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     A Bi-Weekly News Bulletin for CBAI Members                                    September 14, 2016

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • CBAI's 42nd Annual Convention & Expo Begins in Kansas City!
  • ICBA Sues Credit Union Regulator Over Unlawful Lending Regulation
  • News From The Front: Governor's Action 2016
  • CBAI Endorses Jim Ashworth for FHLB of Chicago Board
  • State Bank of Toulon Hosts Meeting with Congressman LaHood
  • Fine: There Is No Such Thing as ‘Overbanked’
  • Community Bank Relief on Table as Congress Returns
  • Freddie Mac Updates Guidance for Rural Properties
  • Why Aren’t Heads Rolling at Wells Fargo?
  • Regulators Issue Revised Information Security Booklet
  • CBAI Convention Information from Midwest Office
  • Investment News From THE BAKER GROUP
  • CBIS Nicoud: How Much Insurance Should Your Bank Buy?
  • CBAI LEGAL: Reinstatement Fails to Save LLC from Foreclosure
  • Are You Beginning to Budget Salaries for 2017?
  • Your Newest Security Threat: Your Car
  • How Do Your Customers Benefit from Small-Dollar Loans?
  • Kasasa® Named to 2016 IDC Financial Insights FinTech Rankings
  • Lender’s Guide to Mortgage Loan Compliance Slated for September 27-28
  • ACH: Stay Informed and In Compliance Set for October 4, 12, and 19
  • Developing a Business-Development Strategy To Be Held October 12
  • CFO Conference Scheduled for October 27


  • CBAI's 42nd Annual Convention & Expo Begins in Kansas City!

    CBAI’s 42nd Annual Convention & Expo kicks off tomorrow in Kansas City, MO. Highlights of day one include a golf outing at the Swope Memorial Golf Course, Partners’ Program including the Truman Presidential Library and World War I Museum, and the Welcoming Reception featuring the BancPac Live and Silent Auction. On day two, attendees hear an Opening Breakfast presentation by Eric Boles, highly-acclaimed speaker, consultant, and former NFL player; two sets of break-out sessions on hot topics for community bankers, the Annual Business Meeting Luncheon, and desserts and hospitality in the Exhibit Hall. The third and final day starts off with the Dawn Buster Breakfast, a third Exhibit Hall session featuring nearly 90 booths, two more sets of educational breakout sessions, the Annual Recognition Luncheon, and Closing General Session with United States Congressman Blaine Luetkemeyer, member of the U.S. House Financial Services Committee. The event is capped off with the Saturday night dinner dance featuring The Fabulous Motown Revue. Convention coverage will be available at www.cbai.com following the event!

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    ICBA Sues Credit Union Regulator Over Unlawful Lending Regulation

    Challenges rule expanding business-lending loopholes for tax-exempt credit unions

    Last week the ICBA filed a lawsuit against the National Credit Union Administration (NCUA) challenging the agency’s unlawful commercial lending rule issued earlier this year. If allowed to stand, the NCUA’s final rule would allow tax-exempt credit unions to exceed limitations on commercial lending activity established by Congress while relaxing regulatory oversight—putting consumers and the financial system at risk.

    “The NCUA is attempting to unilaterally expand loopholes for tax-exempt credit unions by sidestepping Congress and putting consumers at risk,” ICBA President and CEO Camden R. Fine said today. “This unlawful rule from the NCUA is the latest example of the agency stretching the law beyond its breaking point to serve as the tax-exempt credit union industry’s regulatory rubber stamp.” CBAI fully supports and applauds ICBA’s actions. Read ICBA Release. See Lawsuit Q&A.

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    News From The Front: Governor's Action 2016

    Governor Rauner has completed his final action on legislation that passed in the 2016 spring session. The General Assembly is scheduled to return to Springfield on November 15 for the fall veto session and to take action on those bills vetoed by the Governor. See Governor Rauner’s Bill Action.

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    CBAI Endorses Jim Ashworth for FHLB of Chicago Board

    Community Bankers Association of Illinois is pleased to endorse Jim Ashworth for re-election to the 2016 Federal Home Loan Bank of Chicago Board of Directors. Jim Ashworth is the Vice Chairman of CNB Bank &Trust, N.A., Carlinville and President of CNB Bank Shares, Inc. He has served on the Board since 2012, and if re-elected, Jim will continue to serve the interests of community-based financial institutions.

    Ballots are expected to be mailed to eligible member institutions the week of September 26. Completed ballots must be signed and received by mail by the FHLBC no later than October 31.

    A resolution from your board authorizing an officer or director to cast your ballot must also be on file at your bank. Here is suggested language: “Be it resolved, that the (Officer/Director Title) and the (Officer/Director Title) of (Name of Bank) are each separately hereby authorized to cast ballots and/or execute proxies to vote on any and all issues brought before the shareholders of any entity for which we hold stock, including the Federal Home Loan Bank, the Federal Reserve Bank, and Farmer Mac. This authorization is to remain active in perpetuity, until such time it may be amended of rescinded”.

    It is imperative that community-based financial institutions receive the representation that they deserve on the FHLB of Chicago Board. CBAI asks that you support Jim Ashworth!

    Click Here for more information on Jim Ashworth and the 2016 FHLB of Chicago Board of Directors Election.

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    State Bank of Toulon Hosts Meeting with Congressman LaHood

    CBAI Regional Vice Chairman Doug Parrott, President and CEO of State Bank of Toulon, hosted a meeting with Congressman Darin LaHood (R-18) and Congressional District Director Brad Stotler to discuss community bank issues and opportunities. Joining in the meeting were Andrew Black (President and CEO of Princeville State Bank), Keith Douglas (President and CEO of Tompkins State Bank, Avon), Steve Leuthold (President and CEO of State Bank of Speer), and David Schroeder (CBAI Vice President Federal Governmental Relations). The roundtable discussion covered a variety of topics of interest to both the community bankers and Congressman LaHood. Read More.

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    Fine: There Is No Such Thing as ‘Overbanked’

    A recent news story suggesting that Chicago has become “overbanked” dismisses the importance of community banks to local communities, ICBA President and CEO Cam Fine wrote in an American Banker op-ed. In fact, that assertion runs counter to what many bankers view as a dangerous trend: the consolidation of the banking industry into fewer and fewer hands, he wrote.

    “The challenge facing the banking industry is not how to foster more buyouts to line the pockets of merger-and-acquisition consultants, but how to maintain a diverse and decentralized financial system,” Fine wrote. “Community banking is a uniquely American system that goes to the heart of what we believe as a nation: that we are stronger from the bottom up than from the top down. That we are more powerful collectively when we are empowered individually.” Read ICBA Response.

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    Community Bank Relief on Table as Congress Returns

    With Congress returning to Washington last week for a month-long session ahead of the November elections, regulatory relief for community banks is expected to be a key topic of discussion. House Financial Services Committee Chairman Jeb Hensarling’s (R-Texas) Financial CHOICE Act draft relief bill was introduced as lawmakers consider spending legislation ahead of the September 30 deadline. CBAI will, of course, alert members to actionable opportunities. Read Hensarling Release. See CHOICE Act Summary.

    ICBA recently called on Congress to enact tiered regulatory relief before the close of the current session given the strong bipartisan coalition of 70 Senators (including Senator Mark Kirk R-Il) calling for tiered regulations. Read More.

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    Freddie Mac Updates Guidance for Rural Properties

    Freddie Mac recently released guidance to address misconceptions related to general property eligibility, including requirements for properties in rural areas. Responding to ICBA efforts to improve access to the secondary market for rural lenders, Freddie Mac reorganized and reworded certain requirements and provided guidance and case studies.

    The updates are designed to provide clarity to help community banks that operate in rural markets sell loans to Freddie Mac. On behalf of ICBA, community bankers worked with Freddie Mac on developing these guidelines and case studies. See Freddie Mac Seller Bulletin. Access Freddie Mac Q&A. See Freddie Mac Training Catalog.

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    Why Aren’t Heads Rolling at Wells Fargo?

    It's become an all too familiar story – a big bank is caught doing something bad, it pays a fine, some lower-level employees are let go while higher-level executives appear to get off scot-free and no criminal charges are assessed.

    Wells Fargo became the latest example of that cycle, when it paid $190 million in fines and restitution after some 5,300 employees were caught opening more than 2 million unauthorized bank and credit card accounts. However, consumer advocates, industry stakeholders and even many in the public at large were left fuming because no criminal charges were filed and higher-level executives escaped seemingly unscathed. CBAI has repeatedly objected to the preferential treatment accorded the mega banks compared to Main Street banks and called for elimination of this harmful double standard. Read More.

    ICBA: Wells Fargo Scam Displays Industry Inequality

    ICBA said Wells Fargo’s $185 million settlement for widespread illegal sales practices provides yet another example of the industry inequality that plagues the nation’s banking system. In a national news release, ICBA President and CEO Cam Fine said Wells Fargo’s conduct not only harms consumers, it also contributes to the rise in excessive community bank regulation.

    According to state and federal allegations, Wells Fargo opened as many as 2 million fraudulent deposit and credit card accounts for consumers, then fired roughly 2 percent of its 268,000 employees for engaging in the megabank’s improper and illegal sales practices.

    “While Wells Fargo has the luxury of throwing money at the problem to make it go away without its board or senior management being held accountable, the individuals and local institutions affected by its actions will continue to suffer for years to come,” Fine said. “Unfortunately for community banks and the millions of Americans harmed by Wells Fargo’s spurious conduct, this settlement is too little, too late.” Read ICBA Release. Read More on Settlement.

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    Regulators Issue Revised Information Security Booklet

    Federal banking regulators issued a revised Information Security Booklet as part of the FFIEC Information Technology Examination Handbook. The revised booklet addresses how financial institutions should assess security risks to their information systems. It also helps examiners evaluate the integration of information security programs into institutions’ overall risk management. Read FFIEC Release.

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    CBAI Convention Information from Midwest Office

    Midwest Office looks forward to the upcoming CBAI 42nd Annual Convention and Expo September 15-17. Come see us at booth 327 for a chance to WIN a 32" flat screen TV! Also, ask us about MidwestSelect and how the program can optimize your profitability by consolidating orders into a single source and simplifying your procurement in the process. Read More.

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    Investment News From THE BAKER GROUP

    Baker Market Strategies

    We knew fast speeds were inevitable after rates reached record lows in July and the August print is a reflection of that. The MBA’s refinance index averaged 2,604 in July but has since fallen to a 2,445 average and is trending lower. So we should expect this to be the peak in speeds unless rates start to turn South again. See Baker Market Strategies.

    Baker Market Update

    Markets around the globe are roiling as perceptions about economic fortunes appear to have recently shifted. That shift has resulted in shifting perceptions about the future nature of central bank interventions. That, and the new iPhone doesn’t have a headphone jack. See Baker Market Update.

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    CBIS Nicoud: How Much Insurance Should Your Bank Buy?

    Is your bank underinsured? Over insured? Those are simple sounding questions on the face of the matter, but the reality is that there is complexity in determining the best answers for a given community bank. After all, it’s not called actuarial “science” for nothing; the process of determining risk and pricing protections is often daunting at best, and impossibly mercurial at worst. Read More from CBIS Nicoud.

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    CBAI LEGAL: Reinstatement Fails to Save LLC from Foreclosure

    In a September 8 opinion, the Fourth District Illinois Appellate Court upheld a creditor’s right to foreclose when the borrower, a limited liability company (“Borrower”), breached a loan term that required Borrower to maintain its corporate status in good standing. Read Most Recent CBAI LEGAL.

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    Are You Beginning to Budget Salaries for 2017?

    If so, and you did not participate in the CBAI Annual Officer Compensation Survey, you may purchase the results of the 2016 survey to assist in your planning process. CBAI members may purchase results for $300; non-members for $500 (CBAI members that participate received the results for free). Contact andreac@cbai.com to order your results.

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    Your Newest Security Threat: Your Car

    Did you know that you car’s infotainment system may be automatically downloading your mobile device’s data? The Federal Trade Commission (FTC) is warning consumers to be aware that personal information stored in a vehicle’s infotainment system can tell the next person all sorts of things about you. See BankOnIT Blog. BankOnIT is a preferred service provider of Community BancService Corporation (CBSC).

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    How Do Your Customers Benefit from Small-Dollar Loans?

    ICBA is conducting a community bank survey to identify customer experiences related to the benefits of small-dollar loans granted through community banks. CBAI encourages all members to share stories of how small-dollar loans have helped your customers.

    The Consumer Financial Protection Bureau recently released its proposed rule for small-dollar loans, and CBAI and ICBA are preparing official comments on the proposal. The CFPB’s proposal would create additional complex and burdensome regulatory requirements that—if finalized—will significantly affect the ability of community banks to offer small-dollar loans.

    The proposal covers several types of short- and longer-term consumer loans (covered loans), including:

      Loans with a term of 45 days or less, including:

      • Payday loans
      • Vehicle title loans
      • Deposit advance products

      Loans with terms longer than 45 days, an all-in APR in excess of 36 percent and the lender holds:

      • Access to repayment through a consumer’s account or paycheck, or
      • A non-purchase security interest in the consumer’s vehicle

    As a community banker, you know the importance of providing a safe and sustainable small-dollar loan to a consumer in need of credit. That’s why we need your help to showcase the necessity of small-dollar loans originated by community banks. Please submit your stories by Thursday, September 29. Submit Stories Here.

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    Kasasa® Named to 2016 IDC Financial Insights FinTech Rankings

    Kasasa announced last week that they are ranked #87 on the 2016 IDC Financial Insights FinTech Rankings, the most comprehensive vendor ranking within the financial services industry. Recognizing companies as being among the top financial technology providers worldwide, the annual IDC Financial Insights FinTech Rankings is based on 2015 calendar year revenues attributed to financial institutions.

    “These rankings recognize our commitment to exclusively providing community banks and credit unions with nationally recognized products and services to drive new account growth, increase deposit profitability and remain competitive in the industry – particularly with younger consumers,” said Gabe Krajicek, CEO of Kasasa. “In 2015, we more than doubled the number of new clients acquired compared to the previous year, beating our own objective. This year, we’re experiencing record sales growth with more community institutions using our products and services than ever before, indicating strong demand. Our inclusion on this year’s rankings is a testament to Kasasa working as a powerful strategy for community financial institutions nationwide.”

    CBAI and Kasasa have been marketing partners for several years. See Kasasa Release. Read More About Kasasa Rewards Checking.

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    Lender’s Guide to Mortgage Loan Compliance Slated for September 27-28

    During the last few years, both Congress and the various federal regulators have crafted revisions to some of the regulations that have been a part of our lending lives. This has resulted in many additional regulatory issues in every mortgage loan transaction. As a result, lenders have been struggling to determine what they should do to assure that they not only make a safe and sound loan for the bank, but also do so in a manner that will not create regulatory problems for the bank. With all of the changes and additions, a one-day seminar to cover this subject has not been possible in recent years. This seminar will be two very full days in length. It covers all aspects of mortgage compliance that a lender should know, including current rules. All subject covered include all of the latest information available. Leading this seminar is Adam Witmer, CRCM, a senior compliance consultant with Young & Associates, Inc., serving client banks in the Midwest.

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    ACH: Stay Informed and In Compliance Set for October 4, 12, and 19

    In the ever-changing world of ACH, it is difficult to stay abreast of the risks involved and the ever-changing rules. The presentation gives community banks ideas for reducing risk and improving compliance. The ACH-Rule changes that are effective from 2015 – 2018 are also explained in a practical, easy-to-understand approach. ACH officers and operations officers adn staff would all benefit from attending. Nicole Meinhardt, CPA, AAP and senior manager at Wipfli LLP, Sterling, IL leads this seminar.

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    Developing a Business-Development Strategy To Be Held October 12

    CBAI is pleased to offer Developing a Business-Development Strategy and Plan for Prospects this October. Having an effective and focused business development program is the key to the success of any bank’s growth. This program is designed to provide the foundational systems and develop the skills needed to be effective at making business calls on prospects. This seminar benefits anyone involved in the planning or execution of the bank’s business-development plan, including loan officers, branch managers, trust officers, and retail-banking employees. Topics covered include developing a prospecting program by researching, identifying, and prioritizing prospects; turning a gatekeeper into an influencer; getting an appointment over the telephone; key questions to ask during a meeting with prospects; making the difference – between you and the competition; making joint calls; the five keys to getting a commitment; following up and action planning. Leading this seminar is Dianne Barton, who founded Performance Solutions, Inc. in 1982.

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    CFO Conference Scheduled for October 27

    CBAI’s annual CFO Conference is designed to help community-bank CFOs gain a wide variety of information from expert speakers on hot topics and return to the bank ready to implement newly found ideas and knowledge! This conference not only benefits chief financial officers, it is also geared toward presidents, CEOs, and anyone else who is involved in controlling expenses and increasing profitability for their community banks. Topics and speakers include “Interest Rate Risk Case Study: Managing Through the Turn in Rates” with Matt Harris, vice president of the Financial Strategies Group, THE BAKER GROUP, Oklahoma City, OK; “Preparing for CECL: Financial Considerations and Data Preparation” with Tommy Troyer, executive vice president of Young & Associates, Inc., Kent, OH; “Overcoming Today’s Operational Challenges at Your Bank” with Heather Archer Eastep and Robert Flowers, partners at Hunton & Williams, LLP, Richmond, VA; and “Non-Interest Income: The Performance Difference” with Michael Slater, president of VITAL Financial Services, Clive, IA; and “Accounting Update” with Michael Brown, partner, and Toby Handel, senior manager, of Wipfli, LLP, Sterling, IL.

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