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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                     October 16, 2013 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • ACTION ALERT: Sign Petition and Send Letter Opposing Harmful FASB Proposal
  • Career Development Division Fall Meeting Next Week in Peoria!
  • CSBS and Federal Reserve System Release Community-Banking Report
  • Highlights of Community Banking Research Conference
  • Powell: Regs Directly Affecting Community Banks Nearing an End
  • IDFPR's Division of Banking Announces $2.4 Million Fee Rebate
  • Suit Revives Goldman Sachs Conflict-of-Interest Issue
  • GAO Study on Mega Bank Subsidies Could Influence TBTF Debate
  • Bi-partisan Support for the CLEAR Act Grows!
  • How Yellen Will Shape Fed's Banking Regulation
  • SAVE THE DATE for the 32nd Annual CBAI Call on Washington
  • Baker Market Update
  • FFIEC Warns Banks: Microsoft Ending Support for Windows XP
  • FDIC Says No to Civil Money Penalty Insurance For Bank Directors
  • Go Paperless and Maximize Your Board Communications
  • ICBA Mortgage Extends Relationship with Mortgage Technology Leader
  • Mobile Check Deposits, Bill Payments Spike in August
  • Rebuilding America With Community Banks
  • ACH: “Stay Informed and In Compliance” to be Held October 24, 29, and November 6
  • Developing a Performance-Based Culture Scheduled for October 31
  • Women in Community Banking Conference Set for November 19
  • Save the Date for CBAI’s 40th Annual Convention!


  • ACTION ALERT: Sign Petition and Send Letter Opposing Harmful FASB Proposal

    CBAI is calling on Illinois community bankers to sign a petition and send a letter opposing a harmful Financial Accounting Standards Board (FASB) proposal that would implement a single approach for recognizing credit losses on loans, securities and trade receivables. The proposal would use an “expected loss” model, which would require banks to estimate expected credit losses and recognize the net present value of those losses at origination. It would replace the “incurred loss” model.

    FASB’s proposal would require complex modeling and compel banks to recognize losses much earlier than necessary in the credit loss cycle, penalizing community banks for investing in loans and securities. The Office of the Comptroller of the Currency estimates that loan loss reserves on average will increase by 30% to 50% with adoption of the proposal.

    The petition urges FASB to re-propose a simpler and more straightforward proposal that would not harm community banks. Community bankers can go online to sign the petition, send in a customizable comment letter to FASB, and access a summary and frequently asked questions on the proposal.
    Sign the Petition Today!

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    Career Development Division Fall Meeting Next Week in Peoria!

    The CDD
    Fall Meeting on October 21-22 in Peoria 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 Update by CBAI's Kraig Lounsberry. Elaine Hand presents her session entitled, “Lead Out Loud – Learing to Lead Within the Comforts of Your Personality Style.” Following the Business Meeting Luncheon, the afternoon agenda features breakout sessions: “Interest-Rate Risk, Asset/Liability Management;” “Better, Smarter Sales Calls;” “Resolving An Unexpected Compliance Emergency;” “How to Prevent & Report Elder Abuse;” “Rainmaker Prospecting;” and “Preparing Today for Community Banking Tomorrow.” Next, the CDD Fall Meeting features a second Networking Session to allow you to participate in more roundtable discussions on a variety of topics. The Fall Meeting concludes with the continuation of the general session with Elaine Hand. In addition to the educational offerings, this year's meeting includes a fun and great networking opportunity at the hotel the evening of October 21st, where the entertainment for the evening is, “Coole 2 Duel,” a dueling-piano show.

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    CSBS and Federal Reserve System Release Community-Banking Report

    The report reveals findings from a comprehensive series of town halls hosted by state-bank supervisors this past spring and summer and represents the direct views of community bankers from states experiencing different economic and fiscal realities.
    Read More.

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    Highlights of Community Banking Research Conference

    The Research Conference exceeded expectations, according to John Ryan, President and CEO of the Conference of State Bank Supervisors (CSBS), a sponsor of the conference. He provided his thoughts on the event in an interview last week.
    Read CSBS Examiner Interview.

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    Powell: Regs Directly Affecting Community Banks Nearing an End

    Federal Reserve Governor Jerome H. Powell spoke recently at a community banking research conference at the St. Louis Fed sponsored by the Federal Reserve System and the Conference of State Bank Supervisors. Powell noted that community bankers, who played no part in causing the Wall Street financial crisis, have been forced to fight to ensure that they are not swept up in a torrent of costly new regulations. He said the Federal Reserve will continue to be alert to the possible unintended consequences of its regulatory policies.

    Powell also said research presented at the conference provided ample evidence of community banks’ continued viability and importance. He provided a summary of various papers presented at the conference on community bank profitability, consolidation, heterogeneity and relationship lending and on the local economic impact of community bank failures and acquisitions.
    See BankNews Article.

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    IDFPR's Division of Banking Announces $2.4 Million Fee Rebate

    The Illinois Department of Financial & Professional Regulation, Division of Banking, recently announced that it has issued $2.4 million in exam fee rebates to more than 350 Illinois state-chartered banks. The rebate appeared as a credit on the banks' September 30, 2013, assessment invoice.

      The rebate was calculated on a pro-rated basis based on the amount of fees each bank paid during the year. According to the department, a typical community bank, with $100 million in assets and without a trust department, can expect to receive a rebate in an amount equal to $2,597.63. A $200 million bank should receive a $4,215.31 credit.

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    Suit Revives Goldman Sachs Conflict-of-Interest Issue

    A former Federal Reserve Bank of New York examiner recently filed a lawsuit against her former employer based on the claim that she was wrongfully fired for refusing to change her findings that Goldman Sachs lacked a conflict-of-interest policy. Goldman has been buffeted by accusations that it has put its own interests ahead of its clients.

    The examiner’s findings resulted in an FRB New York compliance risk team approving a downgrade of Goldman’s annual rating which would have likely resulted in costly enforcement actions and penalties. Also at issue is the potentially overt influence that the mega banks can exercise over regulators.
    See DealBook Article.

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    GAO Study on Mega Bank Subsidies Could Influence TBTF Debate

    The Government Accountability Office (GAO) is now assessing the extent to which mega banks receive advantages because they have implicit backing from the government. According to Simon Johnson, a noted economics professor at MIT, a strong GAO report could influence policy, although he indicated that big bank lobbyists are working to diminish the findings.

    Based on numerous reputable research reports, CBAI believes that the mega banks not only received massive government support to rescue them from failure, they also continue to benefit from an implicit government backing by virtue of their size. CBAI also believes that Dodd-Frank has not resolved, and will not resolve, the grave threat of too-big-to-fail and too-big-to-jail.
    See Economix Article.

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    Bi-partisan Support for the CLEAR Act Grows!

    Bi-partisan support is growing for the Community Lending Enhancement and Regulatory Relief Act (CLEAR Relief Act of 2013, H.R. 1750) with Illinois Congressmen Bill Enyart (D-13th) and Aaron Schock (R-18th) recently cosponsoring this important legislation. Currently there are 65 cosponsors including Illinois Congressmen Rodney Davis (R-13th) and Mike Quigley (D-5th).

    CBAI's govermental relations staff and CBAI bankers are working to build bi-partisan support for this measure. Community banks face a regulatory burden that is completely out of proportion to their size, business model, and risks they pose to the financial system. The CLEAR Act would provide much-needed relief.
    Read More.

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    How Yellen Will Shape Fed's Banking Regulation

    Janet Yellen is expected to take a more hands-on role in bank regulation than her predecessors if she is confirmed to be the next chairman of the Federal Reserve Board.
    Read More.

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    SAVE THE DATE for the 32nd Annual CBAI Call on Washington
    April 29- May 2, 2014 -- Omni Shoreham Hotel, Washington, D.C.

    Call on Washington is CBAI’s annual lobbying trip to our Nation’s Capital. Now in its 32nd year, community bankers from across Illinois will be traveling to Washington, D.C. to express their opinions on important issues to their Members of Congress and federal regulators.

    YOUR VOICE CAN MAKE A DIFFERENCE! Now is the time to get involved. Again this year CBAI’s Call on Washington will be held in conjunction with the ICBA Washington Policy Summit. Along with CBAI-coordinated events, the entire delegation will attend ICBA’s meetings and events.

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    Baker Market Update

    Americans should have learned by now that the current version of governmental shutdown is not a binary condition. According to the Congressional Budget Office, 83% of the government’s activities are still active; yet we are being told without pause that the government has “shut down”.
    See Baker Market Update.

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    FFIEC Warns Banks: Microsoft Ending Support for Windows XP

    Microsoft will discontinue extended support for XP effective April 8, 2014. After this date, Microsoft will no longer provide regular security patches, technical assistance, or support for XP. Financial institutions, TSPs, and other third parties that use XP in personal computers, servers, and purpose-built devices such as automated teller machines (ATM), or that are dependent on applications that require use of XP could be exposed to increased operational risk.”

    The FFIEC agencies expect financial institutions and their technology service providers to identify, assess, and manage the potential operational risks associated with the discontinuation of XP support to ensure that safety and soundness and the ability to deliver products and services are not compromised.
    See Statement.

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    FDIC Says No to Civil Money Penalty Insurance For Bank Directors

    In an unusual step, the FDIC has weighed-in on financial institutions’ purchase of D&O insurance. The FDIC’s October 10, 2013 Financial Institutions Letter, which includes an “Advisory Statement on Director and Officer Liability Insurance Policies, Exclusions and Indemnification for Civil Money Penalties” (
    here), urges bank directors and officers to be wary of the addition of policy exclusions to their D&O insurance policies and also reminds bank officials that the bank’s purchase of insurance indemnifying against civil money penalties is prohibited. Read FDIC Letter.

    For more information regarding your bank’s D&O coverage options, please contact Patti Tobin at CBIS Powered by Nicoud, at 217-414-4485, or via email at patti.tobin@mycbis.com.

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    Go Paperless and Maximize Your Board Communications

    Communicating with your Board of Directors is often a cumbersome and daunting task, particularly when making sure you are being compliant with all of the regulations surrounding board communications. Learn how hundreds of Community Bankers have gone paperless and improved their communications with their Board of Directors at the same time.
    Learn More.

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    ICBA Mortgage Extends Relationship with Mortgage Technology Leader

    ICBA Mortgage recently extended its agreement with D+H Mortgagebot (also a CBAI associate member), ensuring that community banks will continue to enjoy affordable access to leading mortgage origination technology.

    ICBA members that join the ICBA Mortgage/D+H Mortgagebot program receive discounted start up costs and are eligible for preferred pricing.
    Read News Release.

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    Mobile Check Deposits, Bill Payments Spike in August

    Consumers stayed glued to their smartphones and tablets in August, taking care of financial chores on their devices at a steadily increasing rate.
    See American Banker Article.

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    Rebuilding America With Community Banks

    New CBAI associate member Holman Capital has written an article about the importance of community banks to our nation’s economy.

    “America needs to make a concerted effort to create jobs within each state. In order to achieve job creation there must be a demand. America’s infrastructure is aging and tax dollars and political will are unable to keep pace with demand to rebuild water and sewer pipelines, construct new facilities, upgrade technology platforms, and modernize schools.

    “Community banks are the key to harnessing capital to focus on the needs of their respective states.”
    See Article.

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    ACH: “Stay Informed and In Compliance” to be Held 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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    Developing a Performance-Based Culture Scheduled for October 31

    This
    program is designed to provide a community bank with the outline and details needed to develop and implement their own performance culture change. Too often banks focus on implementing a sales-and-service culture and many employees feel that they don’t have “customers” because they are not on the front line. The program addresses the four key areas of a performance culture: people needs; leadership and coaching; training and skill development, and support. This workshop provides checklists, job aids, case studies, examples, and “real-world” situations. Topics include understanding the need and value of a performance-based culture; discussing the myths of a sales and service culture; completing a self-assessment of your bank’s current culture; selling a performance culture as on-going versus “an event;” reviewing the key elements of a performance culture; and developing and implementing a performance-culture plan. Leading this seminar is Dianne Barton, founder and president of Performance Solutions, Inc., a training and consulting company that specializes in providing solutions to the key challenges facing banks today in attracting and building relationships with their customers.

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    Women in Community Banking Conference Set 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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    Save the Date for CBAI’s 40th Annual Convention!

    Mark your calendar today for CBAI’s 40th Annual Convention and Expo, scheduled for September 18-20, 2014, at the Chicago Marriott Downtown. More information will be available soon. Highlights from the 39th Annual Convention and Expo held in Springfield includes pictures of all main events. The Members Only section contains all convention handout materials from the 24 break-out sessions. Please refer to the yellow card in your convention folder for the login information or use your CBAI Members Only user id and password.

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