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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    October 26, 2016

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • CBAI Urges Regulators to Provide Additional Call Report Regulatory Relief
  • NCUA Moving Ahead on Field-of-Membership Rule
  • Backdoor Estate Tax Increase Threatens Family-Owned Banks
  • Save the Date! CBAI’s 35th Annual Call on Washington
  • CFPB: Rehabed Student Borrowers Likely to Re-Default
  • Investment News From THE BAKER GROUP
  • Rural Economy Continues Suffering from Price Declines
  • USDA Launches Streamlined Guaranteed Loans
  • IDFPR Director Makes Case Against a Federal Fintech Charter
  • Midwest Office Offers October Custom Calendar Promotion
  • Take Advantage of Member-only Discounts on Dell Products
  • What Baseball Can Teach Banking About Data and Analytics
  • HMDA Resources: Exclusive Offer for CBAI Members
  • 10 Ways Banking Will Be Different in 2020
  • CBAI LEGAL: Mortgagors Fail to Prove R.E.S.P.A. Damages
  • CBIS Nicoud: Why Community Banks Should Request Certificates of Insurance
  • CDD Fall Meeting Set for November 3-4
  • Auditing BSA Scheduled for November 9
  • Save the Date for the 2017 Community Bankers School!
  • It’s Renewal Time for the Community Bankers for Compliance Program!

  • CBAI Urges Regulators to Provide Additional Call Report Regulatory Relief

    In a detailed comment letter, CBAI urged the regulators to provide additional Call Report regulatory relief by allowing well-capitalized and highly-rated community banks to file short-form versions of the Call Report in the first and third quarters and by increasing the asset threshold for community banks to file a streamlined version of the Call Report from $1 billion to a minimum of $10 billion.

    Joining ICBA and more than 3,000 community bankers who submitted comments to the Federal Financial Institutions Examination Council, CBAI noted in its letter that truly streamlined reports would roll back the paperwork mandates on community banks, while local institutions would continue to submit complete call reports in the second and fourth quarters of each year.

    CBAI, ICBA and community bankers have long advocated relief from the call report, which has grown over the years to more than 80 pages of forms and 670 pages of instructions. Nearly 15,000 community bankers advocated substantial relief in a 2014 petition, and 98 percent of respondents to a 2014 survey said a short-form call report would reduce their regulatory burden.

    CBAI and ICBA thank the community bankers who submitted comment letters and will continue advocating a short-form call report with the regulatory agencies and Congress. Read CBAI Comment Letter. Read ICBA Release.

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    NCUA Moving Ahead on Field-of-Membership Rule

    The National Credit Union Administration board this Thursday is scheduled to consider its proposed rule to significantly expand credit union fields of membership. ICBA has strongly opposed the plan, which would significantly expand the definition of “well-defined local community” that limits the territory community-based credit unions can serve. The new definition would include any congressional district, allowing community credit unions in seven states to serve their entire state.

    The NCUA plan also would quadruple the rural district population limit to 1 million people. Further, it would allow multiple-common-bond credit unions to expand “virtually,” ignoring the requirement that the credit union be within a reasonable proximity to the location of the group as long as members have access to the Internet.

    In its ongoing lawsuit against the NCUA’s commercial lending rule, ICBA said the NCUA’s actions have stretched the Federal Credit Union Act beyond its breaking point. “Basically the NCUA is saying all air-breathing mammals can be members of credit unions,” said ICBA President and CEO Cam Fine earlier this year.

    Responding to community bankers who have asked how they can help ICBA’s legal challenge, ICBA has established the ICBA Credit Union Litigation Fund. The fund allows community bankers to provide voluntary contributions to ICBA’s lawsuit against the NCUA. Read More on ICBA Litigation. Read How to Contribute.

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    Backdoor Estate Tax Increase Threatens Family-Owned Banks

    A recent Treasury-proposed rule would effectively end estate planning techniques commonly used to transfer family-owned businesses (including community banks) from generation to generation.

    The proposed rule under Section 2704 of the federal tax code would disallow valuation discounts for minority stakes or stakes that are not marketable. Loss of these discounts will increase the tax on many estates by over 30 percent, resulting in forced sales and bank consolidation.

    CBAI and ICBA are calling on community banks to urge their congressional representatives to cosponsor H.R. 6100, the Protect Family Farms and Businesses Act, sponsored by Rep. Warren Davidson (R-Ohio), which would prevent the Treasury proposal from taking effect. See H.R. 6100.

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    Your firewall is your first line of defense against hackers. Do you know where you’re vulnerable? With External & Internal Security Assessments from SHAZAM Secure, you will. Our External Security Assessment looks for areas vulnerable to a malicious attacks through your firewall. Our Internal Security Assessment identifies areas within your internal network at risk from a hacker or even an IT-savvy employee. Improve your security measures by choosing SHAZAM Secure to complete your assessments!

    Save the Date! CBAI’s 35th Annual Call on Washington

    Mark your calendars now for CBAI’s next Call on Washington, scheduled for April 30 to May 3, 2017, at the Grand Hyatt Washington. Join with dozens of your community banking counterparts from Illinois and throughout America for this prime opportunity to meet with congressmen and regulators alike. Held in conjunction with the annual ICBA Capital Summit, the 2017 CBAI Call on Washington will be the 35th member visit to our nation’s Capital. Read More.

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    CFPB: Rehabed Student Borrowers Likely to Re-Default

    The Consumer Financial Protection Bureau projected that one in three rehabilitated student loan borrowers could be driven back into default over the next two years. A report from the agency’s Student Loan Ombudsman examines problems with debt collection and servicing that affect the federal programs designed to help defaulted borrowers enter affordable repayment plans. Read CFPB Report.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    While Americans were preoccupied with football season, baseball season, and Presidential election season, the European Central Bank (ECB) was busy trying to keep the fragile economy of the European Union afloat at the recent policy meeting. Disappointed investors had hoped for clarity from ECB President Mario Draghi on the possible extension and maybe expansion of the current bond-buying program. Those investors seem to have forgotten that they're dealing with a Central Banker. See Baker Market Update.

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    Rural Economy Continues Suffering from Price Declines

    The rural economy sank to its lowest point since the Great Recession on continued declines in commodity prices, according to Creighton University. The Rural Mainstreet Index fell to a dismal 31.8, its lowest reading since April 2009 and 14th consecutive month below a growth-neutral 50.

    Over the past 12 months, livestock and grain commodity prices are down 19.7 percent and 18.5 percent, respectively. Borrowing remained strong, with the loan-volume index at 71.6 and the checking-deposit index rising to 63.7. The October RMI for Illinois slumped to 27.5 from 32.1 in September. The farmland-price index fell to 15.6 from September’s 26.3. The state’s new-hiring index sank to 42.8 from last month’s 50.7. Illinois job growth over the last 12 months for Rural Mainstreet was -2 percent; for Urban Illinois it was 1 percent.

    Bankers were asked to identify the biggest challenge to their banking operations. The cost of regulation was the answer for 27.3 percent, while farm foreclosures were reported as the primary concern by 9.1 percent. See Mainstreet Report.

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    USDA Launches Streamlined Guaranteed Loans

    The USDA launched a streamlined version of its guaranteed loan program for smaller-scale farms and urban producers. The EZ Guarantee Loans program uses a simplified application process to help beginning, small, underserved and family farmers and ranchers apply for loans of up to $100,000 from USDA-approved lenders. ICBA supports streamlined loan programs to reduce lender paperwork. See USDA Release.

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    IDFPR Director Makes Case Against a Federal Fintech Charter

    Bryan Schneider, Secretary of the Illinois Department of Financial and Professional Regulation (IDFPR), recently offered his rationale for not creating a federal charter for fintech firms. He indicated that, at IDFPR, the regulatory approach is to focus on business activity, not technology, and they have found that most fintech firms can be placed in the context of existing law. Read More.

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    Midwest Office Offers October Custom Calendar Promotion

    Midwest Office thanks everyone from CBAI who visited its booth at the CBAI 42nd Annual Convention and Expo September 15-17. Congratulations to Jennifer Marantz, Bank of Springfield, for winning a free 32" flat screen TV! Midwest introduced its newest program, MidwestSelect, and looks forward to rolling out this program to many of you in the coming months!

    As the end of the year slowly closes in, Midwest is offering a discounted rate to all CBAI Members on certain custom calendar items during the month of October. See October Special.

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    Take Advantage of Member-only Discounts on Dell Products

    Joint Program for CBAI and ICBA Members

    CBAI and ICBA member banks, employees, and small business customers are eligible to receive preferred pricing on Dell computer equipment such as workstations, servers and laptops. The average savings is approximately 30% on each order. For more information and to order, Click Here.

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    What Baseball Can Teach Banking About Data and Analytics

    According to Jim Marous, co-publisher of The Financial Brand, baseball and banking are both industries steeped in tradition. He cites how baseball is effectively leveraging data, digital technology, new media channels and innovation to transform in an increasingly competitive marketplace. He believes banks can learn from baseball.

    He notes that the collection of data about human behavior and the analysis and application of this data is big business in baseball and in banking. The banking profession should feel some solace to know that a 150-year-old game played on grass and dirt is achieving significant results using data on the field and off. The same can happen for banking. Read More.

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    HMDA Resources: Exclusive Offer for CBAI Members

    CBAI-endorsed HMDA services provider, Wolters Kluwer, is offering a 10% discount on HMDA file preparation and submission services. Get ready for the March 1, 2017 deadline and engage a team of experts to:
      1. Validate the data
      2. Error-check the data
      3. Format your HMDA or CRA file for submission
    Reserve these resources now and free up time to prepare for the expanded HMDA requirements. Call 1-800-261-3111 and mention this CBAI offer or visit the HMDA Resource Center for more information. But hurry, this offer expires on December 15, 2016.

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    10 Ways Banking Will Be Different in 2020

    An obvious statement: The banking world is changing. However, it does give rise to less obvious questions: Just how fast is it changing, and in what ways? For instance, what will the banking world look like in five years? Will there be chatbots in every smartphone and every app? Will bitcoins or other cryptocurrencies be mainstream forms of money exchange? Read More.

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    CBAI LEGAL: Mortgagors Fail to Prove R.E.S.P.A. Damages

    Unlike the right of rescission to which a residential mortgagor borrower is entitled when the lender has violated Truth in Lending Act disclosure mandates, certain violations regarding mandated communications under the Real Estate Settlement Procedures Act (“R.E.S.P.A.”) require proof of actual damages before the mortgagor can seek any form or amount of damages resulting from that R.E.S.P.A. violation.

    In its opinion published October 6 in the case of Diedrich v. Ocwen Loan Serving, l.l.C., the U.S. Court of Appeals for the Seventh Circuit upheld a federal District Court’s ruling that mortgagors had not sufficiently alleged damages necessary to sustain a R.E.S.P.A. claim. Read Most Recent CBAI LEGAL.

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    CBIS Nicoud: Why Community Banks Should Request Certificates of Insurance

    Sometimes, the simplest oversight can invite the most predictable of risks. As community bankers continue to evolve their risk management programs in response to unprecedented regulatory overreach and the reality of global cyber risk, it is important to remember that traditional insurance caveats still apply today. Read More from CBIS Nicoud.

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    CDD Fall Meeting Set for November 3-4

    The CDD Annual Fall Meeting, scheduled for November 4, 2016, at the Hard Rock Hotel and MidAmerica Club, Chicago, is geared toward honing professional and banking skills. The first general session is “Engaging Today’s Consumer - Everything Has Changed” with Gabe Krajicek, chief executive officer, Kasasa® followed by the session, “Leadership 2.0 – Becoming a Person of Influence” with Jody Holland, Jody Holland Speaking & Training. Then Ryne Graf, information security manager, Federal Home Loan Bank of Chicago, presents “Cybersecurity Update – Best Practices.” The Annual Business Meeting features an address from the newly appointed CBAI Chairman Tom Marantz. Highlights also include reports from CDD officers on membership, financials, and convention activities, as well as the results of the recruitment campaign. The election of officers and the Economic Educator and Outstanding Member Awards are presented. The afternoon features “Hypnotic Selling – The Science of Bypassing the Conscious Mind & Connecting with the Subconscious Mind of Others” with Jody Holland, followed by “Your ‘Competition’ Could Be Your Key to Growth” with Gabe Krajicek. Each participant will receive a copy of Jody Holland’s book, The Hypnotic Selling, along with a take-away toolkit that includes a bullet-point write-up and talking points of the general sessions for bankers to provide follow-up information for their banks.

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    Auditing BSA Scheduled for November 9

    This program is helpful for both experienced and inexperienced internal auditors and BSA officers. It helps you develop a successful audit program based on the BSA/AML Interagency Examination Manual. Methods for reporting and tracking exceptions are presented. Objectives include identifying and understand the key demands of the regulations and their most recent revisions; identifying sources of information to understand the approach used by regulators and the details of the application of the regulations; obtaining and understanding checklists and tools; practicing the actual completion of work papers; and discovering what the present hot topics areas are for the state and federal regulators. Both new and experienced internal auditors, as well as BSA officers would benefit from attending this program. Leading this seminar is Tim Tedrick, CRCM, CRP, and partner at Wipfli LLP in Sterling, Illinois.

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    Save the Date for the 2017 Community Bankers School!

    Mark your calendar today for CBAI’s Community Bankers School, scheduled for July 9-14, 2017, in Bloomington, IL. Are you a career-aspiring banker with ambition? Do you want to advance in your career and become a leader at your bank? Your next big opportunity to get ahead and guarantee success in your career is enrolling in the Community Bankers School. This program, which consists of two, one-week sessions over a two-year period at Illinois Wesleyan University in Bloomington, will allow you to immediately contribute to the overall success of your bank, and give you the knowledge necessary to get ahead. The School features a nationally recognized faculty, an updated curriculum, and timely topics. You will gain a background and experience for broader responsibilities and greater effectiveness, as well as insight into a community bank’s overall operations responsibilities.

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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 be in compliance, 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 beginning its twenty-eighth 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 “Mortgage Lending Under Regulation Z (Omitting TRID),” is being offered November 1 & 2 in Springfield and Lisle, respectively.

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    THROUGH 12/08/2016






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