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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                                    August 3, 2016

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Congressman Luetkemeyer Is Closing Speaker at CBAI Convention
  • CBAI Urges Regulatory Relief for Community Banks in Proposed Incentive Pay Rule
  • Regulators Concerned Again About CRE Risk
  • CBAI Thanks Senator Kirk for Urging CFPB Regulatory Relief for Community Banks
  • Investment News From THE BAKER GROUP
  • Midwest Economic Growth Slowed in June
  • U.S. GDP Growth in the Second Quarter is Weaker than Expected
  • CBAI Meets with Federal Reserve Bank of Chicago President Charlie Evans
  • CFPB Debt-Collection Overhaul Pardons Banks-For Now
  • Community Banks Increase Mortgage Servicing Amid Rising Regulatory Burdens
  • CFPB Shares Proposed TRID Amendments
  • CBAI and CBIS-Nicoud Renew Partnership
  • CBAI Convention Special Coupon from Midwest Office
  • Self-Service Technology: A Win-Win for Banks and Customers?
  • Choosing a Check Vendor: “Cheap Check” Doesn’t Mean a Good Business Fit
  • CBAI LEGAL: Illinois' 30 Day Foreclosure Grace Period Notice is Gone
  • Has Your Firm Reserved a Spot to Exhibit at CBAI's 42nd Annual Convention & Expo?
  • The Dawn of the Age of the Platform
  • 2016 Fed/CSBS Community Banking Research Conference Set for September 28-29
  • Play Like a Champion and Donate to Community BancPac Auction Today!
  • Ag Credit Analysis Scheduled for August 10
  • Community Bank Directors’ Workshop Set for August 16-17
  • BSA Graduate School Slated for August 23 and 24


  • Congressman Luetkemeyer Is Closing Speaker at CBAI Convention

    Register Soon for Showcase Event!

    United States Congressman Blaine Luetkemeyer (R-Missouri) is CBAI's featured speaker for the Saturday afternoon General Session at the 42nd Annual Convention & Expo. As a member of the U.S. House Financial Services Committee, Congressman Luetkemeyer is an outspoken champion of community banks. A strong advocate for tiered regulation, he is chief sponsor of the Communities First Act which provides targeted regulatory and tax relief to community banks. He will address the delegation on prospects for enactment of regulatory relief legislation after the November elections as well as during the next session of Congress in 2017.

    Entitled “Community Banking Playmakers,” CBAI’s Annual Convention & Expo makes its first-ever stop in Kansas City, MO, at the Marriott Downtown on September 15-17, 2016. You won’t want to miss the 20 timely education sessions with expert information on the hottest topics in community banking today, not to mention an opening keynote with acclaimed public speaker, consultant, and former NFL athlete, Eric Boles. Education only scratches the surface of the convention’s attributes. Nearly 90 exhibit booths featuring the latest products and services are on display in the Exhibit Hall. Countless networking opportunities and social events include the golf outing at Swope Memorial Golf Course and the Saturday dinner dance featuring the Fabulous Motown Revue. Don’t miss out! Register Today!

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    CBAI Urges Regulatory Relief for Community Banks in Proposed Incentive Pay Rule

    In a comment letter dated July 22, 2016, CBAI addressed the Agencies' proposed implementation of the Dodd-Frank Act rule regarding incentive-based compensation arrangements. The Act requires regulators to prohibit any types of incentive-based compensation arrangements that encourage inappropriate risks by covered financial institutions (i.e., depository institutions or holding companies that have $1 billion in assets or more). Read More.

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    Regulators Concerned Again About CRE Risk

    Community banks are increasingly being told by their regulators to focus on CRE risk, be aware of a potential downturn, and re-implement their CRE portfolio stress testing programs. The FDIC has recently indicated that, while CRE trends are "positive," there are "some signs of emerging risk"; new multifamily units under construction "exceed absorption"; and "underwriting standards may continue to relax with increased competition." See AB Article.

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    CBAI Thanks Senator Kirk for Urging CFPB Regulatory Relief for Community Banks

    The Community Bankers Association of Illinois thanks Senator Mark Kirk for joining with 69 other members of the U. S. Senate in signing a letter to Director Richard Cordray of the Consumer Financial Protection Bureau (CFPB) asking the Bureau to consider the impact of its rule-making on smaller financial institutions and consumers. The 70-member-strong bi-partisan letter was led by Senate Banking Committee members Joe Donnelly (D-Indiana) and Ben Sasse (R-Nebraska). Read More.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    Recently, not without its surprises, however, the Commerce Department reported its first estimate of Q2 GDP at a very disappointing 1.2%. Conventional wisdom was expecting 2.5%. Surprise! But wait, that’s not all! The previous and also disappointing first quarter result of 1.1% was revised to 0.8%. So, if you felt bad about the first quarter’s performance, you can now feel worse. See Baker Market Update.

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    Midwest Economic Growth Slowed in June

    The Midwest Economy Index (MEI) is a monthly index designed to measure growth in nonfarm business activity in the Seventh Federal Reserve District (Chicago). The Midwest Economy Index (MEI) was -0.04 in June, down from +0.11 in May. The MEI is a weighted average of 129 state and regional indicators measuring growth in nonfarm business activity from four broad sectors of the Midwest economy: 1) manufacturing, 2) construction and mining, 3) services, and 4) consumer spending. It encompasses the entirety of the five states in the Seventh Federal Reserve District (Illinois, Indiana, Iowa, Michigan, and Wisconsin). See MEI Report.

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    U.S. GDP Growth in the Second Quarter is Weaker than Expected

    The Department of Commerce on Friday announced real gross domestic product increased at an annual rate of 1.2 percent in the second quarter of 2016, according to the "advance" estimate released by the Bureau of Economic Analysis. Real GDP for the first quarter was revised to 0.8 percent. The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures and exports that were partly offset by negative contributions from private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending. Real GDP for the second quarter was lower than expected, as reported by the Wall Street Journal.

    “Economy Going Nowhere Fast”

    They are two of the scariest words in the English language, often heard as the engine room is starting to flood or the parachute fails to deploy: "Don't panic." And that was the message among economists trying to make sense of how it is, exactly, that the U.S. could be slowing, when most forecasters had expected it to be speeding up by now.

    The trouble is that even avoiding another full-blown slump could still leave the economy adrift and searching for direction. That might mean no stomach-churning panic in the near-term, but plenty of fear about the storms to come. Read Money Watch Article.

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    CBAI Meets with Federal Reserve Bank of Chicago President Charlie Evans

    Last week, CBAI member and ICBA leadership banker Greg Ohlendorf, President and CEO of First Community Bank and Trust in Beecher, and David Schroeder, CBAI Vice President of Federal Governmental Relations, met with Federal Reserve Bank of Chicago President and CEO Charlie Evans and other senior management to discuss a variety of issues important to Illinois community banks. The wide-ranging topics included the significance of the dual banking system, the electronic delivery of loan files to streamline examinations, the impact of the prolonged low interest rate environment, shared examination responsibilities with other regulators, and a lengthy discussion on the Financial Accounting Standards Board’s (FASB) Current Expected Credit Loss (CECL) model. Read More.

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    CFPB Debt-Collection Overhaul Pardons Banks-For Now

    The Consumer Financial Protection Bureau (CFPB) outlined proposals to reform the debt-collection industry, though its plan wouldn’t apply to banks and other first-party creditors.

    Under the plan, collection agencies, debt buyers and others covered by the Fair Debt Collection Practices Act would be limited to six consumer communication attempts per week. They also would have to confirm they have sufficient information on debts, include specific information about the debt in collection notices, and stop collections until disputes are resolved.

    The CFPB said it plans a separate rulemaking track for first-party debt collectors and creditors to commence at a later date. Over the past few years both CBAI and ICBA have informed the CFPB that community banks have not participated in aggressive and harmful debt-collection practices and should not be subject to “one-size-fits-all” debt-collection regulations. See CFPB Release.

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    Community Banks Increase Mortgage Servicing Amid Rising Regulatory Burdens

    Community banks have increased their share of the mortgage-servicing market amid increasing regulatory burdens, the Government Accountability Office (GAO) reported last week. The study found that the share of mortgages serviced by community banks doubled from 3.4 percent to about 6.8 percent since the first quarter of 2008, based on call report data.

    However, the GAO acknowledges that many of the lenders it interviewed said they face increased costs due to the Consumer Financial Protection Bureau’s mortgage origination and servicing rules. For instance, community lenders said the rules have required them to increase staff, update their data systems, or hire third parties to assist with compliance. Further, some lenders said they have had to raise fees and interest rates and kill off product offerings, such as home equity lines of credit and bridge loans.

    Community banks nevertheless continue servicing mortgages to generate revenue and maintain relationships with customers, the GAO said. Community banks and credit unions have increased their combined share of the mortgage-servicing market to roughly 13 percent—some $3.1 billion in mortgage-servicing rights—while large banks continue to service more than half of the market.

    In interviews with the GAO as part of the study, ICBA discussed the collective impact of the CFPB’s mortgage rules and the Basel III capital rules, which have increased the compliance costs of originating and servicing rules, particularly for community banks. Read the GAO Report.

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    CFPB Shares Proposed TRID Amendments

    Last week, the Consumer Financial Protection Bureau (CFPB) released its notice of proposed rulemaking for the Know Before You Owe rule, commonly referred to as TILA-RESPA Integrated Disclosures (TRID). In their press release, the CFPB emphasized four changes: Tolerances for the total of payments, Housing assistance lending, Cooperatives, and Privacy and sharing of information, along with minor corrections across several topic areas. Read More.

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    CBAI and CBIS-Nicoud Renew Partnership

    he Community Bankers Association of Illinois (CBAI), recently announced that it has extended its agreement with CBIS-Nicoud Insurance Services through June 2019. The new three-year agreement will ensure CBAI members have continued access to insurance professionals exclusively dedicated to serving the insurance needs of community banks. Read More.

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    CBAI Convention Special Coupon from Midwest Office

    The Midwest Office staff is looking forward to the upcoming CBAI 42nd Annual Convention and Expo September 15-17. Come see us at booth 327 for your exclusive for CBAI convention coupon - $25 off! See Offer.

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    Self-Service Technology: A Win-Win for Banks and Customers?

    According to Accenture’s “The Untapped Win-Win in Self-Service Banking” report noted that US banks spend approximately $13 billion a year, employing roughly 514,00 tellers. Furthermore, 50 percent of branch space is dedicated to teller-related activities.

    Yet, these services rarely generate enough revenues to offset costs and digital deposits are 95 percent cheaper to process than face-to-face transactions. Moreover, online and mobile payments reduce physical check deposit costs by 65 percent.

    Self-service technology can therefore enable businesses to redirect budgets into value-creating investments, such as boosting customer relationships, designing better products and restructuring their brick-and-mortar store network. But are consumers as keen to embrace the do-it-yourself trend? Read NCR Article. Access Accenture Report.

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    Choosing a Check Vendor: “Cheap Check” Doesn’t Mean a Good Business Fit

    In a recent survey of bank presidents asking what is important in a check vendor, price was the number one consideration; however, privacy and security were close behind. “Customers need to be assured their information is protected, especially when dealing with personal data,” a CEO wrote. As part of a bank’s due diligence, banks should expect to receive documentation on security, liability, disaster recovery and privacy when considering a check partner. Read More.

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    CBAI LEGAL: Illinois’ 30 Day Foreclosure Grace Period Notice is Gone

    Effective July 1, Illinois residential mortgage lenders are no longer required to provide a grace period notice once a mortgage loan becomes delinquent for 30 days; however, federal pre-foreclosure notice and waiting periods remain in effect. See Most Recent CBAI LEGAL.

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    Has Your Firm Reserved a Spot to Exhibit at CBAI's 42nd Annual Convention & Expo?

    Has your firm reserved an exhibit booth for CBAI’s 42nd Annual Convention & Exposition scheduled for September 15-17, 2016, at the Kansas City Marriott Downtown? We have currently sold over 85% of the hall! Don’t lose out on a valuable space in this year’s convention and a way to meet one-on-one with the decision makers of the bank. Please return completed application to Melinda McClelland (melindam@cbai.com) as soon as possible! Reserve your spot today! See List of Current Exhibitors. Complete Application Here.

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    The Dawn of the Age of the Platform

    As technology continues to evolve, and users interact with their banks via multiple-touchpoints, it's crucial that financial institutions have a consistent user experience across these various touchpoints.

    The Celent report documents the rise of vendors who provide platforms that offer the kind of comprehensive view consumers want: Digital Channel solutions providers are evolving to make a unified digital banking experience more attainable by creating a "digital banking platform." Celent defines a digital banking platform as the following:

    A solution that includes at a minimum, a unified and integrated online banking and mobile banking offering under a single platform, but which often includes functionality, and extensibility of the user experience to additional channels like kiosks, ATMs, or branches.

    These platforms aim to become more than just a single channel offering, moving toward a unified experience that operates independently of a consumer device. This "anytime, anywhere" promise of digital channels is moving closer to reality. Read More.

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    2016 Fed/CSBS Community Banking Research Conference Set for September 28-29

    Community bankers, academics, policymakers and bank supervisors from around the country will meet September 28-29 at the Federal Reserve Bank of St. Louis for the fourth annual Community Banking in the 21st Century research and policy conference. The conference is hosted by the Federal Reserve System and the Conference of State Bank Supervisors (CSBS) and features the latest in community banking research. See FRB Release.

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    Play Like a Champion and Donate to Community BancPac Auction!

    CBAI is excited to begin preparations for Community BancPac’s 25th Annual Silent Auction and 9th Annual Live Auction. Thanks to so many of you, this night is always a fun-filled event and remains one of the highlights of CBAI’s Convention. We hope to make this year’s Auction a successful and memorable event, but we need your help! CBAI deeply appreciates the PAC donations many of you make each year. Be a PLAYMAKER and please make a contribution to the auction! See Donation Form.

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    Ag Credit Analysis Scheduled for August 10

    An agricultural loan officer's responsibility is to perform sound credit analyses and make loans to good customers. This requires a strong understanding of basic agricultural credit analysis, as well as, the drivers of change in the agricultural production sector. The overall objective of this program is to prepare participants to be informed and effective leaders in agricultural lending. A primary focus of the workshop is to review the basic financial statements and ratios that are important to measuring and monitoring the credit risk of agricultural borrowers. Case studies and computerized decision tools are used to illustrate the important concepts. Other contemporary issues such as farmland markets, rental agreements, crop insurance, and other risk management tools are discussed. All participants receive a complimentary copy of computerized decision tools used in the workshop. Dr. Gary Schnitkey is a professor and member of the farmdoc extension project team in the Department of Agricultural and Consumer Economics, University of Illinois and Dr. Nick Paulson is an associate professor and member of the farmdoc extension project team in the Department of Agricultural and Consumer Economics, University of Illinois lead this program.

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    Community Bank Directors’ Workshop Set for August 16-17

    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. Thus, we invite you to join us at CBAI's Directors' Workshop. CBAI gathered top banking experts to make this comprehensive, one-day conference a must-attend. Community bank board members, presidents, and CEOs would all benefit from attending this one-day seminar. Offered in two locations, topics covered include strategy development, balance-sheet analysis, and a regulatory panel. Leading this workshop is John Oliver, founder of Laurel Management Systems, Inc., Palm Springs, CA.

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    BSA Graduate School Slated for August 23 and 24

    This program is designed for BSA professionals who are competent in the core requirements of Bank Secrecy Act rules and will provide a higher level of lecture, training, and interactive discussion regarding the challenges of developing and managing an effective BSA program. Topics include BSA risk assessment, privately owned ATMs, systems to identify and report suspicious activity, management information systems, new rules and their effect on BSA, recent FinCEN changes, and more. This seminar also addresses the recent customer due diligence (CDD) rules addressing the requirements for verifying the ultimate beneficial owners on accounts held by a business entity. As part of this two-day course, the class learns to manually design an effective BSA program. This is accomplished through the study of workflow charts based on a case study example of an imaginary financial institution. This course then discusses best practices for impacting the bottom line of a BSA program. Students walk through a policy checklist and learn how to conduct a gap analysis to ensure their programs are as refined as possible. Another portion of this course involves a roundtable discussion. The facilitator guides the group through a number of pre-determined discussion topics in addition to topics requested by the attendees. Leading this seminar is Adam Witmer, CRCM, senior consultant with Young & Associates, Inc., Kent, OH, where he focuses on regulatory compliance.

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