Connected To Community Banking!
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 13, 2013 Graphic
Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • ACTION ALERT – Continue to Urge Congress to Support the CLEAR Act
  • Annual Community Bank Directors’ Conference Scheduled for December 11
  • CSBS CEO Calls for Tiered Regulations to Insure Future of Community Banks
  • Hedge Fund CEO: “Break Up the Large Banks”
  • Mega Banks May Try to Use Fines as Tax Write-offs
  • Q3 Results: 88% of Illinois Community Banks Profitable
  • Rosenbaum Re-elected to FHLB-Chicago Board of Directors
  • CBAI 401(k) MEP Gaining Traction Among Community Bankers
  • ICBA Testifies on Community Bank Access to Secondary Market
  • Big Banks Again Offering 5% Down Payment Mortgages
  • Agriculture Secretary Calls for Prompt Passage on New Farm Bill
  • USDA Publishes Final Rule on Farm Loan Programs
  • Baker Market Update
  • Fannie Mae Reports 3rd Quarter Net Income of $8.7 Billion
  • Maintaining Confidential Information: Verbal Communication, Part 1 of 3 Part Series
  • Federal Reserve Announces Reserve Requirements for 2014
  • Comptroller Issues Updated Booklet on Insider Activities
  • FRB’s Supervisory View on Community Banking
  • Lender-Placed Insurance Implications Coming 2014 for Community Banks
  • Information on Customer Loyalty and Adding Fees
  • Looking for Christmas Promotion Ideas for Your Bank?
  • Four Ways to Mitigate Risk in Banking
  • Women in Community Banking Conference Set for November 19
  • Global Cash Flow Seminar Scheduled for November 18 & 19
  • Understanding the Essential Functions of HR Set for November 20


  • ACTION ALERT – Continue to Urge Congress to Support the CLEAR Act

    CBAI is calling on Illinois community bankers to urge their Members of Congress to advance legislation to provide much needed regulatory relief. CBAI has had great success so far with the Illinois Congressional Delegation but we need to continue to push for co-sponsors. Please act today to ask your Member of Congress to co-sponsor HR 1750 in the House and S. 1349 in the Senate. Urge them to join Congressmen Rodney Davis (R-13), Aaron Shock (R-18), Bill Enyart (D-13) and Mike Quigley (D-5) as co-sponsors on HR 1750 and Senator Mark Kirk as a co-sponsor of S. 1349.

    The Community Lending Enhancement and Regulatory Relief (CLEAR) Act of 2013 (H.R. 1750 / S. 1349) offers community bank exemptions from mortgage and auditing regulations and supports additional capital opportunities for small bank holding companies.
    Read More.

    Back to top

    Annual Community Bank Directors’ Conference Scheduled 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.

    CBAI's popular
    Annual Directors' Conference has assembled top banking experts to make this conference a must-attend. Tom Munz of Munz Consulting, LLC, discusses the differences in roles between management and the board; Lester Murray of THE BAKER GROUP examines the impact of market volatility on A/L management and portfolio strategy; Kraig Lounsberry and David Schroeder of the CBAI governmental relations team provide a legislative update; Don Hutson of BKD, LLP, shares what directors and executive officers need to know regarding risk management and regulatory compliance, and Scott MacDonald of the Southwest Graduate School of Banking finishes the day with a look at the future of community banking. The Community Bank Directors’ Conference also includes a mini-exposition center featuring the latest products and services pertinent to community banks.

    Back to top

    CSBS CEO Calls for Tiered Regulations to Insure Future of Community Banks

    John Ryan, CEO of the Conference of State Bank Supervisors (CSBS), called recently on federal regulators and policy makers to differentiate between mega banks and community banks when it comes to regulations and supervision. Noting that federal regulators are obsessed with oversight of the mega banks at the expense of community banks, Ryan said, “I believe we must rethink our system of supervision. I challenge us regulators to ensure that regulation is not the reason that a $35 million bank sells or self-liquidates.”

    Ryan also stated, “We need large financial institutions, but not so large and so complex that our efforts to regulate them come at the expense of our diverse industry and our American system... The continuing trend of consolidation into a handful of mega banks is a risk to the health, strength, or stability of our financial system and our country.”

    CSBS provides educational and governmental relations services to state bank regulators across America and advocates the dual regulatory system. CBAI and ICBA are strong supporters of tiered regulations that either outright exempt community banks from certain regulations or greatly reduce their compliance burden. ICBA President Cam Fine complimented Ryan’s remarks by describing them as words of encouragement for community banks.
    See Ryan’s Comments. See Fine’s Blog.

    Back to top

    Hedge Fund CEO: “Break Up the Large Banks”

    Kenneth Griffin, founder and CEO of Citadel, one of the most respected hedge fund operations in America, said yesterday that the banking system is too concentrated and too complex, and the big banks should be broken up. He also suggested restoration of Glass-Steagall provisions that were repealed in 1999 which would pull securities operations out of the banking system. CBAI advocates downsizing the mega banks and supports the position expressed by Mr. Griffin.
    See DealBook Article and Video Interview.

    Back to top

    Mega Banks May Try to Use Fines as Tax Write-offs

    Senators Introduce Bill to Prevent the Deductions

    Mega banks that have agreed to pay multi-billion dollar fines to settle claims tied to the sale of bad mortgages may pass along a portion of those fines to U.S. taxpayers as a business expense. Meanwhile, several U.S. Senators expressed outrage in a letter to Attorney General Eric Holder, “Allowing major corporations to write off penalties for breaking the law and harming the public is impossible to justify to taxpayers.”
    Read More.

    In fact, last week Senators Jack Reed (D-RI) and Chuck Grassley (R-IA) jointly introduced legislation to prevent the deductions. See WBSE Article.

    New York Fed President: “Big Banks Lack Respect for the Law”

    Leveling a potentially explosive charge against Wall Street last week, Federal Reserve Bank of New York President William Dudley said some large banks have an apparent lack of respect for law, regulation and the public trust. “There is evidence of deep-seated cultural and ethical failures at many large financial institutions. Whether this is due to size and complexity, bad incentives, or some other issues is difficult to judge, but it is another critical problem that needs to be addressed.” See The Third Metric Article.

    Back to top

    Q3 Results: 88% of Illinois Community Banks Profitable

    Bank Trends, CBSC’s Preferred Provider of Call Report-based peer analysis tools for community banks, just released its quarterly analysis of Q3-13 Call Report data for Illinois community banks.
    See Results.

    Back to top

    Rosenbaum Re-elected to FHLB-Chicago Board of Directors

    Steve Rosenbaum, President of Prospect Federal Savings Bank in Worth, won re-election to a four year term to the Board of Directors of the Federal Home Loan Bank of Chicago. CBAI’s Board of Directors unanimously supported Rosenbaum’s re-election and congratulates him on this important accomplishment.
    Read More.

    Back to top

    CBAI 401(k) MEP Gaining Traction Among Community Bankers

    Bankers Cite Reduced Liability and Less Work as the Primary Factors

    Since its introduction during the CBAI convention in September, scores of CBAI member bankers have attended informational seminars and learned the benefits of participating in the new CBAI 401(k) Multiple Employer Plan or MEP. Several banks have already agreed to join the program and many others are expected to commit to the program soon.

    What ‘s driving the decision to join the MEP? It’s the reduction in fiduciary responsibilities and administrative burdens, according to plan participants. “My bank agreed to join the CBAI 401(k) MEP because it shifts the fiduciary responsibilities and administration to Pentegra and MSTC,” said Mike Estes, president of Fisher National Bank. That frees up time for my bank’s senior executive officers, time that can be spent serving our customers.”

    Andrew Black, president and CEO at Princeville State Bank, a participating bank, added, “The plan also offers bankers the flexibility of standard benefit features or an option to customize benefits based on specific bank needs.”

    To learn how the CBAI 401(k) MEP can help save your bank time, money, and improve retirement benefits, contact Nathan White at
    nwhite@midwesternsecurities.com.

    Back to top

    ICBA Testifies on Community Bank Access to Secondary Market

    In his testimony before the Senate Banking Committee last week, ICBA Chairman Bill Loving urged policymakers not to create a new housing finance system that limits access to the market or narrows options for community banks. “Any future secondary market structure must preserve the relatively simple process for community banks and other small lenders to ensure their continued robust access to the market.”
    See ICBA Release.

    Back to top

    Big Banks Again Offering 5% Down Payment Mortgages

    Despite the long shadow of the housing finance debacle, mega banks like Bank of America and Wells Fargo are again offering mortgages requiring just a 5% down payment. The banks claim that the FHA’s low down payment loan program has become too expensive, and rising home values have created opportunity for private lenders. The banks are requiring private mortgage insurance until the borrower reaches at least 20% equity in the home.
    See CNN Money.

    Back to top

    Agriculture Secretary Calls for Prompt Passage on New Farm Bill

    U.S. Department of Agriculture Secretary Tom Vilsack last week called on Congress to pass a new Farm Bill to reduce troubling demographic and economic patterns in rural America. He said, “Rural America needs a new Farm Bill now, to meet these modern challenges head on and chart a pathway for future economic success across our rural areas."
    See USDA Release.

    Back to top

    USDA Publishes Final Rule on Farm Loan Programs

    The USDA has
    published a final rule amending its Farm Loan Programs regulations for loan making and servicing, specifically those on real estate appraisals, leases, subordination and disposition of security, and Conservation Contract requirements. The USDA also is streamlining the loan-making and servicing process and giving the borrower greater flexibility while protecting the financial interests of the government.

    Back to top

    Baker Market Update

    It’s been said that the key to happiness is having low expectations. That allegorical statement was personified recently in the form of the Bureau of Labor Statistics' monthly Unemployment Report. An announcement that Non-Farm Payrolls rose by 204k looks positively rip-roarin' when compared to the market's expectation of 120k. Happy days are here again!
    See Baker Market Update.

    Back to top

    Fannie Mae Reports 3rd Quarter Net Income of $8.7 Billion

    Fannie Mae reported its seventh consecutive quarterly profit with net income of $8.7 billion for the third quarter of 2013. Fannie Mae has funded the mortgage market with about $3.9 trillion in liquidity since 2009.
    See Fannie Mae Release.

    Back to top

    Maintaining Confidential Information: Verbal Communication, Part 1 of 3 Part Series

    Information security strategies are heavily focused on the bank’s electronic systems. However, even in a technological world, confidential information is transmitted in non-electronic means. Verbal communication, for example, gets much less emphasis, but requires caution to prevent information from being leaked to unauthorized persons. BankOnIT, CBSC’s Preferred Provider for managed IT services, data and infrastructure protection, and systems availability and recovery services, presents a 3-part series that explores potential sources of data leaks and offers advice on how to protect confidential customer information.
    See Part 1 Article.

    Back to top

    Federal Reserve Announces Reserve Requirements for 2014

    The Federal Reserve Board last week announced the annual indexing of the amounts used in determining reserve requirements effective in 2014. The annual adjustments are based on growth in net transaction accounts and total reservable liabilities, respectively, at all depository institutions between June 30, 2012 and June 30, 2013.
    See FRB Release.

    Back to top

    Comptroller Issues Updated Booklet on Insider Activities

    The Comptroller of the Currency (OCC) has issued an updated “
    Insider Activities” booklet which provides guidance for examiners and bankers as to how national banks and federal savings associations may legally and prudently engage in transactions with insiders. The booklet explains how to implement risk-management processes that provide for the appropriate control and monitoring of insider activities. It also explains how examiners review and assess insider activities during the supervisory process.

    Back to top

    FRB’s Supervisory View on Community Banking

    On November 1, 2013, CBAI members and staff attended the 9th Annual Community Bankers Symposium which was jointly sponsored by the Federal Reserve Bank of Chicago, the FDIC, and the OCC.
    See FRB Presentation Report.

    Back to top

    Lender-Placed Insurance Implications Coming 2014 for Community Banks

    The Consumer Financial Protection Bureau's (CFPB) Amendments to Regulation X are now just weeks away from implementation, and community bankers need to be aware of implications relating to lender-placed insurance. For example, a bona fide and reasonable charge for insurance coverage is one that is reasonably related to the servicer’s cost of providing. Simply put, this places rate, coverage, and deductible back n the hands of the respective state departments of insurance.
    Read More.

    Back to top

    Information on Customer Loyalty and Adding Fees

    Gallup: Most Customers Are Talking About You

    As part of Gallup’s ongoing series on the shifting landscape for financial institutions regarding channel optimization, emerging customer behaviors, product penetration and relationship growth, its latest Retail Banking survey found that most of your customers are talking about you. Fortunately, two-thirds are positive while only 11% is negative.
    See The Gallup Blog.

    Focus on Building, Not Measuring, Customer Loyalty

    According to Steve Busby of Greenwich Associates, most banks focus on measuring loyalty when they should be focused on making changes to improve loyalty. An effective customer experience management program can be measured by a return on investment in three areas: increasing revenues via product cross-sell, new customers or raising fees; reducing customer attrition; and resource optimization (cost savings). See AB Article.

    Community Banks Considering Adding Fees

    Many community banks are rethinking their fee structure and range of services. The challenge is to avoid overly punitive fees while offering valued services. According to Dan Geller of Market Rates Insight, it’s about how the fees are structured, and banks should offer choices. See Financial Planning Article.

    Back to top

    Looking for Christmas Promotion Ideas for Your Bank?

    The Financial Brand, an online publication that focuses on branding issues and advice for banks, offers some interesting Christmas promotion ideas for community bank consideration.
    See Financial Brand Article.

    Back to top

    Four Ways to Mitigate Risk in Banking

    Bankers in today’s environment face a number of challenges, including deciphering and complying with ongoing regulatory changes, developing and conducting adequate
    stress testing methods, and justifying or defending changes in their allowance reserves.

    But bankers can do many things to mitigate risk in those areas, according to several experts participating in the 2nd Annual Sageworks Risk Management Summit next month. See Four Pieces of Advice.

    Back to top

    Women in Community Banking Conference Set for November 18 & 19

    Scheduled for November 18-19, at the Crowne Plaza in Scheduled for November 18-19, 2013, at the Crowne Plaza in Springfield, the “
    Women in Community Banking Conference” begins with an evening social on Monday, November 18, and a full-day conference is scheduled for Tuesday, November 19. CBAI recognizes the powerful influence and potential of women in the banking profession, as well as the many challenges you face on a daily basis. As such, our 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. A mini-exposition featuring the latest products and services is offered, as well. Topics covered include “Who Hijacked My Fairy Tale” and “Stand Up and Stick Out in a Crowded Market” with Kelly Swanson, professional speaker and National Speakers Association member; “Change Is Good – You Go First” with Elaine Hand of Innerview, Inc.; “Consumer Financial Protection Bureau (CFPB) Update” with Robin Loftus, 2012-13 chair of the CFPB Community Bank Advisory Board; and “Accountability and Emotional Intelligence” with Julia Johnson of Wipfli, LLP. CBAI Chairman Bill Wubben, president of Apple River State Bank, also provides a CBAI Update.

    Back to top

    Global Cash Flow Seminar Scheduled for November 18 & 19

    During the most recent financial crisis, both federal and state regulators frequently commented that community bankers could improve at global cash-flow analysis. To assist loan officers in sharpening their skills, CBAI has designed this
    one-day seminar, utilizing the Uniform Cash Flow Analysis (UCA) method and providing 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 use of several cases is provided in order to demonstrate global cash-flow analysis, including a case for the self-employed borrower with interests in several business entities. Upon completion of this course, attendees will have an enhanced understanding of how cash flow is calculated and, more importantly, how to interpret its meaning. Leading this seminar is Jeffery Johnson, president and founder of Bankers Insight Group, Atlanta, GA, who has more than 25 years’ experience in the banking field.

    Back to top

    Understanding the Essential Functions of HR Set for November 20

    Never before has the human-resource management been as critical as it is today. Changing employment laws, shifts in employee demographics, changing business models, and a host of other issues have not only changed how banks do business today, but how they manage their employees. The alignment of human-resource programs with the bank's strategic goals and objectives is of critical importance. A human-resource review is an opportunity for the bank to conduct an in-depth analysis of current human-resource practices. The review will help answer the question, “Are your human-resource practices helping, hindering, or having little impact on what your bank is trying to accomplish?” An effective human-resource management function serves as an integral business partner and assists in the management of the bank's most important asset – its people. Leading this
    seminar is Julia Johnson, senior manager of human-resource consulting at WIPFLi LLP, in Green Bay, WI.

    Back to top

    CBAI



    PROFESSIONAL DEVELOPMENT PROGRAMS THROUGH 12/15/2013


    TELEPHONE/WEBCASTS THROUGH 11/30/2013





    CBAI
    RECOMMENDED SERVICES



    CBAI
    INSURANCES



    CBAI
    FOUNDATION



    CBAI
    PUBLICATIONS


    Finer Points Blog

    800.736.2224 (IL) | 217.529.2265 | www.cbai.com

    DISCLAIMER:The association is not responsible for and has no control over the subject matter, content, information, or graphics when viewing links attached to this association's site. If you do not wish to receive e-mails from Community Bankers Association of Illinois (CBAI), 901 Community Drive, Springfield, IL 62703, through CBAI in the future, please click here. - OR - If you would like to be removed from the CBAI e-mail database, please click here.

    © 2013 Community Bankers Association of Illinois. All Rights Reserved.