Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                      September 20, 2011 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • ICBA Urges Moratorium on Mega Bank Mergers
  • CBAI-Backed Patent Overhaul Bill Signed into Law
  • Final Rule Approved on Mega Bank Resolution Plans
  • ICBA Urges Action on Mega Bank Surcharge
  • FDIC Assessments Reflect Savings for Community Banks
  • Fed Issues Interchange Guide for Small Entities
  • Treasury: $4.3B Approved Under SBLF
  • Finer Points: “Regulatory Burden, Community Banks, and Voices”
  • Inform Customers about Ending OTC Sale of Paper U.S. Savings Bonds
  • FDIC: Community Banks a High Priority
  • FDIC to Close Schaumburg Office on September 28, 2012
  • New iPad App Offers Fed Information
  • Baker Market Update
  • Let Ameren Save Your Bank Money on Electricity
  • CBAI Scholarship Program Now Underway
  • Are You Budgeting for 2012?
  • Diebold’s Opteva ATM Protects Against Card Skimming
  • Sycamore Bank Implements DLP to Protect Against Data Breach
  • Harland Clarke Marketing Services And Card Services Achieve Compliance With Payment Card Industry Data Security Standards
  • Fraud Protection–Changing Your Approach Set for October 4 & 5
  • Wolters Kluwer Launches Fall and Winter IRA Seminar Tour
  • Building a Sales and Service-Driven Organization Set for October 18
  • Analyzing Tax Returns in Self-Employed and Small-Business Situations
  • CDD Fall Meeting Scheduled for October 13


  • ICBA Urges Moratorium on Mega Bank Mergers

    During a Federal Reserve hearing this week concerning the acquisition of ING Direct USA by Capital One Financial Corporation, ICBA’s Senior Regulatory Counsel Chris Cole urged regulators to impose a moratorium on all acquisitions and mergers involving institutions with more than $100 billion in assets.

    Cole expressed concerns with the continued concentration of bank assets and systemic risk posed by the failure of mega banks. He added that the Wall Street Reform Act was intended to end too-big-to-fail and level the playing field between the mega banks and other competitors, but there has been little movement towards either goal.

    CBAI concurs with ICBA’s recommendation for a moratorium on mega bank mergers and acquisitions. CBAI also advocates breaking up the giant banks by separating riskier activities and removing them from the federal safety net.
    See ICBA Release.

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    CBAI-Backed Patent Overhaul Bill Signed into Law

    President Barack Obama has signed into law the CBAI and ICBA-backed patent reform legislation, the first overhaul of the nation's patent system in more than 50 years.
    Read More.

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    Final Rule Approved on Mega Bank Resolution Plans

    The FDIC and Federal Reserve have jointly issued a final rule implementing the Wall Street reform Act provision that requires bank holding companies with assets of $50 billion or more to submit plans for their resolution in the event of material financial distress. The goal is to achieve a rapid and orderly resolution that will not cause risk to the financial system.

    CBAI supports the provision but contends that the measure does not go far enough to prevent another taxpayer-financed bailout of a troubled mega bank. CBAI recommends downsizing the mega banks by separating the high-risk investment banking operation from the traditional commercial banking operation.
    See FDIC Release.

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    ICBA Urges Action on Mega Bank Surcharge

    Late last week the ICBA called on the Treasury and federal regulators to promptly propose rules to assess a major capital surcharge on the mega banks and enhance their supervision as required in the Wall Street Reform Act. Both CBAI and ICBA believe the surcharge should be between 1% and 2.5% of common equity tier 1 capital.
    See ICBA Letter.

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    FDIC Assessments Reflect Savings for Community Banks

    Thanks to the new deposit insurance system that bases assessments on average total consolidated assets minus average tangible equity instead of domestic deposits, community banks are now receiving savings on their second-quarter assessment premiums. Only ICBA and state community banking associations across the nation including CBAI supported the new assessment system, which will lower premiums for about 98% of community banks.

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    Fed Issues Interchange Guide for Small Entities

    The Federal Reserve
    released a compliance guide that answers questions about how its final rule on debit card interchange will affect small entities. The guide answers questions about Electronic Fund Transfer Act requirements, identifies issuers that are not subject to the interchange fee standards, fees that are not subject to the new standards, and more.

    The Federal Reserve noted that the guide summarizes the rule but is not a substitute for the rule itself, which is the only definitive source for information on its requirements. The new standards take effect on October 1.

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    Treasury: $4.3B Approved Under SBLF

    Treasury has approved 382 institutions for $4.3 billion under the Small Business Lending Fund as of September 1, according to a
    department white paper. Treasury has closed deals with 130 of those banks for more than $1.8 billion, with the application deadline set for September 27. Of the 932 applications received for $11.8 billion in SBLF funding, more than 40 percent failed to meet minimum statutory or program requirements and were not approved.

    CBAI and ICBA continue to pressure Treasury and bank regulators to ensure all applications are properly addressed. In an August letter to the Federal Reserve Board, ICBA urged the Fed to provide the required Treasury dividend payment waivers needed to ensure that stable banks eligible for the SBLF program can participate. ICBA noted in the letter that Treasury began approving applications less than three months before the program is scheduled to expire.

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    Finer Points: “Regulatory Burden, Community Banks, and Voices”

    In a recent blog, ICBA’s Cam Fine said much of the regulatory burden weighing down community banks is the direct result of mega bank bad behavior. He said community banks, which suffer the real consequences of big bank misconduct, must continue to make the case that regulations should be applied only to those that engage in bad practices and not on those who play by the rules.
    See Finer Points Article.

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    Inform Customers about Ending OTC Sale of Paper U.S. Savings Bonds

    The U.S. Department of the Treasury announced it will end over-the-counter (OTC) sales of paper savings bonds on December 31, 2011. While paper bonds will no longer be sold at financial institutions, electronic savings bonds remain available for purchase through TreasuryDirect, a secure web-based system operated by the Bureau of the Public Debt.

    The Treasury Department is offering a free toolkit to help financial institutions easily communicate the change to customers about the end of OTC sales of paper U.S. Savings Bonds. The toolkit contains:

      • fliers for customers;
      • short messages for account statements;
      • frequently asked questions (FAQ) for employees;
      • web banners; and
      • an article for employee newsletters or Intranet.
    All can be downloaded at
    www.treasurydirect.gov.

    Financial institutions are asked to educate their customers about the change and to continue redeeming the more than 670 million paper savings bonds worth $181 billion that are currently in the hands of the public. Discontinuing paper savings bond sales is expected to save taxpayers an estimated $70 million over the next five years.

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    FDIC: Community Banks a High Priority

    The future of community banks is a top priority of the FDIC according to its Acting Chairman Martin Gruenberg. In a speech on September 19 he said the FDIC is working to better understand the challenges and opportunities of community banks. He also announced that the FDIC will hold regional roundtables with community bankers and review its risk-management and compliance supervision practices.
    See Gruenberg’s Speech.

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    FDIC to Close Schaumburg Office on September 28, 2012

    The FDIC announced last week that it will close its Midwest Temporary Satellite Office in Schaumburg on September 28, 2012. It was originally scheduled to close in the second quarter of 2013. Since the facility opened in March of 2010, its staff of several hundred handled 35 Midwest bank failures. The early closing announcement is based on the conclusion that projected failures are declining and bank performance is improving.
    See FDIC Release.

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    New iPad App Offers Fed Information

    CHICAGO- (September 19, 2011) – A free application is now available from the Federal Reserve for use on an iPad.
    See Release.

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    Baker Market Update

    Investors have found a bit of solace this week as world central bankers and EU leaders pledged to boost liquidity in the Eurozone, pushing world markets higher.
    Read More.

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    Let Ameren Save Your Bank Money on Electricity

    Making energy purchasing decisions can be complex. Managing today’s volatile electricity costs, comparing competitive offers, and understanding the process can be quite challenging. Ameren Energy Marketing’s (AEM) pricing and contract terms are easy to understand. AEM can give you exactly what you’re looking for in a retail electric supplier. AEM will fix your bank’s electricity price at the time of your contract so you are not subjected to market volatility or utility electric rate hikes. The price will be based upon the forward market prices, CBAI member aggregate usage history, and an additional 10% member discount. Use as little or as much electricity as you need — all for one fixed price.

    AEM’s Fixed Price provides budget certainty needed by most small businesses.

      • Pricing that reflects your business operations
      • The ability to manage budgets
      • Limited customer involvement
      • Protection against market volatility & utility rate hikes
      • Simple, easy-to-understand pricing and billing
      • No hidden charges
      • No special metering requirements
      • Contracts of up to three years
    …and CBAI members receive an additional 10% discount!

    For more information or a no-obligation quote, contact Michael Grimes at Ameren by phone at 314-613-9137, or via email at
    mgrimes@ameren.com.

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    CBAI Scholarship Program Now Underway

    CBAI has sent introductory information to all Illinois high schools regarding the CBAI Foundation for Community Banking scholarship program which is open to all Illinois high school seniors. Your local high school may contact you for more information. THERE IS NO COST TO CBAI MEMBER BANKS TO PARTICIPATE.

    If you would like a scholarship kit, please contact Bobbi Watson of the CBAI Communications Department (
    bobbiw@cbai.com). The bank can serve as a pass-through to CBAI – it’s entirely up to you. However, if you sponsor a winner, your bank representative will be able to present the Foundation check directly to the student and garner the resultant favorable publicity. We hope you’ll participate!

    Attached is a brochure for your information.

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    Are You Budgeting for 2012?

    What are officers’ salaries, benefits, and incentives? How much do community-bank directors earn? Is your bank paying its support personnel as much as your peers? Find out this information and more – by ordering a copy of the results of the 2011 CBAI Officer Compensation Survey. Results are divided by asset size and geographical area. Non-participants that are CBAI member banks can purchase the results for $300; non-participating non-members may do so for $600 (member banks that participated received the results for FREE). Contact the CBAI Department of Communications at 800/736-2224 or
    cbaicom@cbai.com.

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    Diebold’s Opteva ATM Protects Against Card Skimming

    There’s no question ATMs are under attack, and the frequency of these attacks is steadily increasing. According to Javelin Strategy and Research, in 2009 ten percent of victims in the U.S. experienced fraudulent ATM cash withdrawals. What’s more, one in every four ATM fraud victims leaves their primary financial institution. Clearly, strong physical anti-skimming protection is required.
    Read More.

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    Sycamore Bank Implements DLP to Protect Against Data Breach

    One of American National Bank of DeKalb County, Sycamore's highest priorities was to protect its customers’ confidential information. The bank decided to proactively implement a DLP strategy to protect internal IP and customer data. American National Bank discovered that most data breaches occur internally, caused by accidental disclosure of information within an email. “We realized that our encryption policy would be much more effective if we had a tool that would automatically sense what should be encrypted instead of relying a an employee’s judgment to determine what to encrypt”, said Jeff Rolczynski.
    Read More.

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    Harland Clarke Marketing Services And Card Services Achieve Compliance With Payment Card Industry Data Security Standards

    Harland Clarke has announced that the Marketing Services functions at its Baltimore, Maryland, production facility have again received the highly regarded Payment Card Industry Data Security Standards (PCI DSS) certification. Verizon Business, a third-party Qualified Security Assessor, conducted the assessment required for certification. In addition to the PCI DSS certification for Marketing Services, Harland Clarke’s Card Services business has received an Attestation of Compliance with PCI standards from Verizon Business.

    PCI DSS is a multifaceted security standard that includes requirements for security management, policies, network architecture, software design, and other critical data protection measures. These efforts help ensure the safe handling of sensitive cardholder information by companies that process data for major debit, credit, prepaid, e-purse, ATM, and POS cards. Harland Clarke is a preferred marketing partner of Community BancService Corporation.
    Read More.

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    Fraud Protection–Changing Your Approach Set for October 4 & 5

    CBAI is pleased to offer “Fraud Protection – Changing Your Approach: You Can’t Depend on Your Customers To Prevent Losses,” a
    one-day seminar offered in two locations this October (10/4 in Springfield and 10/5 in Lisle). Operational losses attributable to fraud, specifically the variety of payment channel frauds, are changing at a pace that threatens a bank's accounts and reputation. The session will explore why the sales market is local, but fraud risk market is global and what this means to the risk-management strategies in both consumer and business accounts which are subject to so many new fraud attempts. The exponential growth in the use of ACH has created fraud losses that occur at break-neck speed, and with huge losses. Losses are occurring at banks large and small, rural and metropolitan. No one is immune. Leading this seminar is James D. Rechel, president of The Rechel Group, Inc., specializing in security-intervention solutions.

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    Wolters Kluwer Launches Fall and Winter IRA Seminar Tour

    The Wolters Kluwer Fall and Winter Tour offers two types of seminars: IRA Principles for those who are looking for a broad-spectrum view of IRAs, and Advanced IRAs for those who understand the IRA basics but want a deeper understanding of the rules and regulations as they apply to IRA and HSA administration.

    The registration fee is $195 for the first registrant and $180 for each additional registrant from the same financial institution. Find dates, locations, agendas and register by visiting
    www.WoltersKluwerFS.com/IRAseminars.

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    Building a Sales and Service-Driven Organization Set for October 18

    If initiating and maintaining a sales and service culture were as easy as sending an “all-hands e-mail” announcing that as of Monday the bank becomes more “sales focused” you would have already done it! This
    session is designed to provide those charged with or those considering developing and maintaining a sales and service effort with a “big-picture” view of what constitutes a successful sales and service culture in community banks. This may also be referred to as the “infrastructure” of the sales and service organization. If you don't have appropriate infrastructure your sales efforts will fall flat. Topics include evaluating the present reality of your sales culture; exploring key components of a sales culture and best practices related to each aspect; identifying sources of new business and supporting call programs; generating more internal and external referrals; gaining tools and ideas for strengthening key components of your sales culture; and much more. Leading this seminar is Liz Bowermaster of Loyd Pohl Consulting and Training, Inc., who has more than 25 years of experience as a corporate trainer.

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    Analyzing Tax Returns in Self-Employed and Small-Business Situations

    CBAI is pleased to offer
    "Analyzing Tax Returns in Self-Employed and Small-Business Situations" in two locations this October. Underwriting loans to self-employed and small-business borrowers can be tricky due to the variety of sources of income – both business and personal – that affect cash flow and repayment ability. Further, the primary source used by community bankers to make the cash flow analysis is the tax return. Several of the tax schedules and forms are confusing since they are designed to report taxable income, not true cash flow. This program covers how to analyze both personal and business tax returns provided by self-employed borrowers and guarantors. Using case exercises, participants compute personal cash flow, real-estate cash flow, and global (combined business and personal) cash flow. Community bankers in various lending roles, such as consumer lenders, mortgage bankers, private bankers, small business lenders, commercial lenders, credit analysts, loan review specialists, special assets officers, lending managers, and credit officers would all benefit from attending. Leading this seminar is Richard Hamm, who provides consulting and training to banks and businesses as owner of Advantage Consulting & Training in Huntsville, AL.

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    CDD Fall Meeting Scheduled for October 13

    The
    CDD Annual Fall Meeting, scheduled for October 13, 2011, at the Mark Twain Hotel & Packard Plaza in Peoria, is geared toward honing professional and banking skills. In addition to the educational offerings, this year's meeting includes an optional activity at Sully's Pub & Café in Peoria on the evening of October 12th. The Fall Meeting begins with the popular Networking Session where bankers have an opportunity to engage in roundtable discussions with other bankers sharing their job responsibilities. This is followed by a Legislative & Legal Update by CBAI's David Schroeder and Jerry Cavanaugh. Tom Hershberger presents his session entitled, "Eight Habits of Effective Bank Managers." Following the Business Meeting Luncheon, the afternoon agenda features breakout sessions: "Alice in ALLL-Land"; "The ABCs of Personal Branding"; "Managing Producer and Loan Risk with Crop Insurance"; "Move Your Customer from Satisfied to Loyal"; "The 3 Rs: Review, React, and Remediate a Framework for Responding to Problem Loans"; and "Don't Blink: The Ever Changing Regulatory Environment." New this year, the Fall Meeting will feature a second Networking Session of roundtable discussions on a variety of topics. The Fall Meeting concludes with a general session by Tom Hershberger entitled, "What I Learned about Banking While Waterskiing."

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    CBAI
    PROFESSIONAL DEVELOPMENT PROGRAMS THROUGH 11/16/2011


    TELEPHONE/WEBCASTS THROUGH 10/31/2011


    CBAI EVENTS


    CBAI's 37th Annual Convention & Exposition
    Community Banking -
    Fueled by Loyalty!

    September 22-24, 2011
    Hyatt Regency Milwaukee & Frontier Airlines Center

    CDD Fall Meeting
    developing leadership and teamwork
    October 13, 2011
    Mark Twain Hotel & Packard Plaza, Peoria


    Finer Points Blog


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