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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    November 8, 2017

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • President Trump Signs Arbitration Bill
  • Continue Subchapter S Push as Congress Marks Up Tax Reform
  • Noreika Continues De Novo Push in Op-Ed
  • Report: Community Bank Small Business Loans Undercounted
  • ICBA Offers Perspectives on House Tax Plan
  • What Women's Growing Wealth Means for Banks
  • Investment News From THE BAKER GROUP
  • Rural Mainstreet Index Rises for October
  • ICBA’s Fine Again Recognized on List of Top Lobbyists
  • OCC Updates Bank Enforcement Action Policies
  • Attention Goal Setters: How to Have a Great 4th Quarter
  • Complaints: A Banker’s Best Friend
  • City of Chicago Opens 2018 RFP for Municipal Depository Participation
  • CBAI LEGAL: No Insurance Recovery After Settling O.D. Fee Suit
  • CBIS: Employee Benefit Partners Now Available to CBAI Members
  • Time to Check Your Inventory - 10% Off Print Supplies!
  • Women in Community Banking Conference Set for November 13-14
  • Auditing Secondary Mortgage Markets Scheduled for November 28
  • Account Titling to Be Held November 28-30
  • CBAI’s Community-Bank Directors’ Conference Slated for December 11

  • President Trump Signs Arbitration Bill

    Fine Attends White House Arbitration Bill Signing

    Last week President Trump signed into law the CBAI and ICBA-supported Arbitration measure which serves as a victory for financial institutions. ICBA President and CEO Cam Fine attended the bill signing which vacates the Consumer Financial Protection Bureau’s rule restricting consumer arbitration agreements. At the White House, Fine stood by as President Trump signed the legislation and applauded the president for enacting the new law.

    “Arbitration is a well-established and tested process that offers better results for consumers and helps avoid frivolous class-action suits, which serve the interest of trial lawyers at the expense of community banks and consumers,” Fine said in a statement. “ICBA thanks the president for swiftly signing this measure into law because it preserves community banks’ contractual right to pursue fair and timely resolution through arbitration and avoid prohibitively expensive and protracted litigation.”

    Congress passed the CBAI and ICBA-supported resolution the previous week on a 51-50 Senate vote. The White House signing caps a months-long ICBA grassroots campaign that generated nearly 2,000 community banker letters to members of Congress. CBAI thanks Illinois community bankers for making their voices heard on this crucial issue. Read ICBA Release.

    Acting Comptroller Hails Bill Signing

    Upon the bill signing, Acting Comptroller of the Currency Keith A. Noreika stated that President Trump protected consumers and small and midsize banks by repealing a rule that would have cost millions, paved a path to expensive frivolous lawsuits, and lined the pockets of trial lawyers.

    In a release Noreika said, “The action is a victory for consumers and small and midsize banks across the country because it stops a rule that likely would have significantly increased the cost of credit for hardworking Americans and taken away a valuable tool for resolving differences among banks and their customers. The action today preserves a choice for consumers who can choose among financial providers that offer services with arbitration clauses and those that do not.” See Release.

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    Continue Subchapter S Push as Congress Marks Up Tax Reform

    As House and Senate lawmakers debate comprehensive tax reform this week, CBAI and ICBA are calling on Subchapter S banks to weigh in with Congress to protect the S-Corp model. Community bankers can use ICBA’s Action Center to tell Congress to ensure the maximum 25 percent tax rate is available to the more than 2,000 S-Corp community banks.

    With the House Ways and Means Committee marking up its tax reform legislation and Senate Republicans expected to release their own plan this week, now is the time for community bankers to make their voices heard on this critical issue. Contact Congress Today.

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    Noreika Continues De Novo Push in Op-Ed

    Acting Comptroller of the Currency Keith Noreika wrote in a new op-ed last week that policymakers should streamline the processes of chartering a new bank and applying for federal deposit insurance. In American Banker, Noreika cited the dearth of de novo banks since the financial crisis and said the OCC and FDIC can continue making improvements to the application process.

    The op-ed echoes Noreika’s remarks at last week’s ceremony presenting Winter Park National Bank with its official charter. The Central Florida bank, headed by President and CEO David Dotherow, is the first de novo national bank chartered since the financial crisis.

    CBAI and ICBA have pressed regulators to ease regulatory mandates on de novo banks, culminating in the FDIC last year reducing from seven to three years the period of heightened de novo supervisory monitoring and capitalization. However, the associations continue to urge the agency to streamline the financial projections and marketing plans that applicants must submit. See Article.

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    Report: Community Bank Small-Biz Loans Undercounted

    Community banks are even more prolific small-business lenders than previously thought, according to an upcoming FDIC survey previewed in American Banker. The survey, which the agency reportedly plans to release next year, found that the FDIC undercounted the small-business lending of roughly 1,000 community banks by at least $38 billion in the fourth quarter of 2015.

    The agency concluded that relying on call report proxy understates community bank small-business lending, because many loans secured by one- to four-family residential properties are often utilized by small businesses. The report was previewed at last week’s FDIC Advisory Committee on Community Banking meeting.

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    Does your financial institution originate ACH transactions? Do you work with third-party senders? New NACHA Operating Rules now require financial institutions that originate ACH transactions to register their Third-Party Sender customers or attest to maintaining no such customers. Visit the new risk-management portal to register your Third-Party Sender customers by March 1, 2018.

    ICBA Offers Perspectives on House Tax Plan

    In a letter to Chairman Kevin Brady (R-Texas) and Ranking Member Richard Neal (D-Mass.), ICBA President and CEO Cam Fine wrote that community bankers are encouraged by many provisions of the pro-growth Tax Cuts and Jobs Act (H.R. 1), but also have concerns with several provisions.

    The CBAI and ICBA-supported provisions of the bill include the permanent 20 percent corporate rate, the lower 25 percent rate for passive shareholders in Subchapter S community banks, a workable safe harbor for deducting business interest, estate tax relief, repeal of the alternative minimum tax for individuals and corporations, and the permanent extension of the Section 179 deduction.

    However, CBAI and ICBA have significant concerns that the plan does not eliminate or curtail the generous taxpayer subsidies given to credit unions and Farm Credit System lenders, would limit deductions for FDIC premiums, applies an unworkable formula for active shareholders of Subchapter S community banks, penalizes non-qualified deferred compensation plans, and terminates the new markets tax credit for low-income communities.

    The House Ways and Means Committee markup of the measure is expected to run through much of this week. Senate Republicans are expected to unveil their own tax reform plan by week’s end. See House Markup Release. Read ICBA Letter. Read ICBA Release.

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    What Women's Growing Wealth Means for Banks

    Up until the last few decades, the financial world imposed nearly impenetrable barriers that prevented women from reaching the highest levels of an organization. This was the case both in terms of hiring women and offering products. But these days, equality has become a widely touted priority for businesses, and positive gains have been occurring within the profession and the regulatory community. In 2014, Janet Yellen became the first woman to chair the Federal Reserve, for instance. While not banking specific, the number of women on the boards of Fortune 500 companies has grown to 20%, up from 15.7% in 2010.

    Banks are moving in the right direction, but there’s more work ahead, both in the services offered and who is hired — not only because prioritizing equity is the right thing to do, but because the business stakes are equally compelling. Read More.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    In the U.S., the Senate induced a reversal of that rally when it narrowly passed budget measures that enhance the possibility of tax cuts coming to fruition. And stocks prices? Well, they just keep going up ‘cause that’s what they do these days. See Baker Market Update.

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    Rural Mainstreet Index Rises for October

    Ten Percent Expect Farm Foreclosures to Pose Greatest Banking Threat

    The Creighton University Rural Mainstreet Index rose from September’s reading, but remained below growth neutral, according to the latest monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

    The October RMI for Illinois rose to 45.1 from 42.2 in September. The farmland-price index slumped to 35.1 from 35.9 in September. The state’s new-hiring index rose to 56.6 from last month’s 55.4. Jim Eckert, president of Anchor State Bank in Anchor, said, “Harvest is well underway here. Corn is yielding only 5-10 percent less than last year, which is much better than expected. Soybeans yields are 10-15 percent lower than last year.” See Report.

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    ICBA’s Fine Again Recognized on List of Top Lobbyists

    For 10 consecutive years now, ICBA President and CEO Cam Fine has been named to The Hill’s annual list of top lobbyists. The Hill says Fine has “huddled with Trump and lawmakers about dialing back Dodd-Frank regulations on small local banks—a mission with bipartisan support and good odds of success.”

    “I’m honored to be named by The Hill as a top lobbyist on behalf of the community banking industry, and share this honor with community bankers who volunteer their time, effort and passion for the industry, and our dedicated lobbying staff who tirelessly advocate for community banks every day,” Fine said.

    CBAI President Bob Wingert noted, “Cam Fine is a tremendous spokesman and leader for the cause of community banking nationally, and community bankers must rally behind ICBA to achieve our regulatory relief agenda during this session of Congress.” Read The Hill Report. Read ICBA Release.

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    OCC Updates Bank Enforcement Action Policies

    The Office of the Comptroller of the Currency updated its policies and procedures regarding bank enforcement actions and related matters. Effective on December 1, the updates provide the agency with guidelines on consistent terminology, communication, format, follow-up, analysis, documentation, and reporting of bank enforcement actions.

    Separately, the OCC issued a new “Subsidiaries and Equity Investments” booklet of the Comptroller’s Licensing Manual. This booklet revises the “Investment in Subsidiaries and Equities” booklet issued in July 2008. Read Updated Policies. See New Booklet.

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    Attention Goal Setters: How to Have a Great 4th Quarter

    Fourth quarter? What happened? We blinked. That’s it. Summer’s in the wind, and autumn is in already heading into full swing. Calendars are changing. Plans are being made. And eyes are on the end of the year prize. Did you do what you wanted to do? Did you reach milestones? Or do you still have miles to go?

    Consultant Neen James offers guidance to make the fourth quarter more productive and special. Leaders are in full scale acceleration mode to pull out the stops and screech into the new year with kudos all around. She’s got you covered to help make it AH-Mazing – with a side order of fun. Read More.

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    Complaints: A Banker’s Best Friend

    Fewer than half of unhappy customers will bring a complaint to your attention. Those who never say anything will tell an average of 11 or more people about their bad experience. If we recognize complaints as opportunities, we can sway these averages, one resolved complaint at a time.

    So when a customer complains it usually stems from genuine concern. It’s critically important to take care of that customer by listening to the complaint—and resolving it—to ensure a sustainable banking relationship. Read More.

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    City of Chicago Opens 2018 RFP for Municipal Depository Participation

    The City of Chicago has opened its application process for designation as a 2018 municipal depository for both the City and the Chicago Department of Education. Those interested should complete the Request for Proposal (RFP) and submit the application to the Department of Finance no later than December 8, 2017. See More.

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    CBAI LEGAL: Holding ”ORE” and Stock for Loan Collection

    This CBAI Legal column examines Division of Banking Interpretive Letters pertaining to ownership and divestiture of real estate acquired through foreclosure (Other Real Estate) and acceptance of equity stock to mitigate loss on a defaulted loan. See Most Recent CBAI LEGAL.

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    CBIS: Employee Benefit Partners Now Available to CBAI Members

    Through Community BancInsurance Services, powered by Arthur J. Gallagher, CBAI members now have access to an exclusive program in conjunction with MetLife. As employers continue to re-evaluate their employee benefit plans, they constantly search for ways to control benefits costs, while attracting and retaining employees with a valuable-benefits offering. See Most Recent CBIS Article.

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    Time to Check Your Inventory - 10% Off Print Supplies!

    Midwest Office wants to make sure that your supplies and print products are fully stocked and ready for action as 2018 grows near. Have you checked your inventory lately? Now is the time to take advantage of Midwest’s drive-thru and statement-envelopes savings!

    Drive-thru bank envelopes are essential tools for any bank. Whether you are communicating with your customers through a window or when they walk up to the counter, these envelopes are designed to keep your customers’ money safe and secure. Midwest Office carries a number of popular sizes and stays on trend so you don’t have to. Your drive-thru bank envelope:

    • Promotes your brand while safely delivering customers’ money;
    • Cross-promotes add-on products and services;
    • Holds their form in pneumatic tubes; and
    • Markets upcoming special events, promotions or holidays.
    Let Midwest Office be your one-stop shop for all your printing needs. Midwest is a preferred service provider of Community BancService Corporation. To place your next order, contact Kevin Gaffney at 217-303-5511 or email See Specials.

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    Women in Community Banking Conference Set for November 13-14

    Scheduled for November 13-14, 2017, at the Northfield Inn and Conference Center in Springfield, the “Women in Community Banking Conference” begins with an evening social on Monday, November 13, and a full-day conference is scheduled for Tuesday, November 14. The Conference is designed for all levels of female community bankers who are looking to develop their skills and grow within the banking profession. A mini-exposition featuring the latest products and services is offered, as well. Topics covered include “Woman Up!: Overcome the Seven Deadly Sins That Sabotage Your Success” and “Elevate Your Executive Presence and Create a Leadership Pipeline at Your Bank” with Aimee Cohen, founder of Woman Up! And Cohen Career Consulting; “Hunting and Gathering in the Workplace: Effective Communication Skills” with Martha Lehman, partner at SmithAmundsen LLC; and “27 Hangers: Develop a Professional Wardrobe Incorporating Your Style Personality” with Karen Cunnigham, founder of Image Forward; and “The Role of Social Media in Community Banking” with Krista Ammons of Data Center, Inc. CBAI Chairman Gregg Roegge, president/CEO of Rushville State Bank, provides a “CBAI Update.” The agenda also includes a “hot topic” networking session where attendees participate in a roundtable discussion to share issues and ideas with female community bankers statewide.

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    Auditing Secondary Mortgage Markets Scheduled for November 28

    Using internally prepared work papers and regulatory guidance, this seminar guides the attendees through understanding of the different types of secondary-market programs of which a bank can be a part, from a brokered-only program to a complete secondary-market operation. It discusses the regulatory environment and the impact it will have on your internal-audit program. It outlines programs where the loans are sold with servicing retained and servicing released, and the types of internal audits required for each. It brings real-life issues to the attendees and determine appropriate corrective action that the bank should implement to strengthen the internal controls over its secondary-market program and thus strengthen the program. Leading this program are Melissa Blaser, CPA, CRCM, CAMS, CFSA, CFIRS, senior manager specializing in regulatory compliance for financial institutions, and Sara Mikuta, who leads the risk advisory and forensic services team, both at Wipfli LLP.

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    Account Titling to Be Held November 28-30

    This seminar is designed for new account representatives, tellers, and head tellers who need to understand the various types of account ownerships that exist – from single account owners through corporations. You learn what the different ownership types represent and how to make sure you are opening the proper type of account for your customer. In addition, the seminar covers Customer Identification Program requirements and FDIC Insurance, as well as stop payments, forgeries, and tips on spotting and stopping a check-kiting operation. Leading this session is Bryan Fetty with Young & Associates, Inc.

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    CBAI’s Community-Bank Directors’ Conference Slated for December 11

    Being a member of a community bank's board of directors is a challenging and rewarding experience. The community-bank director has duties to the institution, its stockholders and its depositors. And, he or she has responsibilities to the public-at-large. To meet these duties and responsibilities, a director must be knowledgeable and active. Join us at CBAI's Annual Directors' Conference! CBAI gathered top banking experts to make this comprehensive, one-day conference a must-attend. Dale Sheller from THE BAKER GROUP discusses investments and liquidity; Mark Scholl of Wipfli LLP explores new technologies in banking; Jim Mathis of The Reinvention PRO™ discusses how to manage and market to millennials more effectively; and Kraig Lounsberry, CBAI’s senior vice president of governmental relations, provides a legislative and regulation update.

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    THROUGH 12/15/2017






    Finer Points Blog

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