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              November 3, 2010 Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • Election Recap: Republican Wave Larger Than 1994
  • Senators Urge Implementation of Strong Volcker Rule Regulations
  • ICBA and CBAI Urge Congress to Extend Key Tax Measures in Lame Duck Session
  • CBAI’s David Schroeder Discusses Dodd-Frank Wall Street Reform Act
  • CBAI Introduces New Health Insurance Program for Members
  • Harsh Exams Addressed at Examiner Meeting
  • Senators Urge Regulators to Ensure Small-Biz Credit Availability
  • Fine Points
  • Chicago Fed Holds Rural Development Conference and Community Bankers Symposium
  • BAKER Market Update
  • Economic News
  • CSBS Paper Recommends Voluntary Community-Bank Stress Tests
  • Treasury Shields Citigroup on Details of Guarantees
  • Webinar: ICBA Mortgage Solutions - A Partnership For Success
  • ComplianceOne: It’s Not Just New, It's Version YOU.0
  • Reduce Your Bank’s Electricity Rates
  • CBAI On-Demand Marketing: Direct Mail Marketing Made Affordable
  • Great Attractions in Milwaukee, Site of CBAI’s 37th Annual Convention
  • Spread the Word: Lying to Banks Is Illegal
  • Global Cash-Flow Analysis Seminar Scheduled for November 8 & 9
  • Expense Control Seminar Scheduled for November 9
  • Women in Community Banking Conference Set for November 16 & 17
  • 2011 Closing Signs Now Available in English & Spanish

  • Election Recap: Republican Wave Larger Than 1994

    Republicans picked up 60 net seats in the U.S. House in yesterday’s general election, surpassing the 52 net seats gained in 1994, thereby recapturing control of the lower chamber.
    See The Hill Article. In the U.S. Senate, Republicans gained six seats to increase their total to 47. See Politico Article.

    In Illinois, Democratic incumbents Bill Foster, Debbie Halvorson, and Phil Hare were defeated, and Bob Dold defeated three-time candidate Dan Seals for the open seat vacated by Mark Kirk. The race between Democratic incumbent Melissa Bean and Joe Walsh was still not final as of press-time; however challenger Joe Walsh leads the race by nearly 800 votes with only six precincts remaining. As a result, Republicans will control at least 11, and likely 12, of the 19 U.S. House seats from Illinois. Meanwhile, Congressman Mark Kirk won President Obama’s old Senate seat by defeating State Treasurer Alexi Giannoulias. See Tribune Report.

    In the statewide races, Democratic Governor Pat Quinn holds a narrow lead over Republican State Senator Bill Brady. With more than three million votes cast in the race for governor, only about 8,300 votes separate the candidates with about 99% of the votes tabulated. Brady is hoping absentee ballots will narrow the gap. See Tribune Article.

    Democratic incumbents Lisa Madigan and Jesse White were reelected Attorney General and Secretary of State, respectively. However, Republican State Senator Dan Rutherford defeated Democrat Robin Kelly for State Treasurer, and Republican Judy Baar-Topinka made a successful return to public office by defeating Democratic State Representative David Miller for State Comptroller. See More.

    In the Illinois General Assembly, the Democrats retained control of the House and Senate, although Republicans attained net gains in both chambers. House Republicans picked up six seats, resulting in a smaller 64-54 Democratic majority. Senate Republicans gained two seats, ending the current 37 vote veto-proof majority and resulting in a 35-24 Democratic majority.

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    Senators Urge Implementation of Strong Volcker Rule Regulations

    Last week 18 U.S. Senators, including Illinois Senator Dick Durbin, urged members of the Financial Stability Oversight Council to impose strong and effective regulations on the too-big-to-fail banks to end their high-risk proprietary trading activities and limit their relationships with hedge funds and private equity funds. The provisions in the Wall Street Reform Act known as the Volcker Rule are a major aspect of congressional efforts to prevent another financial meltdown. CBAI and ICBA are strong proponents of the Volcker Rule and support the actions of the members of the Senate.
    See Letter to FSOC.

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    ICBA and CBAI Urge Congress to Extend Key Tax Measures in Lame Duck Session

    ICBA and CBAI are encouraging Senate leaders to enact essential tax extender legislation during the upcoming lame duck session of Congress. The measures will allow small businesses and community banks to support job and economic growth. In a letter to Senate leaders, ICBA recommended that the current income tax rates should be extended across-the-board for LLCs, partnerships, sole proprietorships, and Sub S corporations. In addition, the current capital gains and dividend tax rates should be extended as well as the 5-year net operating loss carryback provision, among others. ICBA also urged the Senate to address the estate tax issue, especially as it affects small businesses and family farms.
    See ICBA Letter.

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    CBAI’s David Schroeder Discusses Dodd-Frank Wall Street Reform Act

    CBAI’s Vice President of Federal Governmental Relations participated in a panel discussion titled, "The Road Ahead in CRE & Bank Regulation" at The University Club in Chicago. The Conference was sponsored by Clark Street Capital; Belongia Shapiro & Franklin, LLP; McGladrey; and Beecher Carlson. Schroeder was joined on the distinguished panel by Mark Belongia (Belongia Shapiro), John Kerns (Beecher Carlson), and Bill Wheeler (State Bank of Countryside). The panel discussion was moderated by Tim Moritz of McGladrey. The overflow crowd of approximately 200 attendees attests to the wide-spread interest in these topics by bankers and professional service providers.

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    CBAI Introduces New Health Insurance Program for Members

    CBAI has established a new health insurance program specifically for CBAI member institutions. The Community Bankers Insurance Company (CBIC) is now enrolling banks for the plan year commencing January 1, 2011. There are four plan design options and two HSA plan options from which to choose, and each institution will be individually underwritten. The CBIC program is uniquely structured to allow each participating bank to receive a refund of any unused premiums at the conclusion of each plan year. In addition, the program will provide each bank complete transparency on its claims experience.

    CBIC was formed by CBAI leadership to help community banks better control the cost and quality of health care benefits for years to come. For more information, please contact Randall Kestner at 800/736-2224 or

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    Harsh Exams Addressed at Examiner Meeting

    Jerry Felicelli of the consulting firm Larsen Allen and Chris Cole, ICBA senior vice president and senior regulatory counsel, recently addressed a cross-section of bank examiners at a Federal Financial Institutions Examination Council meeting on the viability of community banking. Felicelli discussed various methods that community banks are pursuing to maintain their profitability and market share. Cole addressed the problems that community banks are having with the current regulatory environment. He said community bankers are still reporting that examiners are unjustifiably requiring capital levels higher than current official standards and are inappropriately downgrading performing commercial real estate loans. ICBA and CBAI have expressed concerns about the current counterproductive exam environment at many different regulatory forums.

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    Senators Urge Regulators to Ensure Small-Biz Credit Availability

    A bipartisan coalition of senators called on the federal banking regulators to work with regulatory staff to maximize credit availability for small businesses. The letter, sent shortly after the Small Business Jobs Act was signed into law, asks regulators to ensure that examination staff encourage full use by community banks.

    The letter also calls on the agencies to continue providing guidance to regulatory staff regarding loan portfolios, particularly small business loans and loan workouts, to preserve credit availability. It notes that overly restrictive terms for accessing or restructuring credit can exacerbate the nation’s economic challenges. ICBA and its affiliated state community banking associations have worked tirelessly to help community banks continue lending to small businesses to spur economic recovery.
    Read the Letter.

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    Fine Points

    ICBA President Cam Fine offers his thoughts on the general election and beyond.
    See “Election Fever.”

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    Chicago Fed Holds Rural Development Conference and Community Bankers Symposium

    On November 9, 2010, the Federal Reserve Bank of Chicago will hold a conference to discuss the role that Midwest agriculture can play in rural development. Experts from academia, industry, and policy institutions will address the conference, and keynote speaker will be Deputy Secretary of Agriculture Kathleen Merrigan. For more details and the agenda,
    Click Here.

    The Sixth Annual Community Bankers Symposium will be held at the FRB Chicago on Friday, November 19, 2010. A reception will also be held on Thursday evening from 5:00 p.m. to 6:30 p.m. Speakers include ICBA President Cam Fine and CSBS President Neil Milner. For more information and to register, Click Here.

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    BAKER Market Update

    Information received since the Federal Open Market Committee met in September confirms that the pace of recovery in out put and employment continues to be slow. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, thoughless rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts continue to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters.

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    Economic News

    Rural Index Reveals Continuing Economic Weakness
    For the fourth consecutive month the Rural Economic Index remained below growth neutral despite a healthy farm economy as farmland prices and farm equipment sales continue to grow briskly.
    See Report.

    Chicago Foreclosure Activity Up 35% in Third Quarter
    The Chicago area saw the second-biggest jump in the U.S. in third-quarter foreclosure activity among big cities.

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    CSBS Paper Recommends Voluntary Community-Bank Stress Tests

    The Conference of State Bank Supervisors released a white paper encouraging community banks to conduct stress tests as part of their risk-management framework. Noting that the Wall Street Reform Act requires stress tests for banks with more than $10 billion in assets, the white paper says community bank stress tests should be an industry-driven initiative to better understand risk profiles and vulnerabilities. It says that the testing should not be a regulatory model and that community banks should not be criticized for identifying vulnerabilities.

    “Community banks already perform various types of stress testing, but the CSBS proposal might be a good tool to help community bankers better understand their risk profile,” ICBA Senior Vice President and Senior Regulatory Counsel Chris Cole said.
    Read the White Paper.

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    Treasury Shields Citigroup on Details of Guarantees

    Government support to bailout giant Wall Street financial firms reached $12.8 trillion in commitments, and despite the Obama Administration's promise for transparency, efforts to obtain more details have been difficult. The late Bloomberg News reporter
    Mark Pittman asked the U.S. Treasury in January 2009 to identify $301 billion of securities owned by Citigroup that the government had agreed to guarantee. He made the request on the grounds that taxpayers ought to know how their money was being used.

    More than 20 months later, after saying at least five times that a response was imminent, Treasury officials responded with 560 pages of heavily-redacted e-mails, none of which Pittman requested. None of the documents answers Pittman’s request for “records sufficient to show the names of the relevant securities” or the dates and terms of the guarantees.

    The saga of Pittman’s request shows that the promise of transparency has its limits when it comes to the government’s intervention in the financial industry. From the 2008 Bear Stearns rescue to the Federal Reserve’s policy of quantitative easing in 2010, the Obama administration has delayed disclosures and defended its right to secrecy in court.

    Like the Treasury Department, the central bank cited the exemption for trade secrets, known as exemption 4, in withholding details about borrowers. Its lawyers argued that disclosing the banks’ identities would put the institutions at a competitive disadvantage and make them less likely to seek emergency loans in the future.

    In an August 24, 2009, ruling, Chief U.S. District Judge Loretta A. Preska in Manhattan disagreed.

    “The risk of looking weak to competitors and shareholders is an inherent risk of market participation; information tending to increase that risk does not make the information privileged or confidential,” Preska wrote. The Fed “would seemingly sweep within the scope of Exemption 4 all information about borrowers that anyone throughout the entire marketplace might consider to be negative. The exemption cannot withstand such inflation.” Read More.

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    Webinar: ICBA Mortgage Solutions - A Partnership For Success

    Join with ICBA Mortgage Solutions to review the benefits and options available today through ICBA Mortgage's new lending fulfillment platform program designed for and by community banks.

    This Webinar is hosted by Elizabeth Deal, executive vice president of ICBA Mortgage Solutions.

    Register for a session now by clicking a date below:

      Thu, Nov 4, 2010 2:00 PM - 3:30 PM EDT
      Tue, Nov 9, 2010 2:00 PM - 3:30 PM EST
      Thu, Nov 10, 2010 2:00 PM - 3:30 PM EST
      Tue, Nov 16, 2010 2:00 PM - 3:30 PM EST
      Thu, Nov 18, 2010 2:00 PM - 3:30 PM EST
    Once registered, a confirmation e-mail will be sent along with the information to join the Webinar.

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    ComplianceOne: It’s Not Just New, It's Version YOU.0

    The latest version of ComplianceOne™ was made with you in mind. It’s still the same comprehensive system that seamlessly integrates compliance, policies/procedures, documentation, and data across your entire organization. It’s still one solution for all your lines of business. But now, it’s better than ever. Check it out

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    Reduce Your Bank’s Electricity Rates

    CBSC, Ameren Energy Marketing, and The Stone River Group have partnered to offer CBAI members Special Discounts on electricity rates.
    See Release.

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    CBAI On-Demand Marketing: Direct Mail Marketing Made Affordable

    Introducing CBAI On-Demand Marketing, a turnkey direct mail marketing program that gives community bankers all the marketing brawn of larger institutions – without the overhead.

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    Impressive Attractions in Milwaukee, Site of CBAI’s 37th Annual Convention & Expo

    Milwaukee, the site of CBAI’s 37th Annual Convention & Expo, is also home to Wisconsin’s premier destination for art and culture. Located downtown on the shore of Lake Michigan, the Milwaukee Art Museum is a marvel both inside and out. Home to 20,000 works of art, the museum welcomes more than 300,000 visitors a year and is highlighted by the magnificent cathedral-like space of Windhover Hall, with a vaulted 90-foot-high glass ceiling; the Burke Brise Soleil, a moveable sunscreen with a 217-foot wingspan that unfolds and folds twice daily; and the Reiman Bridge, a pedestrian suspension bridge that connects the museum to the city. The
    Milwaukee Art Museum is just one of the city’s unique attractions, so mark September 22-24, 2011, on your calendar today for a convention (and a city) you won’t want to miss!

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    Spread the Word: Lying to Banks Is Illegal

    Federal law provides that anyone who knowingly makes a false statement to an FDIC-insured institution for the purpose of influencing its action on any application or loan or deferring action on them "shall be fined not more than $1,000,000 or imprisoned for not more than thirty years, or both." To say the least, this criminal law, intended to protect banks and hence the deposit insurance fund, is rarely enforced against consumers. Why?
    Read More.

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    Global Cash-Flow Analysis Scheduled for November 8 & 9

    This seminar utilizes the Uniform Cash-Flow Analysis (UCA) method and provides guidance in calculating global cash-flow analysis for those entities that must rely on excess cash generated by their owners to service the business entity’s commercial debt. The course begins by defining cash flow as the tool to transform an accrual basis financial statement into a statement of cash flow and its importance to bankers when considering a long-term loan request. It then proceeds to demonstrate how cash flow is calculated by utilizing the accounts on the balance sheet and the income statement to determine the sources and uses of cash from operating, investing, and financial activities. Next, a review of the owner’s personal financial statements and tax returns is presented in order to determine the excess compensation necessary to support the debts of the business entity and the individual. That is the entire premise of global cash-flow analysis. Leading this seminar is Jeffery Johnson, president and founder of Bankers Insight Group, Atlanta, Georgia.

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    Expense Control Seminar Scheduled for November 9

    To weather today's economic storm, a keen understanding of the bank's expense structure is essential. The traditional model for managing a bank has changed. Banks need to adapt and attain their economics of scale efficiently, and this only happens with control of non-interest expenses. Designed for presidents, CEOs, CFOs, COOs, SVPs, and EVPs, this seminar outlines the three keys to successful expense control. Topics covered in this one-day seminar include economy of scale, myths and facts regarding expense control, as well as benchmarks and 12 steps to successful expense control. Leading this seminar is G. Michael Moebs, who is known internationally for his strategies on pricing and expense control.

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    Women in Community Banking Conference Set for November 16 & 17

    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. At the end of the conference, there will be a drawing for a $200 Tiffany & Co. gift card. (You must be present to win!)

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    2011 Closing Signs Now Available in English & Spanish

    "Your choice: English or Spanish, color or black & white."
    Print holiday signs for free and easily. All signs are in Adobe Acrobat format. If you don't have Adobe Acrobat, visit to download a free version of this reader.

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    Other CBAI Events

    Women in Community Banking Conference
    November 16 & 17, 2010 at Crowne Plaza, Springfield

    Finer Points Blog





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