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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                     September 18, 2013 Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • CBAI Unveils Mobile Smartsite for the 39th Annual Convention!
  • Join Continuity Control for Breakfast During the CBAI Convention
  • CBAI Announces a 401(k) Multiple Employer Plan for CBAI Members
  • Senator Warren: “It’s Time to Act on TBTF”
  • Fifth Anniversary of Crisis: Complete List of Wall Street Prosecutions
  • New Documentary Released on Financial Crisis
  • Poll Shows Americans Continue to Distrust Wall Street
  • News From The Front - Governor’s Action: Legislation Signed into Law in 2013
  • Job One in GSE Reform – Preventing Another Mortgage Crisis
  • The Farm Bill Debate Continues
  • USDA Crop Report Mixed
  • Another Compelling Case for Taxing Credit Unions
  • Summers Withdraws as Candidate for Fed Chairman
  • CDD Annual Fall Meeting To Be Held October 22
  • ICBA-Advocated FHLB-Ginnie Mae Securities Offer New Lending Option
  • Baker Market Update - Fed Maintains $85B of Bond Purchases; Most Fed Officials Still See 1st Rate Increase
  • Sageworks: Why Many Banks Are Not Using Migration Analysis
  • Use of Overdrafts Hits 14-Year Low
  • KASASA Ad 14 - “Tuesday Promotion”
  • Additions to the CBAI Associate Member Directory
  • FREE Community-Banking Ads Now Available
  • Add-an-Officer and Director’s Pipeline Programs Keep You in the Loop
  • Auditing BSA Scheduled for October 1
  • CFO Conference to be Held October 7 & 8
  • IT Update: Is Your Data Really Safe? Scheduled for October 9 & 10
  • Women in Community Banking Conference Set for November 19

  • CBAI Unveils Mobile Smartsite for the 39th Annual Convention!

    New this year, CBAI will have a mobile smartsite for the 39th Annual Convention & Expo. Designed to provide access to all convention information at your fingertips, the smartsite can be easily downloaded on your mobile device by
    scanning a QR code. (You can download a free QR code reader through your mobile-device app store). The smartsite includes a complete schedule of events including locations and hotel maps, keynote speaker bios, break-out session write-ups, a list of exhibitors and sponsors, details on social events and partners’ programs, and more! You can even access handouts from each of the 24 break-out sessions on your mobile device during the event. The QR code is now available and can be scanned from the link below, or at convention from your convention program book, convention signs that will be posted at the Crowne Plaza, and a flier provided in your registration folder. The mobile smartsite was created by Systemax Corporation, Springfield, IL, a CBAI associate member focusing on bank marketing and materials management. We look forward to seeing you in Springfield on September 26-28, 2013, at CBAI’s “Community Bankers: Illinois’ Treasure!”

    There is still time to register for CBAI’s 39th Annual Convention! For more information on the convention, and to register, Click Here.

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    Join Continuity Control for Breakfast During the CBAI Convention

    Regulatory compliance has become a top concern for community bank executives. Join us Saturday morning at the CBAI Convention for a warm breakfast and some good news to go with it. During this session Continuity Control will demonstrate how its automated compliance management platform has helped reduce the regulatory burden for community banks of all sizes. During the presentation, you’ll hear from four bank executives who will describe how Continuity’s solution helped reduce their bank’s regulatory burdens, and satisfied the bank regulators!
    Read More.

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    CBAI Announces a 401(k) Multiple Employer Plan for CBAI Members

    CBAI has established the CBAI 401(k) Multiple Employer Plan (CBAI MEP) exclusively for CBAI-member financial institutions. The CBAI MEP has partnered with Midwestern Securities Trading Company, LLC (MSTC) and Pentregra to provide fiduciary and administrative support for the Plan.
    See Details.

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    Senator Warren: “It’s Time to Act on TBTF”

    In a speech last week in Washington, Senator Elizabeth Warren (D-Massachusetts) reported that the four biggest banks are 30% larger than they were five years ago, and the five largest banks hold more than half of all banking assets in the nation. She said, “Who would have thought five years ago, after we witnessed firsthand the dangers of an overly concentrated financial system that the Too Big to Fail problem would only have gotten worse?”

    Warren noted that it’s time to act before another crisis hits. She recently co-sponsored the 21st Century Galss-Steagall Act to again separate traditional depository banks from riskier financial activities. CBAI supports the measure.
    See Warren Speech.

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    Fifth Anniversary of Crisis: Complete List of Wall Street Prosecutions

    Five years after Lehman Brother failed, signaling the start of a global economic crisis that caused misery for millions, the number of Wall Street CEOs who have been prosecuted is ZERO. Washington Post columnist Neil Irwin provides an incisive review of the too-big-to-fail and too-big-to-jail syndrome and what should be done about it.
    See Washington Post Article.

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    New Documentary Released on Financial Crisis

    A new film titled, “Money for Nothing: Inside the Federal Reserve,” was released last week and puts the blame for the 2008 financial crisis squarely on the Federal Reserve. The documentary is receiving early plaudits as a convincing, entertaining, and expertly produced assessment of the Fed’s role in the crisis.

    The cast includes articulate economists, investors, and current Fed officials such as Fed District Presidents Jeffery Lacker, Charles Plosser, and Richard Fisher, and Vice Chairman Janet Yellen who is now the leading candidate to succeed Ben Bernanke as FRB Chairman. The film opens in Chicago this Friday and will be available on DVD later this year.
    See American Banker Article.

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    Poll Shows Americans Continue to Distrust Wall Street

    A recent NBC News/Wall Street Journal poll of American consumers found that 42% have a negative view of mega banks while just 14% have a favorable view, the lowest rating of any institution in the poll. Despite record gains in the stock market since the crisis began in 2008, a majority of Americans (52%) say they have been affected by the crisis, which is just seven points lower than in the immediate aftermath of the financial collapse.
    See NBC News Report.

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    News From The Front
    Governor’s Action: Legislation Signed into Law in 2013

    Governor Pat Quinn has concluded the bill signing process for legislation passed in the 2013 spring session. The Governor approved the vast majority of the legislation sent to him by the General Assembly. To date, Governor Quinn has signed 589 bills, and issued six vetoes, two item vetoes, and two amendatory vetoes. The General Assembly is scheduled to return to Springfield October 22 for the annual Veto Session; however there are only two total vetoes, one item veto and one amendatory veto that will be pending for legislative action. This veto session will be far less about reacting to the Governor’s bill action and more about working on unresolved big picture issues like pension reform.
    See Summary.

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    Job One in GSE Reform – Preventing Another Mortgage Crisis

    James Lockhart, former director of the Federal Housing Finance Agency (FHFA), noted last week that the most important goal of GSE reform is to prevent another mortgage crisis. He said, “On behalf of taxpayers and those of us who were asking Congress for prevention well before the crisis, I ask Congress and the Administration, as they address mortgage reform again, to keep prevention in the forefront of their minds.”

    Lockhart endorsed the Senate Corker-Warner housing reform bill as a good start because it proposes a purely governmental Federal Mortgage Insurance Company. He also indicated that it would be a mistake to mix government functions with for-profit institutions.
    See American Banker Article.

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    The Farm Bill Debate Continues

    In an article this week in Politico, reporter David Rogers identifies the issues in the farm bill fight in Congress. He cites two primary issues: 1) the future of food stamps, and 2) the future of the safety net for farmers.
    See Politico Article.

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    USDA Crop Report Mixed

    The USDA’s crop reports this week reflect concerns about the effects of the recent drought as soybean estimates were reduced while corn estimates remained steady. As a result, soybean prices climbed while corn prices took a hit.
    See USDA Report.

    In Illinois, the corn crop has been on a wild ride according to Emerson Nafziger of the University of Illinois with the late planting and below normal temperatures. See Farm Progress Report.

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    Another Compelling Case for Taxing Credit Unions

    In a recent article titled, "Tax Exemption for Credit Unions: An Unjustifiable $10 Billion Tax Expenditure," Kenneth Kies and Bert Ely present yet another compelling case for credit unions to pay federal corporate income taxes.

    Kies and Ely argue that credit unions have grown to control a significant segment of the financial service market and have moved sharply away from their original mission; however, unlike their direct competitors they do not pay corporate income taxes. The authors find no policy or economic justification for the credit union tax break which has been estimated by the Office of Management and Budget (OMG) to cost nearly $10 billion over the next five years. Credit unions have evolved to become financial institutions which provide services identical to taxpaying competitors. In order to level the playing field, all credit unions should pay taxes.
    Read More.

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    Summers Withdraws as Candidate for Fed Chairman

    Former Treasury Secretary Larry Summers withdrew his name this past weekend from consideration as the next Chairman of the Federal Reserve Board. Current Chairman Ben Bernanke’s term ends next January. With opposition from certain Senate Democrats, Summers concluded that an ugly fight over his nomination would be bad for the Fed and the fragile economy. He is widely known as an ally of Wall Street.
    See Politico Article.

    Rising to the top of the list is current Vice Chair Janet Yellen who would become the first female to hold the position in the Fed’s 100-year history. More than 200 leading economists signed an open letter to President Obama urging her appointment. See Wall Street Bank Examiner Article.

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    CDD Annual Fall Meeting To Be Held October 22

    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; 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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    ICBA-Advocated FHLB-Ginnie Mae Securities Offer New Lending Option

    The Federal Home Loan Bank of Chicago
    will begin issuing securities guaranteed by Ginnie Mae and backed by mortgages originated by member financial institutions. The new ICBA-advocated product, which will use Federal Housing Administration, Veterans Affairs and other government-guaranteed loans, will help community banks offer these loans.

    The FHLB of Chicago noted that these MPF Government Mortgage-Backed Securities will provide community-bank mortgage lenders a new option when creating mortgage products for their customers. The bank said that lenders will be able to choose whether to retain or release servicing on the loans they originate, noting that the program will remove hurdles for low-volume originators.

    ICBA raised the prospect of such a program more than a year ago in meetings with Ginnie Mae and the FHLB of Chicago. The bank has since secured approval from the Federal Housing Finance Agency. It will begin offering the program to Illinois and Wisconsin members, and the program is expected to be rolled out more broadly to other FHLBs next year.

    The program will allow community banks to do more FHA volume and offers another step for the FHLBs into the secondary market. Read More.

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    Baker Market Update - Fed Maintains $85B of Bond Purchases; Most Fed Officials Still See 1st Rate Increase

    Information received since the Federal Open Market Committee met in July suggests that economic activity has been expanding at a moderate pace. Some indicators of labor market conditions have shown further improvement in recent months, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has been strengthening, but mortgage rates have risen further and fiscal policy is restraining economic growth. Apart from fluctuations due to changes in energy prices, inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable.
    See Baker Market Update.

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    Sageworks: Why Many Banks Are Not Using Migration Analysis

    Migration analysis is a rigorous analytical process recommended by regulatory agencies to determine a financial institution's ALLL; yet it is underutilized. While migration analysis is more granular than a historical loss-rate analysis, it's not perfect for every institution's loss provision calculation. A Sageworks survey identifies the reasons.
    See Report.

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    Use of Overdrafts Hits 14-Year Low

    U.S. consumers are overdrawing their checking accounts less frequently than at any time in the last 14 years, according to new
    survey data.

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    KASASA Ad 14 - “My ATM”

    It’s not hard to find an ATM. But finding an ATM that won’t charge you a fee, especially when you’re far away from your local community bank? Now that can be a challenge. Kasasa’s “My ATM” radio ad offers a look at the frustration account holders face when trying to do simple everyday banking activities – like withdrawing cash, without having to pay for it. Free Kasasa checking accounts let account holders make any ATM their ATM, nationwide. So whether at home or across the country, there’s no need to search for a free ATM. Or match up an actual ATM to right ATM network logo. Nationwide refunds on ATM fees are just one way Kasasa accounts make checking easier for your account holders. Plus, customers can choose from other meaningful rewards – like really high interest, cash back, iTunes® and Amazon® refunds, and more. Or even add high-paying, automatic savings!
    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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    Additions to the CBAI Associate Member Directory

    Recently, CBAI members received the summer edition of the CBAI Associate Member Directory in the mail. Some firms were inadvertently omitted, and others have joined since publishing.
    See List.

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    FREE Community-Banking Ads Now Available

    To view a sample of the new, FREE quarterly Community-Banking Ads,
    Click Here. To order, please contact Andrea Cusick, SVP Communications at or 800/736-2224.

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    Add-an-Officer and Director’s Pipeline Programs Keep You in the Loop

    Are your bank-management team and outside directors in the loop on regulation, legislation, and CBAI activities? For a nominal fee, you can guarantee it through either a CBAI Add-an-Officer or Directors’ Pipeline subscription. Add-an-Officer for officers who are not bank’s main CBAI contact,
    Click Here. Directors’ Pipeline for outside directors, Click Here.

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    Auditing BSA Scheduled for October 1

    A financial institution’s Bank Secrecy Act (BSA)
    program continues to be under close scrutiny in today’s regulatory environment. An inadequate BSA program will almost certainly bring an administrative action – either formal or informal – against the financial institution. One particular area receiving criticism by examiners is the bank’s annual independent review of BSA. Are your audit procedures up to date, comprehensive, and independent? Attend this seminar to review the adequacy of your BSA review program. This seminar provides information on a comprehensive approach to completing a thorough BSA audit. In addition to the manual, practical BSA review documents to assist the auditor in the completion of BSA reviews are provided. The program is designed as an update for experienced BSA officers and auditors employed by financial institutions. This is not an introductory program nor is it designed to meet the training needs of the general staff or those with very limited BSA experience. Leading this seminar is Bill Elliott, senior consultant and manager of compliance at Young & Associates, Inc., Kent, OH.

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    CFO Conference to be Held October 7 & 8

    High-performing financial institutions are those that have learned to effectively manage risk. This
    conference examines a practical approach to risk management that focuses on managing strategic, as well as operational risk. It also discusses managing vendor risk. Managing compliance risk is also covered. This conference presents insights on how banks are organizing, staffing, and implementing cost-effective, risk-based compliance management programs. It also discusses areas of current regulatory focus and the impact of new regulations and increased regulatory scrutiny of the bank's compliance and compliance programs. Finally, managing credit risk is examined. Participants are provided with current information on the credit-risk environment and share credit-risk management lessons learned from failed banks. Leading this seminar is Ken Proctor, director of risk management for Abound Resources.

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    IT Update: Is Your Data Really Safe? Scheduled for October 9 & 10

    How safe is your data? This
    program reveals how and why the continued advancements of technology have created security nightmares for financial institutions. Examples of disaster recovery, cyber security, and vulnerability cases are reviewed to show various lapses in coverage and how to prevent the same problems from arising in banks in the future. While looking at past examples of disaster-recovery cases, this program analyzes how to develop an effective disaster-recovery plan that includes the challenges that compliance poses. Cyber security is also a concern for every organization. It's not just external sources that are putting the security of your organization at risk; IT resources are moving outside the firewall, and as your enterprise distributes applications and data across more devices, it has become ever more critical that you extend security protection beyond the perimeter. Leading this seminar is Jim Kellenberger, with LRS IT Solutions, who specializes in system z and storage systems disks, tape, and business continuity plans, and Michael Monticello, who serves as IBM security services threat research and intelligence principal.

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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!

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