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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    September 30, 2015

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • CBAI Recommends Wubben and Estes for ICBA State Delegates
  • CBAI Unanimously Endorses Patty Clarke for St. Louis Fed Board
  • Some Trying to Blur Lines Between Community Banks and Wall Street
  • St. Louis Fed’s Bullard Discusses Monetary Policy at CBAI Convention
  • Committee Considers Community Bank Regulatory Relief Bills
  • ICBA Op-Eds Target Regulatory Relief, Debit Card Interchange
  • CFPB Issues Resources on CBAI/ICBA-Advocated Changes to QM Designations
  • Mortgage Originations Drop 31 Percent in 2014
  • Division of Banking Hosts Cyber Risk and Security Conference
  • FDIC Issues FIL on Proposed Call Report Relief
  • Proposed HMDA Reporting Threshold Changes
  • Investment News From THE BAKER GROUP
  • Chicago Fed Releases Economic Updates
  • Small-Business Loans Up in Illinois
  • CBIS Nicoud Insurance Services Named CBAI Vendor of the Year
  • Registration Begins for Chicago EGRPRA Outreach Meeting
  • Healthcare Plan-Design Solutions Evolve for Community Banks
  • CBAI LEGAL: A Close Look At Two New Illinois Public Acts
  • Save the Date for CBAI’s 42nd Annual Convention in Kansas City!
  • ACH: Stay Informed and In Compliance Scheduled for October 1, 6, & 27
  • Marketing & Retail Banking – Maximizing Your Opportunities Slated for October 6
  • Underwriting Mortgages and HELOCs Set for October 13-14
  • CDD Fall Meeting Scheduled for October 19-20


  • CBAI Recommends Wubben and Estes for ICBA State Delegates

    The CBAI Board of Directors has unanimously voted to support Bill Wubben of Apple River and Mike Estes of Fisher for ICBA State Delegate in Districts 1 and 2, respectively. As former CBAI chairmen, both Bill and Mike are highly qualified to represent the interests of community banks on the ICBA Board of Delegates.

    Ballots are scheduled to be distributed to all ICBA member institutions in Illinois this week, and the deadline for ballot submission is October 16th. CBAI urges all ICBA members in District 1 to vote for Bill Wubben, and all ICBA members in District 2 to vote for Mike Estes. If elected, their three-year terms will commence next March.

    The two incumbents, Gerry Johnson of Grand Ridge in District 1 and Preston Smith of Mattoon in District 2, are term-limited and have capably served the cause of community banking within ICBA leadership. Read Bill Wubben Letter. Read Mike Estes Letter.

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    CBAI Unanimously Endorses Patty Clarke for St. Louis Fed Board

    CBAI’s Board of Directors has unanimously endorsed the nomination of Patricia Clarke (Patty), president and CEO of the First National Bank of Raymond, for election to the Board of Directors of the Federal Reserve Bank of St. Louis.

    Patty is a lifelong member of the Raymond community, has successfully guided her bank during her tenure as President and CEO, and has served in various leadership positions within the Community Bankers Association of Illinois. The CBAI leadership believes Patty will do an outstanding job of representing the interests of community banks in the St. Louis Fed District Group 3.

    For those banks eligible to vote in this election, please watch for your ballot, and then vote for Patty Clarke. Voting will run from November 10 to the afternoon of November 25, 2015. See CBAI Board Endorsement Letter.

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    Some Trying to Blur Lines Between Community Banks and Wall Street

    Some people in Washington would love to blur the lines between community banks and Wall Street institutions so people believe that all banks are the same, ICBA President and CEO Cam Fine wrote in a recent blog post. He noted that banks don’t have a reputation problem, mega-banks do.

    “This raises a challenge for our industry—the community banking industry,” Fine wrote. “We must not allow the biggest and riskiest financial firms to drag our reputations down with them. We must not allow them to compromise the positive image that community banks have earned.” Read the Blog Post.

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    St. Louis Fed’s Bullard Discusses Monetary Policy at CBAI Convention

    Federal Reserve Bank of St. Louis President James Bullard addressed a general session of more than 200 bankers and guests on September 19th during CBAI’s annual convention in Nashville, Tennessee. Dr. Bullard discussed the case for monetary policy normalization which he predicted would commence later this year.

    Dr. Bullard subsequently held a press conference that included members of the media from Bloomberg and Reuters. See FRB St. Louis Release.

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    Committee Considers Community Bank Regulatory Relief Bills

    The House Financial Services Committee is meeting today to consider several CBAI and ICBA-advocated regulatory relief bills, many of which are inspired by ICBA’s Plan for Prosperity regulatory relief platform.

    The Committee is taking up legislation including:

    • the Financial Product Safety Commission Act of 2015 (H.R. 1266) to replace single-director governance of the CFPB with a five-member commission,
    • the Bureau of Consumer Financial Protection-Inspector General Reform Act of 2015 (H.R. 957) to create an independent CFPB inspector general, and
    • the Retail Investor Protection Act (H.R. 1090) to prohibit the Labor Department from issuing new fiduciary rules before the Securities and Exchange Commission issues uniform fiduciary standards for brokers and investment advisers.
    See Committee Markup Announcement.

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    ICBA Op-Eds Target Regulatory Relief, Debit Card Interchange

    Congress should overcome political bickering and pass bipartisan regulatory relief for community banks, ICBA President and CEO Cam Fine wrote in a new op-ed. Fine wrote in The Washington Times that many provisions in Senate Banking Committee Chairman Richard Shelby’s regulatory relief bill enjoy widespread support, but the bill has been held up due to party politics.

    In a separate op-ed in The Hill, Fine wrote that a new study confirms the negative impact of debit interchange price caps as the fourth anniversary of the Durbin amendment approaches. While big-ticket retailers have racked up nearly $32 billion from government-regulated debit card interchange fees, those benefits don’t extend to consumers and small businesses, Fine wrote. Read Washington Times Op-Ed. Read The Hill Op-Ed.

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    CFPB Issues Resources on CBAI/ICBA-Advocated Changes to QM Designations

    The Consumer Financial Protection Bureau has prepared a summary of the CBAI and ICBA-advocated final rule it released last week that broadens the Qualified Mortgage rule’s small-creditor and rural designations. The CFPB said it also will update implementation materials on its Title XIV Rule Implementation Webpage.

    The final rule will allow more community banks to receive QM legal safe-harbor protection for loans they originate and retain in portfolio. It also will provide additional relief from mandatory escrow requirements and include more balloon-payment loans as qualified mortgages.

    ICBA and CBAI continue to support statutory changes to the QM rule under the ICBA Plan for Prosperity legislative platform. Read CFPB Summary. Access CFPB Webpage. Read ICBA Release.

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    Mortgage Originations Drop 31 Percent in 2014

    Mortgage originations declined in 2014 by 31 percent, or 2.7 million, according to Home Mortgage Disclosure Act data released by regulators last week. The Federal Financial Institutions Examination Council said reporting institutions declined roughly two percent to 7,062, continuing a downward trend since 2006. The 2014 data include information on 9.9 million home loan applications, nearly six million originations and 1.8 million loan purchases, totaling nearly 11.7 million actions. See FFIEC Release.

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    Division of Banking Hosts Cyber Risk and Security Conference

    Cyber Risk continues to be one of the top regulatory concerns of banking regulators and the banking industry. Criminals are constantly seeking the opportunity to breach data systems. Unfortunately, several Illinois banks have already been the victims of data breaches. Therefore, as a result of the high risk of cyber threats, the IDFPR's Division of Banking is pleased to sponsor a Cyber Risk and Security Conference designed specifically for the executive leadership of Illinois banks. See Registration. See Agenda.

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    FDIC Issues FIL on Proposed Call Report Relief

    The FDIC released a Financial Institution Letter on banking regulators’ proposed rule to simplify community bank call reports. Regulators proposed deleting certain data items and revising reporting thresholds and said they are considering additional relief, including a streamlined version of the call report.

    In a recent American Banker Op-Ed, ICBA’s Terry Jorde wrote that the proposed reforms show that regulators’ dialogue with the community banking industry has been fruitful. Jorde noted that the announcement comes a year after ICBA met with the FFIEC to deliver a petition with nearly 15,000 signatures urging call report relief. Read FDIC Letter. Read ICBA Op-Ed.

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    Proposed HMDA Reporting Threshold Changes

    In her presentation at CBAI’s 41st annual convention earlier this month, Wolters Kluwer Financial Services regulatory expert Amy Downey fielded a question about the proposed changes in the Home Mortgage Disclosure Act rule’s institutional coverage definition to adopt a uniform loan volume-reporting threshold. Read More.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    With the death last week of Yogi Berra, the world lost a national treasure. We learned, though, that our nation’s treasure, or at least its GDP, still grew by 3.9% in the second quarter. That should make everyone feel a lot more like they do now than they did before. See Baker Market Update.

    MBS Market Strategies
    September 2015 - Prepayment Summary

    Aggregate speeds have now fallen in four of the last five months with all three agencies reporting declines in August. Fannie and Freddie 30yr speeds fell the most on the month, both down 1.6 CPR to 12.8 and 13.1, respectively. See MBS Market Strategies.

    Baker Economic Brief
    Chart of the Day

    As the Fed meets to discuss a possible rate increase, it’s interesting to look back at how dramatically they’ve changed the way they operate. See Baker Economic Brief.

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    Chicago Fed Releases Economic Updates

    The Federal Reserve Bank of Chicago released today its Midwest Economy Index publication which revealed that economic growth was somewhat lower in August compared to July. The Index measures growth in nonfarm business activity based on indicators of four broad sectors of the Midwest economy. Read FRB Chicago Release.

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    Small-Business Loans Up in Illinois

    The updated Lenders Performance list for Fiscal Year 2015, starting from 10/01/14 to 8/31/15 is now available. The Illinois District Office continues a positive trend for FY 2015, with the number of 7(a) loans up by 25%. Last year at this same time, 1512 7(a) loans were approved compared to 1892 loans for this year. SBA 504 loans are also up by 5% when compared to the same period last year. The end of the FY is 9/30/15. See SBA Report.

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    CBIS Nicoud Insurance Services Named CBAI Vendor of the Year

    Community Bankers Association of Illinois (CBAI) annually presents a Service Development Award to a provider of goods and/or services to Illinois community bankers that has performed above and beyond the call of duty to benefit the cause of community banking through CBAI either during the past year or over a period of years. CBAI announced at its 41st Annual Convention held recently in Nashville, TN that the recipient of the 2015 Service Development Award is CBIS Nicoud Insurance Services, a partner of Community BancService Corporation (CBSC), a subsidiary of CBAI.

    CBAI Chairman Todd Grayson said, “Four years ago, the CBAI leadership asked our partners at CBIS Nicoud Insurance Services to improve the banker experience, add products that mitigate bank operational risk, increase the number of carriers to insure that CBAI members receive the best coverage at the lowest rates, and create a health insurance program that will save our members money. While our goals were quite a challenge under the most favorable conditions, the country was in the midst of a financial crisis in which many banks struggled to find adequate coverage, cyber attacks were escalating, and President Obama signed into law the Affordable Care Act creating chaos in the health insurance markets. The professionals at CBIS Nicoud responded." Read More.

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    Registration Begins for Chicago EGRPRA Outreach Meeting

    Registration is now open for the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) outreach meeting in Chicago on October 19, 2015.

    The outreach meeting will provide an opportunity for bankers, consumer and community groups, and other interested persons to present their views directly to senior management and staff of the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (the Agencies) on any of the Agencies’ regulations.

    The meeting will consist of panels of bankers and consumer and community groups to present particular issues. There will be limited time after each panel for comments from meeting attendees. In addition, there will be a session at the end of the meeting during which audience members may present views on any of the regulations under review.

    CBAI encourages Illinois community bankers to attend this important outreach meeting and express their views on regulatory burden directly to the Agencies. Registration Information.

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    Healthcare Plan-Design Solutions Evolve for Community Banks

    Like other businesses, community banks have had to juggle conflicting mandates of providing for their employees while managing mounting benefits costs. CBIS Nicoud offers employers group-health solutions in accordance with our commercial-liability and financial-institution programs. Read More from CBIS Nicoud Insurance Services.

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    CBAI LEGAL: A Close Look At Two New Illinois Public Acts

    Two Public Acts approved in the Spring Session of the Illinois General Assembly, one already in effect and one that becomes effective on January 1, 2016, may merit special attention so that Illinois banks do not become vulnerable to misrepresentations or misunderstandings regarding the powers or requirements enacted in the legislation. See Most Recent CBAI LEGAL.

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    Save the Date for CBAI’s 42nd Annual Convention in Kansas City!

    Mark your calendar today for CBAI’s 42nd Annual Convention and Expo, scheduled for September 15-17, 2016, at the Marriott Downtown in Kansas City, MO. More information will be available soon. Highlights from the 41st Annual Convention and Expo held in Nashville include pictures of all main events. Don’t forget, all convention handout materials from the 20 break-out sessions are also available to convention attendees on the CBAI website. They are posted in the Members Only section titled “CBAI Convention Speaker Materials.” Please refer to the handout in your convention folder provided at registration for the login information. See CBAI's 41st Annual Convention Highlights. See Speaker Materials (members only - password protected).

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    ACH: Stay Informed and In Compliance Scheduled for October 1, 6, & 27

    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 2014 - 2018 are also explained in a practical, easy-to-understand approach. This seminar identifies areas of ACH activity where a financial institution may be held liable if proper procedures are not in place, and learn what examiners are looking for relative to ACH. Fraud schemes occurring within ACH processing are outlined. In response to each risk or fraud identified, there are solutions provided to mitigate the risk to both the financial institution and its account holders. The class provides attendees with ideas for policies and procedures that help protect the financial institution from unnecessary losses. Simplified procedures for maintaining compliance and tips for avoiding those commonly-made mistakes are provided. ACH-Rule changes effective in 2014 and 2015, and those already approved with effective dates 2016 through 2018, are also explained in an understandable manner. Sample written statements for unauthorized debits and stop-payment forms that comply with the rules and limit the bank's liability under Regulation E are provided. Commonly made mistakes regarding ACH-Rules compliance are identified. Nicole Meinhardt, CPA, MST, AAP, and senior manager at Wipfli LLP, Sterling, IL, leads this seminar.

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    Marketing & Retail Banking – Maximizing Your Opportunities Slated for October 6

    With the banking business boiled down to nothing but a commodity, great retail marketing is your opportunity to escape the crowd. An understanding of the concept that marketing is a strategic activity and a discipline focused on the endgame of getting more consumers to buy your product more often so your company makes money, is at the core of this presentation. During this session, we contrast the retail marketing concepts of non-banks with the banks that are standing out of the crowd. We review the path of a community bank that has made the move to consistent retail marketing and increased both customers and profitability. Be sure not to miss this presentation. You leave with strategies and ideas that are sure to help your bank make the move to higher profitability through better retail marketing. Back by popular demand is Jay Coakley, a 25-year veteran of the financial services field, and president of Coakley Strategic Solutions in Jefferson City, MO.

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    Underwriting Mortgages and HELOCs Set for October 13-14

    Consumer loan underwriting in the mortgage area involves extensive paperwork and systematic attention to detail in all phases. This program focuses on the principles involved in the up-front underwriting of mortgage products, and how this underwriting addresses key risks in this product area. We also look at options for how banks can hold mortgages (rather than sell), plus the all-important appraisal review. The focus is on the role of managing risk and creating loans that repay in full and on time. Participants are encouraged to share real-time, workable “best practices” and, while covering the general principles within the various regulations, focusing more on the practical side of dealing with numerous compliance issues. Consumer lenders, mortgage bankers, private bankers, small business lenders, credit analysts, loan review specialists, special assets officers, lending managers, credit officers, and others involved in underwriting residential mortgages and HELOCs should attend. Leading this seminar is Richard Hamm, who has owned and operated Advantage Consulting & Training for 10 years, after a 22-year banking career including senior positions in lending and credit.

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    CDD Fall Meeting Scheduled for October 19-20

    The CDD Annual Fall Meeting scheduled for October 20, 2015, at the Hilton Hotel, Springfield, is geared toward honing professional and banking skills. In addition to the educational offerings, this year's meeting includes a fun and great networking opportunity at the hotel the evening of October 19th, where the entertainment for the evening is a trivia night. The Fall Meeting begins with the popular Networking Session where bankers have an opportunity to engage in a roundtable discussion with other bankers sharing their job responsibilities. This is followed by a general session with Jim Rechel entitled, “What Brick Wall? Don’t Let Adversity Stand in Your Way” followed by a set of breakout sessions: “Compliance Hot Topic Update;” “How to Improve Your Customer’s Credit Report & Scores;” and “Loan Documentation Clauses: The Good, The Bad & The Ugly.” Then, Illinois Department of Financial & Professional Regulation Director of the Division of Banking, Michael J. Mannion, will address the current state of banking in Illinois along with a brief question and answer period. CBAI Chairman Kevin Beckemeyer will give an association update during the Business Meeting Luncheon, along with the Career Banker of the Year and Economic Educator award. The afternoon agenda features the following breakout sessions: “Saving Second Liens in the US Supreme Court;” “Enhancing Crime Prevention with Creativity;” and “Investing in an Uncertain Environment.” The Fall Meeting concludes with the general session from Jim Rechel titled, “Think Beyond the Finish Line-A Path to Exceeding Your Own Expectations.”

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