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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    July 19, 2017

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • CBAI Urges Member Action on CLEAR Relief Act
  • Outreach Needed on Bill Offering HMDA Reporting Exemption
  • OCC: Mortgage Performance Improves in First Quarter
  • Op-Ed: Bank Customers Still Value Human Touch
  • Regulators Propose Raising CRE Appraisal Threshold
  • House Committee Approves Appropriations Bill for Farm Operating Loans
  • ICBA Makes Tax Reform Recommendations Supported by CBAI
  • Senate Ag Appropriations Subcommittee Advances Funding Bill
  • Are De Novo Banks on the Rise?
  • Complete Details Now Available for CBAI's 43rd Annual Convention & Expo
  • Community Bankers Unite - It's Auction Time Again!
  • Investment News From THE BAKER GROUP
  • Americans Are Hoarding Money in Checking Accounts
  • Student Debt Linked to Decreased Home Sales for Millennials
  • CBIS: Vendor Risk Management Must Account for Growing Reliance on Third Parties
  • 2017 CBAI Compensation Survey Results Now Available-Webinar Set for July 25
  • Win $2,500 for a Deserving Student from iHELP
  • July Double Discounts Available from Dell
  • Four Ways to Retain Your Top Talent
  • Poor Safe Deposit Box Revocations Invite Lawsuits
  • CBAI Classified Ads: A Free CBAI Member Benefit that Works for You!
  • Directors' Workshop to be Held July 27 in Springfield
  • Reg B: Current Rule, 2018 Changes, New Real Estate Application Set for August 1 & 2
  • HMDA Seminar Slated for August 3 & 8
  • Basic BSA Institute Scheduled for August 9 & 10

  • CBAI Urges Member Action on CLEAR Relief Act

    CBAI is continuing its push to keep lawmakers engaged with regulatory relief by urging support for the CLEAR Relief Act. If you and your officers and directors have not yet contacted your lawmakers, then CBAI asks that you take action now by urging them to co-sponsor and advance this pro-growth legislation. The CLEAR Act includes numerous regulatory relief provisions for community banks. Contact Congress Today!

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    Outreach Needed on Bill Offering HMDA Reporting Exemption

    CBAI and ICBA are also encouraging community bankers to urge their House members to co-sponsor legislation that would exempt low-volume community bank mortgage lenders from expansive new regulations. The Home Mortgage Disclosure Adjustment Act (H.R. 2954), introduced by Rep. Tom Emmer (R-Minn.), would offer relief from a Consumer Financial Protection Bureau rule requiring covered banks to collect and report 48 unique data points on each mortgage loan they make. Contact Congress Today!

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    OCC: Mortgage Performance Improves in First Quarter

    First-lien mortgage performance improved in the first quarter of 2017 compared to a year earlier, the Office of the Comptroller of the Currency reported. The OCC’s first-quarter Mortgage Metrics Report showed 95.6 percent of mortgages included in the report were current and performing at the end of the quarter, compared with 94.9 percent a year earlier. Meanwhile, servicers initiated 47,546 new foreclosures in the fourth quarter, an increase of 4.5 percent from the previous quarter but a decrease of 19.3 percent from a year earlier. Read Report.

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    Op-Ed: Bank Customers Still Value Human Touch

    Community banks offer both digital and in-person financial services to meet the needs of a broad consumer base, ICBA Senior Executive Vice President and Chief of Staff Terry J. Jorde wrote in a new op-ed. In American Banker, Jorde wrote that consumers remain financial services omnivores despite the widespread adoption of digital banking—preferring branch visits to conduct major transactions or get financial advice.

    “So the challenge for the banking industry is not how to serve the small sector of consumers that prefers online-only banking,” Jorde wrote. “Rather, the task at hand is a balancing act of providing the full slate of in-person and digital banking services to a diverse consumer base—and doing it all well.” Read Op-Ed.

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    Regulators Propose Raising CRE Appraisal Threshold

    Due to community bank advocacy, the federal regulators issued a joint proposed rule-making to raise the transaction-value threshold requiring commercial real estate appraisals from $250,000 to $400,000. Under the proposal, CRE transactions valued at $400,000 or less would require an evaluation and not an appraisal. The current $1 million threshold for business loans would not be increased under the proposal. However, the regulators are seeking comment on the appropriateness of increasing that threshold.

    In a March, 2016 comment letter, ICBA expressed support for raising the threshold to $500,000 for all real estate related loans—not just CRE loans—and for raising the threshold for real estate secured business loans from $1 million to $2 million.

    The agencies decided against raising the $250,000 threshold for loans secured by residential real estate citing limited impact on regulatory burden because of Fannie Mae and Freddie Mac appraisal requirements, consumer protection issues, and safety and soundness concerns. The regulators are also is seeking comment on whether other factors should be considered in evaluating the current threshold for 1-to-4 family residential transactions and whether the threshold can and should be raised, consistent with consumer protection, safety and soundness, and reduction of unnecessary regulatory burden. Read Joint Release. Read Comment Letter.

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    House Committee Approves Appropriations Bill for Farm Operating Loans

    The full House Appropriations Committee last week approved the fiscal year 2018 Agriculture Appropriations bill on a voice vote. The bill totals $20 billion in discretionary funding, which is $876 million lower than the fiscal year 2017 enacted level and $4.64 billion above the President’s budget request. ICBA urged additional funding levels for USDA guaranteed farm and rural loan programs. Rep. Chellie Pingree (D-Maine) offered an amendment, incorporated into the manager’s amendment, adding $200 million in loan volume for the USDA guaranteed farm loan program. Read House Appropriations Bill. Read ICBA Letter.

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    ICBA Makes Tax Reform Recommendations Supported by CBAI

    ICBA sent a letter to Senate Finance Committee Chairman Orrin Hatch (R-Utah) and ranking member Ron Wyden (D-Ore.) laying out ICBA’s plan to strengthen communities, promote local economic growth, and spur job creation through an improved tax code. Given community banks' strong partnership with small businesses, farmers and ranchers, ICBA is particularly concerned about the impact the elimination or limitation of the interest deduction will have on these borrowers. For most small businesses, community bank credit is the only viable source of capital, ICBA stated. In the letter, ICBA and CBAI also advocate several measures as outlined in the ICBA Plan for Prosperity, including:

    • expanding access to credit with tax incentives for targeted community bank lending,
    • repealing the estate tax,
    • seeking tax parity with credit unions and farm credit lenders,
    • opposing new commercial bank taxes, and
    • strengthening the Subchapter S business model by increasing the number of shareholders, allowing for IRA shareholders, and allowing preferred stock.
    ICBA and CBAI will continue to speak out on behalf of community banks as Congress and the White House debate a comprehensive rewrite of the nation’s tax code. Read Letter on Tax Reform.

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    Senate Ag Appropriations Subcommittee Advances Funding Bill

    The Senate’s Agriculture Appropriations Subcommittee adopted legislation yesterday to fund a variety of USDA and related agencies' programs for fiscal year 2018 which begins October 1. Subcommittee Chairman John Hoeven (R-ND) said in an opening statement that the bill provides $4.25 billion in farm ownership loans and $3.49 billion in farm operating loans, consistent with current funding levels.

    The House legislation provided less funding for USDA farm loans. Overall, the Senate bill provides $20.5 billion in discretionary spending, $352 million less than last year and approximately $125 billion in mandatory spending. A full committee markup is scheduled for today. CBAI and ICBA have written Congress urging funding for USDA farm and rural development programs. Read Opening Statement. Read Senate Release.

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    Are De Novo Banks on the Rise?

    De novo bank formation since the recession has been almost nonexistent, a major change from the two decades preceding the recession, when FDIC data show there was an average of 172 de novo charters each year.

    Within the past year, however, there have been signs of life. The FDIC received six applications for deposit insurance last year (though one bank has since withdrawn its application). While the FDIC has provided some relief, there are still significant challenges to starting a bank from scratch.

    The FDIC’s expectations for de novo banks are too onerous, according to Chris Cole, executive vice president and senior regulatory counsel at ICBA. He contends that more regulatory relief, as well a more favorable business environment, is necessary for de novo activity to return in a meaningful way in the United States.

    “I just don’t see us returning to those days, given how the business environment has changed,” says Cole, “but I can see it getting back to the days when it was 30, 40 or 50 a year, and not just dribbles like we are seeing now.” CBAI encourages new bank formations and offers guidance to those interested in starting a new bank. Read More.

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    Complete Details Now Available for CBAI's 43rd Annual Convention & Expo

    CBAI is pleased to announce that complete convention details are now available. CBAI’s 43rd Annual Convention & Expo, scheduled for September 14-16, 2017, at the Crowne Plaza in Springfield, IL, features expert speakers on the hottest community banking topics, networking opportunities, entertainment, and more. The full convention brochure provides details on 20 education break-out sessions, Thursday's Golf Outing, the Saturday night entertainment, Partners' Programs, a special event on Friday night, and more. Don't wait! Check out the full convention brochure and register yourself and members of your team today! See Details.

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    Community Bankers Unite - It's Auction Time Again!

    CBAI is excited to begin preparing for our Community BancPac’s 26th annual silent auction and 10th annual live auction. This night is always a fun-filled event and one of the highlights of CBAI’s annual convention. We hope to make this year’s auction successful and memorable, but we need your help! CBAI deeply appreciates the PAC donations so many of you make each year. However, to continue representing the interests of community banks, we need greater participation for this important cause. There are two options for donations: an actual item (i.e., sports tickets, collectibles, sports memorabilia, electronics, condo/vacation get-a-ways, etc.) or a cash donation. Donated items may be transported to convention or mailed to CBAI for transport. The cash option will allow CBAI staff to purchase popular items for auction and credit your financial institution for the item. Be a SUPERHERO and make a contribution to the auction! Donate Today!

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    Investment News From THE BAKER GROUP

    Baker Market Update

    At the risk of oversimplification, a risk too often avoided, Janet Yellen’s two-day Congressional testimony could be succinctly paraphrased by a single statement; “I’m not sure.” Not sure when inflation will kick in, but sure that it will. Not sure when wages will rise, but sure that they will, too. Not sure when the next rate hike will happen, but it will happen. See Baker Market Update.

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    Americans Are Hoarding Money in Checking Accounts

    Cash – or something close to it – is king again.

    Enjoying a steady job market but reluctant to spend freely due to economic uncertainty, a wide swath of middle-class Americans is hoarding money in banks. Total bank deposits rose 16.6 percent last year to $10 trillion; deposits measured as a percentage of bank assets are the highest since 2006 at 77.7 percent. Read More.

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    Student Debt Linked to Decreased Home Sales for Millennials

    Rising tuition rates were responsible for an 11 percent to 35 percent decline in home ownership rates among Americans ages 28 to 30, according to research from the Federal Reserve Bank of New York. The findings were based on an analysis of public college tuition hikes from 2001 to 2009 and the subsequent impact on student debt held by 24-year-olds from 2003 to 2011. Survey findings suggest that states which increase college costs can expect weaker spending and wealth accumulation among young consumers. Read FRB New York Report.

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    CBIS: Vendor Risk Management Must Account for Growing Reliance on Third Parties

    How community banks manage third-party vendor risk has been an area of increasing regulatory attention for several years now. As financial institutions have become more dependent on third-party vendors to both expand services and streamline operating efficiencies, oversight of vendors has necessitated greater investment from bank leadership.

    These days, more banks are outsourcing functions that range from technology support to human-resource management to core, traditional bank procedures, like loan-review and loan-servicing responsibilities.

    Add cyber and data risk to the growing interdependence of bank-vendor relationships and clearly it is more important than ever that banks need a thorough, proactive vendor risk-management program. Read More.

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    2017 CBAI Compensation Survey Results Now Available-Webinar Set for July 25

    The wait is over! The results of the 2017 CBAI Compensation Survey are now available. And, once again, participants received the results for free, thanks to sponsor IZALE Financial Group.

    We think that you 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 of your peers who took the time to complete the Survey. Non-participant CBAI members can purchase the results for $300. Contact, CBAI SVP Communications, to do so at or 800/736-2224.

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    Win $2,500 for a Deserving Student from iHELP

    For many children, college is the first, big step in their adult journeys and while parents all wish success on this journey, how they define success varies. The #WhatIWish scholarship contest, presented by ICBA and CBAI partner iHELP, asks parents to share a photo and what they wish for their college-bound students; doing so will enter their child for a chance to win a $2500 scholarship.

    The contest is open to any parent or legal guardian with a student who graduated from high school in 2017 or will graduate in 2018 and will be attending college in the U.S. in the 2017-2018 or 2018-2019 academic year. Parents can enter the contest online at The contest ends July 31, 2017, and the $2500 scholarship will be awarded by random draw at that time.

    Please make this information available to your bank customers and employees. Good luck!

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    July Double Discounts Available from Dell

    Did you know you can extend the savings you receive from Dell as a CBAI and/or ICBA member to your own customers, friends and family? Take advantage of these hot summer deals, using the coupon code DOUBLEDISCOUNT (and forward them on). Shop Dell Deals.

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    Four Ways to Retain Your Top Talent

    Keeping talent around is vital to growing a successful company. If you’re having an issue with employee retention, there could be several reasons why employees are flying the coop. While there will always be some level of turnover, it hurts when good employees leave. Here are a few strategies for keeping those employees around. See Strategies.

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    Poor Safe Deposit Box Revocations Invite Lawsuits

    Lawsuits are occurring nationwide because financial institutions are not following correct box relocation procedures. Because of this lack of knowledge or concern, many unhappy box renters are claiming the loss of valuable box contents and filed lawsuits. The article provides information and examples of interest to financial institutions. Read Article.

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    CBAI Classified Ads: A Free CBAI Member Benefit that Works for You!

    CBAI will post your open positions on its web site at no cost to you. And it works! Recently, a member banker let us know that his ad resulted in 11 resumes, eight interviews and a new CEO. Simply send the ad to Andrea Cusick, SVP Communications, at All that we ask is that you let us know when the position is filled. To peruse listings currently available, go to the CBAI Career Center.

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    Directors' Workshop to be Held July 27 in Springfield

    Being a member of a community bank's board of directors is a challenging and rewarding experience. The community bank director has duties to the institution, its stockholders, and its depositors. And, he or she has responsibilities to the public-at-large. To meet these duties and responsibilities, a director must be knowledgeable and active. Thus, we invite you to join CBAI and the FDIC for the Directors' Workshop. Representatives from the FDIC discuss hot banking topics to make this comprehensive, one-day conference a must-attend. Topics covered include Corporate Governance and Succession Planning with Robert Warren; Preparing for Your Examination with Gerald Anderson, Bill Doering, and Angela School; Cybersecurity with Leslee Martin; an Economic Update; Compliance Risk Assessments with Patrick Ryan, Bill Doering, and Angela School; Concentration Risk Management with Gerald Anderson and Ashlee Chapman; and Interest Rate Risk with Deanna Willemsen. All speakers are representative of the FDIC. Insight Group, Atlanta, Georgia, who has more than 36 years’ experience in the banking field.

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    Reg B: Current Rule, 2018 Changes, New Real Estate Application Set for August 1 & 2

    CBAI is pleased to offer the fourth quarter of the Community Bankers for Compliance (CBC) program, in two locations this August. Beginning in 2018, Regulation B will change to adapt to the new application that all bankers will have to use. This is NOT only for HMDA banks – all banks are impacted by these changes. This seminar addresses the new application, the new proposed Regulation B language, as well as review the current version of the regulation. At the end of the seminar, attendees will gain an understanding of Regulation B in its current form, its likely form for 2018, and the new 2018 application that is responsible for the changes. The subjects for the regulatory update will be determined by circumstances and releases from the various agencies. Unless there are major changes in the next few weeks, the majority of update will focus on real issues that impact banks every day – clarifications and aids to help in the day-to-day operations of the bank. Compliance officers should attend this session. In addition, all personnel with responsibilities for real estate lending at all levels, including senior management, auditors, lenders and others should also consider joining us for this session. Adam Witmer, CRCM, senior consultant, Young & Associates, Inc., leads this session.

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    HMDA Seminar Slated for August 3 & 8

    Are you ready to collect more than 40 pieces of information for every mortgage loan you make? And are you aware that many more loans will be on your LAR than there have been there in the past, while some loans that use to appear on the LAR will no longer appear? The year 2018 will bring many changes. While the Home Mortgage Disclosure Act (HMDA) has existed for many years, recent regulatory activity will increase the potential for errors. In many ways, the new rule is simpler, but the volume and complexity of information that will have to be collected will create great strains on your institution. Bankers, now more than ever, must understand the HMDA rules. This seminar discusses the changes. HMDA assumes that everyone lives in an absolutely cookie cutter world – which of course is not even close to accurate. While the new rule takes out some guesswork, it certainly does not solve every possible problem. This seminar is designed to help you get ready for 2018 and beyond. We do not focus on the current rule (still effective for 2017 information gathering) – we focus on the new rule. Leading this seminar is Adam Witmer, senior consultant with Young & Associates, Inc., where he focuses on regulatory compliance.

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    Basic BSA Institute Scheduled for August 9 & 10

    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 will have a limited knowledge of BSA requirements. Although the Board of Directors is ultimately responsible for BSA, each bank must have a BSA officer who in charge of the day-today 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 and cover the new Customer Due Diligence (CDD) rules for ultimate beneficial owners. The primary focus of the institute is to ensure that all attendees understand the basic requirements for a sound compliance program based on the regulation and core examination procedures. Depending on the individual bank's needs, this seminar should be attended by newer BSA officers, compliance officers, senior management, internal auditors, and others who wish to be reminded or to learn about the basics of BSA. This seminar is led by Adam Witmer of Young & Associates, Inc.

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    THROUGH 08/31/2017






    Finer Points Blog

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