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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                            November 12, 2014

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Race for State Treasurer May Be Closest Statewide Race in Illinois History
  • Comment: 'No More Bailouts' For Too Big to Fail Banks - is Carney Right?
  • Cam Fine: Transformational Times
  • Banks Tell Merchants to Pay Up Post Breaches
  • SHAZAM's Ghighlieri: ATM Routing Choice Needed to Spur Competition
  • CBAI Members Participate in Community Bankers Symposium
  • 89% of Illinois Community Banks Profitable in Q3 2014
  • Illinois Division of Banking Cautions Banks on Use of Mobile Devices
  • CBAI Premier E-mail Service Protects Sensitive Data Across Multiple Devices
  • CBAI Congratulates Jean Ann Honegger, CEO of Morton Community Bank
  • ICBA’s Hibbs Serves in New Role for Midwest Region
  • OCC Announces Northeastern and Central District Deputy Comptrollers
  • NFTB: Federal Court Vacates HUD’s “Disparate Impact” Rule
  • What Are Other Banks Doing with the ALLL?
  • CFPB Prepares New TILA-RESPA Mortgage Disclosure Implementation Resource
  • Millennials’ Prefer Community Banks, Survey Finds
  • Baker Market Update
  • How to Strengthen Your Next Board Presentation
  • 2015 CBAI Foundation Essay Contest for 26 Scholarships Now Underway!
  • This Week’s Quick Poll
  • Save the Date for Medical Marijuana Webinar on December 11
  • Women in Community Banking Conference November 17 and 18
  • Account Titling Set for December 2, 3, and 4
  • Directors' Conference to be Held December 10


  • Race for State Treasurer May Be Closest Statewide Race in Illinois History

    The race to be Illinois’ 74th state Treasurer may be closer than any other statewide race in Illinois History. Just a few hundred votes separate State Representative Tom Cross and State Senator Mike Frerichs, and we may not know who will be the next Illinois State Treasurer for some time.

    Cross led Frerichs by roughly 19,000 votes on Election Day, but as absentee and provisional ballots were counted, that lead quickly vanished, and by the end of last week the lead was less than 10,000 votes. Absentee and provisional ballot counting continued, and after 69 Chicago precincts were reportedly re-run through the voting machine the lead for Cross was under 2,000 votes. The latest count has Cross leading by just under 500 votes, but because votes are coming in from election authorities all over the state, the exact count is hard to get. Some say the lead for Cross is under 100 votes with absentee ballots still coming in and provisional ballots still being researched and verified. In fact, there are several thousand provisional ballots still to be counted in Cook County and that does not bode well for Cross. Absentee ballots must have been postmarked by November 3, and must be received by the local election authority by November 17. Although a winner might be declared on or around that date, this race will likely not be decided at that time as the candidate who is behind will likely call for a discovery recount to decide if a total recount of all the votes in the election will be necessary. This process is time consuming and expensive, and the cost is born by the challenger, so the decision to re-count will not be made lightly. CBAI will continue to track this race and will provide updates as we get them. Please Click Here for last week’s re-cap of the 2014 election.

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    Comment: 'No More Bailouts' For Too Big to Fail Banks - is Carney Right?

    Mark Carney, chairman of the Financial Stability Board and Bank of England governor, today declared that taxpayer’s cash should never again be used to rescue banks. The governor said the rules proposed on Monday are aimed at forcing creditors, rather than taxpayers, to pay the bill when big banks get into trouble. The plans envisage that global banks like Goldman Sachs and HSBC should have a buffer of bonds or equity equivalent to at least 16 to 20 per cent of their risk-weighted assets, such as loans. These bonds would be converted to equity to help shore up a stricken bank. The banks’ total buffer would include the minimum mandatory core capital requirements banks must already hold to bolster their defenses against future crises.

    Now, in my view, Mr Carney’s moves are all well and good. But they miss the whole point that the financial crisis and all those taxpayer bailouts made clear – we have allowed our banks to become way too big for our own good. Read More.

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    Cam Fine: Transformational Times

    Throughout the sweeping arch of civilization, advancing knowledge and technology have brought us continual and inevitable progress. Every few generations or so, mankind takes a new turn at living and working through another transformational period of change. Each breakthrough period introduces unprecedented new possibilities, often along with turmoil and frustrations. Read Fine Points.

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    Banks Tell Merchants to Pay Up Post Breaches

    Banks and retailers may be gearing up for a battle royale over whose responsibility it is to foot the bill when cyber-criminals attack.Industry bodies that represent banks are urging lawmakers to introduce legislation during the new session of Congress next year that would make retailers pay for cleanup costs themselves. “This is an equity argument,” said Cam Fine, head of the Independent Community Bankers of America, which has about 5,000 members. “If it was Home Depot’s data security system that was breached, shouldn’t they have to reimburse banks for all of the costs since it wasn’t the banks’ fault? That’s just common sense.” Read More.

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    CBAI Members Participate in Community Bankers Symposium

    On November 7, more than 40 CBAI member bankers participated the 10th Annual Community Bankers Symposium hosted by the Federal Reserve Bank of Chicago, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC). Titled “A Decade of Discussion Focused on Community Banking” senior officials from the FDIC, OCC and Federal Reserve Bank presented current industry developments and key bank supervision issues. Bankers engaged regulators on a variety of supervisory issues. Read More.

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    SHAZAM's Ghighlieri: ATM Routing Choice Needed to Spur Competition

    The ATM Industry Association (ATMIA) has long been concerned ATM operators are being excluded from the decision-making process specific to transaction routing. This sanction is occurring despite the fact routing decisions have a significant impact on the revenue and expense sides of ATM operator business models. Currently, competition is limited as network fees and routing decisions are set by networks and issuers. The association is urging the Federal Reserve Board to add language to Reg II, making ATM transactions subject to the routing requirements of the Durbin Amendment. Read More.

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    89% of Illinois Community Banks Profitable in Q3 2014

    Sixteen of the 20 most profitable banks had less than $175 million in assets

    Through Q3 2014, sixteen of the 20 most profitable community banks in Illinois had assets of less than $175 million, debunking the myth that only banks over $1 billion is assets can be profitable. Below are Q3 2014 financial highlights for Illinois community banks. See Q3 2014 Financial Highlights.

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    Illinois Division of Banking Cautions Banks on Use of Mobile Devices

    During a recent meeting with CBAI executives, officials from the Illinois Division of Banking expressed growing concern that banks are allowing employees to access bank information and sensitive customer data via unprotected mobile devices. They explained that more bank employees are using personal devices, such as smart phones or tablets, to connect to the bank’s networks or enterprise systems, including e-mail.

    The Division of Banking officials said they are not confident that personally-owned mobile devices or bring-your-own-device (BYOD) are secure. They indicated very few banks require their employees to install anti-virus/anti-malware software on their smart phones or tablets, scan them for viruses and malware, or scan and remove all mobile apps that present a security threat prior to allowing them to be connected their networks or systems.

    Only a few years ago, community banks were looking at the BYOD movement with trepidation because of concerns that their carefully constructed information security infrastructure would come tumbling down as loan officers and other employees tapped their way to needed data. Today, many banking organizations are not only tolerating employee use of smart phones and tablets but embracing it.

    Here are five tips that banks can use as a foundation for a secure and cost-effective mobile program.

      1. Determine which apps will be allowed and banned.
      2. Establish device locking and user access control policies.
      3. Encrypt devices, shared corporate documents and email attachments.
      4. Separate business and personal information.
      5. Define policies for handling lost or stolen devices.
    Clearly, given benefits ranging from employee convenience to a better customer-facing experience, increasing mobile adoption for bank employees is inevitable. These recommendations are a good starting point for achieving that goal.

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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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    CBAI Congratulates Jean Ann Honegger, CEO of Morton Community Bank

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    ICBA’s Hibbs Serves in New Role for Midwest Region

    The Independent Community Bankers of America® (ICBA) this week named David Hibbs vice president and membership account manager. Hibbs has nearly thirteen years of experience with ICBA serving as Midwest regional vice president. In this new capacity, he is positioned to enhance the ICBA member experience for Midwest community banks through even more personalized access to ICBA’s premier advocacy, services, education and networking resources. See News Release.

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    OCC Announces Northeastern and Central District Deputy Comptrollers

    The Office of the Comptroller of the Currency Monday named Kris Kiefer its deputy comptroller for the Northeastern District and named Blake Paulson its deputy comptroller for the Central District.

    As deputy comptroller for the agency’s Northeastern District, Kiefer oversees more than 300 community banks and federal savings associations, 34 independent national trust companies, and 15 independent data service providers. In that capacity, she will manage more than 350 bank examiners and other professional and support personnel.

    As deputy comptroller for the agency’s Central District, Paulson will oversee 545 community banks and federal savings associations, as well as 20 independent data service providers and trust companies. In this capacity, he manages a staff of 480 bank examiners and other professional and support personnel. He will succeed Deputy Comptroller Bert Otto, who is retiring January 2015.

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    NFTB: Federal Court Vacates HUD’s “Disparate Impact” Rule

    On November 3, the United States District Court for the District of Columbia invalidated the U.S. Department of Housing and Urban Development’s (“HUD’s) “disparate impact” test to show discriminatory lending practices in violation of the federal Fair Housing Act. The Court vacated HUD’s disparate impact test because it exceeded the statutory authority under the Fair Housing Act. For more information on the recent decision in American Insurance Association v. United States Department of Housing and Urban Development, Click Here.

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    What Are Other Banks Doing with the ALLL?

    Over 200 banks and credit unions were recently polled about how they have been managing their allowances for loan and lease losses. In particular, feedback was given on how they release reserves, use an unallocated reserve, and use external Q factor(s). The first poll asked whether or not banks have released reserves in the past four quarters. Despite improvements in the economy and credit quality, 70 percent of respondents have not. See Full Results.

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    CFPB Prepares New TILA-RESPA Mortgage Disclosure Implementation Resource

    The CFPB has created new resources that can help banks comply with the new TILA-RESPA Integrated Mortgage Disclosure Implementation rule. Read More.

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    Millennials’ Prefer Community Banks, Survey Finds

    Millennials are interested in learning more about local banks according to a recent national study released by ICBA and The Center for Generational Kinetics. The 2014 ICBA American Millennials and Banking Study also found that Millennials are by far the most entrepreneurial generation, with 46 percent saying that they are interested in learning about starting up and running a successful small business.

    “Community banks provide nearly 60 percent of all small business loans under $1 million, so they are an excellent resource for the 46 percent of Millennials who are interested in starting a business,” said Chris Lorence, ICBA executive vice president and chief marketing officer.

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    Baker Market Update

    A famous movie director once said that the secret to having a happy ending was knowing when to roll the credits. Well, the credits for quantitative easing rolled last week, but it’s way too early to know how happy the ending will eventually be. See More.

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    How to Strengthen Your Next Board Presentation

    Just as a bank teller speaks differently to a client than to a colleague, tone and content of communication will be different for a management report and those prepared specifically for the Board of Directors. There are certain characteristics that can either add to or detract from the “Board-friendliness” of a presentation, which should be considered when preparing for Board meeting presentations. See Article.

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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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    This Week’s Quick Poll

    Take This Week’s Quick Poll on community banks’ top initiatives for 2015. Take the Poll.

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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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    Women in Community Banking Conference November 17 and 18

    CBAI recognizes the powerful influence and potential of women in the banking profession, as well as the many challenges they face on a daily basis. As such, our Women in Community Banking Committee has shaped the agenda for this eighth annual conference around the top concerns facing women professionals, as well as pertinent banking issues for all community bankers. Don't miss this opportunity for invaluable networking, powerful information, and a great career move. Not only do you benefit both personally and professionally, you leave this conference motivated, energized, and inspired! Register Now!

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    Account Titling Set for December 2, 3, and 4

    This seminar is designed for new account representatives, tellers, and headtellers 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. Seminar available December 2, Mt. Vernon, December 3, Springfield, and December 4, Utica. Register Now!

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    Directors' Conference to be Held December 10

    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. Thus, we invite you to join us at CBAI's Annual Directors' Conference. CBAI gathered top banking experts to make this comprehensive, one-day conference a must-attend. Tom Munz of Munz Consulting, LLC, discusses serving as a community bank director in a regulated environment; Ryan Hayhurst of THE BAKER GROUP examines the volatile bond market; Kraig Lounsberry and David Schroeder of the CBAI governmental relations staff provide a legislative and elections update; Richard Hamm of Advantage Consulting & Training discusses global cash flow; and Mark Scholl of Wipfli, LLP, shares what’s on the horizon in technology for community bank directors. Register Now!

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