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     A Bi-Weekly News Bulletin for CBAI Members                         August 21, 2013 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Governor Quinn Approves CBAI Initiatives
  • Advance Pricing for CBAI’s 39th Annual Convention Ends August 30!
  • Tell Congress to Reform the Farm Credit System’s Tax Breaks
  • CBAI Board Endorses Rosenbaum for FHLB-Chicago Board
  • CBAI FedPac Fundraiser was a Grand-Slam!
  • Time to Get Mega Banks Out of Commodities Business
  • Wall Street Changes Course on Reforms as Pressure Mounts
  • Delinquencies and Distressed Mortgage Loans Down
  • Baker Market Update
  • Rural Mainstreet Economy Grows
  • St. Louis Fed Survey: Farmland Values Increased in Second Quarter
  • Consumers Only Think They’re Spending Less Money
  • Donate Now to Community BancPac Auction!
  • Consumers and Free Market Are Losers in Debit Interchange Ruling
  • Loan Participations: Lessons Learned from Crisis
  • CFPB Updates Compliance Guide for Ability-to-Repay/Qualified Mortgage Rule
  • OCC Issues Final Rule on Lending Limits
  • Rowe: Level Playing Field Needed
  • Free Sageworks Whitepapers on Loan Stress Testing and ALLL
  • HSA Growth Continues at Healthy Clip
  • TCM Bank Sponsors Summer Back-To-School Promotion
  • KASASA Ad 12 - “I Am A Customer!”
  • Expand Your Mortgage Lending Products Scheduled for August 28 & 29
  • CDD Fall Meeting To Be Held October 22
  • Women in Community Banking Conference Set for November 19


  • Governor Quinn Approves CBAI Initiatives

    Governor Quinn approved two CBAI initiatives on August 16, 2013:

    HB 1335 (PA 98-0387) allows financial institutions and title companies that know each other and agree to use cashier’s checks, teller’s checks and certified checks as settlement funds in transactions greater than $50,000. While the bill is permissive in nature, the title insurance industry still opposed the legislation. At the request of Senator Don Harmon (D-Oak Park), the bill was amended in the Senate to make it clear the parties will address the issue of delivery of the check to the title company in sufficient time for the check to be deposited to the title company’s account before any disbursement of funds is made by the title company. As part of the compromise, a January 1, 2015 sunset was also included in the bill. Senator Harmon inserted the sunset and committed to repeal it next year if there is no proof that that this legislative change negatively impacts the title insurance industry. CBAI plans to continue to work with the General Assembly on this issue and to repeal the sunset.

    HB 2432 (PA 98-0415) removes the requirement for banks to disclose ATM fees with a physical sign on the terminal, when the fee is shown electronically on the terminal screen. Last year, Congress removed this physical signage requirement in federal law, and this bill makes state law consistent with that change. Both bills are effective immediately.

    CBAI thanks Representative Ron Sandack (R-Downers Grove), Representative Lou Lang (D-Skokie) and Senator John Mulroe (D-Chicago), for their hard work on these bills. CBAI also thanks Governor Quinn for approving these initiatives.

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    Advance Pricing for CBAI’s 39th Annual Convention Ends August 30!

    Register by August 30 for CBAI’s 39th Annual Convention & Expo to be eligible for advance pricing! Scheduled for September 26-28, 2013, at the Crowne Plaza in Springfield, this year’s convention is entitled “Community Bankers: Illinois’ Treasure.” Join with hundreds of other community bankers to 1) learn from top-rated community banking educators on all aspects of bank operations, 2) browse through an exhibit hall featuring 100 firms and their latest products and services; 3) enjoy entertaining presentations and performances, and 4) mix and mingle with your peers in this great community-banking profession.

    CBAI’s 39th Annual Convention and Exposition is organized just for you, and it’s right here in your own backyard at the Crowne Plaza in Springfield. Don’t forget, to assure availability; book your hotel room at the Crowne Plaza by September 4. Call 217/529-7777 today for reservations and be sure to identify yourself as a CBAI convention attendee.

    CBAI’s 39th Annual Convention and Exposition is organized just for you, and it’s right here in your own back yard at the Crowne Plaza in Springfield on September 26-28. Register Today!

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    Tell Congress to Reform the Farm Credit System’s Tax Breaks

    The Farm Credit System tax breaks are among the key issues CBAI and ICBA are encouraging community bankers to address in meetings with members of Congress during the August recess. With lawmakers back home in their districts until September, community bankers are encouraged to set up district meetings to advocate a repeal of the costly and controversial tax breaks.

    Congress is evaluating the nation’s tax code for reform, and the FCS tax breaks are among many exemptions under review. The August recess is an ideal time for community bankers to contact their members of Congress and urge them to reform the FCS’s tax subsidies.
    See ICBA Talking Points.

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    CBAI Board Endorses Rosenbaum for FHLB-Chicago Board

    CBAI’s Board of Directors has unanimously endorsed the reelection of Steve Rosenbaum to the Board of Directors of the Federal Home Loan Bank of Chicago. Rosenbaum is Chairman and CEO of Prospect Federal Savings Bank in Worth and has been a community banker for more than 35 years. He is the current Vice Chairman of the FHLB-Chicago where he also serves as Chairman of its Human Resources and Compensation Committee and as a member of the Executive & Governance and Audit Committees.

    In addition, Rosenbaum is one of three members from the FHLB-Chicago serving on the Council of Federal Home Loan Banks which represents the positions and views of the Council’s members to Washington policymakers. Ballots will be mailed in late September, and CBAI encourages all CBAI members that are also FHLB-Chicago members to support Steve Rosenbaum for reelection.

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    CBAI FedPac Fundraiser was a Grand-Slam!

    FedPac supporters throughout Illinois enjoyed the extra inning St Louis Cardinals victory over the Pittsburg Pirates on August 15th at Busch Stadium. It was a great opportunity to take off the banker pin-stripes, get comfortable, and have some fun. Many brought “teammates” which provided a great mix of veteran players and rookies that made this FedPac fundraiser another outstanding success.
    Read More.

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    Time to Get Mega Banks Out of Commodities Business

    Recent revelations that mega banks may be manipulating commodities markets, including energy and aluminum prices, have resulted in calls for Congress to prevent mega banks from owning physical commodities, including the facilities used to transport, store and process them. U.S. Senator Sherrod Brown (D-Ohio), a member of the Senate banking Committee and advocate for a safer banking system, recently asked, “What do we want our banks to do, make small-business loans or refine and transport oil? Issue mortgages or corner the metals market?”

    Banking law professor Simon Johnson believes it’s a bad idea to allow big banks to dominate any dimension of the commodities business, and he believes they will soon have to divest themselves of these activities. CBAI fully concurs.
    See New York Times Article.

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    Wall Street Changes Course on Reforms as Pressure Mounts

    Although the mega banks opposed the Dodd-Frank Act, many are now taking shelter behind it just as tough new too-big-to-fail legislation is advancing, according to ICBA’s “End Too-Big-To-Fail” White Paper. The document dispels myths about too-big-to-fail and notes that Wall Street now argues that Dodd-Frank solved the problem and should be given time to work. The mega banks fail to note, however, that they have only gotten larger and riskier since the financial crisis.

    While Dodd-Frank included enhanced regulatory supervision and oversight of mega-institutions, CBAI and ICBA believe more is needed to reduce the risk these institutions pose and to reduce the impact their failure would have on the broader financial system and economy.
    See “End TBTF” White Paper.

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    Delinquencies and Distressed Mortgage Loans Down

    Distressed mortgage loans fell to the lowest level in five years during the second quarter of 2013, according to a recent report by the Mortgage Bankers Association. Its National Delinquency Study found that, for most of the country, delinquencies and foreclosures have returned to more normal historical levels.
    See Mortgage News Daily Article.

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    Baker Market Update

    Bond yields pushed a bit higher this week as economic data continues to show creeping improvement. The bellwether 10yr T-Note yield climbed to a 24 month high of 2.86% and the yield curve steepened further, giving ammo to banks in their battle against margin compression. For their part, Federal Reserve officials kept markets guessing as to whether and when the dreaded “tapering” of their $85 billion in bond purchases might commence. The Fed’s balance sheet currently sits at an all-time record of $3.65 trillion.
    See Baker Market Update.

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    Rural Mainstreet Economy Grows

    According to the August Mainstreet Economic survey of community bankers from across the Midwest, the rural economy continued to grow, although the rate of growth declined slightly compared to the previous month. The Rural Mainstreet Index slipped to 55.8 from July’s 57.3 (50.0 represents growth neutral).
    See Mainstreet Economy Release. See Detailed Mainstreet Economy Report.

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    St. Louis Fed Survey: Farmland Values Increased in Second Quarter

    Last week the Federal Reserve Bank of St. Louis released the results of its latest Agricultural Finance Monitor which found that farmland values continued to rise in the Eighth District during the second quarter. Capital and household spending also increased slightly compared to a year ago.
    See St. Louis Fed Release.

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    Consumers Only Think They’re Spending Less Money

    Recent surveys have found that consumers think they have been spending less money during the economic downturn, but in reality they are spending as much or more than before the recession. In a recent study, consumer research firm Mintel concluded that consumer spending has in fact increased across all evaluated markets, spurred on by recurring cycles of sales, coupons, and discount offers.
    See Time Article.

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    Donate Now to Community BancPac Auction!

    The annual silent and live auction for Community BancPac will be held on Thursday, September 26, 2013, during the CBAI Convention at the Crowne Plaza Hotel in Springfield. Now is a great time to donate to this worthy cause. Sporting events tickets, memorabilia, and time shares are popular items and are encouraged.
    See Auction Sponsor Form.

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    Consumers and Free Market Are Losers in Debit Interchange Ruling

    During a timely development by U.S. District Judge Leon recently, ICBA Chairman-Elect John Buhrmaster wrote in a new
    American Banker op-ed: consumers and the free market are the losers in the latest District of Columbia U.S. District Court ruling on debit interchange on July 31.

    Declining interchange revenue translates into consumers paying more for the products and services that, in many instances, were once free. Consumers will pay more for financial products and services and see no corresponding decrease in retailer prices. This is a no-win situation for consumers throughout the country, wrote Buhrmaster, who is also president of 1st National Bank of Scotia, N.Y.

    “Consumers and our free-market system have already been put through the wringer enough, courtesy of the latest financial crisis. Why put either through any more change, which will inevitably result in higher costs, lower income and further uncertainty?” Buhrmaster wrote. Read Op-Ed.

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    Loan Participations: Lessons Learned from Crisis

    The Federal Reserve Bank of Richmond recently released a research paper titled, “Loan Participations: Lessons Learned During a Period of Economic Malaise” that provides a helpful list of best practices. The article also offers several ways to strengthen board and senior management oversight of loan participations.
    See Research Article.

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    CFPB Updates Compliance Guide for Ability-to-Repay/Qualified Mortgage Rule

    The Consumer Financial Protection Bureau has announced that it is updating the
    Small Entity Compliance Guide for the Ability-to-Repay and Qualified Mortgage (ATR/QM) Rule. This update incorporates clarifications and amendments to the rules issued on May 29, 2013 and July 10, 2013.

    Guides are available for each of the new mortgage rules. The goal of these guides is to provide an overview of the rules in a format accessible and consumable for a broad array of industry constituents. Although the guides provide an overview of the rules, they are not substitutes for the underlying rules.

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    OCC Issues Final Rule on Lending Limits

    The Office of the Comptroller of the Currency (OCC) has issued a final rule that amends the OCC’s rule governing lending limits. On June 21, 2012, the OCC published an interim final rule amending 12 CFR part 32 to implement section 610 of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (the act) and to consolidate the lending limits rules applicable to national banks and federal and state savings associations (collectively, banks). (See OCC Bulletin 2012-19.) The act revises the lending limits statute applicable to banks to include credit exposures arising from derivative transactions and repurchase agreements, reverse repurchase agreements, securities lending transactions, and securities borrowing transactions (collectively, securities financing transactions).
    See More.

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    Rowe: Level Playing Field Needed

    Martin B. Rowe is the managing director and principal shareholder of Legence Bank, a family owned community bank headquartered in Eldorado. Recently, he authored a compelling case for taxing credit unions for his area newspaper.
    Read Argument.

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    Free Sageworks Whitepapers on Loan Stress Testing and ALLL

    Solving Data Challenges of Loan Portfolio Stress Testing

    In a recent
    poll, almost 19 percent of responding financial institutions said the biggest challenge they have in creating and maintaining a stress testing analysis is the availability of granular data. For both top down and bottom up stress tests, aggregating the necessary data from several departments can be an overwhelming task. This whitepaper from Sageworks helps explain which data fields are recommended, what steps should be taken for data collection, where to find necessary data, and how to maintain and update this data. Download Free Whitepaper.

    Can’t We “ALLL” Just Get Along?

    The FASB and the IASB submitted a joint proposal in 2011, commonly known as the three-bucket impairment model. But since then, there has been some divergence between the two organizations, and each board has set out to develop its own exposure drafts. In this paper, Sageworks’ Ed Bayer and Regan Camp outline the history of the FASB and the IASB convergence and divergence, details of the FASB’s CECL model and the IASB’s credit deterioration model, pros and cons of each model, and thoughts on whether or not a re-convergence will occur. Download Free Whitepaper.

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    HSA Growth Continues at Healthy Clip

    Health savings account (HSA) growth continues at a healthy clip, according to the annual census by America’s Health Insurance Plans (AHIP), the national trade association representing the health insurance industry. AHIP’s recently released 2013 census shows that nearly 15.5 million people are covered by health savings account/high deductible health plans (HSA/HDHP) as of January 2013, up from 13.5 million in January 2012. The nearly 15 percent annual growth rate of HSA/HDHPs nationally is translating into similar growth in the number of HSAs at banks.
    Read More.

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    TCM Bank Sponsors Summer Back-To-School Promotion

    ICBA Bancard subsidiary, TCM Bank, N.A., announced a sponsored summer credit card promotion for its agent bank clients from May through July. The idea behind the promotion was to help community banks grow their credit card portfolio while giving back to the students in their communities. Nearly 70 banks participated in the promotion, and the five that submitted the most credit card applications were announced as winners. TCM supplied 48 backpacks filled with school supplies along with balloons, frisbees and t-shirts to each winner.

    “This promotion was very successful because it combined the best things about community banking—high-quality personalized service, an excellent credit card offering and support for the local community,” said Paul Weston, president and CEO, TCM Bank, N.A. “At TCM Bank, we are proud to be the ‘back office’ for our agents, helping them to be successful with very competitive, bank-branded credit card services.”
    Read More.

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    KASASA Ad 12 - “I Am A Customer!”

    Remember back when you could call a bank and talk to a person? Of course you do, because true personal service is still a thing of the present at community banks across the country. Kasasa’s “I Am A Customer!” radio spot addresses the sad truth about banking at megabanks – convenience is king, at the expense of the customer. When in reality, convenience should make a customer’s life easier.

    Free Kasasa checking and savings accounts show every account holder that he or she comes first. And account holders know how much they matter, because they’re thanked in cash each month – all on top of trusted, community bank personal service. Plus, easy monthly qualifications are not only a way to earn rewards, but save account holders time.
    See Ad.

    Want Kasasa to take your community bank to the next level? Contact Steve Prost via email at steve.prost@bancvue .com, or phone at 847.341.8003. Kasasa is one of the many fine products of BancVue, a CBSC Preferred Marketing Partner.

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    Expand Your Mortgage Lending Products Scheduled for August 28 & 29

    Seeking to increase your lending opportunities or to brush up on the current guidelines? Then this program is for you! From the CEO to the processing staff, there is something to learn from each section of the products discussed. FHA, VA, USDA and, of course, the secondary market consisting of Fannie Mae and Freddie Mac are covered. Learn the insurability underwriting requirements as well as the documentation to successfully originate, process, and sell an FHA-insured loan. This course is designed for those who have never originated a VA loan before. What are the guidelines for VA, and how can you best serve your customers with this product? Learn why this is the up-and-coming product offered by the USDA. Get to understand what is considered rural, and how to know if someone qualifies. Learn the principles behind Fannie Mae and Freddie Mac, what they are, and about their functions from origination to the secondary market. What does the future hold? Leading this seminar is Paul R. Grabstanowicz, vice president of training at Mortgage Services III, LLC (MSI), a subsidiary of First State Bank, Mendota.
    See Information and Registration.

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    CDD Fall Meeting To Be Held October 22

    The
    CDD Annual Fall Meeting, scheduled for October 22, 2013, at the Marriott Hotel Pere Marquette, Peoria, is geared toward honing professional and banking skills. In addition to the educational offerings, this year's meeting includes an excellent networking opportunity at the hotel the evening of October 21; the entertainment for the evening is "Coole 2 Duel” a dueling-piano show. The Fall Meeting begins with the popular Networking Session, a roundtable discussion among bankers sharing job responsibilities. This event is followed by a Legislative Update by CBAI's Kraig Lounsberry. Elaine Hand then presents the general session entitled, “Lead Out Loud: Learning to Lead Within the Comforts of Your Personality Style.” Following the Business Meeting Luncheon, the afternoon agenda features breakout sessions and a second Networking Session with roundtable discussions on a variety of topics. The Fall Meeting concludes with a second general session again with Elaine Hand.

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    Women in Community Banking Conference Set for November 19

    Mark your calendar today for CBAI’s seventh annual Women in Community Banking Conference on Tuesday, November 19, at the Crowne Plaza in Springfield. Highlighting the conference is motivational speaker and comedienne
    Kelly Swanson, who will present two keynotes, Who Hijacked My Fairytale? and Stand Up and Stick Out in a Crowded Market. This conference helps restore your passion for work and home and find a renewed sense of purpose. You learn how to set yourself apart from the competition, motivate yourself to deal with stress and change, inspire others to form stronger teams, and much more! Other conference highlights include a social event on Monday evening, a mini-exposition featuring the latest products and services, and networking luncheon by area of banking. Don't miss this opportunity for invaluable networking, powerful information, and a great career move. Not only do you benefit both personally and professionally, you leave this conference motivated, energized, and inspired! More information will be available soon!

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