Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois Community Bankers Association of Illinois
 
     A Bi-Weekly News Bulletin for CBAI Members              October 20, 2010 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • FDIC Chairman Cites Community Bank Advantages of Dodd-Frank
  • CBAI's Schroeder Visits with Illinois Congressional Delegation
  • FHLBC Voting Deadline: Only Two Weeks Remain
  • FDIC Proposes Long-Term DIF-Management Plan
  • FDIC Board Proposes Rules on Temporary Unlimited Deposit Insurance Coverage for Noninterest- Bearing Transaction Accounts
  • Fed Expected to Continue “Quantitative Easing”
  • Chicago Fed Creates Midwest Economic Index
  • BAKER Market Update
  • Architecture Billings Index Shows First Expansion Since January 2008
  • CDD Fall Meeting Scheduled for October 27th in Champaign
  • FDIC to Host Last Free Deposit Seminar for Officers and Directors
  • CBA of Ohio Partners with SHAZAM EFT Network
  • Fraud-Induced Cleveland CU Failure To Cost NCUA $170 Million
  • A Proven Source For High Quality Earning Assets
  • CBAI Member Devon Bank Hosts International Delegation
  • Enroll Now for the Community Banker for Compliance Program
  • Community Bank Attorney Seminar Scheduled for November 5th
  • Women in Community Banking Conference Set for November 17th
  • Save the Date for CBAI’s 37th Annual Convention & Expo!


  • FDIC Chairman Cites Community Bank Advantages of Dodd-Frank

    In a speech before the Risk Management Association in Baltimore, MD on October 18, 2010, Chairman Bair stated that “ (Regulatory) reform should help community banks by imposing greater regulation on the shadow banking sector, where some of the riskiest mortgage lending practices took place.”

    She added “I know there are concerns that the new Consumer Financial Protection Bureau will impose an additional level of regulation on banks and thrifts and interfere with their ability to earn a fair rate of return in consumer and mortgage lending. But I see it differently. I think the CFPB provides a golden opportunity to simplify consumer rules, making them work better for consumers while making them less costly for community banks to comply with. It provides a golden opportunity to apply more rigorous rules and examinations on non-bank providers, while rewarding good actors who are trying to do the right thing by their customers.” She concluded “… Dodd-Frank seems to skew the competitive playing field in favor of smaller banks in that it protects banks with less than ten billion dollars in assets from many of its provisions.”
    Read More.

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    CBAI's Schroeder Visits with Illinois Congressional Delegation

    CBAI's David Schroeder recently visited Washington D.C. to meet with staff and members of the Illinois congressional delegation. Schroeder’s trip was timed to discuss the final push to approve the Small Business Lending Fund which is part of the Small Business Jobs Act, the future of the housing GSE's (Fannie Mae and Freddie Mac), and CBAI's strong opposition to FASB’s mark-to-market proposal.
    More.

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    FHLBC Voting Deadline: Only Two Weeks Remain

    Ballots to elect Roger Lehmann to the board of the Federal Home Loan Bank of Chicago must be received by the bank not later than November 5. If you have not already done so, please execute your ballot, vote only for Roger, and return it to the FHLBC now. Ballots will be tabulated beginning November 8 and the final results will be announced on November 15.
    More.

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    FDIC Proposes Long-Term DIF-Management Plan

    The FDIC board of directors recently proposed a long-range Deposit Insurance Fund management approach that includes a plan to restore the DIF. The board adopted a notice of proposed rulemaking on its long-term management plan that calls for a lower assessment rate to take effect when the reserve ratio equals 1.15 percent. Progressively lower assessment rate schedules would take effect in lieu of dividends when the reserve ratio reaches 2 percent and 2.5 percent. The DIF reserve ratio also must be at least 2 percent before a period of large fund losses, and average assessment rates over time must be approximately 8.5 basis points. The board said the goal is maintaining a positive fund balance even during periods of large fund losses and steady, predictable assessment rates throughout economic and credit cycles.

    The board also adopted a DIF restoration plan to ensure that the fund reserve ratio reaches 1.35 percent by Sept. 30, 2020, as required by the Wall Street Reform Act. The DIF restoration plan would forgo the 3-basis-point increase in assessment rates scheduled for Jan. 1, 2011, and maintain the current rate schedule largely because projected DIF losses for 2010-2014 have dropped from $60 billion to $52 billion. The plan also calls for a new rulemaking next year on how to offset the effect of the Wall Street Reform Act requirement on community banks with less than $10 billion in assets.

    Next month, the FDIC is expected to issue proposed regulations implementing the assessment-base change mandated by the Wall Street Reform Act. These new regulations will include proposed changes to the assessment rates necessitated by the change in the assessment base and, according to the FDIC, will ensure that the revenue collected under the new assessment system will approximately equal that under the existing system.
    Read More.

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    FDIC Board Proposes Rules on Temporary Unlimited Deposit Insurance Coverage for Noninterest- Bearing Transaction Accounts

    On September 27, 2010, the Federal Deposit Insurance Corporation (FDIC) Board of Directors approved the issuance of a proposed rule to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act to provide depositors at all FDIC-insured institutions unlimited deposit insurance coverage on noninterest-bearing transaction accounts beginning December 31, 2010 through December 31, 2012.

    Unlike the FDIC's voluntary Transaction Account Guarantee ("TAG") Program, which will expire at the end of this year, the Dodd-Frank provision will apply at all FDIC-insured institutions and it will cover only traditional checking accounts that do not pay interest. The proposed rule emphasizes that, starting January 1, 2011, low-interest consumer checking accounts and Interest on Lawyer Trust Accounts (IOLTAs) (currently protected under the TAG Program) will no longer be eligible for an unlimited guarantee.
    More.

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    Fed Expected to Continue “Quantitative Easing”

    When the Fed’s FOMC meets on November 3rd, it will likely announce its next move to boost the faltering economy. Chairman Bernanke has indicated that the central bank will continue to buy long-term bonds to drive down rates. The controversial process called “quantitative easing” involves the Fed creating money to acquire long-term bonds it doesn’t directly control, favoring large corporate borrowers and homeowners.
    See TIME Article.

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    Chicago Fed Creates Midwest Economic Index

    The Federal Reserve Bank of Chicago has developed a weighted average of measures of growth in economic activity in the five Midwestern states that comprise the Seventh District. The Midwest Economic Index found that the Midwestern business cycles tend to resemble national business cycles to a high degree. During the recent recovery period, all five states in the District have made positive contributions to the MEI.
    See Chicago Fed Letter.

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    BAKER Market Update

    At the Boston Fed conference, Fed Chairman Ben Bernanke plainly indicated that the Fed is ready to provide additional monetary stimulus toward of the persistent low level of inflation and high level of unemployment.
    More.

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    Architecture Billings Index Shows First Expansion Since January 2008

    Reuters
    reports that the American Institute of Architects’ Architecture Billings Index increased to 50.4 in September from 48.2 in August. Any reading above 50 indicates expansion. The index is a leading indicator for new Commercial Real Estate (CRE) investment. More.

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    CDD Fall Meeting Scheduled for October 27th in Champaign

    CDD’s Fall Meeting is scheduled for October 27 at the I Hotel Conference Center in Champaign. The 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 with a Legislative Update by CBAI's Kraig Lounsberry and David Schroeder. Laurie Guest presents her session entitled, “I Want To See the Jalapeno Coming: A Hot Recipe to Attract New Customers.” Following the Business Meeting Luncheon, the afternoon agenda features breakout sessions on: “Emerging Trends in the Payment Industry;” “Loan Review: The Best Time for Best Practices Is Now;” “Solving People and Business Problems;” “Just When You Thought It Couldn't Get Any Worse;” “You Better Cross-Sell Like Hell!;” and “Best Practices for Foreclosures and Collection” The Fall Meeting concludes with a general session by Laurie Guest entitled, “Are We Having Fun Yet? How To Shake Your Attitude in the Workplace.”

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    FDIC to Host Last Free Deposit Seminar for Officers and Directors

    The FDIC will host the final installment in a series of six free telephone seminars on deposit insurance coverage for bank representatives. The October 26, 2010, session will provide a basic overview of deposit insurance coverage, while the November 2, 2010, session will focus on advanced deposit insurance coverage issues. The FDIC believes that these seminars provide a unique opportunity for bank employees to receive training about federal deposit insurance coverage from FDIC subject matter experts.
    Click here for more information and to register.

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    CBA of Ohio Partners with SHAZAM EFT Network

    The Community Bankers Association of Ohio (CBAO) announced a partnership with SHAZAM as its preferred electronic funds transfer (EFT) network. The CBAO joins
    fourteen bank trade associations nationwide, including CBAI, that exclusively recommend SHAZAM for EFT services. More.

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    Fraud-Induced Cleveland CU Failure To Cost NCUA $170 Million

    The NCUA reported today that May’s failure of St. Paul Croatian FCU was caused by fraud and will cost the National CU Share Insurance Fund as much as $170 million in losses, one of the biggest losses ever for a non-corporate credit union.

    A Material Loss Review released this morning by NCUA’s Office of the Inspector General on the failure of the credit union for the area’s Croatian-American population concluded that while the credit union had reported as recently as December that most of its $238 million in loans were secured by shares (deposits), most of them were not secured by shares and “a number of them were allegedly fraudulent.” The CEO of the credit union, said the Inspector General, tried to cover up the scheme by manipulating the credit union’s books.

    Law enforcement authorities are currently investigating the alleged fraud, sources revealed to the Credit Union Journal last week. NCUA liquidated St. Paul Croatian FCU on May 1, just days after taking the credit union, which claimed some 13% capital as of March 31, under conservatorship. The quickness in which NCUA liquidated a credit union it had just taken over was unusual.

    The collapse of St. Paul’s Croatian came weeks before the failure of a Canadian credit union serving Toronto’s Croatian immigrant population that authorities attributed to a real estate scheme known as “the Oklahomas” for its origin. The fraud cost members of the Croatian CU some $9 million. Under the Oklahomas scheme four individuals working through the credit union were able to obtain fraudulent mortgages on undeveloped parcels of land, located in rural Ontario, according to charges against the four.

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    A Proven Source For High Quality Earning Assets

    Triad Financial, a CBSC Preferred Provider, delivers loans earning nearly 7% interest, low delinquency, and no losses! This bank regulator-examined company is a proven source for high quality loans. For more information,
    click here.

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    CBAI Member Devon Bank Hosts International Delegation

    Devon Bank of Chicago hosted a group of 20 diplomats, government and business officials, academics and media from 19 countries who visited the community bank to learn about how the economic crisis has affected the U.S. banking system. The visitors, from Albania to Uganda, were on a State Department–sponsored tour of several cities. Devon Bank leaders discussed the role of community banks in the economy and the current examination environment.

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    Enroll Now for the Community Banker for Compliance Program

    Now more than ever community banks are faced with a bewildering array of ever-changing regulations. While all banks strive to be in compliance, the regulatory requirements can be daunting. Most community banks do not have the time or money to build elaborate compliance systems. In response, CBAI has teamed up with Young & Associates of Kent, Ohio to offer
    “The Community Bankers for Compliance” (CBC) program. Now beginning its twenty-second year, this program provides a cost-effective approach to obtaining up-to-date information concerning bank regulations and practical techniques for maintaining an effective compliance program. Included in this program are four quarterly meetings; the first quarterly meeting is entitled, “Dodd-Frank: Its Impact on Banks and Preparing for a CRA Examination.”

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    Community Bank Attorney Seminar Scheduled for November 5th

    To help community bank attorneys obtain the latest information regarding the myriad of legislative, legal, and regulatory mandates facing community banks, as well as to meet the Supreme Court of Illinois-ordered requirements for Minimum Continuing Legal Education (MCLE), CBAI has developed this comprehensive one-day education session entitled,
    “Seminar for the Community Bank Attorney.” This seminar utilizes the expertise of several attorneys who specialize in banking law and related topics. CBAI has applied for 5.5 hours of MCLE credit. Any attorney who sits on a community bank board of directors, acts as legal counsel to a community bank, or has an interest in these topics would benefit from attending. Topics and speakers include “Recent State Legislation and Case Law Affecting Financial Institutions” with Jerry Cavanaugh, CBAI, Springfield, IL; “365/360 Interest Calculations, Claims, Defenses, and Strategy” with Edward Halper, Shefsky & Froelich Ltd., Chicago, IL; “Dodd Frank Regulatory Reform – An Overview” with Ted Dreyer, Wolters Kluwer Financial Services, St. Cloud, MN; “Avoiding Aider and Abetter Conspiracy Liability” with David Helms of Lewis, Rice & Fingersh, St. Louis, MO; “Hot Issues in Employment Law” with Scot Hinshaw of Vedder Price, P.C., Chicago, IL; and “Dealing with Bank Examiners and Regulators” with Harvey Stephens of Brown Hay & Stephens, LLP, Springfield, IL.

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    Women in Community Banking Conference Set for November 17th

    CBAI’s fourth annual
    “Women in Community Banking Conference” is scheduled for November 16-17, 2010, at the Crowne Plaza in Springfield. It begins with an evening social on Tuesday, November 16, and a full-day conference is scheduled for Wednesday, November 17. CBAI’s Women in Community Banking Committee has shaped this agenda around the top concerns facing women professionals, as well as pertinent banking issues for community banks.

    Topics covered include “Real Women Have Chipped Nails” and “Upside: How To Zig when Life Zags” with Allison Blankenship, CEO of Precision Speaking, Inc., Birmingham, AL; “Dealing with the Cancerous Employee: When Ineffectiveness Is Accepted – Not Terminated” with Mike Lehr, Young & Associates, Inc., Kent, OH; “The Federal Financial Reform Bill: What It Means for Community Banks,” with Lorraine Buerger, Schiff Hardin LLP, Chicago, IL; “Strategic Communication Planning” with Rosanne Pastorek-Belczak of Chicago; and a “CBAI Update” with CBAI Chairman Michael Estes of Fisher, IL.

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    Save the Date for CBAI’s 37th Annual Convention & Expo!

    CBAI is pleased to announce that the 37th Annual Convention & Expo will be held at the Hyatt Regency Milwaukee and Frontier Airlines Center Hotel in Milwaukee, WI, on September 22-24, 2011. Mark your calendar today for what is sure to be another great convention with expert speakers, hot topics, dozens of exhibitors, multiple networking opportunities with your peers, and great fun! More information will be available soon.

    For highlights of the 2010 convention in Louisville, KY, please
    click here.

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