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Community Bankers Association of Illinois
Community Bankers Association of Illinois    Community Bankers Association of Illinois CBAI E-Newsletter Sponsor - SHAZAM
 
     A Bi-Weekly News Bulletin for CBAI Members                            October 29, 2014

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Ballots Due This Friday to Elect David Pirsein for Chicago FHLB Board!
  • Exercise Your Right to Vote on November 4th!
  • New York Fed President Tells Big Banks to Behave or Be Downsized
  • CBAI Premier E-mail Service Protects Sensitive Data Across Multiple Devices
  • FDIC Approves QRM Risk-Retention Rule
  • ICBA Responds to President’s Chip-and-PIN Executive Order
  • CFPB Posts List of Rural, Underserved Counties for 2015
  • Survey: Rural Economy Lowest in Four Years
  • Special Baker Market Update and Economic Brief
  • NFTB Case Law Classic: 1986 Bank Failure Bore Judicial Fruit for State Banks
  • CBSC and CBIS Nicoud Introduce New Health Insurance Assessment Program
  • New ICBA Video Highlights Millennial Study
  • IRA-to-IRA Rollovers-One Per Year (12 Months) Rule
  • 2015 CBAI Foundation Essay Contest for 26 Scholarships Now Underway!
  • Community Banks Score with Kasasa College Football Sponsorships
  • CSI Secure Connect: Become A Part of the Paperless Trend
  • Sageworks Offers Guidance on How to Manage CRE Risk
  • Save the Date for Medical Marijuana Webinar on December 11
  • Analyzing Tax Returns in Self-Employed and Small Business Situations Scheduled for November 5 & 6
  • Navigating the FMLA Corn Maze to be Held for November 5
  • CFO Conference Scheduled for November 6
  • HMDA Seminar Set for November 13 & 14


  • Ballots Due This Friday to Elect David Pirsein for Chicago FHLB Board!

    CBAI is urging all community banks to vote only for David Pirsein, President and CEO of First National Bank in Pinckneyville, for election to the Federal Home Loan Bank of Chicago Board of Directors. The ballots have been mailed to all FHLB member institutions, and they must be returned to the FHLB and received by October 31st. See Announcement.

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    Exercise Your Right to Vote on November 4th!

    Please encourage all of your community banking colleagues (employees and directors) to vote on November 4th because much is at stake. Here are the positions that are up for election in Illinois: all statewide offices; all 118 Illinois House seats; 19 of the 59 Illinois Senate seats; all 18 U.S. House seats; and one of the two U.S. Senate seats.

    See Statewide Offices Election Information.
    See Illinois House Election Information.
    See Illinois Senate Election Information.
    See U.S. House Election Information.
    See U.S. Senate Election Information.

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    New York Fed President Tells Big Banks to Behave or Be Downsized

    In a speech last week, William Dudley, president of the Federal Reserve Bank of New York, told bankers that continued ethical lapses would be a sign that their institutions were too big to manage and might need to be downsized, a statement which apparently unnerved the executives in attendance.

    CBAI has long advocated downsizing the mega banks not only for their chronic unethical behavior but also for their inordinate exercise of economic and political influence that tramples competitive free enterprise. See Dealbook Article.

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    CBAI Premier E-mail Service Protects Sensitive Data Across Multiple Devices

    Complies With Regulators’ Expectations, Improves Staff Efficiency, and Enhances Customer Service

    The CBAI Premiere E-mail Service enables community banks to harness the power of a feature-rich Microsoft E-mail Exchange Server at a significantly reduced cost. Members avoid the cost of purchasing a single exchange server license and the hardware necessary to manage the system. Learn More.

    CBAI has aggregated the collective purchasing power of its membership and successfully negotiated with Intermedia to provide member banks access to the Intermedia Microsoft Exchange E-mail Server at a greatly reduced cost. Intermedia is the nation’s largest and most secure provider of hosted exchange services.

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    FDIC Approves QRM Risk-Retention Rule

    The FDIC approved a final rule requiring firms to retain risk in loans they securitize and defining the “qualified residential mortgage” (QRM) loans that will be exempt from the rules. The “skin in the game” rule includes in the QRM definition “qualified mortgage” (QM) loans under the Consumer Financial Protection Bureau’s ability-to-repay rules.

    CBAI and ICBA support including QM loans as well as loans backed by Fannie Mae and Freddie Mac in the QRM definition which will provide much-needed consistency, and including loans sold to Fannie and Freddie will allow many community banks to continue to lend. Read the Final Rule. Read ICBA Statement.

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    ICBA Responds to President’s Chip-and-PIN Executive Order

    ICBA responded to President Barack Obama’s executive order directing the federal government to use chip-and-PIN technology in its payment cards and terminals. In a statement, ICBA said it supports a more secure payments system for financial transactions, but that requiring cards to immediately be PIN-capable will slow the transition to chip cards. ICBA advocated the use of tokenization in concert with chip technology. Further, the association advocated subjecting all participants in the payments system to data-protection standards such as those under the Gramm-Leach-Bliley Act and ensuring that parties at fault for data breaches are liable for losses. See President’s Executive Order. Read ICBA Statement.

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    CFPB Posts List of Rural, Underserved Counties for 2015

    The Consumer Financial Protection Bureau published the 2015 lists of rural and underserved counties. The lists are used to apply several regulatory provisions, including escrow requirements, ability-to-repay and qualified mortgage standards, and appraisals for higher-priced mortgage loans. Read More from CFPB.

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    Survey: Rural Economy Lowest in Four Years

    The rural economy is at its lowest level in four years on lower grain and oil prices, according to Creighton University’s Rural Mainstreet Index. The October index, based on a survey of bank CEOs in a 10-state region, declined for the fifth consecutive month. On average, bank CEOs expect farmland prices to decline by 5 percent over the next year. See Mainstreet Economy Report. See More Details.

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    Special Baker Market Update and Economic Brief

    The Federal Open Market Committee (FOMC) today officially ended QE3 and maintained a commitment to keep rates low for a “considerable time”. The FOMC’s official statement reads, “The committee anticipates, based on its current assessment, that it likely will be appropriate to maintain the 0 to 1/4 percent following the end of its asset purchase program this month, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.” Read Baker Assessment of FOMC Actions. Read FOMC Announcement.

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    NFTB Case Law Classic: 1986 Bank Failure Bore Judicial Fruit for State Banks

    In this edition of News From the Bench (“NFTB”), an opinion from the Illinois Appellate Court for the Fourth District that was issued more than a quarter of a century ago is resurrected due to its continuing relevance and value to state-chartered community banks. For the review of Town & Country Bank of Quincy vs. E & D Bancshares, Click Here.

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    CBSC and CBIS Nicoud Introduce New Health Insurance Assessment Program

    Helps Bankers More Effectively Manage Rising Health Benefit Costs

    Community BancService Corporation, Inc. (CBSC), the business services affiliate of Community Bankers Association of Illinois (CBAI), the state’s largest banking trade organization exclusively representing community banks, announced last week that it has partnered with CBIS Nicoud, the premier provider of insurance services and expertise to community banks in Illinois and Missouri, to deliver a new health insurance assessment service that will help banks better manage their health care costs. See Announcement.

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    New ICBA Video Highlights Millennial Study

    Millennials are the future of finance, and community banks can be their strongest financial ally, according to a recent ICBA study on American Millennials and Banking. In a new video, ICBA’s Chris Lorence and Aleis Stokes note that the study dispels myths about Millennials and shows that they are a good fit for community banks.

    The study found that more than half of Millennials said they would prefer to work with a community bank and that generation is the most interested in learning about starting up and running a small business. See Video and Read Study Results.

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    IRA-to-IRA Rollovers-One Per Year (12 Months) Rule

    Beginning as early as January 1, 2015, individuals can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs owned. The U.S. Tax Court recently held that individuals can’t make a non-taxable rollover from one IRA to another if they have already made a rollover from any of their IRAs in the preceding one-year period (Bobrow v. Commissioner, T.C. Memo. 2014-21). Learn More.

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    2015 CBAI Foundation Essay Contest for 26 Scholarships Now Underway!

    Get on your area’s high-school radar screen. Start publicizing the CBAI Foundation for Community Banking’s annual essay contest for deserving high-school seniors. No cost to banks to participate! See Details. For the full kit to get started, contact Bobbi Watson at bobbiw@cbai.com.

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    Community Banks Score with Kasasa College Football Sponsorships

    Kasasa®, the national brand of innovative free checking and savings accounts offered exclusively at community banks and credit unions, are taking the field at some of America's most popular college football programs this fall. Kasasa account holders, who bank at community institutions, say they love college sports. So what better opportunity to ensure Kasasa products are recognized by the target consumers of community banks than at their favorite sports franchises? Sponsorships were strategically selected based on the location and proximity to Kasasa clients and their target consumers. By attaching the Kasasa product brand to long-standing national collegiate brands such as Alabama, Illinois, Michigan, Virginia Tech, LSU, and GA, Kasasa helps financial institutions create product interest via borrowed relevance of those nationally loved college brands. Community banks and Kasasa just got game!

    Kasasa by BancVue® is a CBAI preferred provider. To become part of the Kasasa network, contact Bob Brandt at Bob.Brandt@BancVue.com or 512-349-4424.

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    CSI Secure Connect: Become A Part of the Paperless Trend

    The paperless trend has become an integral part of how businesses conduct their board meetings. This is no surprise when you consider that it takes between two and five people several days to prepare board books and committee mailings; even a small board could spend more than 7,500 dollars per year on printing and mailing alone.

    In a survey last year, 71 percent of financial institutions planned to invest more in technologies, like secure board portals, compared with only 18 percent the year before. Why? Because, bank technology spending as a percent of total costs (14.3 percent) is higher than any other industry.

    Learn how your peers are becoming cost efficient by switching to a secure board portal. For more information please visit www.csiweb.com or call 800-545-4284.

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    Sageworks Offers Guidance on How to Manage CRE Risk

    As banks are increasingly playing a bigger role in commercial real estate (CRE) lending, it is more important than ever to ensure proper risk management practices. This is especially true for banks exceeding one or both of the CRE supervisory criteria. U.S. banks are seeing incredibly low loss rates on CRE and construction loans relative to the past six years. As a result, many are moving back into commercial real estate lending and borrowers are presented with more options. Despite the good news, CRE loans have always been known to be riskier than other types of loans. Due to the volatility of CRE concentrations at banks, regulators have released supervisory guidance to ensure sound risk management practices. How can banks manage the risk? Learn More from Sageworks.

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    Save the Date for Medical Marijuana Webinar on December 11

    CBAI is offering a 90-minute webinar entitled “Marijuana Businesses: Offering Services and Avoiding Errors,” on December 11, 2014. Presenting this webinar are Bill Elliott, CRCM, senior consultant and manager of compliance at Young & Associates, Inc., in Kent, OH, and Jerry Cavanaugh, general counsel at the Community Bankers Association of Illinois in Springfield. More information will be available soon.

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    Analyzing Tax Returns in Self-Employed and Small Business Situations Scheduled for November 5 & 6

    Underwriting loans to self-employed and small business borrowers can be tricky due to the variety of sources of income – both business and personal – that affect cash flow and repayment ability. Further, the primary resource used by community bankers to make the cash flow analysis is tax returns. Several of the tax schedules and forms are confusing since they are designed to report taxable income, not true cash flow. This program covers how to analyze both personal and business tax returns provided by self-employed borrowers and guarantors. Using case exercises, we will compute personal cash flow, real estate cash flow and global (combined business and personal) cash flow. Community bankers in various lending roles, such as consumer lenders, mortgage bankers, private bankers, small business lenders, commercial lenders, credit analysts, loan review specialists, special assets officers, lending managers and credit officers all benefit from attending this seminar. Leading this seminar is Richard Hamm, owner/operator of Advantage Consulting & Training in Huntsville, AL.

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    Navigating the FMLA Corn Maze to be Held November 5

    Recent amendments to the FMLA expand both the scope of covered employers and the nature of employee-leave rights. Fortunately, the DOL regulations present new opportunities for employers to minimize excessive absenteeism and avoid intermittent leave abuse. These same regulations, however, create new obligations and traps for the unwary employer. Additionally, the recent legalization of medical marijuana has created a cloud of uncertainty arising out of seemingly inconsistent rights and legal obligations. This lively and interactive program provides an advanced level, comprehensive overview of your duties under the FMLA and state and federal disability-discrimination laws. This entertaining and informative session will explain the best practices to help your organization take full advantage of your employer rights without interfering with the duties you owe your employees. Leonard Sachs, who serves as partner-in-charge of the Labor and Employment Group at Howard and Howard Attorneys PLLC, a business-law firm with offices in Michigan, Illinois, and Nevada, leads this program.

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    CFO Conference Scheduled for November 6

    The 2014 CFO Conference is designed to help community-bank CFOs manage interest rate risk for optimal bank performance, discover expense control tactics, gain capital raising strategies, learn information regarding the new capital rules, and find out how to determine the right measure of loss. Participants walk away with a wide variety of information from expert speakers on topics that community bank chief financial officers have repeatedly requested, and return to the bank ready to implement newly found ideas and knowledge! Topics and speakers include “Managing Interest Rate Risk for Optimal Bank Performance” with Lester Murray, SVP Financial Strategies Group, THE BAKER GROUP, Oklahoma City, OK; “Expense Control” with Mike Moebs, president and founder of Moebs $ervices, Inc., Forest Park, IL; “Capital Raising Strategies and the New Capital Rules” with Zack Christensen, partner, Barack Ferrazzano Kirschbaum & Nagelberg, LLP, Chicago; and “How to Determine the Right Measure of Loss” with Tim McPeak, senior risk management consultant, Sageworks, Inc., Raleigh, NC.

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    HMDA Seminar Set for November 13 & 14

    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 future (perhaps 2016), around 20 new data fields will be required to be added to the HMDA Loan Applicant Register (LAR). Bankers, now more than ever, have to understand the existing HMDA standards, as inefficiencies and errors now are compounded as the new HMDA data fields bring challenges of their own. This seminar is designed around the existing HMDA rules. We also discuss the proposal for the new HMDA rules, which were released in mid-2014. The primary focus is to discuss the existing requirements and to visit the challenges bankers face for the new requirements. 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 seminar allows you the opportunity to review your existing program to assure that it is “under control” so when the time comes to deal with the new fields, you will find your bank ready to face the challenge. Leading this seminar is Adam Witmer, a compliance consultant with Young & Associates, Inc., Kent, OH, serving client banks in the Midwest.

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