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 5, 2008 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • Obama Presidency Must Promptly Confront Economic Issues
  • Q & A on the TARP Capital Purchase Program
  • Congressmen Frank Complains About Use of TARP Funds
  • FDIC Extends Opt-Out Deadline for TLGP to December 5
  • Details on Rules for Temporary Liquidity Guarantee Program
  • CBAI and ICBA Offer Complete Information on Rescue Program
  • 20 Percent of Mortgages Now Underwater
  • Baker Market Update
  • Rural Mainstreet Economic Index Declines Again
  • Latest Chicago Fed Midwest Manufacturing Index Released
  • Consumer Spending Drops in September
  • Deposits Shifting to Community Banks as Safe Haven
  • Federal Reserve Survey – Community Banks Positioned to Lend
  • Support Grows for Reducing Built-in Gains Tax on S-Corps
  • GMAC May Become Bank Holding Company to Access Funds
  • Freddie Mac Updates
  • Chicago FHLB Releases Information Ahead of Third Quarter Report
  • OTS Issues Exam Procedures on ID Theft Red Flags
  • Fraud Alert – Increased Fraud Activity Detected
  • Phishing Scams Involving Financial Institutions in the News
  • FBI Statement Regarding Threatening Letters
  • SecureWorks Warns of Deceptive Antivirus Computer Pop-ups
  • Farmers Urged to Mitigate Risk
  • USDA Revises October Crop Acreage Estimates
  • CDD Fall Meeting Nears
  • Last Chance To Register for the Women in Banking Conference
  • Midwest Office Supply Acquires Roberts' Office Supply
  • Recognize Your Bank’s Community Service Efforts
  • Forbes and Sageworks Predict 15 Industries "Poised for Pain"
  • Holiday Signs Now Available from CBAI


  • Obama Presidency Must Promptly Confront Economic Issues

    President-elect Obama has indicated he will immediately begin addressing the formidable issues facing the nation, including the economic and financial crisis. For more on President-elect Obama and his daunting agenda,
    click here.

    CBAI and ICBA anticipate the introduction of numerous financial reform proposals in the next Congress, and all community bankers will need to become meaningfully involved in the governmental relations process to insure that community banking interests are upheld.

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    Q & A on the TARP Capital Purchase Program

    The ICBA has prepared helpful information concerning the Treasury’s voluntary Capital Purchase Program which allows eligible financial institutions to sell senior preferred shares to the federal government. Applications for publicly-traded banks are due by November 14. Treasury is working to develop terms for Sub-S, mutual, and privately-held banks, and Treasury will release an application and term sheet along with a separate deadline date.
    Details here.

    In addition, CBAI associate member law firm Howard & Howard has prepared a memorandum regarding the TARP.

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    Congressmen Frank Complains About Use of TARP Funds

    Congressman Barney Frank expressed disappointment that many banks are using TARP funds for other than lending, and he insisted that Treasury Secretary Paulson enforce compliance with the Rescue Plan passed by Congress in early October.
    Complete statement.

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    FDIC Extends Opt-Out Deadline for TLGP to December 5

    The FDIC has extended the deadline for participation in the Temporary Liquidity Guarantee Program (TLGP) to December 5, 2008. The original deadline was November 12. The extension was granted to give more time for banks to fully consider the Final Rule before making a final decision. Community banks that do not opt out by December 5 will continue to receive the guarantee non-interest bearing transaction accounts through December 31, 2009, for an extra 10-basis-point assessment on amounts above $250,000. The program also guarantees senior unsecured debt issued through June 30, 2009, for a 75-basis-point annualized fee. For complete release,
    click here.

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    Details on Rules for Temporary Liquidity Guarantee Program

    CBAI associate member law firm Hinshaw & Culbertson has prepared
    updated information regarding the FDIC’s Debt Guarantee Program and Temporary Liquidity Guarantee Program.

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    CBAI and ICBA Offer Complete Information on Rescue Program

    All the information regarding the Economic Rescue Plan, including the various articles and documents, can be found at the
    Economic Recovery Central.

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    20 Percent of Mortgages Now Underwater

    An estimated 7.5 million homeowners owe more on their mortgages than their homes are worth, according to a research report prepared by First American CoreLogic. With no home equity to tap, they are more vulnerable to financial trouble. For more information and a list of the most and least affected states, please
    click here.

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    Baker Market Update

    As expected, the Federal Reserve lowered its benchmark target rate by 50bps to 1.00% amid faltering economic conditions and continued liquidity concerns. New home sales unexpectedly rose in September. And, the Labor Department will release October’s employment report next Friday.
    Click here to read more.

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    Rural Mainstreet Economic Index Declines Again

    For the third straight month, the
    Rural Mainstreet Index (RMI) declined to a record low in October. Maintained by Creighton University economist Ernie Goss, the RMI reflects the opinions of community bank CEOs in the Midwest. The October Index was just 34.4 compared to 81.0 in January of this year. Respondents cited growing unemployment, declines in agri-commodity prices and farm equipment sales, and anticipated lower retail sales for the upcoming holiday season.

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    Latest Chicago Fed Midwest Manufacturing Index Released

    The monthly
    Index, which estimates manufacturing output in the Midwest, declined 2.6% in September. Meanwhile, Fed economist Bill Testa provided an historical perspective on the current economic downturn.

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    Consumer Spending Drops in September

    The U.S. Commerce Department
    announced last week declined by 0.3% in September, capping the weakest quarter in three decades. Job losses, increases in food and fuel costs and falling property values put the skids on the longest expansion in spending on record.

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    Deposits Shifting to Community Banks as Safe Haven

    Investors have already pulled billions of dollars out of the stock market and troubled institutions, and many are depositing the funds into local community banks.
    See full article.

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    Federal Reserve Survey – Community Banks Positioned to Lend

    A Fed survey of senior loan officers at banks of all sizes found that community banks may be better positioned to lend than the large banks. About 80% of the largest bank tightened residential real estate lending standards compared to 55% of smaller banks during the third quarter.
    Complete survey.

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    Support Grows for Reducing Built-in Gains Tax on S-Corps

    Last week several U.S. Senators
    urged key Senate leaders to provide S-Corporations relief from the built-in gains (BIG) tax in order to free up capital. The ICBA had testified this past June for a reduction in the BIG tax along with other S-Corp reforms.

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    GMAC May Become Bank Holding Company to Access Funds

    GMAC, the troubled auto and mortgage finance company which has lost $7.2 billion in the past seven quarters,
    confirmed it intend to become a bank holding company so that it can access funds from TARP.

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    Freddie Mac Updates

    Freddie Mac
    announced that bond yields drove long-term mortgage rates to higher levels for the week ending October 30, 2008. The agency also noted that the cash-out refinance share during the first three quarters of 2008 was the lowest in four years.

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    Chicago FHLB Releases Information Ahead of Third Quarter Report

    Although the Chicago FHLB will soon file its third quarter financial report with the SEC, it has
    announced an expected $33 million in net income for the quarter ending 9/30/08, compared to a net loss of $74 million in the previous quarter.

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    OTS Issues Exam Procedures on ID Theft Red Flags

    OTS examiners will use the new procedures during exams beginning November 1, 2008. For more information, please
    click here.

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    Fraud Alert – Increased Fraud Activity Detected

    During the last several weeks, several CBAI member bankers have reported an increase in card fraud. The fraud has taken place on both Visa and MasterCard credit and debit accounts. Discussions with EFT processors have confirmed that these new fraud trends are being reported across the card industry. Efforts by EFT processors, as well as Visa and MasterCard, to determine the common point of purchase (CPP) have so far been unsuccessful. For more information,
    click here.

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    Phishing Scams Involving Financial Institutions in the News

    The FDIC
    warns of fraudulent phishing e-mails claiming to be from, or related to, financial institutions involved in high-profile mergers, acquisitions or failures are reportedly in circulation.

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    FBI Statement Regarding Threatening Letters

    The FDIC is
    alerting financial institutions of threatening and potentially dangerous letters received through the U.S. mail.

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    SecureWorks Warns of Deceptive Antivirus Computer Pop-ups

    If a message suddenly popped up on your computer to download Antivirus XP 2008 or Antivirus XP 2009, would you do it? After all, you do want to ensure you have the latest anti-virus software to protect your computer from hackers, right?

    If you have received this message recently and downloaded what was seemingly a legitimate piece of software, you may be the victim of one of the latest 'scarewares.'

    Joe Stewart, director of malware research at CBAI associate member firm SecureWorks, has been tracking this Russian-led scheme that has been very profitable for hackers - in the neighborhood of $5 million a year. As
    outlined in The New York Times recently, Stewart details the ring of hackers and further dissects the program through a two-part analysis.

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    Farmers Urged to Mitigate Risk

    According to Darrel Good, marketing specialist at the University of Illinois Extension Service, the current level of risk in farming is off the charts, and he urged farmers to mitigate risk by re-examining their operations to finds areas to maximize efficiency.
    More details here.

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    USDA Revises October Crop Acreage Estimates

    On October 28, 2008, the USDA released revised crop acreage estimates which reflected 1.2 percent fewer planted acres for corn, and 1.4 percent fewer planted acres for soybeans. Price forecasts are raised slightly for both commodities.
    Click here for more information.

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    CDD Fall Meeting Nears

    The
    CDD Annual Fall Meeting is geared toward honing professional and banking skills, as well as providing an opportunity for networking. The Fall 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 by a general session by Charles Williams entitled, "Turning Lemons into Lemonade: How to Make Our Economy Work for Your Bank." Following the Business Meeting Luncheon, a representative of the FDIC conducts a session to answer important questions on FDIC Deposit Insurance Coverage. The afternoon agenda also features three breakout sessions: "The Examiners are Coming and I Feel Good About My Loan Review and ALLL Process;" "ACH Origination and the Risks Your Bank Should Consider;" and "Don't Panic!" The Fall Meeting concludes with a general session by Charles Williams entitled, "Always Leave ‘em Laughing!”

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    Last Chance To Register for the Women in Banking Conference

    Register today for CBAI’s second annual
    Women in Banking Conference scheduled for November 18-19, 2008, at the Crowne Plaza in Springfield. Learn keys to organization, stress management, and successful networking. This one and one-half day conference also tackles issues including gender communication differences and crucial communication skills, as well as how to attract your next customer. New to the agenda is a state and federal legislative update with Kraig Lounsberry, CBAI’s senior vice president of Governmental Relations. Also highlighting the conference are a mini-exposition, a networking luncheon by area of banking, and an evening wine tasting social. Don't miss this opportunity for invaluable networking, powerful information, and a great career move. Not only will you benefit both personally and professionally, you'll leave this conference motivated, energized, and inspired!

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    Midwest Office Supply Acquires Roberts' Office Supply

    Midwest Office Supply
    announced today that it has acquired Roberts’ Office Supply in Effingham. Midwest Office Supply is a preferred services provider of Community BancService Corporation, Inc. (CBSC).

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    Recognize Your Bank’s Community Service Efforts

    Nominate your bank for the 8th annual National Community Bank Service Awards of the Independent Community Bankers of America (ICBA). The national award program is a great opportunity to remind customers of your bank's community service efforts, receive some much deserved kudos from colleagues, and inspire others to follow a similar path. The award recipients will be recognized during the ICBA National Convention and Techworld in March. Submissions are now due Nov. 15, 2008.

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    Forbes and Sageworks Predict 15 Industries "Poised for Pain"

    With the help of Sageworks, a Raleigh, N.C.-based private-company data provider, Forbes.com has assembled a list of the 15 U.S. industries that most likely will feel even more heat in the coming months. The data were drawn from financial statements gathered from some 100,000 privately held U.S. companies with annual revenues up to $10 million, and bucketed by their Internal Revenue Service classifications. We included only industries for which Sageworks had collected data from at least 35 companies. For the complete article, please
    click here.

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    Holiday Signs Now Available from CBAI

    FREE 2009 holiday closing signs are now available from CBAI. The signs are available in color and in black and white, in English and in Spanish.

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