big Decision? Coming Up with a Name
  • Donate to the Community BancPac Auction Today!!
  • CBIS: D&O-Your Bank’s Malpractice Insurance
  • CBAI’s 44th Annual Convention Slated for September 27-29
  • Privacy, Fair Credit Reporting Act and Regulation V Set for July 31 & August 1
  • Training the Credit Analyst Slated for August 13-15
  • BSA Graduate School Set for August 23-24
  • CFO Conference Coming on August 30

  • Regulatory Agencies Issue Interim Guidelines on EGRRCPA

    The banking agencies last week issued interim positions detailing rules and associated reporting requirements following the passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The agencies extended the deadline for company-run stress testing requirements for banks under $100 billion in assets until November 25, 2019 and stated that they would not enforce the Volcker Rule exemption in a manner inconsistent with EGRRCPA and will address statutory amendments through a separate rulemaking process.

    With respect to the reporting of HVCRE on the call report, the agencies said the statutory changes are effective immediately, and banks should only use the higher risk-weight of 150 percent for those commercial real estate exposures meeting the statutory definition of a HVCRE ADC loan. Banks may use available information to reasonably estimate and report only HVCRE ADC loans. Banks may also refine these estimates in good faith as they obtain additional information but will not be required to amend previously filed regulatory reports as these estimates are adjusted. Alternatively, banks may also continue to report and risk-weight HVCRE exposures in a manner consistent with current call report instructions. Read More.

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    CBAI Opposes Postal Service Banking Proposal

    House Taking Up Amendment to Bar Postal Banking

    In a July 13, 2018 comment letter to the U.S. Department of the Treasury, the Community Bankers Association of Illinois (CBAI) stated its opposition to a proposal that is again being revisited in Congress and elsewhere for the United States Postal Service to provide banking services. CBAI recommended the various stakeholders work cooperatively to find ways to enhance the ability of community banks to expand the delivery of banking services in a safe and sound manner.

    The House is expected to vote today on an ICBA-advocated amendment that would prohibit the U.S. Postal Service from providing banking services. House Financial Services Committee Vice Chairman Patrick McHenry (R-N.C.) is offering the amendment to the fiscal 2019 Financial Services and General Government appropriations bill.

    In a joint letter, ICBA and other national groups urged members of Congress to adopt the amendment, noting serious concerns with postal banking proposals and encouraging the Postal Service to focus on its core business of mail delivery. It follows other communications from ICBA and McHenry calling on the Treasury Department’s special task force on postal reform to recommend prohibiting an expansion of banking services at the Postal Service.

    In an American Banker op-ed earlier this year, ICBA President and CEO Rebeca Romero Rainey wrote that postal banking would put the livelihoods of many Americans in the hands of a government agency that has no experience in underwriting loans and cannot balance its own books. Read CBAI Article. See Joint Letter. Read ICBA Op-Ed.

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    Romero Rainey: Open Your Eyes to Credit Union Tax Exemption

    The nation’s tax-exempt credit unions have big plans for their multi-billion-dollar tax subsidy—a nationwide marketing campaign funded by the rest of us, ICBA President and CEO Rebeca Romero Rainey wrote in a new blog post. She noted the Credit Union National Association’s plan to raise $100 million over the next three years to launch an awareness program called “Open Your Eyes to a Credit Union.”

    “I guess buying up stadium naming rights isn’t cutting it anymore,” Romero Rainey wrote. “This taxpayer-subsidized investment in the expansion of growth-oriented financial firms certainly is eye-opening.” For many years CBAI and ICBA have strongly urged lawmakers to tax those credit unions that have no true common bond member affiliation limits. Read Blog.

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    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!

    Low-Volume Lenders Exempt from HMDA Reporting Requirements

    Following the passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act, low-volume community bank lenders will now be exempt from certain HMDA data collection and reporting requirements, according to a recent announcement from the Bureau of Consumer Financial Protection.

    Specifically, community banks that originate fewer than 500 closed-end mortgage loans or 500 open-ended lines of credit will no longer be required to collect, record, and report certain data points specified in current Regulation C of HMDA. The bureau also restated that reporting entities will not have to resubmit HMDA data collected in 2018 and reported in 2019 for non-material reporting errors, and that it will not assess penalties for data collected in 2018 and reported in 2019.

    The format of the Loan/Application Registers for institutions filing HMDA data collected in 2018 will not be affected. Banks that do not report information for a certain data field due to the Act’s partial exemptions will enter an exemption code for the field specified in a revised 2018 financial institutions group that the bureau expects to release, along with additional HMDA reporting guidance, later this summer. Read BCFP Statement.

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    Investment News from THE BAKER GROUP

    Baker Market Update

    While President Trump is busy sweet-talking our allies in Europe and the U.K., Fed Chairman Powell might want to think about how he’s going to sugar-coat his inflation message to American consumers. The much-desired and long-sought-after condition of rising price levels has now succeeded in eliminating any gains in the purchasing power of those that are compensated on an hourly basis. For the second month in a row, Real Average Hourly Earnings, adjusted for inflation, have been stagnant. So, while headlines herald an ever-soaring stock market and a “booming” domestic economy, the manon-the-street may still have to do most of his shopping through windows. See Baker Market Update.

    Investment Strategies for 3rd Quarter 2018 Webinar

    Thursday, July 19, 2018
    10:30 a.m. CDT

    Topics will include:
    • Economic Overview and Fed Policy Outlook: Good News, Rising Risks, and Coal Mine Canaries
    • Banking Industry and Balance Sheet Trends Deep in the Economic Cycle
    • Regulatory Relief Update – “Dodd-Frank Rollback” Gets Signed into Law
    • Should I Borrow or Sell Bonds? Determining the Best Way to Raise Liquidity
    • Tax Cuts Have Shifted Relative Value in the Municipal Market – Are Taxable Munis Now a Better Option?
    • Portfolio Management Strategies – What the Past Has Taught Us About Late-Cycle Investing
    Who Should Participate:

    Financial institutions’ CEOs, CFOs, investment officers, board members, and those who are directly or indirectly responsible for financial management functions will benefit from this webinar. There is no cost for this webinar. Register for this FREE webinar today!

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    Mid-America Economic Index Remains Healthy

    The June Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Arkansas to North Dakota, fell to a healthy level continuing to point to strong growth for the next three to six months.

    “The regional economy continues to expand at a very healthy pace with manufacturing growth of approximately 2.5 percent over the past 12 months compared to a lower 2.1 percent for the U.S. However, I expect expanding tariffs, trade restrictions and rising oil prices to slow growth and push inflation into a range leading to more aggressive Federal Reserve rate hikes,” said Ernie Goss, PhD, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business. Read More.

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    Producer Price Gain Highest in Six Years

    The Producer Price Index rose a seasonally adjusted 0.3 percent in June and was up 3.4 percent from a year ago—the biggest annual gain since November 2011. The U.S. Labor Department index of prices businesses receive for goods and services reported gains in the cost of transportation due to economic growth and a tight supply of shipping labor. Read More.

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    Illinois Treasurer Announces the Community Uplift Program

    Illinois State Treasurer Michael Frerichs is announcing the newly launched Access to Capital Community Uplift Program (CUP). CUP is a form of below-market access to capital for financial institutions in underserved areas. The CUP program works with qualified financial institutions that operate in designated areas (Enterprise Zones, Opportunity Zones, and Low-Income Communities) to increase their lending activities, fund more local development efforts, and provide direct investment to local communities and their residents.

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    Crop Conditions Remain Good Despite Recent Heat Stress

    According to Dan Grant of, 40 percent of the corn crop in Illinois had silked as of July 1 compared to the average of just 11 percent. Soybean development also was four times ahead of average as 44 percent of the crop was blooming in early July compared to the average of 11 percent.

    Crops are taking off due to rapid accumulation of growing degree days (GDD), according to Emerson Nafziger, University of Illinois agronomist. Crop condition ratings in the state the first of July totaled 85 percent good to excellent for corn (20 percent better than last year) and 78 percent good to excellent for soybeans (8 percent above last year). Read More.

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    Boston Federal Reserve: Mobile Continues Overtaking Checks

    Less than 80 percent of consumers who had paper checks on hand reported using them last year, while mobile payments are on the rise, the Federal Reserve Bank of Boston reported. A new report on Fed payments surveys found that one-third of consumers made a mobile payment in 2017, up from one-fourth in 2015. Further, 44.9 percent of consumers had a nonbank payment account last year, most commonly PayPal, according to the data. Read Fed Report.

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    Why AI Is The Future Of Community Banking

    On a surface level, community banking and artificial intelligence (AI) can seem like something of a mismatch in concept. Community banking is all about relationship-lending — forging personal and lasting connections directly with a consumer, while AI — particularly embodied by chatbots and voice assistants — focuses primarily on digitally mediating that personal relationship.

    Tina Giorgio, president and CEO at ICBA Bancard, says that surface perspective misses the bigger AI picture and the scope of what AI can offer to community bankers and their customers across the country. According to Giorgio, AI is a “tremendous opportunity” for community banking. In fact, she says that it could be a game changer for community banks over the next five years. Read More.

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    CSI: Community Banks Zap the Tech Gap

    Community banks have historically been viewed as slow to adopt technology when compared to their larger counterparts. Today, however, these banks are zapping the technology gap between themselves and larger institutions, with a push centered on digital banking.

    This advance toward digital banking logically stems from a desire to attract new customers. Find out how these two banks are using technology to level the playing field and acquire more customers. Read More from CSI.

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    What Disclosures Do You Need on Social Media?

    Social Media disclosures are a difficult topic. For example, can you spot what's wrong with this Facebook post? "Comment on this post for a chance to win a $10 gift card!" What about this tweet? "Looking for frugal fun this summer? Check out this post [weblink to third-party site]"

    If it is not immediately obvious, that's okay. We see these mistakes all the time, and honestly, they are fairly reasonable. When a bank posts on social media, it’s accountable to several different organization, such as the FDIC, FTC, NLRA, and the terms of service for the respective social media platform. Read More from CBSC Preferred Partner Kasasa.

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    Liberty Bank Selects Econocheck’s Secure Checking to Grow Club-Account Program

    In order to provide its customers with enhanced service offerings and drive growth of its club-account checking program, Liberty Bank selected CBAI-endorsed Econocheck’s Secure Checking as its new club-account partner. A leading provider of packaged checking-account strategies for more than 40 years, Econocheck has established a proven track record of helping banks deliver value for which its customers will pay.

    Mark Field, president & chairman at Liberty Bank, said the bank has offered a club-account checking program for years, but the products were stale and needed an update. He said three priorities played a role in the bank’s decision to partner with Econocheck. The first is its Secure Checking, which offers a strategy that delivers a suite of modern products designed to meet customers’ needs and expectations in a technologically-advanced world. The second factor is that Econocheck’s long list of satisfied bank clients is a testament to its ability to deliver strategies that include world-class products and services at a fair price. And the third factor was that CBAI chose to partner with Econocheck and provided the bank with member-only discounts. Field added, “CBAI’s special partnership with Econocheck sealed the deal for me.”

    For more information about Econocheck’s Secure Checking program, please contact Jeff Phillips, Econocheck national sales manager, via email at or telephone at 312/343-2752.

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    A Bank Organizer's First Big Decision? Coming Up with a Name

    Choosing a new bank’s name is an important marketing decision, especially since it is challenging and expensive to rebrand down the line. While some groups still prefer brands tied to a market or home state, new electronic channels and the need for broad expansion are pushing some organizers to get more creative.

    CBAI has long advocated for the creation of new banks and offers basic guidance on new bank formations. Read More on Bank Name. Access CBAI Guidance.

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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: D&O—Your Bank’s Malpractice Insurance

    Proper fiduciary stewardship of a large corporation is not without its own ambiguities, regulatory perils and potential conflicts of interest. But the fiduciary demands on the leaders of community banks could rightfully be thought of as even more intense, particularly when considering the limited resources of community banks compared to publicly held corporations, the onerous nature of bank regulation, and the competitive constraints owed to historically low interest rates.

    The good news for community bank directors and officers is that there are concrete practices that can—and must—be put in place to ensure the amorphous duties of loyalty and care are being fully executed. Read More.

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    CBAI’s 44th Annual Convention Slated for September 27-29

    EXHILARATED. CHARGED-UP. MOTIVATED. REFRESHED. That's how you'll feel after attending CBAI's 44th Annual Convention and Exposition to be held September 27-29, 2018, at the Hyatt Regency at The Arch in St. Louis, MO. This year’s convention features hard hitting educational topics, a huge exhibit center, and fun-filled social events. Take a few minutes to look through the pages of the brochure which describes all activities and get registered today!!! More Information and Registration Here!

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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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    BSA Graduate School Set for August 23-24

    This two-day program is designed for BSA professionals who are competent in the core requirements of Bank Secrecy Act rules and provides a higher level of lecture, training, and interactive discussion regarding the challenges of developing and managing an effective BSA program. Much of the discussion revolves around real life case studies which are an integral part of the school. This school also addresses the customer due diligence (CDD) rules which became effective May 11, 2018, addressing the requirements for verifying the ultimate beneficial owners for business accounts, and any up to the minute changes. A major focus of the program is managing a BSA program. Topics include discussions on ethics, efficiency vs. effectiveness, dealing with examinations, escalating issues within the organization, and managing MSB relationships. In addition, the class will learn to design an effective BSA program through the study of workflow charts, which are provided. We discuss best practices for impacting the bottom line of a BSA program and we discuss a policy checklist, as well as how to conduct a gap analysis to ensure your program is as refined as possible. The course will rely heavily on a roundtable discussion. The facilitator guides the group through a number of pre-determined discussion topics, as well as topics requested by the attendees. Leading this institute Bill Elliott, CRCM, senior consultant and manager of compliance, Young & Associates, Inc.

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    CFO Conference Coming on August 30

    The 2018 CFO Conference is designed to help community-bank CFOs gain a wide variety of information from expert speakers on topics that community bank chief financial officers have requested, and return to the bank ready to implement newly found ideas and knowledge! Topics include “Liquidity Crunch” with Drew Simmons, vice president at THE BAKER GROUP, Oklahoma City, OK; “Trends in Cybersecurity: Is Your Bank at Risk?” with Sara Nielsen, senior vice president at BankOnIT, Oklahoma City, OK; “Regulatory Changes – What Ones are Important to Financial Performance” with Tim Tedrick, partner at Wipfli LLP, Sterling, IL; and “Creating Funding Stability” with Jim Lutter, senior vice president, and Todd Terrazas, business development product manager, both of PMA Financial Network, Inc., Naperville, IL.

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    THROUGH 08/30/2018


    THROUGH 12/31/2018

    THROUGH 12/31/2018





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