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 28, 2010 Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • FDIC Releases Summary of Financial Reform Act
  • The Wall Street Lobby Spent Big Bucks to Water Down Reforms
  • Comptroller Dugan Discusses Lessons from Financial Crisis
  • Time to Request District Meetings During Congressional Recess
  • CBAI FedPac Fundraiser was a "Grand-Slam"!
  • Agencies Issue Final S.A.F.E. Act Rules
  • Economic Signals Remain Worrisome
  • Illinois Faces Precarious Fiscal Situation
  • Baker Market Update
  • NACHA Releases E-mail Phishing Alert
  • Midwest Office Supply Hosts Community Banking Appreciation Night
  • CBAI Announces Grand Prize for 36th Annual Convention & Expo
  • E-mail Marketing: What's New? What's Hot? What's Next?
  • Training the Credit Analyst Set for August 4-5
  • First Session of Banking Essentials Series Scheduled for 8/11 & 8/12
  • CBAI's New IRA Institute Scheduled for August 17-18, 2010

  • FDIC Releases Summary of Financial Reform Act

    The FDIC recently released a summary of certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Several provisions require notice-and-comment rulemaking and action by the FDIC board and/or other regulatory agencies. ICBA and CBAI will be actively engaged in the rule-writing process. Unless otherwise specified, the provisions of the Act became effective on July 22, 2010.
    See FDIC Summary.

    ICBA’s Director of Congressional Relations, Steve Verdier, discussed the impact of the reform measure on community banks in a recent C-SPAN interview. See Verdier Interview. In addition, ICBA Chairman Jim MacPhee shared his observations on the Act in a recent article. See MacPhee Article.

    Fox Business concluded that community banks were clearly winners in the reform debate and predicted that the competitive pendulum will swing back toward smaller institutions. See Fox Business Article.

    ICBA Offering Resources on Reform Act

    ICBA is offering various resources to better understand the contents of the reform act. ICBA began a three-part audio conference series on July 27 with an audio conference focused on deposit insurance and regulatory authority. A second call on consumer and mortgage reform, the Consumer Financial Protection Bureau and interchange is scheduled for 2 p.m. Tuesday, Aug. 3. The series finishes at 2 p.m. Tuesday, Aug. 24, with a call on too-big-to-fail, the new resolution authority and investor protections. The audio conferences are free for ICBA members and $99 for nonmembers and will include time for questions and answers. ICBA also offers a series of fact sheets outlining the impact of various provisions in the law on the nation's community banks. The fact sheets address deposit insurance, financial stability, consumer protection, prudential regulation, interchange and investor protection. ICBA also offers a summary of the measure.

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    The Wall Street Lobby Spent Big Bucks to Water Down Reforms

    Wall Street firms spent an estimated $300 million trying to kill the financial reform bill this year, including hiring scores of former congressmen and congressional staff members. Although the measure was enacted with some meaningful provisions, the giant institutions were able to mitigate or eliminate certain key provisions aimed at addressing the too-big-to-fail issue.

    First, the proposal to break up the big banks, supported by CBAI, was defeated in the Senate. Then the prefunded systemic risk resolution fund was eliminated which Art Wilmarth, law professor at George Washington University, described as “a huge win for the ‘too-big-to-fail’ players, and a huge loss for the FDIC and taxpayers.”
    See American Banker Article. See Huffington Post Article.

    Next the Volcker Rule, which would have prevented banks from speculating in the markets and operating and investing in hedge funds and private-equity funds, was markedly compromised with last minute concessions. Now banks can invest up to three per cent of their capital in hedge and private-equity funds, thereby maintaining a higher risk factor for these giant banks. See New Yorker Article.

    With the five largest banks controlling a whopping 58% of all U.S. banking assets today, too-big-to-fail has not been resolved. Simon Johnson, an MIT economics professor, recently stated, “We are setting ourselves up, without question, for another boom based on excessive and reckless risk-taking at the heart of the world’s financial system. This can end only one way: badly.” In the next Congress, CBAI will continue to push for downsizing the giant banks and restoring the legal divide between commercial banking and investment banking.

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    Comptroller Dugan Discusses Lessons from Financial Crisis

    In the last formal speech of his five-year term as Comptroller of the Currency, John C. Dugan said the financial crisis had exposed glaring gaps and differences in the regulation of different types of financial institutions and made clear the need for an updated capital framework.
    Read Speech.

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    Time to Request District Meetings During Congressional Recess

    ICBA and CBAI are encouraging community bankers to set up district meetings with members of Congress during the August congressional recess. The August recess is the perfect time for community bankers to meet personally with elected officials to discuss the impact of the Wall Street Reform Act on their banks and make representatives and senators aware of community banking issues on the horizon. ICBA offers a variety of resources on its Grassroots Advocacy Center to help community bankers set up and execute district meetings. The comprehensive grassroots webpage offers
    House and Senate sample meeting request letters, House and Senate contact information, and an automated form to tell ICBA about district appointments and meetings. Meeting resources including issue talking points and vote breakouts will be added to the Grassroots Advocacy Center as the August recess approaches. Visit Grassroots Advocacy Center.

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    CBAI FedPac Fundraiser was a "Grand-Slam"!

    Thank you to the bankers, associate members, and staff for stepping up to the plate and supporting CBAI FedPac!
    Click here for highlights.

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    Agencies Issue Final S.A.F.E. Act Rules

    Federal agencies issued final rules today requiring residential mortgage loan originators to meet the registration requirements of the Secure and Fair Enforcement of Mortgage Licensing Act of 2008. For further details and final rules,
    Click Here.

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    Economic Signals Remain Worrisome

    During the second quarter of 2010, the home ownership rate (households that own their own residence) fell to 66.9%, the lowest since 1999. About 18.9 million homes nationwide were unoccupied as foreclosures increased.
    See Bloomberg Article.

    Meanwhile, the equity markets continued their volatility, and Treasury yields reached new lows last week with investors willing to accept lower returns for government guarantees. See Reuters Article.

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    Illinois Faces Precarious Fiscal Situation

    The Chicago Federal Reserve recently conducted a two-day conference of academics, policymakers, business leaders, and policy analysts to determine Illinois’s fiscal problems and what measures can be taken to restore fiscal stability. The group concluded that Illinois has accumulated more than $120 billion in total indebtedness and a budget deficit in excess of $11 billion in the next budget year. They concluded that solutions will require extensive budget cuts and higher taxes over a period of several years.
    See Chicago Fed Letter.

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    Baker Market Update

    Fed Chairman Bernanke addressed Congress; June’s leading economic indicator index dropped for the second time since March 2009; and the Treasury auctions off Notes.

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    NACHA Releases E-mail Phishing Alert

    The Electronic Payments Association said several individuals and companies have received a fraudulent e-mail that has the appearance of having been sent from NACHA. The subject line of the e-mail states: "Unauthorized ACH Transaction." The e-mail includes a link that redirects the individual to a fraudulent website and contains a link that is almost certainly an executable virus with malware. NACHA noted that it does not send communications to individuals or organizations about individual ACH transactions that they originate or receive.
    Read More from NACHA.

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    Midwest Office Supply Hosts Community Banking Appreciation Night

    On a beautiful June evening, more than two dozen bankers and their guests gathered at Rent One Park in Marion to celebrate Community Banking Appreciation Night and watch the Marion Miners beat the River City Rascals 8-3. The event, sponsored by Midwest Office Supply, brought together more than 80 area businesspeople for an evening of fun and fellowship. A “baseball-style” buffet of burgers, dogs, and sides was served and prizes were awarded to the attendees between innings.

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    CBAI Announces Grand Prize for 36th Annual Convention & Expo

    CBAI recently announced the
    grand prize trip to be awarded at the 36th Annual Convention & Expo on September 30 – October 2, 2010, at the Galt House in Louisville, KY. This year's grand prize takes you to the 137th running of the Kentucky Derby, the crown jewel of the elusive Triple Crown, which includes the Belmont Stakes and the Preakness Stakes. Witness first-hand “the most exciting two minutes in sports” as you sip mint juleps and place your bets at the 2011 “Run for the Roses.” Steeped in tradition, the Derby is a stakes race for three-year-old thoroughbred horses, staged yearly in Louisville, Kentucky. One of the oldest and most important sporting events in the world, it typically draws around 155,000 fans, making it the most popular horse race in North America. Only full community banker convention registrants are eligible to win, so sign up to attend the convention today!

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    E-mail Marketing: What's New? What's Hot? What's Next?

    E-mail is growing and the buzzwords are changing. If you're still relying on old-fashioned generic e-blasts, it's time for a new tack.
    See Article.

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    Training the Credit Analyst Set for August 4-5

    CBAI is pleased to offer
    “Training the Credit Analyst,” a two-day program scheduled for August 4 & 5 in Springfield. As community banks strive to become high-performing financial institutions, the need to cultivate and develop a portfolio of commercial borrowers increases. Credit analysis is an essential part of this process as banks strive to develop solid commercial relationships. This seminar addresses the needs of beginning credit analysts and reinforces 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.

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    First Session of Banking Essentials Series Scheduled for 8/11 & 8/12

    CBAI presents
    “Banking Essentials”, a must for newer community bank employees. This series is designed to provide a complete knowledge of banking principles and operations. It is also geared toward veteran employees as a refresher course. Offered in one location, the program is structured as two, two-day sessions to cut down on travel for your convenience. As such, sessions one and two are offered on consecutive days in August, and sessions three and four are offered on consecutive days in February. All seminars are held at CBAI headquarters in Springfield. While it is recommended that the individual attend all four sessions of the series to receive an entire overview of banking, each session's material stands alone; one is not a prerequisite for another.

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    CBAI's New IRA Institute Scheduled for August 17-18, 2010

    Do you get an uneasy feeling in the pit of your stomach when a customer asks questions about IRAs? Do you know a little about IRAs but wish someone would take the time to explain more about IRAs to you? Would you have a hard time explaining the differences between a Traditional IRA and a Roth IRA? Would it be stressful for you to describe a Recharacterization to a customer? Have you ever looked at various IRA forms and not understood why the information that's being requested on them is being requested? If you answered “Yes” to any or all of the above questions, then this
    two-day institute is for you!

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    Other CBAI Events

    CBAI’s 36th Annual Convention & Exposition (9/30-10/2; Galt House, Louisville, KY)
    Convention Brochure
    Exhibiting Information

    Finer Points Blog





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