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                  August 11, 2010 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • CBAI Offers Education Bonanza at Convention
  • Fed Warns Economic Recovery is Weakening
  • Baker Market Update and Commentary: Refi Rumors and Strategies
  • Implementation of Too-Big-to-Fail Reforms Underway
  • Chicago Fed Addresses Future of Banking System
  • Regulatory Hearing on CRA in Chicago Available Online
  • Freddie Mac Requests More Funding
  • SHAZAM to Discuss Emerging Trends at CBAI Conference
  • CBAI Summarizes Recent IDFPR Interpretations
  • Credit Card Issuance May Be Worth Another Look
  • 504 Loan Program Update
  • ICBA Community-Banking Advocacy Ads Nominated
  • Farm Bill Negotiations Expected to be Tough
  • Lenders’ Guide to Mortgage Loan Compliance Session Nears
  • Basic BSA Institute Coming Up
  • Analyzing Business Financial Statements Next Month


  • CBAI Offers Education Bonanza at Convention

    At CBAI’s 36th Annual Convention & Expo on September 30 – October 2 in Louisville, KY, a record 24 education sessions will provide bankers with the most up-to-date information available on the hottest topics in community banking today. Hear from the regulators on bank supervision, capital, liquidity, asset quality, corporate governance, and more. All convention registrants will receive password-protected access to downloadable versions of the material for all 24 concurrent education sessions following the convention. Don’t miss out on this opportunity to gain timely and pertinent information on a variety of the most important issues your community bank is facing today.

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    Fed Warns Economic Recovery is Weakening

    The Federal Open Market Committee announced this week that the economic recovery is weakening, indicating that the pace of recovery in output and employment has slowed in recent months.
    See Fed Press Release. As expected, the fed funds rate remained near 0% which the Fed noted will likely continue for an “extended period.” The Fed also announced plans to purchase additional long-term Treasuries. See CNN Article.

    The U.S. Labor Department said yesterday that productivity in the U.S. unexpectedly decreased in the second quarter after employers expanded the workweek by the most in four years. See Bloomberg Article. In addition, the U.S. trade deficit widened to nearly $50 billion in June to the highest level in nearly two years as consumer goods imports rose to a record and exports declined. See Bloomberg Article.

    Meanwhile, St. Louis Federal Reserve President James Bullard recently offered his thoughts on the potential for a deflationary period and the need to develop a contingency plan if deflation arises. See CNBC Video Interview.

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    Baker Market Update and Commentary: Refi Rumors and Strategies

    Fed Leaves Overnight Rate Unchanged; Initiates Asset Reinvestment into Treasuries.
    More.

    Considerable energy has been spent lately on rumors regarding a potential government-induced refinancing wave in the mortgage market. At this point the only statement from any executive branch official has been a denial from a Treasury spokesman who said, “The administration is not considering a change in policy in this area.”

    As always, The Baker Group is circumspect when these things come up as we believe it is better to be accurate than hasty. At this point, based on what we’ve heard, the rumors imply changes that are implausible but not impossible. In any case, here is what is being batted about by the financial world’s chattering class. More.

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    Implementation of Too-Big-to-Fail Reforms Underway

    The FDIC Board this week announced creation of a new Office of Complex Financial Institutions (CFI) and Division of Depositor and Consumer Protection (DCP) to help fulfill its responsibilities under the recently enacted Wall Street reform measure. The CFI will perform continuous review and oversight of BHCs with more than $100 billion in assets as well as non-bank financial firms deemed systemically important.
    See FDIC Press Release.

    Also this week Treasury Assistant Secretary Michael Barr addressed efforts to end “too-big-to-fail” during remarks at the Chicago Club. Barr noted that the reforms will help make sure that risks taken by the giant banks will not threaten the economy again. See Barr’s Remarks.

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    Chicago Fed Addresses Future of Banking System

    The latest edition of the
    Chicago Fed Letter focuses on the future of the financial services industry in light of the recent financial crisis and forthcoming reforms. The authors of this Chicago Fed Letter are Douglas D. Evanoff, vice president and senior financial economist, and William F. Moeller, associate economist, Federal Reserve Bank of Chicago.

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    Regulatory Hearing on CRA in Chicago Available Online

    A CRA hearing sponsored by the federal regulatory agencies tomorrow (August 12) will be available for viewing online. The session will address ways to modernize the regulations that implement the Community Reinvestment Act. For more information about the hearing and how to access it online, please
    click here.

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    Freddie Mac Requests More Funding

    Freddie Mac announced second quarter losses of $4.7 billion, due primarily to provisions for credit losses and derivative losses. The giant housing lender will ask the U.S. government for an additional $1.8 billion in taxpayer funds.
    See Freddie Mac Release.

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    SHAZAM to Discuss Emerging Trends at CBAI Conference

    James Ghiglieri Jr., SHAZAM vice president of corporate communications, will discuss new trends and emerging products and services at the CBAI Career Development Division’s (CDD) Fall Conference on October 27 at the I Hotel in Champaign.

    “I consider it a great honor to be given the chance to speak at CBAI’s CDD Conference,” said Ghiglieri. “Emerging trends is always a very hot topic in financial services. People want to know what to look out for, what is the next successful product or service on the horizon, and how they can increase the profitability of their products and services. SHAZAM has always been committed to providing current, meaningful information to our participants, so with an opportunity to share what we know beyond that is a real honor for us.”

    Complete details and registration information for the Fall Meeting will be coming soon. For questions, contact Tracy McQuinn, CBAI SVP Education, at
    tracym@cbai.com.

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    CBAI Summarizes Recent IDFPR Interpretations

    From "sharing otherwise confidential trust account information for the purpose of co-marketing trust services with an affiliate" to "sharing ownership of a limited liability company for the purposes of maintenance and disposition of other real estate owned through foreclosure by participating banks in a lending consortium," the Division of Banking of the Illinois Department of Financial & Professional Regulation (“IDFPR”) has issued four Interpretive Letters in 2010. To read summaries of IDFPR’s interpretations, please
    click here. If you would like to obtain a copy of the actual Interpretive Letter(s), feel free to contact CBAI General Counsel Jerry Cavanaugh by phone (1-800-736-2224) or by e-mail (jerryc@cbai.com).

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    Credit Card Issuance May Be Worth Another Look

    According to some community bankers, now is a great time to be in the credit card business because community banks are well-positioned to garner card business from larger banks due to a higher public perception.
    See U.S. Banker Article. CBAI recommends ICBA BanCard for community banks interested in issuing credit cards.

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    504 Loan Program Update
    August Interest Rates on SBA 504 Loans are at a record low – 4.78%

    Small Business Growth Corporation reports that the interest rate for a 20-year SBA 504 loan has hit a record low of 4.78% for the projects funded in August 2010. This rate is the lowest it has been since the program’s inception in 1986. This is truly an historic opportunity for small businesses to access long-term capital.

    Nationwide, the 504 Loan Program is providing substantially increased capital availability for small businesses to use for the expansion of their business. In addition, participation in the 504 Program actually requires either job creation or the fulfillment of public policy goals. Therefore, the 504 provides small business owners better access to capital and below-market, fixed interest rates while simultaneously benefitting local communities through job creation and community development. For more information, please call (217) 787-7557 or visit
    www.growthcorp.com.

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    ICBA Community-Banking Advocacy Ads Nominated

    The Independent Community Bankers of America (ICBA) received word that its nationally recognized too-big-to-fail advocacy advertisement featuring “The Giant” and its sister ad advocating against a single regulator, entitled “Cyclops,” are finalists for PR News’ Platinum Award under the category of public affairs. “The Giant” was part of a national campaign to educate policymakers and the public about the negative consequences associated with too-big-to-fail and the need to rein in the nation’s giant too-big-to-fail institutions through meaningful financial regulatory reform. In the ad, ICBA communicated that too-big-to-fail must end to protect taxpayers and the future of our economy and that community banks exist to protect and provide for the “little guy” in thousands of cities, towns and rural areas across the nation. “Cyclops” educates policymakers on the dangers associated with a single bank regulator and communicates that instead of creating one colossal financial oversight body, Congress should close gaps that leave Wall Street and nonbank lenders off the hook in order to safeguard consumers on Main Street from abusive and improper practices on Wall Street. To view the ads,
    click here.

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    Farm Bill Negotiations Expected to be Tough

    The American Farm Bureau predicts that federal budget concerns will likely cause cuts in farm spending in the farm bill next year. In addition, a battle between the Midwest and the South over how to cut spending will arise as Midwest farmers want more resources directed to improving crop insurance at the expense of direct payments, while Southern farmers prefer direct payments for cotton and rice.
    See AFB Article.

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    Lenders’ Guide to Mortgage Loan Compliance Session Nears

    Congress and the various federal regulators have crafted revisions to some of the regulations that have been a part of our lives for many years. Additionally, they have added additional regulatory issues to every mortgage-loan transaction. As a result, lenders are struggling to determine how to make a safe and sound loan for the bank, and to do so in a manner that will not create regulatory problems. Scheduled for August 24-25, at CBAI Headquarters in Springfield,
    “Lenders’ Comprehensive Guide to Mortgage Loan Compliance” is a one and a one-half day seminar that covers all aspects of mortgage compliance for lenders.

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    Basic BSA Institute Coming Up

    It certainly is no secret that the Bank Secrecy Act (BSA) is an important topic.
    The Basic Bank Secrecy Act Institute, scheduled for August 31 – September 1, at CBAI Headquarters in Springfield, is a one and a one-half day program designed to provide a thorough grounding in the basics of the BSA for those that are just beginning to work with this regulation. Every bank must have a BSA officer who is in charge of the bank’s 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. 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.

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    Analyzing Business Financial Statements Next Month

    CBAI is pleased to offer
    “Analyzing Business Financial Statements,” September 14 – 15. Offered in two locations, this seminar is designed to address the needs of bankers and credit analysts by reinforcing their credit analysis skills. Credit analysts with little or no experience, credit officers, commercial loan officers/managers, loan review officers, and branch managers will all benefit from this seminar.

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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

    CBAI Career Development Division Fall Meeting (10/27; I Hotel & Conference Center, Champaign


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