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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 15, 2018

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • CBAI Announces Recognition Luncheon Speaker at 44th Annual Convention
  • Custom Message Urges Bank Secrecy Act Reform
  • CBAI ACTION ALERT: Urge HUD to Amend Fair Lending Disparate-Impact Rule
  • CSBS Responds to the OCC and Treasury on Fintech Chartering
  • Treasury Issues Plan for Sub S Tax Deduction
  • NEWS FROM THE FRONT 08/07/18
  • Most Reciprocal Deposits No Longer Considered Brokered Deposits
  • Investment News from THE BAKER GROUP
  • BankOnITUSA: Artificial Intelligence, Real Results
  • Is Your Bank Properly Prepared for a Cyber Incident?
  • CBAI LEGAL: “Corporate Veil” Pierced in Bankruptcy Case
  • Donate to the Community BancPac Auction Today!
  • Study: 58 Percent of Workers to Get Pay Raise
  • Small Business Optimism Highest Since 1983
  • Social Media Disclosures Decision Tree
  • FDIC Publishes 25th Anniversary Special Edition of Consumer Newsletter
  • Mid-America Economic Index Points to Slower Growth
  • St. Louis Fed Ag Survey: Bankers See Decline in Farm Income/Land Values
  • CBIS: What Community Banks Need to Know About Illinois Mine Subsidence
  • Check Writers Are More Important and Valuable Than Ever Before
  • BSA Graduate School Set for August 23-24
  • CFO Conference Coming August 30
  • Auditing BSA Scheduled for September 5


  • CBAI Announces Recognition Luncheon Speaker at 44th Annual Convention & Expo

    CBAI is pleased to announce Jerry Peck, CBAI’s senior vice president of governmental relations, as the Recognition Luncheon speaker at the 44th Annual Convention & Expo. The CBAI Governmental Relations team is closely monitoring state and federal campaigns ahead of the November election. Additionally, both Community BancPac and CBAI FedPac are engaged in races and supporting candidates who support community banks. Peck provides an update on campaigns including the latest polling, spending and analysis of key races on both the state and federal level.

    CBAI’s 44th Annual Convention & Expo, scheduled for September 27-29, 2018, at the Hyatt Regency at The Arch in St. Louis, MO, 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 and more. Don't wait! Check out the full convention brochure and register yourself and members of your team today!

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    Custom Message Urges Bank Secrecy Act Reform

    With many community bankers meeting with members of Congress during the August recess, the profession can also specifically urge Bank Secrecy Act reforms with a new custom message to lawmakers. Community bankers can use ICBA’s Be Heard grassroots resource center to call on Congress to introduce legislation that will streamline the BSA/AML framework to more effectively produce useful information while alleviating compliance burdens. Urge BSA Reform Now.

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    CBAI ACTION ALERT: Urge HUD to Amend Fair Lending Disparate-Impact Rule

    The Community Bankers Association of Illinois is calling on all Illinois community bankers to urge the Department of Housing and Urban Development (HUD) to amend its fair lending disparate-impact rule to meet the limitations imposed by the United State Supreme Court.

    The 2015 Supreme Court decision placed important limits on the rule under which lenders may be held liable for neutral practices that have a disparate impact on certain classes of borrowers. HUD’s current rule is not consistent with the Supreme Court’s ruling. Your message calls on HUD to eliminate the uncertainty caused by this inconsistency.

    Please share this Action Alert with your board members. We need a strong response from Illinois community bankers. Thank you for responding!

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    BECOME A THOUGHT LEADER IN YOUR COMMUNITY THROUGH SHAZAM MEDIA RELATIONS
    Local news organizations are hungry for fresh content and credible experts. SHAZAM Media Relations Training can teach you how to feed local media outlets valuable information while gaining vital exposure for your brand and positioning you and your staff as financial experts in the community. Dates are filling quickly, contact SHAZAM today.




    CSBS Responds to the OCC and Treasury on Fintech Chartering

    John Ryan, President of the Conference of State Bank Supervisors, commented recently on the report issued by the Treasury Department on financial innovation and a decision by the Office of the Comptroller of the Currency (OCC) to move forward with creating a new national bank charter for select, uninsured fintechs.

    Ryan stated that an OCC fintech charter is a regulatory train wreck in the making and indicated that such a move exceeds the current authority granted by Congress to the OCC. He continued that fintech charter decisions would place the federal government in the business of picking winners and losers in the marketplace, and taxpayers would be exposed to a new risk: failed fintechs. Read More.

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    Treasury Issues Plan for Sub S Tax Deduction

    The Treasury Department issued its highly anticipated proposed rule to implement the Tax Cuts and Jobs Act’s 20 percent tax deduction for pass-through businesses. The proposal heeds congressional intent by allowing Subchapter S community banks to qualify for the deduction, but restrictions on certain types of financial services raise questions about how it will be applied.

    Citing Section 199A of the tax law, Treasury’s proposed rule cites various financial services that do not qualify for the 20 percent deduction, such as wealth management and retirement planning. Businesses that have $25 million or less in gross receipts and earn less than 10 percent of those receipts from these services would not be excluded from the deduction, nor would businesses with more than $25 million in gross receipts that earn less than 5 percent from those services.

    While income derived from insurance brokerage would be fully eligible for the deduction, CBAI and ICBA are concerned about whether income from loans sold to be securitized will be eligible. The associations have advocated a broad interpretation that would ensure all Sub S community bank activities are eligible which would bolster lending while ensuring the tax code does not incentivize pass-through businesses to restructure to C corporations—both priorities of tax reformers.

    Comments on the proposal are due 45 days after it is published in the Federal Register. CBAI and ICBA are reviewing the plan and will submit comments. View Proposed Rule.

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    NEWS FROM THE FRONT 08/07/18

    Governor Bruce Rauner has signed two CBAI legislative initiatives into law that will bring regulatory relief to community banks. One eliminates an annual audit provision for state-chartered savings banks. The second exempts community banks from oversight by the Attorney General's Office under the Installment Sales Contract Act. At the urging of CBAI and other groups, Governor Rauner has vetoed a legislative initiative of the Treasurer’s Office to impose a statutory fee restraint on rebate cards.

    With the November reporting deadline under the new Revised Uniform Unclaimed Property Act approaching, CBIA has had many requests for guidance on how to comply with new provisions in the law. We have produced a webinar, a letter of guidance and sought additional guidance from the Treasurer's Office. See Most Recent NEWS FROM THE FRONT.

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    Most Reciprocal Deposits No Longer Considered Brokered Deposits

    On May 24, 2018, President Donald Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act, which provides relief from certain rules and regulations for community banks. Among the law’s many provisions, one stands out in importance—most reciprocal deposits are no longer considered “brokered deposits.” Read More from Promontory Interfinancial Network.

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    Investment News from THE BAKER GROUP

    Baker Market Update

    Well, it seems the new Turkey Melt isn’t just for lunch anymore. As markets open this week, the latest investor snack first popularized last Friday has now made its way onto breakfast menus, too. Despite the promise by Turkey’s central bank to “take all necessary measures” to stem the lira’s freefall, the currency is still falling freely. So far, a reduction in the Turkish Central Bank’s reserve requirements along with an easing of liquidity regulations has failed to stem the currency’s slide, and that has triggered a growing perception that a currency-defending rate hike may be in the offing. See Baker Market Update.

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    BankOnITUSA: Artificial Intelligence, Real Results

    Artificial Intelligence (AI) is already in use at some banks and allows them to make decisions that help decrease risk and improve efficiencies. AI is allowing these banks make smarter decisions and make them faster. Imagine what other competitive advantages your bank could gain by using AI. Read BankOnIT's Blog.

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    Is Your Bank Properly Prepared for a Cyber Incident?

    Business leaders continue to rank cyber risks as a top concern. The good news is that many of these risks can be mitigated, and there are resources available to help businesses of any size stay protected. With thoughtful planning, businesses can prepare for and often avoid these risks. Read More.

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    CBAI LEGAL: “Corporate Veil” Pierced in Bankruptcy Case

    When the owner of a corporation in bankruptcy intentionally dissipated corporate assets to prevent recovery by a judgment creditor, a federal court “pierced the corporate veil” and allowed personal liability to be imposed for the corporate indedbtedness. Read Most Recent CBAI LEGAL.

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    Donate to the Community BancPac Auction Today!!

    The CBAI Governmental Relations team is preparing for Community BancPac’s 27th Annual Auction. Thanks to the generosity and thoughtfulness of many community bankers, this night is always a fun-filled event as it kicks off the opening night of CBAI’s Annual Convention. We are excited and hope to make this years’ auctions a successful and memorable event. That said, we can always use your help.

    Can you think of items your fellow community bankers would love? Sports tickets, high end wines, collectables, excursions and experiences? There are two ways you can donate them to the auction. You can simply purchase an item and donate it or you can donate cash and the GR team will do the shopping for you. Either way, you will get credit for your donation in the official auction guide.

    Community BancPac is also building a pyramid of golf balls. Do you have a dozen golf balls to donate? Even better if they come with your bank’s logo. Access Community BancPac Auction Donation Form. Learn How to Donate to the Pyramid of Golf Balls.

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    Study: 58 Percent of Workers to Get Pay Raise

    With the labor market tight and companies increasingly competing to attract and retain qualified workers, 58 percent of employers plan to give out raises by the end of 2018, according to a report released recently by CareerBuilder. Pay bumps will be 5 percent or more at 24 percent of companies, the survey found. Read More.

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    Small Business Optimism Highest Since 1983

    Small-business optimism reached its second highest level in the survey’s 45-year history, according to the National Federation of Independent Business. The NFIB Index rose 0.7 points in July to 107.9, rising to within 0.1 point of the July 1983 record-high of 108. The July 2018 report also set new records for owners reporting job creation plans and those with job openings. See NFIB Report.

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    Social Media Disclosures Decision Tree

    All of the potential disclosures needed on social media are overwhelming, which is why Kasasa worked with Sterling Compliance to create a simple visualization to cover a majority of the social-media content banka may share. View Infographic and Additional Info Here.

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    FDIC Publishes 25th Anniversary Special Edition of Consumer Newsletter

    FDIC Consumer News, the newsletter published quarterly by the Federal Deposit Insurance Corporation since the fall of 1993, is celebrating its 25th anniversary with a special expanded edition featuring updated versions of 25 of our more popular articles.

    Much has changed in banking and financial services in the last 25 years. For example, the FDIC deposit insurance limit increased from $100,000 to $250,000 and consumers now enjoy internet banking at home and mobile banking by smartphone from virtually anywhere. Even so, many of the core concepts on matters such as saving, borrowing money, and avoiding fraud and theft remain generally the same. The new guide, entitled "25 Years of Tips You Can Bank On: Time-Tested Strategies for Managing and Protecting Your Money," includes one article from each year going back to 1993. Topics include saving for retirement, understanding FDIC deposit insurance coverage, money tips for travelers, and how to search for lost or forgotten bank accounts. Read FDIC Release. See New Guide.

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    Mid-America Economic Index Points to Slower Growth

    The July Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, fell to a solid level continuing to point to positive, but slower, growth for the next three to six months.

    The Business Conditions Index, which ranges between 0 and 100, declined to 57.0 from June’s 61.8 and May’s 67.3. This is the 20th straight month the index has remained above growth neutral 50.0, but the second straight month that the index has fallen.

    “The regional economy continues to expand at a healthy pace with manufacturing growth of approximately 2.6 percent over the past 12 months compared to a lower 2.3 percent for the U.S.,” said Ernie Goss, PhD, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business.

    “However, I expect expanding tariffs, trade restrictions, and rising short-term interest rates from a more aggressive Federal Reserve to slow growth to a more modest, but still positive pace,” said Goss. Read More.

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    St. Louis Fed Ag Survey: Bankers See Decline in Farm Income/Land Values

    The latest survey shows most agricultural bankers expect farm income to decline next quarter, just as it did in this second quarter report. Quality farmland values also fell in the most recent survey, according to the latest Agricultural Finance Monitor published by the Federal Reserve Bank of St. Louis. There was a slight improvement in cash rents compared to a year ago.

    The survey was conducted from June 15, 2018, through June 30, 2018. The results are based on responses from 24 agricultural banks within the boundaries of the Eighth Federal Reserve District. The Eighth District includes all or parts of seven Midwest and Mid-South states: Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee. See Fed Release. Read Agricultural Finance Monitor.

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    CBIS: Community-Bank Lawsuit Versus Cyber-Insurer Hits Insurance News

    Three CBAI-member banks have made inquiry with CBIS regarding a recently filed lawsuit by a Virginia community bank against its cyber insurer (See: https://krebsonsecurity.com). The bank suffered two intrusions in eight months resulting in a $2.4-millioin total loss. Both thefts began as phishing attacks and compromise of a computer that managed credit- and debit-card transactions Evidently, hackers were able to disable or alter PINs, daily withdrawal limitations, card usage and fraud-score protections. Read More.

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    Check Writers Are More Important and Valuable Than Ever Before

    Harland Clarke, a CBAI business partner since 1988, recently surveyed a group of bank customers on check writing and found some interesting results. While 40% of those surveyed say they never write checks, and another 20% only write a few checks annually, the most avid check writers earn more than $150,000 a year in income.

    According to the survey, check writers are more affluent and they are older. That comes as no surprise. The younger generation comprises the majority of non-check writers. That is no surprise. However, as the younger generation attains affluency, they write more checks. That is surprising! Read More.

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    BSA Graduate School Set for August 23-24

    This two-day program is designed for BSA professionals who are competent in the core requirements of Bank Secrecy Act rules and provides a higher level of lecture, training, and interactive discussion regarding the challenges of developing and managing an effective BSA program. Much of the discussion revolves around real life case studies which are an integral part of the school. This school also addresses the customer due diligence (CDD) rules which became effective May 11, 2018, addressing the requirements for verifying the ultimate beneficial owners for business accounts, and any up to the minute changes. A major focus of the program is managing a BSA program. Topics include discussions on ethics, efficiency vs. effectiveness, dealing with examinations, escalating issues within the organization, and managing MSB relationships. In addition, the class will learn to design an effective BSA program through the study of workflow charts, which are provided. We discuss best practices for impacting the bottom line of a BSA program and we discuss a policy checklist, as well as how to conduct a gap analysis to ensure your program is as refined as possible. The course will rely heavily on a roundtable discussion. The facilitator guides the group through a number of pre-determined discussion topics, as well as topics requested by the attendees. Leading this institute Bill Elliott, CRCM, senior consultant and manager of compliance, Young & Associates, Inc.

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    CFO Conference Coming August 30

    The 2018 CFO Conference is designed to help community-bank CFOs gain a wide variety of information from expert speakers on topics that community bank chief financial officers have requested, and return to the bank ready to implement newly found ideas and knowledge! Topics include “Liquidity Crunch” with Drew Simmons, vice president at THE BAKER GROUP, Oklahoma City, OK; “Trends in Cybersecurity: Is Your Bank at Risk?” with Sara Nielsen, senior vice president at BankOnIT, Oklahoma City, OK; “Regulatory Changes – What Ones are Important to Financial Performance” with Tim Tedrick, partner at Wipfli LLP, Sterling, IL; and “Creating Funding Stability” with Jim Lutter, senior vice president, and Todd Terrazas, business development product manager, both of PMA Financial Network, Inc., Naperville, IL.

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    Auditing BSA Scheduled for September 5

    This program is helpful for both experienced and inexperienced internal auditors and BSA officers. It helps you develop a successful audit program based on the BSA/AML Interagency Examination Manual. Methods for reporting and tracking exceptions are presented. Participants identify and understand the key demands of the regulations and their most recent revisions; identify sources of information to understand the approach used by regulators and the details of the application of the regulations; obtain and understand checklists and tools; practice the actual completion of work papers; and discover what the present hot topics areas are for the state and federal regulators. Leading this seminar is Tim Tedrick, CRCM, CRP, and partner at Wipfli LLP in Sterling, Illinois.

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