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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    August 2, 2017

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Action Request: Support Senate CFPB Arbitration Rule Reversal
  • Action Request: Outreach Needed on HMDA Reporting Exemption Bill
  • CBAI Seeks Congressional Support for Reciprocal Deposit Legislation
  • Report on Staff Visit to Washington, D.C.
  • USDA Accepting Rural Broadband Access Applications
  • States to OCC: Fintech Charter Lacks Legal Authority
  • Investment News From THE BAKER GROUP
  • U.S. GDP Growth Accelerates in Second Quarter
  • Fed Leaving Rates Unchanged and Plans to Wind Down Stimulus
  • Agriculture Secretary Perdue to Kick Off “Back to Our Roots” RV Tour
  • CBAI Proposes Goals for New Farm Bill
  • Feeding Supermarket-starved Communities Through Food Co-ops
  • Complete Details Now Available for CBAI's 43rd Annual Convention & Expo
  • Community Bank Attributes Spotlighted in Article
  • Community Bankers Unite - It's Auction Time Again!
  • Why Corrupt Mega Bankers Avoid Jail
  • Bank-Policy Templates Now Available for Purchase
  • CBAI Convention — Visit Midwest Office at Booths 51/56!
  • CBAI LEGAL: Some Mortgage Forms Not Applicable to CBAI Members
  • CBIS: Importance of Umbrella Insurance for Community Banks
  • HMDA Seminar to be Held August 3 & 8
  • Basic BSA Institute Scheduled for August 9 & 10
  • Auditing HMDA Seminar Slated for August 29
  • Appraisal Review Set for August 30 & 31


  • Action Request: Support Senate CFPB Arbitration Rule Reversal

    CBAI is urging community bankers to contact Senators Durbin and Duckworth to support Senator Mike Crapo’s (R-Idaho) Congressional Review Act resolution (S.J. Res. 47), which seeks to reverse the Consumer Financial Protection Bureau’s final ruling restricting the use of consumer arbitration agreements. Join ICBA and CBAI by taking action and sending a letter to your elected officials! Contact Congress Today!

    ICBA, State Groups Denounce CFPB Arbitration Rule

    ICBA and 42 of its state-affiliated associations sent a letter to the Senate in support of Senator Mike Crapo’s (R-Idaho) Congressional Review Act resolution (S.J. Res. 47), which seeks to void the Consumer Financial Protection Bureau’s recently finalized arbitration ruling.

    “With your support for S.J. Res. 47, arbitration will be preserved as a fair, established and cost-effective tool of dispute resolution. This is the best outcome for consumers, community banks, and the broader economy,” the groups wrote. Read ICBA Letter.

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    Action Request: Outreach Needed on HMDA Reporting Exemption Bill

    CBAI and ICBA are encouraging community bankers to urge members of Congress to co-sponsor legislation that would exempt low-volume community bank mortgage lenders from expansive new regulations. Community bankers can use ICBA’s grassroots website to urge support for the Home Mortgage Disclosure Adjustment Act (H.R. 2954), introduced by Representative Tom Emmer (R-Minn.) and the Senate version (S. 1310) introduced by Senators Mike Rounds (R-S.D.) and Heidi Heitkamp (D-N.D.). The legislation, inspired by a key provision in ICBA’s Plan for Prosperity and supported by CBAI, would offer relief from a pending Consumer Financial Protection Bureau rule requiring banks to collect and report data on small business loan applications. Contact Congress Today.

    CBAI Again Urges the CFPB to Provide HMDA Reporting Relief

    In a July 31, 2017 comment letter, CBAI again urged the CFPB to provide community banks with HMDA reporting relief. The letter was sent in response to the Bureau’s proposal to temporarily increase the transaction threshold to 500 lines of credit for two years and during that time reconsider the open-ended transaction coverage limits. Read Article. Read Comment Letter.

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    CBAI Seeks Congressional Support for Reciprocal Deposit Legislation

    In August 2, 2017 letters to United States House and Senate leadership, the Community Bankers Association of Illinois urged lawmakers to support for H.R. 2403 and S.1500 which is legislation to address the issue of reciprocal deposits inappropriately being treated as brokered deposits. Read Article. Read Letters.

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    Report on Staff Visit to Washington, D.C.

    During the week of July 17, 2017, CBAI’s Vice President of Federal Governmental Relations, David Schroeder, visited the offices of every member of the Illinois Congressional Delegation, attended an Illinois Group breakfast with Congresswoman Cheri Bustos (D-17th), and conferred with senior legislative staff at the Independent Community Bankers of America (ICBA).

    The major purpose of Schroeder’s quarterly visits is to inform the Illinois Congressional Delegation and urge their support for CBAI positions on issues of importance to Illinois community banks. These positions include: meaningful regulatory relief for community banks, tiered regulation and supervision of community banks, tax reform, reform of the housing GSEs, and credit union and Farm Credit System taxation and containing their expansion of powers. Schroeder also asked members to cosponsor bi-partisan legislation led by Illinois’ Randy Hultgren (R-14th) to grandfather certain captive insurance companies in membership of the Federal Home Loan Bank System, which particularly impacts the Chicago Federal Home Loan Bank. Read Article.

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    USDA Accepting Rural Broadband Access Applications

    The U.S. Department of Agriculture is accepting applications for the Rural Broadband Access Loan and Loan Guarantee Program for fiscal year 2017. The program provides loans and loan guarantees for construction, improvement or facilities and equipment needs. Applications will be accepted until Sept. 30, 2017. Read More.

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    States to OCC: Fintech Charter Lacks Legal Authority

    Last week, Acting Comptroller of the Currency Keith Noreika announced that the OCC will defend itself against lawsuits filed by CSBS and New York Department of Financial Services (DFS), regarding the extension of national bank charters to non-banks such as fintech firms.

    Noreika stated: "Does the OCC have the authority to grant national bank charters to financial technology companies that don’t take deposits? A potential spoiler here to our upcoming litigation filings, but the answer to that question is a rather simple 'yes'…Suffice it to say, the agency is developing its litigation response and plans to defend this authority vigorously."

    CSBS President and CEO John Ryan responded: “CSBS continues to believe that the OCC’s proposed fintech charter lacks legal authority. Legal precedent and common sense suggest as much. Now, it is a matter for the courts to decide. Meanwhile, state regulators are focused on modernizing non-bank regulation to make state licensing and supervision more effective and integrated across the 50 states.”

    DFS Superintendent Maria T Vullo also responded: “New York continues to stand by its position that the OCC lacks the authority to charter nonbank financial services firms and only state regulators like DFS have the extensive experience, knowledge, and skills to supervise these cash-intensive companies.

    “As we clearly assert in our lawsuit, the OCC is simply not equipped nor legally authorized to provide the strict oversight and enforcement of anti-money laundering, consumer identification and transaction monitoring statutes and regulations that nonbank financial services companies require. Additionally, providing nonbank financial services companies with an OCC charter will have a detrimental effect on well-regulated community and regional banks. “DFS will continue to fight the OCC’s efforts and work to support the Conference of State Banking Supervisors in its own lawsuit challenging the OCC’s ill-conceived plan.” Read OCC Speech. See CSBC Policy.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    How is the economy making the Fed look? Well, we learned recently that second-quarter GDP growth came in about as expected at 2.6%. Is this the monster comeback from the disappointing first quarter? Yes, this is what constitutes a monster comeback these days. One way to make Q2 look better is to make Q1 look worse, which is what the Bureau of Economic Analysis did with its revision of the first stanza’s results from a paltry 1.4% to a paltrier 1.2%. See Baker Market Update.

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    U.S. GDP Growth Accelerates in Second Quarter

    The gross domestic product increased at an annual rate of 2.6 percent in the second quarter of 2017, according to the advance estimate from the U.S. Commerce Department. Real GDP for the first quarter was revised to 1.2 percent. The economy gained steam in part because of strong consumer spending. The accelerated annual rate from April to June of this year is double the pace of the first quarter, according to a CNN Money article. See Commerce Department Report. Read CNN Money Article.

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    Fed Leaving Rates Unchanged and Plans to Wind Down Stimulus

    The Federal Reserve moved into the ready position last week for the next phase of its retreat from its post-crisis economic stimulus campaign. In a statement after a two-day meeting of its policy-making committee, the Fed said it would start reducing its bond holdings “relatively soon” so long as moderate economic growth continues. Read More.

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    Agriculture Secretary Perdue to Kick Off “Back to Our Roots” RV Tour

    Five-State Tour to Focus on Rural Prosperity, Preparation for 2018 Farm Bill

    U.S. Secretary of Agriculture Sonny Perdue announced this week that he will embark on a five-state RV tour including Illinois, titled the “Back to Our Roots” Tour, to gather input on the 2018 Farm Bill and increasing rural prosperity. The Tour begins August 3rd in Wisconsin and concludes August 8th in Indiana. Along the way, Perdue will meet with farmers, ranchers, foresters, producers, students, governors, Members of Congress, U.S. Department of Agriculture (USDA) employees, and other stakeholders. See Announcement and Schedule.

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    CBAI Proposes Goals for New Farm Bill

    In a July 31, 2017 letter to the Illinois members of the United States House of Representative’s Agriculture Committee, CBAI urged the adoption of a new multi-year farm bill which incorporates several broad principals to prevent a future farm credit crisis and enable produces and lenders to engage in multi-year planning and business decision making. Read Letters.

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    Feeding Supermarket-starved Communities Through Food Co-ops

    Small towns looking for a grocery store or help in replacing a closed one can get it through the Illinois Cooperative Development Center (ICDC), part of the Illinois Institute for Rural Affairs at Western Illinois University. 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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    Community Bank Attributes Spotlighted in Article

    ICBA Senior Executive Vice President and Chief of Staff Terry Jorde discussed the benefits of community banking in a recent U.S. News & World Report article. “The money you deposit in your community bank will be reinvested in ways that drive your local economy, such as in the form of loans to local residents who want to buy a home or to small-business owners who are looking to open shop on Main Street,” Jorde said. The article notes higher deposit rates available at smaller financial institutions and their reputation for community involvement and relationship-based lending. Read U.S. News Article.

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    Why Corrupt Mega Bankers Avoid Jail

    This is a primer in why community banks are staggered under such heavy regulatory burden. Wall Street wants policy makers and the public to forget - but community bankers remember - and have suffered for it. We will not let up on our efforts to remove the burden that crushes community banks today. Remember how you became burdened, and don't let them get away with this ever again. Read New Yorker Article.

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    Bank-Policy Templates Now Available for Purchase

    Bank-policy templates and other bank products created by Young & Associates, Inc. are now available for purchase through CBAI. Subject areas include general policies, personnel, deposits, security, risk management, collection and privacy, general lending, and lending compliance.

    For a complete listing of policies, a brief description, and pricing information, please Click Here.

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    CBAI Convention — Visit Midwest Office at Booths 51/56!

    The Midwest Office staff is looking forward to the upcoming CBAI 43rd Annual Convention and Expo September 14-16. Visit them in booths 51 & 56 and enter for a chance to win a FREE flat screen TV! Have you heard about Midwest Select? Find out more by visiting Midwest in September!

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    CBAI LEGAL: Some Mortgage Forms Not Applicable to CBAI Members

    Occasionally, a bank’s mortgage-document system might print out a disclosure document with which the loan officer or the bank’s compliance officer is not familiar. Is it a new Illinois statutory mandate? Maybe not. See Most Recent CBAI LEGAL.

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    CBIS: Importance of Umbrella Insurance for Community Banks

    Umbrella Insurance refers to liability coverage that is excess over a specified list of policies described as underlying coverage which responds first. Typically, an Umbrella Policy offers higher limits for Auto Liability, General Liability, and Workers Compensation Employer’s Liability. It is NOT excess insurance for personal business pursuits. Nor is it excess insurance for directors’ and officer’s management-liability exposures. Read More.

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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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    Auditing HMDA Seminar Scheduled for August 29

    Using both the regulators' guidance and our own internally created process, this seminar walks the attendees through an understanding (via examples) of what the regulation covers, how to select and test files, how to evaluate results, and how to search for unreported loans and denials. Designed for internal auditors, the key objectives of this course include identifying and understanding the key demands of HMDA and its most recent revisions; identifying sources of information to understand the approach used by regulators and the details of the application of the regulations; obtaining and understanding checklists and tools; practicing the actual completion of work papers; and discovering what the present hot topics are for state and federal regulators. Leading this seminar is Tim Tedrick, CRCM, CRP, and partner at Wipfli LLP in Sterling, Illinois.

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    Appraisal Review Scheduled for August 30 & 31

    Since 2010, all regulatory agencies have increased their expectations regarding a bank's review of property appraisals. A checklist simply does not suffice anymore, particularly on commercial property appraisals. Banks must gain a better understanding of the appraisal process and of the appraisals it receives. Just because an appraiser is on the bank's approved appraisal list does not mean the bank should accept his or her work without question or review. Banks are expected to thoroughly review the appraisals, and question the assumptions contained therein when necessary. This seminar focuses on the regulatory requirements and expectations regarding the review of third-party appraisals and in-house evaluations. Both single-family dwelling and commercial property appraisals are discussed. Depending on the individual institution's structure, this seminar should be attended by personnel from loan administration, underwriting/credit analysis, to all general loan personnel. Topics covered include appraisal regulations and guidance, term used in an appraisal, the review process, reviewing commercial property appraisals, reviewing the residential home appraisals, and case studies. Leading this seminar is Aaron Lewis, consultant in the lending division of Young & Associates, Inc., Kent, OH.

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