Community Bankers Association of Illinois
Community Bankers Association of Illinois    Community Bankers Association of Illinois CBAI E-Newsletter Sponsor - SHAZAM
     A Bi-Weekly News Bulletin for CBAI Members                         October 5, 2011 Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • Sulser Elected CBAI Chairman
  • Consensus: Tax Hike Didn’t Dent Illinois’ Budget Deficit
  • UBS Loss Justifies Implementing Strong Volcker Rule
  • ACTION: Urge Senators Durbin and Kirk to Co-Sponsor Communities First Act
  • The Truth About the Proposed Financial “Transaction Tax”
  • FHFA Approves FHLB-Chicago Capital Plan
  • St. Louis Fed Burgundy Book Reveals Mixed Economic Picture
  • Global Recession Concerns Mounting
  • Wall Street Protests Spread Across Nation
  • Rural Mainstreet Economy Rebounds for September
  • Plan NOW To Attend BancVue’s Marketing Seminar and Golf Outing
  • ICBA Leadership Articles for October
  • ICBA Urges Megabank Merger Moratorium
  • CBAI Associate Member Conducts Survey
  • CBAI Annual Report Now Available
  • Baker Market Update
  • Illinois Community Bank Supports iHELP® Student Loan Program
  • ADA ATM Compliance Deadline is March 15, 2012
  • Midwest Economic Growth Weakened in August
  • Foundation Certificate Winners Announced
  • CDD Fall Meeting Scheduled for October 13
  • Building a Sales & Service-Driven Bank Set for October 18
  • Analyzing Tax Returns in Self-Employed and Small-Business Situations Scheduled for November 2 & 3
  • Save-the-Date for CBAI’s 38th Annual Convention & Expo!

  • Sulser Elected CBAI Chairman

    Mary Sulser, executive vice president of Buena Vista National Bank in Chester, was elected CBAI Chairman during the association’s 37th annual convention in Milwaukee, Wisconsin on September 23, 2011. Her annual term began October 1st. In her address she emphasized the need for true statesmen to emerge in the next election who will make the right decisions for our nation. She urged all community bankers “… to become outspoken advocates for our profession in every way and in every forum.”

    Her complete address, along with the comments of outgoing Chairman Mike Estes, president of The Fisher National Bank, will soon be available on CBAI’s web site.

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    Consensus: Tax Hike Didn’t Dent Illinois’ Budget Deficit

    The 67-percent personal income tax increase approved earlier this year was used to fund state pensions and payroll. As a result, the state’s budget woes remain to be addressed by difficult and painful cost-cutting.
    See ISN Report.

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    UBS Loss Justifies Implementing Strong Volcker Rule

    The loss of $2.3 billion at Swiss bank UBS by a rogue trader has fueled cries for implementing strong rules to prevent banks from trading for their own account. The original provision, contained in the Dodd-Frank Wall Street Reform Act which was enacted last year, was named after its author, former Federal Reserve Chairman Paul Volcker.

    CBAI supported the original Volcker Rule, which was watered down by mega bank lobbyists prior to the measure’s passage. CBAI supports elimination of the exceptions gained by the mega banks and urges restoration of Glass-Steagall provisions that separate commercial and investment banking.
    See New York Times Article.

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    ACTION: Urge Senators Durbin and Kirk to Co-Sponsor Communities First Act

    A high priority for ICBA and CBAI is passage of the Communities First Act, first introduced in the U.S. House (H.R. 1697) by Financial Services Committee member Representative Blaine Luetkemeyer (R-MO), and then in the U.S. Senate (S. 1600) by Senator Jerry Moran (R-Kan).

    CBAI urges all community bankers to contact the offices of Senators Durbin and Kirk to co-sponsor this important legislation. The CFA provides much needed regulatory and tax relief for community banks, their customers, and their communities. Key provisions include:

      • Allowing community banks to amortize losses on commercial real estate loans and other real estate owned over 10 years for regulatory capital purposes;
      • Requiring the SEC to conduct a cost/benefit analysis for any proposed accounting change;
      • Allowing the Financial Stability Oversight Council to veto a Consumer Financial Protection Bureau rule upon finding that it would “adversely impact a subset of the financial industry”;
      • Increasing the SEC shareholder registration threshold;
      • Amending the Dodd Frank Act to restore bank reliance upon external credit ratings; and
      • Extending the 5-year net operating loss (NOL) carry back provision.
    To contact the Senators, please
    click here.

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    The Truth About the Proposed Financial “Transaction Tax”

    CBAI has received numerous inquiries about a "proposed 1 percent tax on all financial transactions" to help close the federal debt. Spam emails with inaccurate information about the proposal have been circulating, and CBAI encourages community bankers not to open or forward the e-mails because they are inaccurate and they may contain viruses.

    H.R. 4646 was introduced last Congress by Rep. Chaka Fattah (D-Pa.) and would impose the tax on transactions that use a payment instrument, including any check, cash, credit card or transfer of stock, and phase out the individual income tax. However, the bill was not introduced in the current 112th Congress and is not advancing. The proposal has no cosponsors, has not been taken up in any committee and is not supported by the Obama administration or Treasury.

    CBAI and the ICBA continues to oppose any tax or fee directly targeting the nation's financial sector. The Obama administration and Treasury have pressed for a proposed "Financial Crisis Responsibility Fee" on the nation's largest financial institutions, which CBAI and ICBA opposes.

    We will continue working with Congress and the administration against new financial-sector taxes and fees. Such proposals will remain a threat due to the nation's record budget deficits.

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    FHFA Approves FHLB-Chicago Capital Plan

    CHICAGO, October 3, 2011 – The Federal Home Loan Bank of Chicago (FHLBC) has
    announced that it has received approval of its capital stock conversion plan from its regulator, the Federal Housing Finance Agency (FHFA). As of January 1, 2012, members’ capital stock will be converted to two subclasses of stock, redeemable in five years pursuant to the Capital Plan, which complies with the Gramm-Leach-Bliley Act of 1999. Under the approval, the Bank can submit a plan to the FHFA to repurchase excess stock. The Bank intends to submit such a plan in December to begin repurchasing excess stock within six months of the conversion. Members will receive the Capital Plan later this month.

    In a letter to member shareholders, President and CEO Matt Feldman said, “The conversion of the Bank’s capital stock is an important development for the Bank and our members, and is indicative of the progress we have made over the last three and a half years.”

    The Federal Home Loan Bank of Chicago is a $77 billion wholesale bank serving the needs of member housing finance institutions located in Illinois and Wisconsin. Our mission is to partner with our member shareholders in Illinois and Wisconsin to provide them competitively priced funding, a reasonable return on their investment in the FHLBC, and support for community investment activities. For more information, visit

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    St. Louis Fed Burgundy Book Reveals Mixed Economic Picture

    The September edition of the
    Burgundy Book, the Federal Reserve Bank of St. Louis’ quarterly summary of economic information for the region, has been released and shows mixed results.

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    Global Recession Concerns Mounting

    Growing concerns about Europe’s debt crisis has increased fears of a global recession as evidenced by a decline in the S&P 500 equity futures benchmark.
    See Bloomberg Article.

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    Wall Street Protests Spread Across Nation

    A grassroots protest against corporate greed on Wall Street that began as a small group in New York on September 17 has now spread across the U.S. Many protestors are expressing frustration with the troubled economy brought on by excessive risk-taking by Wall Street firms that have subsequently received massive bailouts.
    See Wall Street Journal Article.

    Community banks did not engage in high-risk collateralized debt obligations and credit default swaps created and championed by Wall Street firms, but many received the backlash of a runaway housing boom and bust. CBAI advocates breaking up the giant financial firms by separating commercial and investment banking and prohibiting mega mergers.

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    Rural Mainstreet Economy Rebounds for September

    The Rural Mainstreet Index (RMI) moved into positive growth range for September indicating that the agriculturally dependent markets in the Midwest are growing at a slow rate. The findings are based on a periodic survey of community bank CEOs in a 10-state region including Illinois that is administered by Creighton University economist Ernie Goss.
    See Full Report.

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    Plan NOW To Attend BancVue’s Marketing Seminar and Golf Outing

    This past spring, hundreds of community bankers who attended CBAI’s Group Meetings heard about the latest innovations in retail banking from senior executives at BancVue. Mobile banking, personal financial management (PFM), service and fee income strategies were among the topics discussed. Based on comments from many bankers, it is clear they were impressed with the new strategies and technological innovations that will help them compete more effectively and efficiently for their customers. Since the meetings, we learned that a 30 minute presentation during the Group Meeting wasn’t enough. The bankers wanted to learn more. So BancVue has scheduled two special sessions that will cover in greater detail many of the topics presented during the Group Meetings.

    The sessions are free and include an optional afternoon of golf as guests of BancVue. If you prefer to arrive the night before the sessions, BancVue will provide you with lodging at no cost to you.

    The dates and locations are:
    Tuesday, October 18, 2011, at Keller Convention Center, Effingham, Illinois. Golf is at Effingham CountryClub.

    Thursday, October 20, 2011, at Pheasant Run Convention Center, St Charles, Illinois. Golf is at Pheasant Run Golf Course.

    The agenda for both meetings are as follows:
    8 AM-11:30 AM: Retail Strategy Discussion with Peers and Industry Leaders 11:30 AM-12:30 PM: Working Lunch Afternoon: Optional Golf

    For more information or to register to attend, please send an email to Steve Prost at, or call Steve at ( 847) 341-8003; or email Stuart McLellan at, or call Stuart at (509)-688-4812

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    ICBA Leadership Articles for October

    From the Top: A Story of Giving Back
    ICBA Chairman Sal Marranca said he is inpsired by community bankers across America who are making a difference in their communities. Read Article.

    Fine Points: A Test Case on TBTF
    That every long journey begins with a single first step applies to today’s rare bipartisan agreement in Washington over reversing the decades-long momentum of ever greater financial concentration. Read Article.

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    ICBA Urges Megabank Merger Moratorium

    ICBA called on bank regulators to impose a moratorium on all acquisitions and mergers involving financial institutions with more than $100 billion in assets until they finalize Wall Street Reform Act rules on systemically important financial institutions, among other conditions. Testifying before the Federal Reserve Board, ICBA Senior Vice President and Senior Regulatory Counsel Chris Cole said the moratorium should include Capital One’s proposed acquisition of ING Direct USA. At a hearing on the proposed merger, Cole said that regulators don’t have sufficient information yet on the systemic risks that SIFIs pose or how they can be safely and quickly resolved if there is another economic crisis. He also recommended that the agencies immediately issue rules establishing standards for evaluating systemic risk involving SIFI mergers and acquisitions.
    Read ICBA Testimony. Read ICBA Release.

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    CBAI Associate Member Conducts Survey

    Interested in how community financial institutions were interpreting and implementing the FFIEC supplemental guidance on authentication, HEIT, a
    Computer Services, Inc. (OTCQX: CSVI) company, partnered with cbanc Network to survey chief-information, security, compliance, and operations officers from hundreds of community financial institutions.

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    CBAI Annual Report Now Available

    Annual Report for CBAI’s just-completed fiscal year is now available for viewing.

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    Baker Market Update

    Treasury prices fell last week while Treasury yields ticked higher across the curve; housing prices in the top 20 metropolitan cities fell less than frecasted; August durable goods orders fell less than economists expected.
    Read More.

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    Illinois Community Bank Supports iHELP® Student Loan Program

    Washington, D.C. (September 15, 2011) — First National Bank of Dieterich in Dieterich, Ill., is the latest member bank of the Independent Community Bankers of America (ICBA) and CBAI member to commit loan capital to the iHELP® private student loan program.
    Read More.

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    ADA ATM Compliance Deadline is March 15, 2012

    Last year, the U.S. Department of Justice issued a final ruling on new accessibility standards under the Americans with Disabilities Act (ADA) which pertains to ATMS. The new standards took effect on March 15, 2011 and have a March 15, 2012 compliance date. Diebold, CBSC’s preferred vendor for ATMs and physical security equipment, is building an online resource center that will help banks comply with the new rules. That site should be ready next month. Meanwhile, a brief overview of the new
    accessibility standards, and an FAQ are available for your review.

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    Midwest Economic Growth Weakened in August

    Midwest Economy Index (MEI) decreased to –0.24 in August from +0.01 in July, marking the first time that the index has indicated below-average Midwest growth in 18 months. The relative MEI decreased to 0.00 in August, down from +0.92 in the previous month and its lowest value since June 2010.

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    Foundation Certificate Winners Announced

    The CBAI Foundation for Community Banking, which awards 15 scholarships each year to graduating high school seniors, has announced the winners of its Certificate drawing. The Foundation board thanks the many community bankers and friends who purchased certificates throughout the year. Here are the winners:

      $2,500 – Frank Appleby, The Peoples’ Bank, Arlington Heights
      $1,000 – Sheila Burcham, Community Trust Bank, Irvington
      $500 – Kathy Jackson, State Bank of Niantic
      $250 – Shawn Davis, Carlinville National Bank
      $250 – Irene Kruse, First National Bank of Carlyle
      $150 – Karin Parrott, State Bank of Toulon
      $150 – Gary Genenbacher, BKD, LLP
      $150 -- Dave Pirsein, First National Bank, Pinckneyville
      $150 – Cathy Maubach, State Bank of Saunemin
      $150 – Robin Loftus, Security Bank, s.b., Springfield (donated her winnings to the Foundation)

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    CDD Fall Meeting Scheduled for October 13

    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 a roundtable discussion 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 then 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 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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    Building a Sales & Service-Driven Bank Set for October 18

    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. 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 Scheduled for November 2 & 3

    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, attendees 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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    Save-the-Date for CBAI’s 38th Annual Convention & Expo!

    Mark your calendar today for CBAI’s 38th Annual Convention and Expo, scheduled for September 20-22, 2012, at the Hyatt Regency in St. Louis, MO. More information will be available soon.
    Highlights from the 37th Annual Convention and Expo, held in Milwaukee, WI, including pictures of all main events, are available now.

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

    Finer Points Blog





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