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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    August 16, 2017

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • ACTION REQUEST: Tell CFPB to Exempt Community Banks from Section 1071
  • Hotel Reservation Deadline for CBAI's 43rd Annual Convention Is August 30!
  • Congressman Kinzinger (R-16th) Meets with Community Bankers
  • August Is Ideal for Congressional Outreach!
  • CBAI Urges Illinois Congressmen to Cosponsor FHLB Member Bill
  • Hoenig: Payouts, Not Capital Requirements, to Blame for Fewer Big Bank Loans
  • Fed Issues Guidelines on Joint Account Requests
  • Farmer Mac Reports $414M Q2 Net New Business Volume
  • Investment News From THE BAKER GROUP
  • Banking Experts Weigh in on De Novo Charter Process
  • Four Strategies to Innovate Without Betting the Bank
  • U.S. ATM Population Reaches Half-million Mark
  • Don’t Ditch Your Holding Company
  • 482 More Reasons to Hire BankOnIT
  • Rethinking Direct Mail in a Digital Environment
  • Be a Superhero and Donate to the Community BancPac Auction Today!
  • How to Use Social Media to Drive Business Results
  • Production Cost Insurance Offers New Solution
  • CBAI LEGAL: Bank Robber Not Obligated (Maybe) for Dye-Pack Cash
  • CBIS: Difference Between an Incident, Loss and Claim
  • CBAI Convention — Visit Midwest Office at Booths 51/56!
  • CBAI Offers Online Training Through OnCourse Learning (formerly BankersEdge)
  • Auditing HMDA Seminar Slated for August 29
  • Appraisal Review Set for August 30 & 31
  • Loan-Review Best Practices Scheduled for September 28
  • The Keys to Bank to Business Selling to be Held October 3

  • ACTION REQUEST: Tell CFPB to Exempt Community Banks from Section 1071

    Under Dodd-Frank Section 1071, the Consumer Financial Protection Bureau is required to implement rules for the collection and reporting of data on banks’ small business loan applications. This data collection will impose a significant new burden on community banks who already must adhere to numerous regulatory requirements. This new regulation will require HMDA-like data to be collected and reported as well as the purpose of the loan; the race, sex or ethnicity of the business owners; and whether the business is minority or women-owned.

    Section 1071 will have a chilling effect on lenders’ ability to price for risk. This, in addition to the expense of data collection and reporting, may impact community banks’ ability to provide affordable commercial lending products and curb access to small business credit, an engine of local economic growth and job creation. Ultimately, this new regulation would be harmful to community banks and problematic for small businesses and consumers who could bear the increase in the cost of compliance for this new rule.

    Join CBAI and ICBA and tell the CFPB to exempt community banks from Section 1071 and urge Congress to repeal the section all together. Contact CFPB and Congress Today!

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    Hotel Reservation Deadline for CBAI's 43rd Annual Convention Is August 30!

    CBAI’s 43rd Annual Convention & Expo, scheduled for September 14-16, 2017, at the Crowne Plaza in Springfield, IL, is just around the corner! A block of rooms and suites has been reserved for CBAI convention participants at the Crowne Plaza. To ensure accommodation availability, reservations must be made at the hotel by August 30, 2017. Room reservations received after this date are confirmed on a “space-and-rate available basis.” When you call for hotel reservations, be sure to identify yourself as a CBAI convention attendee. Don’t wait! Call 217/529-7777 or 877/270-1393 today to book your room at the special rate of $135 plus tax for single or double. You won’t want to miss CBAI’s showcase event, which features expert speakers on the hottest community banking topics, networking opportunities, entertainment, and more. For details on the 20 education break-out sessions, Thursday's Golf Outing, the Saturday night entertainment, Partners' Programs, a special event on Friday night, and more, check out the full convention brochure and register yourself and members of your team today! More Information on CBAI's 43rd Annual Convention.

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    Congressman Kinzinger (R-16th) Meets with Community Bankers

    Illinois Congressman Adam Kinzinger (R-16th) met recently with a delegation of community bankers to discuss important banking issues and opportunities. The meeting was hosted by Foresight Financial Group’s German-American State Bank, German Valley and Northwest Bank of Rockford. The Congressman appreciated this opportunity to meet with local community bank leadership and the bankers expressed their sincere appreciation for the Congressman taking time to discuss their important priorities. Read Article.

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    August Is Ideal for Congressional Outreach!

    ICBA’s Director of Advocacy Joshua Habursky co-wrote an article that appeared in The Hill that focuses on outreach to members of Congress during the August recess. In the piece, Habursky shares how the month provides the ideal time for advocacy groups to assess the success of their initiatives and personally connect with lawmakers and their staff.

    “Getting members or advocates to bring your issues to their home base will resonate and impact the future course of an organization’s legislative success,” said Habursky and co-author Mike Fulton in the piece. Habursky and Fulton also emphasize the importance of advocates sharing their distinct stories with key legislators to develop relationships and spur action.

    This month, ICBA and CBAI encourage community banker to contact their congressmen concerning several key community banking issues. The ICBA has prepared an August Recess Lobby Card which provides direction on topics to discuss with members of Congress. Contact Congress. Read Lobby Card. Read The Hill Article.

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    CBAI Urges Illinois Congressmen to Cosponsor FHLB Member Bill

    In a July 17, 2017 letter, the Community Bankers Association of Illinois (CBAI) urged the Illinois members of the United States House of Representative to cosponsor the Housing Opportunity Mortgage Expansion Act (H.R. 2890), which is bi-partisan legislation introduced by Representatives Randy Hultgren (R-IL-14th) and Gwen Moore (D-WI-4th). This bill will grandfather the Federal Home Loan Bank (FHLB) memberships of approximately 20 captive insurance companies, including two of the Chicago FHLB’s largest borrowers, which are threatened as a result of a regulation implemented by the Federal Housing Finance Agency. A regulation that results in a smaller and less efficient Chicago FHLB, with lower profits and less ability to carry out its mission, is the wrong approach and will hurt efforts to revive and sustain Illinois housing markets and local economies. Read Article. Read Letter to Delegation.

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    Hoenig: Payouts, Not Capital Requirements, to Blame for Fewer Big Bank Loans

    Big banks say tight U.S. financial regulation forces them to sit on capital and not put money to work by making loans, but in truth they choose to distribute all of their earnings to investors instead of lending them, according to FDIC Vice Chairman Tom Hoenig in a letter to two powerful senators released earlier this month.

    Hoenig emphasized that the biggest banks should be required to set aside more capital so they can weather a crisis without devastating the financial system. Using public data to analyze the 10 largest bank holding companies, Hoenig found they will distribute more than 100 percent of the current year's earnings to investors, which could have supported to $537 billion in new loans. Read More.

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    Fed Issues Guidelines on Joint Account Requests

    The Federal Reserve Board recently released final guidelines that broadly outline considerations for evaluating joint account requests. Joint accounts are used to facilitate settlement between depository institutions participating in private-sector payment systems.

    The final guidelines will provide consistency and transparency given continued innovation in the U.S. payment system and the likelihood that there may be broader interest in joint account arrangements going forward, the Fed said. The guidelines will become effective upon publication in the Federal Register. Read Final Guidelines.

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    Farmer Mac Reports $414M Q2 Net New Business Volume

    Farmer Mac last week announced $414.3 million in net new business volume growth in the second quarter, which brought total outstanding business volume to $18.3 billion as of June 30. Farmer Mac’s net income attributable to common stockholders was $17.5 million for second quarter 2017, compared to $12 million in the second quarter of 2016. Core earnings rose 22 percent to $16 million for second quarter 2017, compared to $13 million for the same period in 2016. See Farmer Mac Release.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    Anyone looking for a little fire and fury from this week’s inflation reports is probably disappointed, and that’s being euphemistic. The Bureau of Labor Statistics (BLS) released new reports for its Producer Price Index (PPI) and its Consumer Price Index (CPI). Neither pronouncement contained the news that policy makers so crave. With its four rate hikes over the last twenty months, the Fed is spoiling for a fight with inflation, its old nemesis. The problem for the Central Bank seems to be that its old nemesis doesn’t want to fight. See Baker Market Update.

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    Banking Experts Weigh in on De Novo Charter Process

    Last year, the FDIC announced it would reduce the review process for newly chartered institutions from seven years to three. The agency also published a handbook for prospective de novo applicants and held six outreach meetings in select cities. ICBA Executive Vice President, Senior Regulatory Counsel Chris Cole recently discussed the positive changes resulting from the streamlined review period. “They’ve been moving in the right direction,” he said. “The change in the heightened scrutiny period improved things a great deal.” Read More.

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    Four Strategies to Innovate Without Betting the Bank

    Most banks recognize that innovation, particularly technological advances and the new business strategies they enable, is critical to their ongoing success. The challenge is how to build a risk-tolerant culture that encourages and even enables innovation without compromising the necessary risk management capabilities of a sound financial services organization.

    Research suggests four broad areas in which effective management can have a direct impact on how well an organization overcomes inertia and encourages an environment in which appropriate levels of risk are viewed as acceptable. Read More.

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    U.S. ATM Population Reaches Half-million Mark

    After years of stagnant growth, likely brought on by a struggling economy, Windows updates, and a complex EMV migration, the U.S. ATM population has reached a significant milepost. A new analysis of industry data by the ATM Industry Association (ATMIA) indicates that there are now between 475,000 and 500,000 ATMs operating in the U.S. market.

    Looking even further into the future, ATM deployers and manufacturers are coming together to embrace the next generation of ATMs, which will rely on app-based platforms for an enhanced user experience, improved security, and greater interoperability. These factors will collectively drive accelerating growth in the ATM channel, according to the ATMIA. Read More.

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    Don’t Ditch Your Holding Company

    Because two multi-billion dollar institutions have recently announced termination of their holding companies, many smaller banks across the nation are questioning whether they still need their holding companies. Without hesitation, the advice of community bank consultant Jeff Gerrish is to keep the holding company in place and not terminate it. In other words, just because two big banks did this does not necessarily mean it is a good idea for community banks. Read More.

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    482 More Reasons to Hire BankOnIT

    There are 482 tasks related to IT documentation that a typical financial institution needs to address in a calendar year. Regulators are expecting more documentation and Board reporting than ever before. Information technology risks are rapidly expanding; financial institutions and their Boards must find a way to keep up with technology and the constantly increasing risks. That’s why BankOnIT has released FinITO, your virtual Financial Institution Information Technology Officer. FinITO helps identify, track, report and manage 482 information technology related compliance tasks your financial institution is responsible for completing to satisfy regulatory compliance demands. Read BankOnIT's Blog.

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    Rethinking Direct Mail in a Digital Environment

    In July, Kasasa explored how you can increase your number of engagements and accounts opened with a hyper-personalized email marketing strategy. But email isn’t the only effective marketing tool.

    Direct-mail campaigns for cross-selling and upselling can make account holders more profitable for you, bring in more deposits at a very low cost, and be the start of a long and engaged relationship.

    In this webinar, Kasasa CMO Keith Brannan will discuss:

    • Ways that micro-targeted direct mail campaigns can increase your ROI.
    • How to successfully upsell and cross-sell using direct mail.
    • Strategies that community financial institutions can use to increase engagement and attract profitable consumers
    Join this webinar to learn how to take advantage of targeted direct-mail campaigns. Register Here.

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    Be a Superhero and Donate to the Community BancPac Auction Today!

    CBAI is 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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    How to Use Social Media to Drive Business Results

    The days of relying on a Facebook® page with a few posts and branch photos are behind us. Social media is now a must-have service channel, consumer engagement tool and sales driver. But is your organization using it that way? In this top-priority session, you'll learn:

    • How to maintain a consistent presence on social media
    • How to stay relevant to today's networked, engaged and demanding audience
    • Lessons from Filene's Social Media Advisory program
    • Actionable strategies to drive social engagement and account holder relationships
    • How are industry leaders preparing and developing the people, process, and technology of banking to become more future ready?

    Reserve Your Space Now.

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    Production Cost Insurance Offers New Solution

    As we face this upcoming 2018 crop season, input costs and commodity prices are not providing much profit opportunity and consequently grower optimism is being severely challenged. Margins are being squeezed with lenders asking many tough questions of farm operators. A Canadian company called Global Ag Risk Solutions (GARS) has partnered with Diversified Crop Insurance Services (DCIS) to bring a fresh and creative insurance product that will garner tremendous discussion and examination this winter. This new product is called Production Cost Insurance (PCI). Read More.

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    CBAI LEGAL: Bank Robber Not Obligated (Maybe) for Dye-Pack Cash

    When a bank robber was sentenced for his crime, one of the issues was the amount of restitution that he would have to make to the bank; specifically, whether currency that was recovered by the police but had been damaged by a dye pack explosion should be included in the restitution amount See Most Recent CBAI LEGAL.

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    CBIS: Difference Between an Incident, Loss and Claim

    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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    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, 2017. 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 Offers Online Training Through OnCourse Learning (formerly BankersEdge)

    Founded in 1998, OnCourse Learning, formerly BankersEdge, is a leading provider of online learning solutions for the banking marketplace. It works closely with its clients to develop tailored learning solutions, drawing from a comprehensive array of technology, instructional design, and consulting services. With more than a decade of expertise in training management, learning development and consulting, combined with a detailed focus on business results, it helps its customers develop tailored training programs to meet their strategic business objectives. OnCourse Learning provides a comprehensive catalog of online training courses, each designed to ensure that employees are receiving the most up-to-date and accurate training in the banking field. The breadth of courses supports regulatory compliance, essential financial skills, and professional skills. See 2017 Course Catalog.

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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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    Loan-Review Best Practices Scheduled for September 28

    Loan review is the bedrock of your bank’s risk-management function. Banks with strong loan-review departments confidently move into new products and industries knowing if they get off track, their loan-review department will reel them in. In this new course, you learn how to unlock the full value of the loan-review function. This training utilizes case studies and real-life application to reinforce techniques and teach new approaches managing the credit risk in your bank. Leading this seminar is Ancin Cooley, CIA, CISA, founder and principal of Synergy Bank Consulting, Inc.

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    The Keys to Bank-to-Business Selling to be Held October 3

    Small business is actively looking for lending and deposit alternatives, often with a non-bank. This engaging seminar looks at the ways a community bank can find small-business loan and deposit opportunities and find them faster than your competitors. The first strategy is to generate more small-business loans and deposits from your existing customers. The second strategy is to take opportunities from your competitors. This seminar focuses on tactics that help you discover, qualify, and take all available loan and deposit opportunities. The program focuses on the concepts of identifying opportunities, deciding which businesses make sense to work with, and which businesses you might consider for specialization. Leading this seminar is Duane F. Sobecki, CEO of Focused Results, LLC, a sales strategy, consulting, and training firm.

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    THROUGH 10/15/2017






    Finer Points Blog

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