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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    October 14, 2015

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • State Associations Rally Congress to Oppose Fed Dividend Cut
  • Bernanke Confirms Reality of Too-Big-To-Jail
  • Warren: Time to Break Up Big Banks and Restore Glass-Steagall
  • Wubben and Estes Elected by Acclamation as ICBA State Delegates
  • CBAI Urges Senator Kirk to Support Federal Reserve Board Nominations
  • TRID Goes Live and CFPB Promises No Punitive Enforcement
  • Big Growth in Small Personal Loans
  • FASB Now Expects Final CECL Rule in 2016
  • Mark Your Calendar for CBAI’s 42nd Annual Convention in Kansas City!
  • How Do You Want to Spend Your Time?
  • Student Scholarships: NOW Is the Time to Begin!
  • Officer Compensation: Are You Budgeting Now for 2016?
  • Midwest Office October Specials: Executive Gifts with Bank Logo
  • Revised Loan Estimate: Changed Circumstances and other Triggering Events
  • CBIS Nicoud Insurance Services: Cadillac Tax on the Horizon
  • Investment News From THE BAKER GROUP
  • CBAI LEGAL: Rules Vary for Local Government Entity Borrowing
  • CDD Fall Meeting Scheduled for October 19-20
  • Security Officer Training Scheduled for October 21
  • Home Mortgage Disclosure Act Seminar Scheduled for October 21 & 22
  • It’s Renewal Time for the Community Bankers for Compliance Program!

  • State Associations Rally Congress to Oppose Fed Dividend Cut

    A coalition of 43 state community banking associations called on Congress to oppose a legislative proposal that would impose a 75 percent cut to dividends paid on Federal Reserve Bank stock. In a joint letter to lawmakers, the coalition noted that the reduction amounts to a backdoor tax increase that would disproportionately affect community banks and their customers.

    The CBAI and ICBA-opposed provision would reduce from 6 percent to 1.5 percent the dividend paid on stock that banks are required to hold as state-chartered Federal Reserve members or as national banks. The state letter, which was covered in Politico, is the latest in a months-long CBAI and ICBA effort to block the dividend cut, which lawmakers want to use to fund a highway bill.

    CBAI and ICBA are calling on community bankers to communicate with their congressmen against the provision and to encourage them to sign onto a letter from Reps. Bill Huizenga (R-Mich.) and Bill Foster (D-Ill.) to House leadership raising concerns with the proposal. Read Coalition Letter. Contact Congress Today.

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    Bernanke Confirms Reality of Too-Big-To-Jail

    Former Federal Reserve Board Chairman Ben Bernanke has released a book, The Courage to Act: A Memoir of a Crisis and Its Aftermath, which is about his experiences at the center of the financial crisis. In a broadcast interview regarding the book, Bernanke responded to the question, “Should somebody have gone to jail?” [regarding responsibility for the crisis] by saying unequivocally, “Yes, I think so.” Bernanke went on to explain that the efforts of the Department of Justice have been to indict or threaten to indict financial firms. He also noted that a "financial firm" can't be put in jail. Read More.

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    Warren: Time to Break Up Big Banks and Restore Glass-Steagall

    Last month U.S. Senator Elizabeth Warren (D-Mass.) addressed members of the World Savings Bank Institute (WSBI) on the need to resolve too-big-to-fail and hold executives at big banks accountable. WSBI is an organization that brings together savings and retail banks from about 80 countries.

    During her remarks, Senator Warren stated, “The megabanks helped fuel a housing bubble that ended up costing millions of families their homes, their jobs, and their savings. They turned around and received hundreds of billions of dollars in bailouts from the government. And now they're bigger than ever and back to making record profits. It's almost as if the crisis never happened. Meanwhile, smaller banks got hammered. When things got bad, government officials proved how tough they were by letting small banks them fail. And the ones that survived are left to compete with megabanks that are bigger and more powerful than ever.

    In America, the response to the crisis was to put in place a number of new rules – rules on capital, on leverage, on acceptable kinds of investments. I strongly support these rules: they make the global financial system safer and more resilient. They reduce the chances of another crisis. But the market for financial services is still broken. Too big to fail is alive and well. The whole system is still fundamentally tilted towards the megabanks. And the only way to solve that problem is to make some basic structural changes.”

    The Senator then offered a solution to the problem. “First, we need to end Too Big to Fail once and for all… How? Simple: break up the biggest banks. We should cap the size of the biggest financial institutions, as Congress considered in the aftermath of the financial crisis. And we should adopt a 21st century Glass-Steagall Act that rebuilds the wall between commercial banking and investment banking. If banks want access to government-provided deposit insurance, they should be limited to boring banking… Second, we need to ensure that executives at the big banks are held accountable for wrongdoing.” Read Warren’s Remarks.

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    Wubben and Estes Elected by Acclamation as ICBA State Delegates

    The next ICBA State Delegates representing Illinois will be Bill Wubben of Apple River State Bank (District 1) and Mike Estes of Fisher National Bank (District 2). They were both elected by acclamation given the fact that they were the only candidates in their respective Districts.

    CBAI recommended the election of Messrs. Wubben and Estes who are both former CBAI Chairmen and highly qualified to serve on the ICBA Board of Delegates. They will take office in March of 2016 for three-year terms. The current ICBA State Delegates, Gerry Johnson of Grand Ridge National Bank and Preston Smith of First National Bank in Mattoon, are term-limited and have capably served the Illinois community banking profession on ICBA leadership.

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    CBAI Urges Senator Kirk to Support Federal Reserve Board Nominations

    On October 2, 2015, the Community Bankers Association of Illinois (CBAI) urged Illinois Senator Mark Kirk to support two Federal Reserve Board nominations pending before the Senate Banking Committee and requested that the Committee convene hearings for their consideration at the earliest possible date. The nomination of Allan Landon (former CEO of the Bank of Hawaii) fulfills a new CBAI supported mandate for community bank representation on the Board, and Kathryn Dominguez (University of Michigan Professor of Public Policy and Economics) has impressive experience and knowledge of financial markets and economic policy. These individuals will inform the Board with appropriate input for balanced deliberations, and CBAI urges their swift confirmation. Read CBAI Letter.

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    TRID Goes Live and CFPB Promises No Punitive Enforcement

    Despite CBAI urging for delayed implementation, the new TILA RESPA (TRID) rule took effect on Saturday, October 3, 2015. In several comment letters to the Consumer Financial Protection Bureau (CFPB) CBAI also called for a period of restrained enforcement and liability as vendors and lenders make the complicated transition to the TRID. While these repeated calls did not result in a formal grace period, these efforts none-the-less had a favorable impact on community banks in the implementation of the rule. Read More.

    ICBA has prepared a summary of the TILA-RESPA Integrated Disclosure (TRID) rule, which consolidates mortgage loan disclosures and makes important changes to the closing process. See TRID Summary.

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    Big Growth in Small Personal Loans

    New research from TransUnion has identified another market that has emerged as a potential growth segment: unsecured personal loans. A typical personal loan is a simple instrument with a short duration of five years or less, and amounts rarely exceed $10,000. TransUnion data has found that originations of personal loans have risen at a compound annual rate of 8.4%, and balances by 12.9%, during the period 2010 through 2014. Read TransUnion Article.

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    FASB Now Expects Final CECL Rule in 2016

    The Financial Accounting Standards Board (FASB) now anticipates its final version of the long-debated current expected credit loss (CECL) model will be issued in the first quarter of 2016. A majority of the board is expected to approve the final rule. A published report in September said two members of the FASB would oppose the final version of a proposal first issued in December 2012.

    A recent poll found that more bankers are expecting a 10 to 50 percent increase in their ALLL than ever before. See the Full Poll Results.

    When the FASB releases final guidance on the credit impairment standard, Sageworks, CBSC’s Preferred Provider for ALLL, stress testing and credit analysis software to CBAI member banks, will conduct a panel-style webinar so that industry thought leaders can cover what the standard means for the ALLL calculation, how it will affect institutions and what bankers must do to comply. Sign up to be notified of the webinar time and date and to be automatically registered for it HERE.

    In the meantime, Sageworks will present “The Latest on the FASB’s CECL Model and How to Prepare” at CBAI’s CFO Conference on November 4, 2015, in Springfield. Other topics on the agenda include “Portfolio Management and Interest Rate Risk: What Worries You About Higher Rates?” with Lester Murray, SVP Financial Strategies Group, THE BAKER GROUP, Oklahoma City, OK; “Enterprise Risk Management” with Sara Mikuta and Cheryl Thomas, Wipfli, LLP, Westchester, IL; and “Top 10 Strategic Issues Facing Illinois Community Banks” with Thomas Homberg and Patrick Murphy of Godfrey & Kahn, S.C., Milwaukee, WI. For more information on the CFO Conference or to register, please Click Here.

    For other resources on preparing for the CECL model, visit, a one-stop resource for information and advice on preparing, managing and strategically planning for the ALLL calculation.

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    Mark Your Calendar for CBAI’s 42nd Annual Convention in Kansas City!

    Mark your calendar! You won't want to miss CBAI's 42nd Annual Convention and Exposition. Scheduled for September 15-17, 2016, it will be held at Marriott Downtown in Kansas City, MO. Please Click Here to add a reminder to your Outlook calendar for CBAI's showcase event! Then read the upcoming issues of Banknotes, our bi-monthly magazine, and the various publications for complete details and registration forms. The 2016 convention features high-quality speakers and educational break-out sessions from which to choose, nearly 100 firms exhibiting the latest in bank products and services; and outstanding social events including the Annual Golf Tournament, the Welcoming Reception and Live and Silent Auctions; and the fabulous Saturday Dinner Dance.

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    How Do You Want to Spend Your Time?

    Have you thought about how you want to spend the 24 hours you are given each day? You save time and get a better result when you hire a firm that has the knowledge and reputation for making businesses their best. When your bank has an issue, or it’s time for upgrades, do you have the time or expertise to analyze the servers, firewalls, data circuits, regulations, policies and all the other components your bank’s network needs to provide the best security, reliability and regulatory compliance? See BankOnIT Blog.

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    Student Scholarships: NOW Is the Time to Begin!
    The CBAI Scholarship Program for 2016 Is Underway

    There is no cost to the bank to participate, and the CBAI Foundation for Community offers 26 scholarships annually for Illinois high-school seniors. All they are required to do is complete a one-page essay about community banking to vie for prizes ranging from $500 to $4,000! Get your local program underway now, as the deadline is in mid-February. Contact Bobbi Watson at 800/736-2224 or today!

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    Officer Compensation: Are You Budgeting Now for 2016?

    The results of the 2015 CBAI Officer Compensation Survey are now available. Cost is $300 to CBAI members that did not participate (members that did participate received the results at no cost). Order your results today! Contact Andrea Cusick at 800/736-2224 or

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    Midwest Office October Specials: Executive Gifts with Bank Logo

    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. See Midwest Office October Specials.

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    Revised Loan Estimate: Changed Circumstances and other Triggering Events

    When issuing a Loan Estimate under the TILA-RESPA Integrated Disclosure (TRID) rule, situations can arise where TRID provides for a limited set of triggering events that warrant issuing a revised Loan Estimate for purposes of re-setting fees and good faith analysis. Read More From Wolters Kluwer Financial Services.

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    CBIS Nicoud Insurance Services: Cadillac Tax on the Horizon

    Community-bank sponsors of group health-care plans have probably heard the term “Cadillac Tax” bandied in the Obama Care context. Many may be unsure of what the so-called provision of the law is precisely, and what its implications are for community banks that have offered the most comprehensive protection possible to employees in the past. That lack of clarity stems from the provision’s uncertainty. As written, the Cadillac Tax is scheduled to be enacted in 2018. See More from CBIS Nicoud.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    With the release last week of September’s FOMC minutes, the policy makers at the Fed look positively homogeneous compared to, say, the House of Representatives. But, “like-mindedness” is relative and attentive observers know that the individual members of the keepers-of-monetary-policy do not act, think, or talk, in lockstep. See Baker Market Update.

    MBS Market Strategies
    October 2015 - Prepayment Summary

    Speeds were modestly down for all three agencies in September, with all but aggregate multi-issuer Ginnies experiencing slower prepayments. Both Fannie and Freddie 30yrs fell to 12.6 CPR while 15yrs were down about half a point to 10.2 and 10.3 respectively. See MBS Market Strategies.

    Baker Economic Brief
    September Jobs Report - Ugh!

    The US economy created only 142K jobs in September and the two prior months’ revisions totaled -59K. The headline number was far below the 201K consensus estimate. The six-month moving average of monthly job creation is now below 200K, the lowest level since early last year. See Baker Economic Brief.

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    CBAI LEGAL: Rules Vary for Local Government Entity Borrowing

    In addition to the authority for local political units of government to obtaining financing and incur debt through bond issuances, Illinois law allows conventional borrowing from banks through the execution of promissory notes; however, there is no uniform law that governs such borrowing by different types of governmental units. See Most Recent CBAI LEGAL.

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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, and 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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    Security Officer Training Scheduled for October 21

    The program is fast-paced, interactive, and provides new information to address familiar perils in more effective ways. Join us to discover issues pertaining to the responsibilities of the security officer, not only by regulation, but by the ever-changing world in which we operate. This Program provides the opportunity to discover the top crime stories of the past year and how they impact your financial institution; learn about new approaches to camera, alarm, and robbery prevention practices; implement robbery-risk procedures based on risk analysis samples provided in the workshop; understand the importance of destroying the inefficient practices in your workplace; recognize the opportunities to address other perils facing your institution with robust physical security awareness; uncover fraud prevention methods you may have and are not using that are part of physical security programs. The agenda also covers preparing for civil disturbances, including a review of insurance coverages and contingency plans related to these types of events. Jim Rechel, president of The Rechel Group, Inc., a risk-consulting firm headquartered in Cincinnati, Ohio, leads this workshop.

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    Home Mortgage Disclosure Act Seminar Scheduled for October 21 & 22

    While the Home Mortgage Disclosure Act (HMDA) has existed for many years, recent regulatory activity has highlighted the potential for errors. In addition, it is expected that sometime in the near future, around 14 new data fields will be required to be added to the HMDA Loan Applicant Register (LAR), as well as other changes to the regulation. Bankers, now more than ever, have to understand the HMDA rules. This seminar is designed around the HMDA rules as they exist at the time of the seminar, and discusses the potential changes. Included in this seminar is a discussion of several case studies, some of which will not have a clear answer – and the group will have to determine how to complete the HMDA LAR for these situations. The primary focus will be to discuss the requirements as they exist at the time of the seminar and to discuss the HMDA challenges bankers are facing as of the date of the seminar. Anyone who is involved in HMDA reporting or fair-lending compliance will find this seminar invaluable. Leading this seminar is Adam Witmer, CRCM, compliance consultant with Young & Associates, Inc., serving client banks in the Midwest.

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

    Now beginning its 27th year, the Community Bankers for Compliance (CBC) Program provides a cost-effective approach to obtaining up-to-date information concerning bank regulations and practical techniques for maintaining an effective compliance program. The CBC program reduces the risk of regulatory action by reducing compliance errors, since your employees have a better understanding of regulatory requirements. Additionally, the compliance program has passed the test of regulatory scrutiny. The regulators know and recognize the program for its comprehensiveness and practicality. The nationally recognized experts at Young & Associates spend nearly 300 hours translating each regulation into understandable language, developing model policies, training instruments, and audit procedures. This is time your staff doesn't have to spend and, thereby, creates bottom-line savings to your bank. Young & Associates has five full-time consultants participating in the CBC program. All have front-line community-banking experience. They know how to tap this practical experience to make every seminar and publication as helpful as possible. The CBC program was designed to deliver a cost-effective service to community banks.

    Again this year, CBAI is offering several enhancement options to the CBC program, which are highlighted on the CBC renewal brochure insert. You can choose to register for the basic CBC program or you can choose to add on additional tiered enhancement options.

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    THROUGH 12/15/2015






    Finer Points Blog

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