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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 20, 2014

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Governor Quinn Signs CBAI Initiative SB 3029
  • Sign Up for a One-Day Registration at CBAI’s 40th Annual Convention!
  • Five Scholarships To Be Awarded at CBAI Convention! Are You Eligible?
  • Reduce Call Report Burden, Sign ICBA’s Petition
  • Bipartisan and Bicameral Support for the CLEAR Act Grows!
  • Regulatory Relief for Community Banks More Likely Post Election
  • CBAI Endorses David Pirsein for the Chicago FHLB Board
  • End of Summer To-Do: Submit Comments for EGRPRA
  • CBAI Leadership Bankers Attend Housing Finance Roundtable
  • Baker Market Update
  • USDA Forecasts Record Corn and Soybean Harvest
  • Farmland Values Vary in Second Quarter
  • 2014 CDD Fall Meeting Slated for October 20-21 in Champaign
  • Layered Security Best for Fighting Card-Not-Present Fraud
  • ESOPs in S Corporations
  • Why Do Banks Maintain an Unallocated Reserve?
  • OCC Issues Revised Booklet on Lease Financing
  • Regulators Announce Availability of 2013 CRA Data
  • Third Quarter FREE Community-Banking Ads Now Available!
  • News from the Bench: Police Access to Customers’ Bank Records Limited
  • Results of the 25th Annual CBAI Officer Survey Are Now Available!
  • Parental Guidelines for Children on Financial Accountability
  • Order Additional Copies of the CBAI Illinois Financial Institutions Directory!
  • Safe Deposit Operations, Compliance, Legal & Disaster Issues Set for October 1
  • Run, Hide, Fight, or Comply? Robbery Training Scheduled for October 8


  • Governor Quinn Signs CBAI Initiative SB 3029

    Governor Quinn signed SB 3029 (P.A. 98-0950) on Friday, August 15. SB 3029 deletes the requirements that all new checking accounts begin with number 101 and that the month and year the account was opened be printed on the face of the check. CBAI received complaints from members that these requirements were outdated and unnecessary; as a result, CBAI initiated SB 3029 earlier this year. The measure became effective immediately upon the Governor's signature.
    Read More.

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    Sign Up for a One-Day Registration at CBAI’s 40th Annual Convention!

    We know you have a busy schedule. If you cannot get away for CBAI’s entire 40th Annual Convention & Expo, scheduled for September 18-20, 2014, join us for a day! You can sign up for a one-day registration and still take advantage of break-out sessions featuring the hottest topics in community banking today, expert general session speakers, and a jam-packed 100-booth exhibit hall with the latest products and services for community bankers! Friday’s schedule features former NFL quarterback and highly sought-after speaker and leadership expert Tom Flick, the annual Business Meeting Luncheon, desserts and hospitality in the Exhibit Hall, and two series of education break-out sessions. Saturday’s highlights include the Closing General Session with CBAI member-favorite David Kemp, founder of Bankers Management, Inc., breakfast in the Exhibit Hall, the Recognition Luncheon, and two series of education break-out sessions. Just choose which day works best for you and come celebrate our 40th anniversary with us in Chicago!
    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 CBAI Convention! Are You Eligible?

    Time Running Out For Your Bank to be Eligible for the 2014 Drawings!

    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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    Reduce Call Report Burden, Sign ICBA’s Petition

    Over the last 10 years, the number of hours required to complete call reports and the resources involved with meeting those reporting obligations have increased for many community banks. The time it takes to file repetitive and burdensome reports is time taken away from working with consumers. Have you taken a stand in reducing this call report burden?

    ICBA launched the petition last month as part of its broader war on regulatory burden. The petition highlights the increasing length and complexity of the call report and advocates streamlined reporting rules for community banks. CBAI encourages all community bankers to sign the petition.

    ICBA’s petition cites data from the association’s 2014 ICBA Community Bank Call Report Burden Survey which found that the annual cost of preparing the call report has increased for 86 percent of respondents during the past 10 years, 98 percent of respondents said ICBA’s proposed short-form call report would reduce their regulatory burden, and 72 percent said the reduction would be “substantial.”
    See Survey Results. Sign the Petition. Read ICBA Release. Read Bank Think Article.

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    Bipartisan and Bicameral Support for the CLEAR Act Grows!

    Bipartisan and bicameral support is growing for the Community Lending Enhancement and Regulatory Relief Act (CLEAR Relief Act of 2013, H.R. 1750/S. 1349) with Illinois Congresswoman Tammy Duckworth (D-8th) recently cosponsoring this important legislation. Currently the CLEAR Act has 38 cosponsors in the Senate and 172 cosponsors in the House.
    Read More.

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    Regulatory Relief for Community Banks More Likely Post Election

    Thanks to the unrelenting efforts of community bankers across America and post-election committee leadership changes, regulatory relief measures may receive favorable action by the new Congress in 2015. That’s the opinion of lawmakers and banking representatives. CBAI has actively supported ICBA’s Plan for Prosperity which contains numerous relief measures including the CLEAR Relief Act, now co-sponsored by nine Illinois House members and Senator Mark Kirk.
    See Newsmax Article.

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    CBAI Endorses David Pirsein for the Chicago FHLB Board

    CBAI is 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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    End of Summer To-Do: Submit Comments for EGRPRA

    The Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA) requires that regulations prescribed by the Federal Financial Institutions Examination Council, Office of the Comptroller of the Currency, FDIC and Federal Reserve System be reviewed by the agencies at least once every 10 years. The purpose of this review is to identify outdated, unnecessary or unduly burdensome regulations and to consider how to reduce regulatory burden on insured depository institutions while, at the same time, ensuring their safety and soundness and the safety and soundness of the financial system.

    To facilitate this review, the agencies have divided their regulations into 12 subject-matter categories and will publish four requests for comment over a two-year period. The first request deals with three categories—Applications and Reporting, Powers and Activities and International Operations. Comments are due by Sept. 2, 2014. These three categories cover such things as branching, operating subsidiaries, fiduciary activities, investment in securities and bank premises, real estate lending, and the sale of insurance.

    A full list of regulations can be found in the charts that are included in the first request for comments. ICBA supports this periodic review and is seeking member comments to EGRPRA.
    See List of Regulations. Submit Comments.

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    CBAI Leadership Bankers Attend Housing Finance Roundtable

    CBAI Chairman Bill Wubben (Apple River State Bank), First Vice Chairman Todd Grayson (South Central Bank, N.A., Chicago), and Past Chairman and FHLB-Chicago Board member Roger Lehmann (The Harvard State Bank) attended a Housing Finance Roundtable with Illinois Senator Mark Kirk hosted by the Federal Home Loan Bank of Chicago. The Roundtable was held on August 7 in Chicago.
    See Article.

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    Baker Market Update

    Slack in the labor market? Well, it didn’t take long to fill that little civil service posting in Iraq . In fact, that Prime Minister position got filled before it was even vacant. Job seekers, however, need not despair just because that plum job is no longer available.
    See Baker Market Update.

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    USDA Forecasts Record Corn and Soybean Harvest

    According to the U.S. Department of Agriculture, corn and soybean production in 2014 will set records nationally. Illinois is expected to rank first in soybean production and second in corn production behind Iowa.
    See USDA Release.

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    Farmland Values Vary in Second Quarter

    Chicago Fed District Reports Gains while St. Louis Fed District Reports Declines

    For the second quarter of 2014, “good” agricultural land values in the Seventh Federal Reserve District (Chicago) were 3 percent higher than a year ago. Moreover, farmland values increased 2 percent from the first quarter to the second quarter of 2014, according to a survey of 230 agricultural bankers. Farmland values were partly buoyed by a spring rally in corn and soybean prices, which occurred before these crop prices started falling again in May.
    See Chicago Fed Ag Newsletter.

    However, a June survey of 45 agricultural banks in the Eighth Federal Reserve District (St. Louis) found that farmland values declined by .42 percent from the first quarter of 2014 and 3.5 percent from the previous year. See St. Louis Fed Quarterly Ag Survey.

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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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    Layered Security Best for Fighting Card-Not-Present Fraud

    E-commerce continues to grow at a steady rate as consumers are becoming more comfortable shopping on the Internet. As well, online businesses continue to innovate to leverage this comfort for increased online engagement with their customers.
    Read More.

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    ESOPs in S Corporations

    Many banks have converted to S Corporations, and the law allows employee stock ownership plan (ESOPs) to own stock in an S Corporation. Because S Corporations sponsoring ESOPs do not have to pay federal (and usually state) income tax on the percentage of their profits attributable to the ESOP, there has been rapid growth in S Corporation ESOPs.
    Read More.

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    Why Do Banks Maintain an Unallocated Reserve?

    According to Sageworks, the unallocated reserve can play an important role in maintaining a financial institution’s overall reserve; however, it is, by nature, a rather subjective process. Unallocated reserves are the result of an adjustment to account for estimated credit losses which fall outside of the predefined qualitative factors and historic loss calculations. Unallocated reserves are necessary when an institution applies qualitative risk factors and historic loss calculations to the reserve, yet still expects credit losses as of the evaluation date to exceed that of the reserve (above and beyond the qualitative factors adjustment).
    Read Sageworks Article.

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    OCC Issues Revised Booklet on Lease Financing

    The OCC has issued the
    “Lease Financing” booklet of the Comptroller’s Handbook. This updated booklet replaces a similarly titled booklet issued in January 1998. This booklet also replaces section 219, “Leasing Activities,” issued in June 1999 as part of the Office of Thrift Supervision’s (OTS) Examination Handbook for the examination of federal savings associations.

    This booklet provides an overview of the leasing business, its associated risks, and sound risk- management processes. It also provides examiners with expanded examination procedures and other tools that can be utilized in supervisory activities that target this type of financing.

    With the issuance of this booklet, the following publication has been rescinded:

    • OTS Examination Handbook, section 219, “Leasing Activities” (June 1999)

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    Regulators Announce Availability of 2013 CRA Data

    The three federal banking agency members of the Federal Financial Institutions Examination Council (FFIEC) with Community Reinvestment Act (CRA) responsibilities – the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency – announced yesterday the availability of data on small business, small farm, and community development lending reported by certain commercial banks and savings associations, pursuant to the CRA.
    See OCC News Release. See Fact Sheet on 2013 Data.

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    Third Quarter FREE Community-Banking Ads Now Available!

    No cost to CBAI members to access! Simply contact Andrea Cusick in the CBAI Department of Communications to have a .pdf sent to you.
    See Sample Ads.

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    News from the Bench: Police Access to Customers’ Bank Records Limited

    Looking back to November of 2010, an opinion from the Illinois Appellate Court for the Second District is instructive on the topic of whether a law enforcement officer can have access to a bank customer’s records in the course of an investigation of that customer. The Court’s instruction: It depends. State of Illinois vs. Nesbitt
    Case Details.

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    Results of the 25th Annual CBAI Officer Survey Are Now Available!

    Non-participants can now order the results (participants have received 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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    Parental Guidelines for Children on Financial Accountability

    ICBA has released tips and advice for parents on how to talk to their children about money. The topics include teachable moments, earning money, tiered saving system and additional resources available to help.

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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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    Safe Deposit Operations, Compliance, Legal & Disaster Issues Set for October 1

    Are your internal safe-deposit procedures now in compliance with all state and federal security regulations and do you follow correct day-to-day operating procedures? This timely and comprehensive presentation contains important information about your “Most Frequently Asked” operations and compliance questions. It covers the SCRA, USA Patriot Act, Suspicious Activity Reporting, Bank Protection Act, OCC, FDIC, NCUA and ADA regulatory requirements, plus recommended procedures for renting, surrendering, box access, key control, deceased renters, living trusts, payable-on-death accounts, delinquent boxes, record retention, unclaimed property and many other legal and operation issues. David McGuinn, a nationally known expert in the area of safe deposit, leads this
    program. McGuinn will provide clear, concise answers to complicated questions regarding your institution's responsibility and potential liability. He identifies and discusses various compliance issues and provides correct procedures for each regulatory, operations, liability, and disaster topic. McGuinn, president and founder of Safe Deposit Specialists, is a former banker with 45 years of safe-deposit experience.

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    Run, Hide, Fight, or Comply? Robbery Training Scheduled for October 8

    Thinking it was a normal bank robbery, three bank employees complied with the demands of the “robber.” He ultimately took all three employees hostage as part of a rambling daylong ordeal that ended in tragedy, and not until it was too late did anyone realize that the perpetrator never intended to rob the bank. Bank employees in other market areas began asking: What should I do if I am ever in the same position? At what point do I consider other alternatives rather than complying with the robber’s demands? How do you know what to do if it looks like it’s a robbery but then it’s not? Help, I need some guidance to deal with a new world of active threats! Jim Rechel of The Rechel Group, Inc. who worked with the bank and its employees to develop a response to the tragedy, and provided guidance for the future, leads this program. We have put the ideas and strategies together into a
    full-day workshop for institutions of all sizes and locations, to provide information that can better equip you to deal with “active threats” in the workplace.

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