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     A Bi-Weekly News Bulletin for CBAI Members                                    November 9, 2016

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Trump Victory Changes Game for Financial Reform
  • ICBA Releases Post-Election Analysis
  • Initiative Launched to Stop Backdoor Estate Tax Increase
  • ICBA Stands Firm as NCUA Moves to Dismiss Lawsuit
  • FDIC Issues Community Bank Mortgage Lending Guide
  • OCC Updates Community Bank Supervision Booklet
  • CBAI Meets with FDIC’s New Deputy Regional Director
  • FS-ISAC Spotlights How to Respond to Cyber-Incidents
  • Banks Tighten CRE Loan Standards in Q3
  • Investment News From THE BAKER GROUP
  • Resurrecting De Novo Banks
  • Tackle Industry Challenges in San Antonio at ICBA Convention
  • A Rising Rate Lifts All Rates – Or Does It?
  • SHAZAM: Stop the Skimming Fraud
  • With the Holidays Right Around the Corner, Midwest Office Has Perfect Gift Solutions!
  • Have You Checked the CBAI Career Center Lately?
  • Look for the November Issue of Banknotes in Your Mailbox and Online
  • How Vulnerable Are Your Safe-Deposit Boxes?
  • Will This Be the Newest Criticism at Your Next Exam?
  • "How to Pay Your CEO" - A Webinar from BalancedComp & IZALE
  • CBAI LEGAL: Novel Foreclosure Defense Fails
  • CBIS Nicoud: Why Community Banks Should Request Certificates of Insurance
  • Women in Community Banking Conference Set for November 14 & 15
  • Consumer Lending Institute Slated for November 28-30
  • Account Titling Scheduled for November 29 – December 1
  • Community Bank Directors’ Conference Slated for December 12

  • Trump Victory Changes Game for Financial Reform

    Republican presidential nominee Donald Trump's shocking victory late Tuesday invoked memories of the recent "Brexit" decision in the United Kingdom, leaving political and financial observers unprepared for an outcome that did not go as anticipated.

    Once the uncertainty settles down, however, financial institutions are likely to embrace Trump's deregulatory stance. Republicans will now have control of the House, Senate and White House for the first time in over a decade which provides a viable path to a number of big changes to the Dodd-Frank Act, including restructuring the Consumer Financial Protection Bureau.

    Trump could also turn to a package that is being put forth by House Financial Services Committee Chairman Jeb Hensarling (R-Texas) that would create an alternative regulatory framework for banks and credit unions and rollback a number of Dodd-Frank measures.

    Stephen Moore, an economic advisor for Trump, said the campaign hasn't had a lot of discussion of finance policy but noted that Dodd-Frank hasn't worked. "One of the reasons we want to roll it back is because we think it has had a very negative impact on small community banks," said Moore. "The regulatory costs and the compliance costs have contributed to a big consolidation of the industry and if it is not corrected in ten years we are not going to have community banks in this country. The regulatory burden can only be absorbed by big banks." Read More.

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    ICBA Releases Post-Election Analysis

    ICBA has prepared an initial analysis of the November 8 election results and their expected impact on the community banking profession based on currently available data. A number or races remain too close to call.

    In defiance of nearly every public pollster and election model, Donald Trump won a decisive victory, bringing closure to a historic campaign. Republicans hold the Senate as well and the House, albeit with slimmer margins, ushering in complete Republican control of the executive and legislative branches of government and a new era in Washington. Read Analysis.

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    Initiative Launched to Stop Backdoor Estate Tax Increase

    CBAI and ICBA are calling on community bankers to contact their congressional representatives to cosponsor H.R. 6100, sponsored by Rep. Warren Davidson (R-Ohio), which would block a Treasury proposal targeting family businesses for higher gift and estate taxes.

    The 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 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. Enter your address to locate your members of Congress and their phone number on this page. Take Action Here! See H.R. 6100. Read CBAI’s Comment Letter.

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    The ability to batch-transfer funds efficiently and cost-effectively is an essential element in a cash management program. SHAZAM’s ACH services offers a cost-effective and efficient alternative to process transactions, such as direct deposits and government benefits, direct payments and business-to-business payments, e-checks, tax payments, child-support payments and much more. LEARN MORE about SHAZAM ACH and the benefits of membership today!

    ICBA Stands Firm as NCUA Moves to Dismiss Lawsuit

    ICBA is reaffirming its pledge to vigorously challenge the National Credit Union Administration’s commercial lending rule following the agency’s Nov. 2 motion to dismiss ICBA’s lawsuit. While the NCUA claimed that ICBA lacks standing to bring the suit, ICBA’s legal team is confident the association is in the best position to do so on behalf of community banks and consumers threatened by the agency’s unlawful commercial lending rule.

    ICBA’s case notes that the NCUA rule allows tax-exempt credit unions to exceed limits on commercial lending activity established by Congress, sidestepping the legislative branch and putting consumers at risk. The NCUA’s push to unilaterally expand credit union loopholes shows it is captive to the taxpayer-subsidized industry it is charged with regulating, ICBA said.

    While ICBA looks forward to responding forcefully to the NCUA’s motion, community bankers who would like to help ICBA’s legal challenge can contribute to the ICBA Credit Union Litigation Fund. The fund allows community bankers to provide voluntary contributions to ICBA’s lawsuit to help level the playing field with tax-exempt credit unions through the courts. Learn More About Lawsuit. Learn How to Contribute.

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    FDIC Issues Community Bank Mortgage Lending Guide

    The FDIC has published a new guide to help community bankers learn more about grant and mortgage loan programs offered by state housing finance agencies. The guide focuses on first-lien mortgage products, down-payment and closing assistance, mortgage tax credit certificates, and homeownership education and counseling programs that can facilitate mortgage lending. It also provides an individual summary of each state agency with programs and web links. See FDIC Release and Guide.

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    OCC Updates Community Bank Supervision Booklet

    The Office of the Comptroller of the Currency updated the asset-quality core assessment procedures in the “Community Bank Supervision” booklet of the Comptroller’s Handbook. These updates incorporate supervisory guidance issued since the last update to the booklet, including new concentration risk management procedures, stress-testing guidance, and procedures for the credit underwriting assessment. Access Handbook.

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    CBAI Meets with FDIC’s New Deputy Regional Director

    On October 24, 2016, CBAI’s Vice President of Federal Governmental Relations, David Schroeder, met with Christopher Newbury, the Federal Deposit Insurance Corporation’s new Deputy Regional Director – Chicago Region, Division of Risk Management Supervision. The purpose of the meeting was to introduce Newbury to CBAI and to learn more about his background and experience. Schroeder discussed issues of importance to Illinois community banks including the Wells Fargo fraud and scandal, Call Report regulatory relief, and the CFPB’s proposed payday lending rules. Read More.

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    FS-ISAC Spotlights How to Respond to Cyber-Incidents

    FS-ISAC’s latest report for community institutions discusses how to quickly respond to cybersecurity incidents. The weekly risk summary covers the kinds of risks posed by breaches and keys to remediation, including identifying accessed customer information, notifying regulators and taking steps to control the incident. Read the FS-ISAC Report.

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    Banks Tighten CRE Loan Standards in Q3

    Banks left their standards on commercial-and-industrial loans basically unchanged during the third quarter while tightening standards on commercial real estate loans, according to the Federal Reserve Board’s latest senior loan officer survey.

    Demand for C&I loans was modestly weaker from large and middle-market firms, while a moderate net fraction of banks reported stronger demand for construction and land development CRE loans. Regarding loans to households, moderate net fractions of banks reported easing standards on loans eligible for purchase by government-sponsored enterprises, while demand for most types of home-purchase loans strengthened. See FRB Senior Loan Officer Survey.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    Recently, the Bureau of Economic Analysis (BEA) reported that Personal Income rose by 0.3% in September while, at the same time, Personal Spending rose by 0.5%. Some have suggested that things would be better if those two measurements were switched. See Baker Market Update.

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    Resurrecting De Novo Banks

    The number of community leaders in search of a local, trusted bank versus a bank that is “too big to fail” is growing, and with the FDIC on board, it seems that the resurrection of de novo banks is within reach. Of course, once the banks are established, it is important to note some critical steps that must be taken in order to ensure long term success. Read More.

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    Tackle Industry Challenges in San Antonio at ICBA Convention

    The hottest show in community banking, ICBA Community Banking LIVE®, is headed deep into the heart of Texas, March 15-19, 2017 in San Antonio. The event will help attendees tackle industry challenges while helping their banks thrive—all amid the diversity and timeless beauty of the Alamo City. CBAI and sponsoring firms will host a special reception for Illinois community bankers, friends, and guests during this annual showcase event. Learn More and Register.

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    A Rising Rate Lifts All Rates – Or Does It?

    When the Federal Reserve increases short-term interest rates, does it automatically translate into higher short-term rates for all? Economic theory would suggest yes, but in reality, this often isn’t the case – nor should it be. According to Jim Lutter of PMA Funding, when it comes to pricing, especially deposit pricing, numerous competing factors play an integral role. It is important to first differentiate between institutional and retail depositors in order to build an effective framework to meet an institution’s funding plan. Both have unique characteristics that require tailored approaches in order to effectively execute an institution’s funding strategy in a rising rate environment.

    Lutter notes that rising rates do not necessarily need to be transmitted across the board. It is important to understand the unique characteristics of depositors and their underlying motives to establish an effective framework for implementing rate increases. Read More.

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    SHAZAM: Stop the Skimming Fraud

    Skimming fraud can happen anywhere, at any time. Skimmers can be easily placed on a financial institution’s ATM machine with something as simple as a piece of tape.

    They are often hidden in plain sight. That’s why it’s important for banks and credit unions to stay one step ahead of the skimmers. Here are five important steps to accomplish this goal:

      1. Know your machine.
      2. Take a picture of the front exterior, so everybody knows what it’s supposed to look like.
      3. External camera placement to have a video recording on or in the machine.
      4. Educate your customers of the potential threat.
      5. Be vigilant with suspicious activity at ATM sites.

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    With the Holidays Right Around the Corner, Midwest Office Has Perfect Gift Solutions!

    Executive gifts attract and maintain customers and build brand image, recognition and loyalty. Midwest Office can help you achieve all these things while maintaining your budget, brand name and consistency. Midwest is a preferred service provider of CBSC. See Midwest Office November Specials.

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    Have You Checked the CBAI Career Center Lately?

    Recent job postings include Mortgage Loan Officer, Commercial Loan Officer, Retail Banker and Loan Processor. See what’s happening. And, if your bank wishes to post a job opening, contact Andrea Cusick, CBAI SVP Communications at See Career Center Postings.

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    Look for the November Issue of Banknotes in Your Mailbox and Online

    Articles in the November issue include:

    • “Why Strategic Value-Building for Shareholders Is the Key to Retaining Bank Independence”
    • “CBAI Leadership Is Poised to Advance the Ball!”
    • “Addressing Conflicts on Bank Boards”
    • CBAI Annual Convention Highlights

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    How Vulnerable Are Your Safe-Deposit Boxes?

    CBAI perennial presenter Dave McGuinn of Safe Deposit Specialists was called in on safe-deposit box breaches recently. See New York Video. See Florida Video.

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    Will This Be the Newest Criticism at Your Next Exam?

    Is your bank filing a SAR for certain cybersecurity events? You’re already familiar with what details you should include in a Suspicious Activity Report (SAR), but do you know what circumstances would require your bank to file a SAR relating to a cyber event? What details are you expected to include? The U.S. Treasury Financial Crimes Enforcement Network (FinCEN) recently released a guide for banks on what events require a SAR filing and what information should be included in cyber-related SAR filings. Read BankOnIT Blog.

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    "How to Pay Your CEO" - A Webinar from BalancedComp & IZALE

    Join one of the upcoming webinars hosted by Christie Summervill, CEO/Founder of BalancedComp, an expert in human-resource management, and Scott Richardson, CEO/Founder of IZALE Financial Group, an expert in executive compensation. They will be sharing the current trends in compensation and benefits. Both companies are exclusively providing the 2017 CBAI Annual Officer Compensation Survey. Compensation is still the key to hiring and retaining a talented CEO and staff. The webinar will increase your understanding of this sensitive topic for any board of directors. Learn from two financial industry experts strategies and insights on this essential aspect of creating a successful team in today's competitive job market. See More on Upcoming Webinars.

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    CBAI LEGAL: Novel Foreclosure Defense Fails

    The Illinois Appellate Court for the First District (Cook County) recently rejected mortgagors’ defenses to a foreclosure sale. In the case of U.S. Bank Trust, N.A. v. Junior, the husband and wife mortgagors raised a unique argument that a “missing 13th Amendment” to the Constitution had removed the case from the court’s jurisdiction. 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.

    Remember bankers: as far as the trial bar is concerned, you all have deep pockets. So it is absolutely essential that every community bank verify subcontractors hired to do even routine facility maintenance are insured. Read More from CBIS Nicoud.

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    Women in Community Banking Conference Set for November 14 & 15

    CBAI is pleased to offer the 10th annual “Women in Community Banking Conference.” Scheduled for November 14-15, 2016, at the Northfield Inn and Conference Center in Springfield, the “Women in Community Banking Conference” begins with an evening social on Monday, November 14, and a full-day conference is scheduled for Tuesday, November 15. The 2016 Women in Community Banking 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 “Winners Do the Extra Credit – Even When They Have an A” and “Real Teamwork Isn’t about Playing Nicely in the Office Sandbox” with Merit Gest, professional speaker and president and founder of Merit-based Professional Development; “Becoming a Person of Influence” with Debby Davis-Skipp, regional sales manager for Date Center, Inc.; and “The Busy Women’s Guide to Being Active and Eating Healthily” with Heidi Thomas, founder of Sweat 60 Zumba Fitness and Melanie Kluzek, registered dietician and nutritionist with County Market/Niemann Foods; and “Critical Conversations” with Julia Johnson, senior manager, human-resource consulting, at Wipfli LLP. CBAI Chairman Tom Marantz, CEO of Bank of Springfield, 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.

    Don't miss this opportunity for invaluable networking, powerful information, and a great career move. Register today! Not only will you benefit both personally and professionally, you'll leave this conference recharged, motivated, and inspired!

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    Consumer Lending Institute Slated for November 28-30

    Sound credit decisions by community-bank lenders require a high degree of perception and skill. To reach this level of sophistication, your lending personnel must constantly rethink existing approaches, research new ideas, and update their knowledge. To provide your community bank with guidance and training, CBAI has developed the “Consumer Lending Institute.” This educational program provides essential knowledge and skills to your lending professionals and establishes a network of lenders for continued support by sharing experiences with lending professionals. Topics covered include lending compliance, introduction to consumer lending, taking the loan application and interviewing, investigating the application, risk analysis, lending to self-employed borrowers, business development, loan documentation, and collections and bankruptcy. Leading this institute is David Kemp, president of Bankers Management, Inc., College Park, GA, a nationally recognized company in financial services training and bank consulting. Tim Tedrick, CRCM, CRP, and executive officer at Wipfli LLP in Sterling, Illinois, also presents at this institute.

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    Account Titling Scheduled for November 29 – December 1

    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. 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 the seminar is Bryan Fetty, who brings more than 26 years of banking experience to Young & Associates, Inc., Kent, OH. A former vice president of a mid-sized community bank, Fetty's primary expertise is on the operations side.

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    Community Bank Directors’ Conference Slated for December 12

    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. So, please 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; Paul Cornell of Premier Consulting Partners examines shareholder succession; Patrick Dix of SHAZAM Network shares tactics on helping directors leverage the media; Robert Purdy with BKD, LLP, focuses on risk management; and Kraig Lounsberry and David Schroeder of the CBAI governmental relations staff provide a legislative and regulation update.

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    THROUGH 12/12/2016






    Finer Points Blog

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