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     A Bi-Weekly News Bulletin for CBAI Members                        October 2, 2013 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Action Alert – Urge Congress to Support the CLEAR Act
  • ICBA: “Hold Wall Street's Bad Actors Personally Accountable”
  • Register to Attend the CBAI 401(k) Multiple Employer Plan (MEP) Seminars
  • CBAI’s 39th Annual Convention & Expo Deemed a Huge Success
  • Fisher: “TBTFs are Dagger at Heart of Economy”
  • Hoenig: “Five Years After Crisis, Contributing Factors Still Exist”
  • GAO Must Ensure Accurate Accounting in TBTF Study
  • How Government Shutdown Would Impact Banks
  • OCC: Community Banks’ Performance in Midwest Improves
  • Wall ST Bank CEOs to Meet With Obama: Still No Charges For Wall St Exec’s
  • Sageworks: Largest Database of Private-Company Financial Information - Free
  • SHAZAM Offers Fraud Prevention Tips for Merchant Clients
  • CBAI Board Endorses Rosenbaum for FHLB-Chicago Board
  • CFPB Releases Flowcharts to Navigate New Mortgage Rules
  • CBAI and BankOnIT Partner to Deliver Private Cloud and Managed IT Services
  • Consistancy is Key to Uniform Credit Risk Analysis
  • Federal Regulators Issue Guidance on Reporting Senior Financial Abuse
  • FDIC Consumer Newsletter Features Tips for Seniors
  • CDD Annual Fall Meeting To Be Held October 22
  • Baker Market Update - Fed Maintains Bond Purchases; 1st Rate Hike Looming
  • KASASA Ad 15 - “Return My Account”
  • Career Opportunities in Community Banking: New Positions Posted
  • Surprise! Merchant and Issuer Interchange Research Yields Conflicting Results
  • CFO Conference to be Held October 7 & 8
  • IT Update: Is Your Data Really Safe? Scheduled for October 9 & 10
  • Consumer Lending Institute to be Held October 15-17
  • ACH: Stay Informed and In Compliance Set for October 24, 29, and November 6
  • Women in Community Banking Conference Scheduled for November 19


  • Action Alert – Urge Congress to Support the CLEAR Act

    CBAI is calling on Illinois community bankers to urge their Members of Congress to advance legislation to provide much needed regulatory relief.

    The Community Lending Enhancement and Regulatory Relief (CLEAR) Act of 2013 (H.R. 1750 / S. 1349) offers community bank exemptions from mortgage and auditing regulations and supports additional capital opportunities for small bank holding companies.
    Read More.

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    ICBA: “Hold Wall Street's Bad Actors Personally Accountable”

    ICBA President Cam Fine, who addressed the CBAI convention delegation last week, urged regulators and the Justice Department to ensure that mega banks officials are held to the same personal accountability as community bankers. He stated, “Unlike community bankers, who are held publicly and personally accountable by their regulators when things go wrong, not one senior Wall Street executive or board member has been held personally responsible for the 2008-10 financial collapse and the repeated scandals that have followed.” Fine said Wall Street’s bad actors must be brought to justice.
    See ICBA Release.

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    Register to Attend the CBAI 401(k) Multiple Employer Plan (MEP) Seminars

    The CBAI MEP simplifies a bank’s 401(k) program by outsourcing most fiduciary responsibilities and liabilities, eliminating the 5500 filings, and eliminating the plan audit (for larger plans), all while potentially providing cost savings. Under the CBAI MEP, CBAI members will have a dedicated team of experts from MSTC and Pentegra to manage the Plan. Each bank will retain the ability to customize plan provisions for its employees with the freedom to select its own financial advisor.
    Register Now.

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    CBAI’s 39th Annual Convention & Expo Deemed a Huge Success

    More than 265 bankers from 118 banks attended CBAI’s 39th Annual Convention & Expo at the Crowne Plaza in Springfield. Along with representatives from 102 exhibiting firms, associate members, speakers, spouses, guests, and staff, the total attendance reached nearly 700 individuals.
    See Convention Highlights.

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    Fisher: “TBTFs are Dagger at Heart of Economy”

    The President of the Federal Reserve Bank of Dallas told Texas community bankers last week that reform legislation designed to protect our economy and taxpayers from the big Wall Street mega banks has instead made the problem worse. Richard Fisher said, “Am I exaggerating when I say that the TBTFs are a dagger pointed at the heart of the economy?” Fisher, an outspoken advocate of downsizing the mega banks, addressed the annual convention of the Independent Bankers Association of Texas, a counterpart of CBAI.
    See WSBE Article.

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    Hoenig: “Five Years After Crisis, Contributing Factors Still Exist”

    FDIC Vice Chairman Tom Hoenig said recently that, despite new laws and regulations, many of the conditions that contributed to the financial crisis are being replicated. He noted that the rules of the game still provide advantages to some over others and protect players against the fallout of excessive risk and irresponsible behavior.

    Hoenig cited parallels between the crisis of 2008 and today. He called for strong capital requirements for regulated financial firms and tightening the federal safety net to protect only the payments and intermediation systems that commercial banks operate. Hoenig also supports downsizing the mega banks.
    See BankNews Article.

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    GAO Must Ensure Accurate Accounting in TBTF Study

    The Government Accountability Office (GAO) is now studying the TBTF subsidy to measure the taxpayer-funded advantages the mega banks enjoy over their smaller competitors. A background report is expected later this month, and the primary report will be issued next year. Professor Cornelius Hurley of Boston University declared that the whole point of addressing the TBTF problem and its market distortions is to ensure that free-market principles apply consistently across the financial system. He urged the GAO to focus on the gross benefit of being TBTF, not the benefit net of fines, penalties and regulatory burdens.
    See AB Article.

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    How Government Shutdown Would Impact Banks

    With Congress engaged in a fiscal battle over Obamacare and funding the federal government, a government shutdown will have a material effect on the banking system. While banking regulators will remain open, government-guaranteed small business, mortgage, and farm loan programs will grind to a halt. Analysts also warned that the shutdown could weaken consumer confidence and slow economic growth.
    See AB Article.

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    OCC: Community Banks’ Performance in Midwest Improves

    National banks and federal savings associations located in nine Midwestern and upper Midwestern states continue to report better earnings compared with 2012 as a result of improving credit quality, the Office of the Comptroller of the Currency reported today in the agency’s second quarter 2013 risk analysis. In addition, the condition of national banks and federal savings associations in the Chicago area is stabilizing, with the number of problem institutions falling modestly since last year.
    Read the OCC release. Also, see the OCC's top 5 risks and a state-by-state summary of community banks financial conditions.

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    Wall ST Bank CEOs to Meet With Obama: Still No Charges For Wall St Exec’s

    Goldman Sachs' (
    GS, Fortune 500) Lloyd Blankfein will be among the group of CEOs meeting with the president in a visit organized by the Financial Services Forum, a trade group which represents bank chiefs, according to three sources familiar with the schedule. Blankfein is currently the forum's rotating chairman. Other CEOs expected to attend are Bank of America's (BAC, Fortune 500) Brian Moynihan, J.P. Morgan Chase's (JPM, Fortune 500) Jamie Dimon and James Gorman of Morgan Stanley (MS, Fortune 500). President Obama met at the White House with the same group in April. Financial Services Forum spokeswoman Laena Fallon declined to comment. Related: Still no charges for Wall Street execs after crisis

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    Sageworks: Largest Database of Private-Company Financial Information - Free

    Sageworks, a financial information company that provides risk management solutions to banks and credit unions, today announced that it will make its database of industry statistics on privately-held companies available for free to all banking professionals in the US.
    Read More. Sageworks has been a CBSC Preferred Provider since 2008.

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    SHAZAM Offers Fraud Prevention Tips for Merchant Clients

    A recent SHAZAM Network blog offers tips and resources for helping bank merchant clients avoid charge-backs and fraud. The VISA resource is titled, “Global VISA Card-Not-Present Merchant Guide to Greater Fraud Control.”
    See SHAZAM Blog. See VISA Resource.

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    CBAI Board Endorses Rosenbaum for FHLB-Chicago Board

    PLEASE RE-ELECT Steve Rosenbaum, Chairman & CEO, Prospect Federal Savings Bank, Worth. There is one seat up for election this year, and CBAI asks that you support only this candidate. If elected, he will effectively serve the interests of community-based financial institutions on the FHLB Board. Signed ballots must be received by mail at the FHLB by October 25, 2013.
    Cast Your Ballot.

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    CFPB Releases Flowcharts to Navigate New Mortgage Rules

    The Consumer Financial Protection Bureau has released several flow charts that offer a way to visualize how the new mortgage rules are likely to impact certain products or transactions in a variety of circumstances. (These charts are not substitutes for the regulation text and official interpretations, but they can provide an idea of where to start.)

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    CBAI and BankOnIT Partner to Deliver Private Cloud and Managed IT Services

    Community BancService Corporation (CBSC), the business-services subsidiary of CBAI, has partnered with BankOnIT (BOIT), to provide Bankers Private Cloud, a fully hosted cloud-computing solution, and managed-IT services to CBAI member banks.
    Learn More.

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    Consistancy is Key to Uniform Credit Risk Analysis

    “The last thing you want is to be unable to answer the question, 'How in the world did you get that figure?'" Tim McPeak, Sageworks, a CBSC preferred service provider.

    Check out this
    article in American Banker to find out how to make the credit-analysis process more manageable: Credit Risk Analysis Needs 'All in Concert'.

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    Federal Regulators Issue Guidance on Reporting Senior Financial Abuse

    Seven federal regulatory agencies have
    issued guidance to clarify that the privacy provisions of the Gramm-Leach-Bliley Act generally permit financial institutions to report suspected elder financial abuse to appropriate authorities.

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    FDIC Consumer Newsletter Features Tips for Seniors

    The summer 2013 issue of
    FDIC Consumer News features a collection of articles that provide financial tips for seniors. Other topics include avoiding wire-transfer scams, new protections for sending money abroad, things to keep in mind when considering adjustable-rate mortgages, basic points about Health Savings Accounts, and help for student-loan borrowers having payment problems. The FDIC encourages financial institutions and others to help make the tips and information in FDIC Consumer News widely available.

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    CDD Annual 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; 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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    Baker Market Update

    Now that the tumult from last week’s “taper caper” has subsided and Senator Ted Cruz’s career as an extemporaneous speaker has ended, credit markets have managed to hold on to, and even further, the price gains that were initially sparked by the Fed’s inaction. A steady flow of data this week has failed to change perceptions that economic performance is, and will continue to be, sluggish.

    Despite the positive influence of a year - over - year 12.39% rise in the Case - Shiller 20 City Home Price Index, the Conference Board’s Consumer Confidence Index dropped to 79.7 from last month’s 81.8. This represents a four month low in that measure.
    See Baker Market Update.

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    KASASA Ad 15 - “Return My Account”

    Some checking accounts just don’t make sense… for the account holder, that is. Kasasa’s “Return My Account” radio spot points out that if it were possible to return a checking account, a lot of people probably would. After all, why choose a checking account that gives more than it takes when you can have free checking that pays?

    Even interest-bearing accounts often charge a costly monthly service fee, unless offset by a high minimum balance requirement. However, Kasasa checking and savings accounts are always free. And there’s no minimum balance to earn really high interest or other Kasasa rewards. So your customers can see how hard-working Kasasa accounts actually work in their favor – unlike the “defective” accounts you might expect from a megabank.
    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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    Career Opportunities in Community Banking: New Positions Posted

    Several banks have posted new classified ads on CBAI’s web site. There is no charge for this service.
    See New Classifieds.

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    Surprise! Merchant and Issuer Interchange Research Yields Conflicting Results

    On the same day a merchant group's study
    claimed retailers pass on interchange savings to consumers, debit card issuers released their own study that claims merchants do no such thing.

    “As part of their lobbying tactics, giant retailers promised to lower prices for their customers if Congress passed the Durbin amendment. Two years after implementation, retailers have taken home an $8 billion annual windfall while their customers still aren’t seeing a discount for using debit,” said Sam Fabens, spokesman for the Electronic Payments Coalition, which sponsored the study.

    To collect the data for the field research, 32 shopping trips were performed at 16 stores nationwide. Identical products were purchased at each store and compared: one shopping trip in September 2011 before implementation of the Durbin amendment; one in September 2012 – a year after the implementation of the Durbin amendment; and one in September 2013 – two years after the implementation of the Durbin amendment.

    This differs sharply from the merchant study, also released on Tuesday, which said merchants use their interchange savings to lower prices by applying a previous study of merchant behavior to the known amount of interchange savings released by the Federal Reserve.

    Specific findings included that the price of milk at a Walgreens in San Francisco has increased by 30 cents in the past year, and the cost of peanut butter at a 7-Eleven in Boston went up by 20 cents.

    The research shoppers found a hammer at a Home Depot in Portland, Maine, had been $4.98 since before the implementation of the Durbin amendment in 2011 and that a Slurpee from a 7-Eleven in Washington, D.C., has cost $1.49 each year since 2011.

    Finally, the cost of macaroni and cheese from a Wal-Mart in Washington, D.C., has been $1.38 every year since 2011 while the cost of paint from a Home Depot in Atlanta has stayed the same price since last year, the EPC study found.

    “As part of their lobbying tactics, giant retailers promised to lower prices for their customers if Congress passed the Durbin amendment. Two years after implementation, retailers have taken home an $8 billion annual windfall while their customers still aren’t seeing a discount for using debit,” said Sam Fabens, spokesman for the Electronic Payments Coalition, which ordered the study.

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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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    Consumer Lending Institute to be Held October 15-17

    Sound credit decisions by community-bank lenders require a high degree of perception and skill. To reach this level of sophistication, your lending personnel must constantly rethink existing approaches, research new ideas, and update their knowledge. To provide your community bank with guidance and training, CBAI has developed the “
    Consumer Lending Institute.” This educational program provides essential knowledge and skills to your lending professionals and establishes a network of lenders for continued support by sharing experiences with lending professionals. Topics covered include lending compliance, introduction to consumer lending, taking the loan application and interviewing, investigating the application, risk analysis, lending to self-employed borrowers, business development, loan documentation, and collections and bankruptcy. Leading this institute is David Kemp, president of Bankers Management, Inc., College Park, GA. Tim Tedrick, CRCM, CRP, and executive officer at Wipfli LLP in Sterling, IL, also presents at this institute.

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    ACH: Stay Informed and In Compliance Set for October 24, 29, and November 6

    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 2012-2015 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 demonstrates what examiners are looking for relative to ACH. The class also gives attendees 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, as well as sample written statements for unauthorized debits and stop-payment forms that comply with the new rules and limit the bank's liability under Regulation E are also provided. Nicole Meinhardt, CPA, MST, AAP and manager at Wipfli LLP, Sterling, IL, leads this seminar.

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    Women in Community Banking Conference Scheduled 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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