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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 6, 2014

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • ICBA Launches Petition Urging Call Report Relief - Sign Today!
  • CBAI’s 40th Annual Convention Features 20 Hot Education Topics!
  • Five Scholarships To Be Awarded at the CBAI Convention!
  • Staff Visit to Washington Reinforces Support for Community Bank Positions
  • ICBA Urges Senate to Act on CLEAR Relief Act
  • GAO Report Finds Mega Bank Subsidy Still Exists
  • FDIC’s Hoenig Questions Credibility of Mega Banks’ Living Wills
  • Comptroller Seeks Change to Thrift Charter Restrictions
  • CBAI Endorses David Pirsein for the Chicago FHLB Board
  • Why Banks Should Prevail in the Payments Arena
  • Baker Market Update
  • Q2 Illinois Bank Rankings Released
  • Results of the 25th Annual CBAI Officer Survey Are Now Available!
  • 2014 CDD Fall Meeting Slated for October 20-21 in Champaign
  • What Retail Banks ‘Think’ is Most Important to Mobile Customers
  • Cash Is Half of the US Payments Pie
  • Cash Automation: Where Time and Money Count
  • Prediction Three Million ATMs Worldwide By 2015
  • August Consumer Tip Is Now Available
  • Order Additional Copies of the CBAI Illinois Financial Institutions Directory!
  • Improving Customer Lifetime Value: The Age of the Consumer
  • "ACH: Stay Informed and In Compliance" Set for August 7, 11, & 14
  • Banking Essentials Scheduled for August 12 & 13
  • Compliance for Loan Processors Scheduled for August 18
  • IRA Institute to be Held on August 19 & 20


  • ICBA Launches Petition Urging Call Report Relief

    Important: Sign the Petition Today!

    CBAI and ICBA are calling on community bankers, directors, and allies to sign a petition calling for relief from the increasingly burdensome quarterly call report.

    ICBA launched the petition as part of its broader war on community bank overregulation. The petition highlights the increasing length and complexity of the call report and advocates streamlined reporting rules for community banks. The petition cites data from ICBA’s recent call report survey, which found that the annual cost of preparing the call report has increased for 86 percent of respondents over the past 10 years. The survey also found that 98 percent of respondents said the proposed short-form call report would reduce their regulatory burden, and 72 percent said the reduction would be “substantial.”

    In his recent blog, ICBA’s Cam Fine urged a massive show of force to demonstrate to regulators that community banks are up in arms concerning call report relief. He said, “… I’m calling on every community banker, every staffer, every director, every industry ally – join the fight! Sign our petition today to help us turn the tide.”

    Sign the Petition. Read ICBA Release. See Call Report Burden Survey Results. Read Finer Points Blog.

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    CBAI’s 40th Annual Convention Features 20 Hot Education Topics!

    You won’t want to miss CBAI’s 40th Annual Convention & Expo! Entitled “Looking to the Past to Plan for the Future,” this special anniversary celebration is scheduled for September 18-20, 2014, at the Marriott Downtown in Chicago. Featuring 20 education breakout sessions on the hottest topics for community banks led by top banking consultants and experts, this convention provides the must-have information and ideas to prepare your bank for the months ahead. Topics include managing interest rate risk for optimal bank performance, a regulator discussion of the most up-to-date issues in supervision; a look at the compliance challenges for 2015; Basel III planning for community banks, trends in payments and electronic funds transfer; an executive briefing on the most current legal, regulatory, and business issues; the loan approval process; and much more!
    Register Now! Please click here to add a reminder to your Outlook calendar for CBAI's showcase event!

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    Five Scholarships To Be Awarded at the CBAI Convention!

    Time Running Out For Your Bank to be Eligible!

    Complete the pledge form to become eligible for scholarships for your employee's children and scholarships for your employees to attend the Community Bankers School. Act Now!

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    Staff Visit to Washington Reinforces Support for Community Bank Positions

    David Schroeder, CBAI’s vice president federal governmental relations, was in Washington, D.C. last week and visited every office of the Illinois Congressional delegation, the Federal Housing Finance Agency (FHFA), and the Independent Community Bankers of America (ICBA) to discuss the critical issues which are vitally important to Illinois’ community banks.
    See Discussed Issues.

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    ICBA Urges Senate to Act on CLEAR Relief Act

    Late last month ICBA marked the one-year anniversary of the introduction of Senate legislation supporting community bank regulatory relief by calling on senators to advance the bipartisan measure.

    The Community Lending Enhancement and Regulatory (CLEAR) Relief Act (S. 1349) would exempt community bank portfolio loans from new mortgage rules, support capital opportunities for small bank holding companies, and provide exemptions from Sarbanes-Oxley mandates.

    The measure, introduced by Senators Jerry Moran (R-Kan.) and Jon Tester (D-Mont.) and inspired by ICBA's Plan for Prosperity, has gained 38 bipartisan cosponsors over the past year.
    See ICBA Release. Read Plan for Prosperity.

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    "CBAI Connected to Community Banking" Is Sponsored
    by The SHAZAM Network


    For nearly 40 years, SHAZAM has been helping financial institutions compete effectively in their marketplace. Trust your financial services needs to a network that will always be your partner, not your competitor. Learn More.

    GAO Report Finds Mega Bank Subsidy Still Exists

    Last week the Government Accounting Office (GAO) released a long-anticipated study that attempts to quantify the size of the too-big-to-fail bank subsidy. The report found that a subsidy does, in fact, exist, but that it has diminished since the financial crisis exploded in 2008. In response, ICBA’s Cam Fine emphasized that a subsidy of any size is still too big, and the riskiest financial firms continue to have a competitive advantage over smaller institutions.

    Fine pointed out that the subsidy puts the taxpayer on the hook, and another crisis is certain to occur. CBAI and ICBA support various legislative proposals to resolve the TBTF threat to our economy.
    See AB Article. Read Cam Fine Interview. See GAO Report.

    Big Banks Remain a Risk

    During a Senate hearing on the GAO Report, senators and professors alike stated that there continues to be enormous value in a mega bank’s ability to tap the taxpayer for a bailout, and six years after the crisis began, the TBTF banks remain too complex and interconnected to be unwound efficiently if they get into trouble. See NY Times Article.

    Complacency About Mega Banks Runs the Risk of Another Crisis

    Financial analysts have recently pointed out that the TBTF banks have failed to learn from the detrimental effects of the global credit crisis and pleas from regulators as they have loosened credit standards and are extending leveraged loans to companies. See AB Article.

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    FDIC’s Hoenig Questions Credibility of Mega Banks’ Living Wills

    In a public statement this week, FDIC Vice Chairman Tom Hoenig revealed that the Living Wills submitted by the eight largest banks are deficient and fail to demonstrate how, in the event of failure, they could overcome obstacles to entering bankruptcy without precipitating a crisis. He also noted that the mega banks remain excessively leveraged and continue to combine commercial banking, investment banking, and broker-dealer activities.

    CBAI and ICBA have repeatedly warned that the grave perils of TBTF have not been resolved, and our nation is at risk to endure another financial and economic meltdown at the hands of highly-leveraged, highly risk-prone mega banks deemed too-big to fail.
    Read Hoenig’s Statement. See NY Times Article.

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    Comptroller Seeks Change to Thrift Charter Restrictions

    Comptroller of the Currency Thomas Curry recently stated that federal thrifts should be able to adapt their business strategies to current conditions without having to change charters.

    Speaking at the 2014 Joint Mutual Forum, Curry proposed an approach that wouldn’t require charter changes for thrifts that want to move from a business model based on mortgage lending to one that places more emphasis on business loans and consumer credit.

    The forum, which was held in coordination with the FDIC, also featured remarks from FDIC Chairman Martin Gruenberg and several panels.
    Read Curry’s Remarks.

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    CBAI Endorses David Pirsein for the Chicago FHLB Board

    CBAI urging all community banks to vote only for David Pirsein, President and CEO of First National Bank in Pinckneyville, for election to the Federal Home Loan Bank of Chicago Board of Directors.

    The ballots are scheduled to be mailed to all FHLB member institutions around September 22nd. Banks need to adopt a board resolution to be eligible to vote.
    See Announcement.

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    Why Banks Should Prevail in the Payments Arena

    With upstart payments competitors emerging virtually every day, concern has grown that banks are at risk of losing dominance in the payments space. However, at least one technology consultant believes banks will win the payments war because 1) the compliance burden is a barrier to entry for nontraditional competitors, 2) branches give banks a major advantage for enrolling customers in new payments products, 3) banks with merchant businesses have ready-made channels for promoting new payments offerings, and 4) banks are better positioned to influence standards and infrastructure.
    Read More.

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    Baker Market Update

    The Federal Reserve continues asset purchase tapering, but job weakness is still a concern.
    See Baker Market Update.

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    Q2 Illinois Bank Rankings Released

    Second quarter performance measures for every bank in Illinois are listed below from BankTrends. Where did you bank stack up in Q2?
    See Illinois Bank Rankings Map.

  • For the 532 Illinois community banks with less than $10B in assets, median pretax ROA was 0.92% in Q2
  • Median ROE was 5.98% during the first-quarter and Net Interest Margin was 3.35%
  • Year-over-year median loan balances increased 4.15%; median Loans-to Deposits ratio was 66.50%
  • Median noncurrent loans to loans ratio was 1.26%
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    Results of the 25th Annual CBAI Officer Survey Are Now Available!

    Non-participants can order the results (participants have been e-mailed them). Survey results include salary, benefits, incentive compensation and more for officers, categorized by asset size and location. They also feature directors’ fees, support-personnel pay, and compensated time off.

    CBAI member non-participants may purchase the results for $300; non-members for $500. Contact Andrea Cusick at
    cbaicom@cbai.com or 800/736-2224.

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    2014 CDD Fall Meeting Slated for October 20-21 in Champaign

    Be a Game-Changer! That is the challenge presented at the General Session for the CDD Fall Meeting.

  • Change bad habits to achieve your goals.
  • Overcome road blocks in communication.
  • And more!
  • For more information or to register, contact Melinda McClelland at 217.529.2265 or visit
    www.cbai.com.

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    What Retail Banks ‘Think’ is Most Important to Mobile Customers

    To stay relevant and competitive in the digital financial world, community bankers need to know what consumers really want in a mobile banking product.

    A comparison of two recent surveys indicates disparity between what bank leaders believe consumers are looking for in a mobile banking app, and what consumers actually want.
    See Shazam Article.

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    Cash Is Half of the US Payments Pie

    Those who prefer cash use cash. Those who prefer credit and debit use cash. Everyone uses cash, according to the June Federal Reserve Bank study "Consumer Preferences and the Use of Cash."

    While compiling data from two studies with a combined 5,644 participants, the Federal Reserve rendered a number of interesting conclusions that seem to bode well for the ATM industry. The explosion in debit and credit card use has had no impact on the use of cash.
    Read More.

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    Cash Automation: Where Time and Money Count

    We’ve all heard how the rise in electronic payment systems will result in the U.S. becoming a cashless economy, but we’re not there yet and may never truly be cashless. There are simply advantages to cash that don’t translate well into the electronic world.
    See Article.

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    Prediction Three Million ATMs Worldwide By 2015

    The ATM Industry Association recently predicted there would be three million ATMs across the globe by 2015, and the total number of withdrawals of cash from ATMs globally would rise to more than 8.6 billion per year.

    ATMIA drew upon these statistics to strengthen a call on governments around the world to maintain their commitment to cash.
    See White Paper.

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    August Consumer Tip Is Now Available

    The FREE Consumer Tip for this month discusses safe-deposit boxes and urges consumers to use them over home safes for many items. Visit the
    Members Only section of the CBAI web site to download the free article.

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    Order Additional Copies of the CBAI Illinois Financial Institutions Directory Today!

    The 2014 edition of the CBAI Illinois Financial Institutions Directory is now available!
    Order your copy today! (Available in print, online, or in e-book form).

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    Improving Customer Lifetime Value: The Age of the Consumer

    The age of the consumer puts pressure on marketers to nurture real loyalty from their consumers, loyalty that is not only unique to the brand but also to all of its products and services. This type of loyalty is instilled through customer advocacy and trust. In today’s marketplace, community banks’ concentration on customer service will become a first-rate competitive advantage.
    See Article.

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    "ACH: Stay Informed and In Compliance" Set for August 7, 11, & 14

    In the ever-changing world of ACH, it is difficult to stay abreast of the risks involved and the ever-changing rules. The presentation gives community banks ideas for reducing risk and improving compliance. The ACH-Rule changes that are effective from 2013-2015 are also explained in a practical, easy-to-understand approach. This seminar identifies areas of ACH activity where a financial institution may be held liable if proper procedures are not in place, and demonstrates what examiners are looking for relative to ACH. The class also gives attendees ideas for policies and procedures that help protect the financial institution from unnecessary losses. Simplified procedures for maintaining compliance and tips for avoiding those commonly-made mistakes, as well as sample written statements for unauthorized debits and stop-payment forms that comply with the new rules and limit the bank's liability under Regulation E are also provided. Nicole Meinhardt, CPA, MST, AAP and manager at Wipfli LLP, Sterling, IL, leads this seminar.

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    Banking Essentials Scheduled for August 12 & 13

    A must for the newer community bank employee, 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 four quarters are structured as two, two-day sessions, to cut down on travel for your convenience. As such, quarters one and two are offered on consecutive days in August and quarters 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 quarters of the series to receive an entire overview of banking, each quarter's material stands alone; one quarter is not a prerequisite for another.

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    Compliance for Loan Processors Scheduled for August 18

    This
    course is designed to enhance understanding of the regulatory requirements and the “decision trees” that are important for processors to fully understand. It focuses on the documents – the most important portion of the processor's job. Errors in documents can cost banks thousands of dollars, and, as the Dodd-Frank rules begin to appear, the risks will certainly increase. The curricula also addresses the existing forms and their requirements. Topics covered include the initial documents: Good Faith Estimate; Early Truth in Lending; ARM Disclosures and Booklets; Servicing Disclosure; Right to Appraisal Disclosure; Credit Score/Notice to Home Loan Applicant; Affiliated Business Arrangement Disclosure; and flood documents. The seminar also covers the closing documents: Final Truth in Lending; determining HPML Status; rescission; the HUD-1 and HUD-1A; Escrow Disclosure; PMI Disclosure; Servicing Transfer Disclosure; and Negative Information Disclosure. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance at Young & Associates, Inc., Kent, OH.

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    IRA Institute to be Held on August 19 & 20

    CBAI is pleased to offer the “
    IRA Institute,” a two-day program this August in Springfield. Do you get an uneasy feeling in the pit of your stomach whenever a customer starts asking questions about IRAs? Do you know a little about IRAs but need more information? 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 what a recharacterization is to a customer? Have you ever looked at various IRA forms and not understood why the information that's being requested on them is necessary? Have you wondered if any of the rules have changed recently? If you answered “Yes” to any or all of the above questions, this two-day institute is for you. Leading this institute are Randy J. Heidmann and Robert Skomars, both consultants at Wolters Kluwer Financial Services.

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