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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    October 11, 2017

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Elect Todd Grayson to the FHLB Chicago Board!
  • Continue Push on CFPB Arbitration Initiative
  • ICBA Thanks Treasury for Withdrawing Estate Tax Increase
  • CFPB Adopts CBAI Recommendations in Final Payday Lending Rule
  • ICBA Tackles Wells Fargo, Grassroots in New Op-Eds
  • USDA Begins Making $10B in Farm Payments
  • CBAI FedPac Fundraiser Was a Grand Slam!
  • How to Stop Identity Fraud Before It Starts
  • Investment News From THE BAKER GROUP
  • Baker Group Investment Strategies Webinar Set for October 12
  • Financial Services is Like Football - Balance Wins
  • 2017 National Survey of Community Banks Findings Released
  • The Rewards of Board Service
  • Fall Is Here! Time to Think About Holiday Gifts!
  • eClosing and Buying a Home: Tech's Role in Closing a Mortgage
  • CBAI LEGAL: Authorized Insurance and Public Deposits
  • Save the Date for CBAI’s 44th Annual Convention in St. Louis!
  • It’s Renewal Time for the Community Bankers for Compliance Program!
  • ACH: Stay Informed and In Compliance Scheduled for October
  • CFO Conference Slated for November 2


  • Elect Todd Grayson to the FHLB Chicago Board!

    CBAI is pleased to exclusively endorse Todd Grayson, president of South Central Bank, N.A., Chicago, for election to the 2017 Federal Home Loan Bank of Chicago Board of Directors. Ballots are now out to all FHLB member institutions, and CBAI urges all members to complete and return the ballot to the FHLB in support of Todd Grayson.

    Here are important guidelines for voting:

    • Members must vote the original green ballot they have been sent. Copies cannot be accepted. If the original ballot is lost, please contact the FHLB to receive a replacement ballot.
    • The original green certification form must be completed and signed by an officer or director of the member and returned with the ballot.
    • The ballot and certification form must be mailed or sent via FedEx or UPS. The FHLB cannot accept faxes or e-mails.
    • The ballot and certification form must be received in the FHLB by the close of business on November 3, 2017.
    • Each member must have a resolution of its Board or governing body on file authorizing officers or directors to vote the members’ ballot, but it is not necessary that a copy of the resolution be sent with the ballots and certification form. It simply needs to be available in case of an audit. Read Grayson Background.

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    Continue Push on CFPB Arbitration Initiative

    ICBA and CBAI are calling on community bankers to express their support for a congressional resolution to nullify the Consumer Financial Protection Bureau’s recent arbitration rule. Community bankers can use ICBA’s Be Heard website to submit custom letters to their senators on the negative impact of prohibiting consumer arbitration agreements. Contact Congress Now.

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    ICBA Thanks Treasury for Withdrawing Estate Tax Increase

    The U.S. Treasury Department has announced plans to withdraw a CBAI and ICBA-opposed proposal to effectively raise the estate tax. The proposed amendment to Section 2704 of the tax code would have increased by more than 30 percent the estate tax on family-owned community banks and other small businesses.

    The proposed rule would have effectively ended estate-planning techniques commonly used to transfer community banks and other family-owned businesses to subsequent generations. A study commissioned by ICBA and other business groups found that the proposed rule would have cost the U.S. economy nearly 106,000 jobs and reduced the gross domestic product by more than $150 billion over the next decade.

    CBAI and ICBA have repeatedly called on the Treasury Department and Internal Revenue Service to withdraw the estate tax increase and has supported House and Senate legislation to block the proposal. Further, CBAI and ICBA support a full repeal of the estate tax. Read Treasury Plans. Read ICBA Release. Access Estate Tax Study.

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    Does your financial institution originate ACH transactions? Do you work with third-party senders? New NACHA Operating Rules now require financial institutions that originate ACH transactions to register their Third-Party Sender customers or attest to maintaining no such customers. Visit the new risk-management portal to register your Third-Party Sender customers by March 1, 2018.



    CFPB Adopts CBAI Recommendations in Final Payday Lending Rule

    On October 5, 2017, the Consumer Financial Protection Bureau (CFPB or Bureau) finalized its payday lending rule. While the complete analysis of the 1,700 page Final Rule continues, it does include Community Bankers Association of Illinois (CBAI) and Independent Community Bankers of America (ICBA)-advocated exemptions from the onerous full-payment test and the principal-payoff option for lenders that make 2,500 or fewer covered short-term or balloon-payment loans per year and derive no more than 10 percent of their receipts from such loans. These exemptions benefit hundreds of Illinois community banks. Read Article.

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    ICBA Tackles Wells Fargo, Grassroots in New Op-Eds

    The most shocking aspect of Wells Fargo’s repeated scandals is that federal regulators have taken no meaningful action against its leadership, ICBA President and CEO Cam Fine wrote in a new American Banker op-ed. With Wells Fargo’s chief executive scheduled to testify before Congress tomorrow, Fine wrote that the $2 trillion-asset bank’s board of directors and senior managers are supposed to be held responsible for the institution’s ethical, moral and legal conduct.

    In a separate op-ed in Campaigns & Elections, ICBA Director of Advocacy Joshua Habursky discussed how advocacy groups can use new tools and strategies to make their positions heard in a crowded field. Read Fine Op-Ed. Read C&E Op-Ed.

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    USDA Begins Making $10B in Farm Payments

    The USDA announced last week that it has begun making approximately $10 billion in payments to producers through the Agriculture Risk Coverage, Price Loss Coverage and Conservation Reserve programs. The USDA is issuing approximately $8 billion in payments under the ARC and PLC programs for the 2016 crop year and $1.6 billion under CRP for 2017. Read USDA Release.

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    CBAI FedPac Fundraiser Was a Grand Slam!

    CBAI’s late season FedPac Fundraiser was the first Cards vs. Cubs night game in FedPac history, but the game itself was second-to-none in excitement and attendance. The fundraiser helps CBAI combat the triple threat of harmful legislation, overregulation, and unfair competition from credit unions, Farm Credit lenders and the emerging fintech companies. Simply said, it was a base-clearing HOME RUN! Read More.

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    How to Stop Identity Fraud Before It Starts

    Community banks have always prided themselves on knowing their customers. And yet, just like large banks, community banks and their customers are feeling the sting of identity theft. Here are some ideas used by community banks to prevent identity fraud. Read More.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    Bond market arborists seem unconcerned with the hurricane distortions that occurred during the survey period and are looking past the NFP decline to the Fed’s December meeting, where the chances of another rate hike are still about three in four See Baker Market Update.

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    Baker Group Investment Strategies Webinar Set for October 12

    Topics will include:

    • Economic Review and Fed Policy: Elusive Inflation Perplexes the Fed
    • Mortgage Securities in a Low Volatility Market: Anchor That Cash Flow
    • Tax Reform Framework: Potential Impact to Municipal Market and Strategy
    •     Rate Changes and Sub-S Treatment
    •     Proposed Changes to Deductions and Exemptions
    • Liquidity Risk Rising: Management Tools and Tactics
    Click Here to Register.

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    Financial Services is Like Football - Balance Wins

    According to banking consultant Mike Moebs, important to proper planning and budgeting is an understanding of how relationship services can dilute fee income. He notes that relationship pricing tends to charge lower or no fees to gain new services, and the service most likely impacted by a reduction in fee revenue is checking. This seems very fundamental, yet escapes much of the planning and budgeting done by banks.

    Moebs indicates that some financial institutions view checking needs to be either relationship or transaction oriented, and he offers an analogy as a answer: How many football teams have won the Super Bowl by being one-dimensional: run or pass? None. The answer is the same for relationship services and transaction service—balance wins. Read More.

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    2017 National Survey of Community Banks Findings Released

    The Federal Reserve and the Conference of State Bank Supervisors recently released the findings from the 2017 National Survey of Community Banks. Survey responses were obtained from 611 community bankers in 37 states, and provide insights into what community bankers are thinking about key issues facing their profession. The survey questions addressed changes in bank lines of business, regulatory compliance, competition and consolidation. The 2017 survey also asked specific questions about small business lending and challenges and opportunities posed by financial technology firms. See Findings.

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    The Rewards of Board Service

    Bank directors may be breathing a little easier or at least have adjusted to their enhanced responsibilities since 2007, according to findings in the 2017 Compensation Survey sponsored by Compensation Advisors, a member of Meyer-Chatfield Group. The white paper looks at the evolving trends both in composition and compensation that have occurred over the past ten years.

    Today, most directors (73 percent) believe that their compensation is competitive enough to attract new board members. As the oversight responsibilities of bank directors expand, fueled not just by the regulatory environment but also an evolving marketplace, the composition of bank boards is gradually shifting to meet these new demands. Sixty percent of survey respondents say their board has a plan in place to identify prospective directors, and 51 percent say their board will actively seek to become more diverse in the next two years. See Key Findings. Read Complete Report.

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    Fall Is Here! Time to Think About Holiday Gifts!

    Executive gifts attract and maintain customers and build brand image, recognition and loyalty. Midwest Office can help you achieve all these things while maintaining your budget, brand name and consistency. Mention this flyer for an additional 10% off your next purchase toward any executive gift or promotional product! Contact Kevin Gaffney at 217-303-5511 or kgaffney@midwestoffice.com.

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    eClosing and Buying a Home: Tech's Role in Closing a Mortgage

    Technology is transforming everything; it is changing the way we communicate, the way we access goods and services, and even the way we purchase homes. Soon, more and more consumers may increasingly find themselves being offered technology that allows them to access, sign, and submit mortgage closing documents online. "eClosing” can leverage technology in the mortgage closing process by providing consumers with more time to review closing disclosures and transform the way consumers relate to the overwhelming process of closing on a home. Read More.

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    CBAI LEGAL: Authorized Insurance and Public Deposits

    Interpretive Letters of the Illinois Division of Banking describe authorized and unauthorized insurance policy holdings and securing public funds in excess of FDIC deposit insurance coverage. See Most Recent CBAI LEGAL.

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    Save the Date for CBAI’s 44th Annual Convention in St. Louis!

    Mark your calendar today for CBAI’s 44th Annual Convention and Expo, scheduled for September 27-29, 2018, at the Hyatt Regency at the Arch in St. Louis, MO. More information will be available soon. Highlights from the 43rd Annual Convention and Expo held in Springfield are on the website now, including pictures of all main events. Don’t forget, all convention handout materials from the 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.” An e-mail was sent to all convention registrants with the login information. See CBAI's 43rd Annual Convention Highlights. See Convention Speaker Materials.

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    It’s Renewal Time for the Community Bankers for Compliance Program!

    Now more than ever the community bank is faced with a bewildering array of ever-changing regulations. While all banks strive to comply, the regulatory requirements can seem to be overwhelming. Most community banks do not have the time or money to build elaborate compliance systems. In response to these facts, CBAI has teamed up with Young & Associates of Kent, OH to offer The Community Bankers for Compliance (CBC) program. Now in its 29th year, this program provides you a cost-effective approach to obtaining up-to-date information concerning bank regulations and practical techniques for maintaining an effective compliance program. The Community Bankers for Compliance Program reduces the risk of regulatory action by reducing compliance errors, since your employees have a better understanding of regulatory requirements, and saves you time and money because the experts at Young & Associates translate each regulation into understandable language, developing model policies, training instruments, and audit procedures for you. The first quarter of the CBC program, entitled “The Fifth Bank Secrecy Act Pillar: Requirements and Implementation and Regulation CC Updates,” is being offered October 31 & November 1 in Springfield and Lisle, respectively. Renew Now!

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    ACH: Stay Informed and In Compliance Scheduled for October

    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 2016 – 2018 are also explained in a practical, easy-to-understand approach. Nicole Meinhardt, CPA, AAP and senior manager at Wipfli LLP, Sterling, IL, leads this seminar.

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    CFO Conference Set for November 2

    This conference not only benefits chief financial officers, it is also geared toward presidents, CEOs, and anyone else who is involved in controlling expenses and increasing profitability for their community banks. Topics and speakers include Managing Interest Rate Risk for Uncertain Outcomes with Lester Murray, senior vice president at THE BAKER GROUP, Oklahoma City, OK; Accounting's Impact on the Bottom Line with Fred Markwell, partner, and Leslie Wilson, partner, of BKD,LLP, St. Louis, MO; 2017 State of Cybersecurity with Brendan McGowan, chief technology officer at Safe Systems, Inc., Alpharetta, GA; The Real Price of Risk in Lending with Robert Ashbaugh, senior risk-management consultant at Sageworks, Raleigh, NC; and CECL is Coming - What Should We Do? with Brett Schwantes, senior manager at Wipfli, LLP, Wausau, WI.

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