Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                       November 16, 2011 Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • Urge Illinois House Members to Cosponsor Communities First Act
  • CBAI Responds to Senator Durbin on Deposit Account Disclosures
  • 2012 Washington Policy Summit Dates Set
  • “Go Local” Main Street Campaign Gaining Attention
  • Autonomous Voice Essential for Community Banks
  • Double Standard Exposed in Enforcement Actions
  • History Repeats Itself - Getting Investment Houses Out of Banking
  • Report: FDIC Planning Review of Community Bank Oversight
  • CBAI Encourages Members to Complete ICBA Overdraft Survey
  • Wanted: Your Views on Credit Card Issuance
  • Baker Market Update
  • Midwest Farmland Values Surge
  • ICBA Backs Megabank Capital Proposal
  • SBA Has Empowered Banks To Help Businesses
  • Prosecutions for Bank Fraud Decline Sharply
  • Safe Deposit Essentials Scheduled for November 29–December 1
  • Consumer Credit Reports and Scores Set for November 29–December 1
  • Account Titling to be held December 6-8
  • Impaired Loans Scheduled for December 6 & 7
  • The Ins and Outs of Auditing Lending Compliance Scheduled for December 8

  • Urge Illinois House Members to Cosponsor Communities First Act

    The House Financial Services Subcommittee on Financial Institutions and Subcommittee on Capital Markets held a joint hearing today, November 16th on the CBAI and ICBA-backed Communities First Act (CFA). ICBA President Sal Marranca testified in support of the measure.
    See Release.

    The CFA (H.R. 1697) is bipartisan legislation that would provide much needed regulatory relief for community banks and their communities. The CFA also reduces the tax burden on community banks and narrows the competitive gap between community banks and tax-exempt credit unions. The CFA is extremely important to the continued ability of community banks to effectively service their communities.

    H.R. 1697 currently has nearly 50 cosponsors including Illinois Congressmen Robert Dold (R-10th), Tim Johnson (R-15th), Don Manzullo (R-16th), and Mike Quigley (D-5th).

    CBAI recently joined with community bank trade associations across the country in support of the CFA. Read letter. Please click here to urge your Congressman to cosponsor this important legislation. Thank you for your efforts!

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    CBAI Responds to Senator Durbin on Deposit Account Disclosures

    U.S. Senator Richard Durbin has asked CBAI and other Illinois financial trade groups to provide their customers with standardized, concise, and consumer-friendly disclosures listing the fees and key terms associated with checking accounts. The Senator recommends that banks use a new form proposed by the Pew Charitable Trust.
    See Durbin's Letter.

    In a response to Senator Durbin, CBAI stated that community banks provide their customers with all of the deposit account disclosures that are required by the banking regulators, at the time they are required, with the information that is required, and they are examined for compliance on a periodic basis. CBAI pointed out that the proposed new disclosure form has not been approved by any banking regulator, and existing disclosure requirements are sufficient. Providing consumers two disclosures, with essentially the same information but in a different form, would be duplicative and confusing.

    CBAI encourages the CFPB to simplify all deposit account disclosures so they are easily understood by the consumers who read them. CBAI also encourages the CFPB to thoroughly vet any proposed replacement account disclosures with input from community banks, in a manner similar to their revisions of the RESPA and TILA mortgage forms. See CBAI Response.

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    2012 Washington Policy Summit Dates Set

    CBAI’s 2012 Washington Visitation will again be held in conjunction with the ICBA’s Washington Policy Summit, which is scheduled for April 24-27 at the Gaylord Resort and Convention Center in National Harbor, Maryland on the Potomac. Hundreds of community bankers from across the nation are expected to attend, and CBAI encourages member bank officers and directors to participate in this important event. It’s a perfect time to visit our nation’s Capital.

    Meetings will be scheduled with the Illinois congressional delegation and representatives of the various regulatory agencies, and presentations will be made by top-ranking government officials. Please mark your calendars now. Further details will be provided in the near future. For more information, please contact either Kraig Lounsberry, SVP Government Relations, at 800/736-2224 ( or David Schroeder, VP Federal Governmental Relations, at 847/909-8341 (

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    “Go Local” Main Street Campaign Gaining Attention

    CBAI and ICBA are continuing to expand the “Go Local” public relations campaign to encourage consumers to bank locally with community banks. CBAI offers a letter to the editor, news releases, and newspaper/statement stuffer artwork for community bank use.
    See More Details.

    Meanwhile, ICBA is taking the “Go Local” message to Wall Street by featuring an hourly advertisement on the CBS Spectacular jumbo screen in Times Square throughout the holidays. See Release. ICBA also has several customizable “Go Local” resources for community banks on its “Go Local” Webpage.

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    Autonomous Voice Essential for Community Banks

    The importance of maintaining autonomous representation for community banks was borne out in a recent article that addressed the existence of multiple groups representing the giant banks including the ABA. Arthur Wilmarth, a banking law professor at George Washington University, said, “The American Bankers Association on some things reflects the views of their small and midsized members. But on issues like deposit insurance assessments, they’ve been conflicted. On issues where there is a conflict between big and small banks the ABA has some difficulty and struggles. They can’t speak as clearly as ICBA certainly, but they also can’t speak as clearly for the big banks as the Roundtable or The Clearing House.”

    CBAI has long advocated that, with autonomous representation in Washington and Springfield, the positions of community banks on important issues will not be diminished or compromised by the varied interests of the mega banks.
    See Full Article.

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    Double Standard Exposed in Enforcement Actions
    From the Blog of ICBA’s Cam Fine titled “Is This Justice?”

    A recent New York Times article exposes the double standard in regard to enforcement actions between community banks and too-big-to-fail institutions. The article finds that nearly all of the largest Wall Street financial firms have repeatedly settled fraud cases by promising to never again violate the antifraud laws, only to do so over and over again. According to evidence revealed in the article, there were at least 51 violations in just the past 15 years, with several of the largest banks in the United States having violated fraud laws multiple times in just the past five years alone!

    Any community banker or director reading the article should be outraged. There are no consequences for senior officers and boards of these systemically dangerous financial firms. However, community bankers and directors who, in good faith, sat on the boards of failed community banks are routinely pursued individually and collectively by bank regulators both civilly and, in some cases, criminally.

    What is that all about? Certainly not equal justice. It is justice by size and influence—sometimes called crony capitalism. Whatever you call it, don’t call it equal application of the laws.
    See NY Times Article.

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    History Repeats Itself - Getting Investment Houses Out of Banking

    Soon after the Crash of 1929 and as our nation was entering the Great Depression, Congress considered reforms to prevent another financial crisis. Ultimately, after considerable wrangling, Congress enacted various reform measures in 1933, most notably the Glass-Steagall Act which separated investment banks from commercial banks. Interestingly, even the heads of certain giant banks agreed with the provision.

    Unfortunately, the lessons of that era eventually faded, for in 1999 Congress passed the Gramm-Leach-Bliley Act which authorized the common ownership of commercial and investment banks. Then we experienced the debacle of 2008 and beyond. CBAI recommends that the basic provisions of Glass-Steagall be restored to avert yet another financial crisis. For enlightening banking news excerpts from 1933,
    Click Here.

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    Report: FDIC Planning Review of Community Bank Oversight

    The FDIC will launch a review of its supervision of community banks to make the process more efficient and possibly less burdensome, according to comments from an agency official reported by
    HousingWire. FDIC Director of Supervision and Consumer Protection Sandra Thompson reportedly said that the agency wants to promote the community banking sector as a major player in economic growth and job creation. She said that supervisors have to take a holistic view of oversight.

    ICBA has met repeatedly with FDIC officials and other bank regulators to express community bank concerns with the overly harsh examination environment. The association also strongly supports legislation to ease the exam environment and regulatory and tax burdens on community banks.

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    CBAI Encourages Members to Complete ICBA Overdraft Survey

    In an effort to gain current information on the consumer overdraft payment services of community banks, ICBA is asking community bankers to complete a survey. The findings will help ICBA properly advocate community bank positions to policy makers and regulators who are implementing and proposing new overdraft regulations and guidance. CBAI urges its members to participate in the survey which can be accessed by
    Clicking Here.

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    Wanted: Your Views on Credit Card Issuance

    The 2011 ICBA Payments Survey revealed that 40 percent of community banks have experienced a decline in revenue in the past year (due to fraud and increased regulation). Now ICBA Bancard is seeking to learn whether credit cards may be a resource to replace some of that lost income. Share your thoughts on how credit cards could fit into your payments blueprint and be entered into a drawing for a chance to win one of three Kindle Fires. Only collective responses will be reported.
    Take the Survey.

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    Baker Market Update

    European officials have been hard pressed lately to finalize a rescue fund to limit the impact of a Greek default and even more so, the contagion of the debt crisis affecting other parts of Europe.
    Read More.

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    Midwest Farmland Values Surge

    The 25 percent year-over-year increase in Midwest farmland values was the largest in more than three decades, and the 7 percent increase in the value of good farmland in the third quarter matched the highest since the late 1970s. In addition, credit conditions for agricultural producers remained favorable with low interest rates. Repayment rates for farm loans rose in the third quarter compared to a year ago, and the average loan-to-deposit ratio for Seventh Federal Reserve District banks was 69 percent, the lowest since 1997.
    See the Chicago Fed’s AgLetter.

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    ICBA Backs Megabank Capital Proposal

    ICBA expressed support for a Federal Reserve proposal that would require the 19 largest U.S. bank holding companies to provide selected quarterly and annual performance and portfolio data to the agency. As required by the Dodd-Frank Wall Street Reform Act, regulators would review the data to assess the quality of the banks’ capital plans and risks in future capital actions. In a
    comment letter to the Federal Reserve, ICBA wrote that it is encouraged that the plans incorporate pro forma stressed conditions to ensure that the banks have sufficient capital to absorb future losses regardless of their own expectations. ICBA also cautioned the agency against expanding the reporting requirements to smaller institutions such as community banks, which did not create systemic and trading risks in the banking sector.

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    SBA Has Empowered Banks To Help Businesses

    CBAI associate member Small Business Growth Corporation reports that recent improvements to the SBA’s 504 Debt Refinance Program (Refi Program) have greatly increased the scope and capacity of the Refi Program while simplifying the process. In February 2011, SBA launched the Refi Program to allow businesses to refinance eligible fixed assets through its 504 Loan Program, thus enabling them to take advantage of the 504’s long-term, fixed-rate financing. However, the program’s original regulations severely limited the scope of businesses that were able to benefit from this unique financing solution. After listening to thousands of comments regarding the pros and cons of the Refi Program, SBA responded with new regulations that greatly expand the program’s abilities while simplifying the process.

    What’s New?
      *Cash-Out Refinance Now Available – Consolidate debts, including lines-of-credit!
      *Bank is no longer required to be at 50% of Appraised Value
      *Refi Program now much easier to use

    Banks that tried this program when it was in its infancy and found their projects did not qualify, should try the program again. The amended parameters have increased the program’s ability to strengthen banks and provide payment stability for borrowers.

    Located in Springfield, IL, Small Business Growth Corporation (Growth Corp) is a not-for-profit Certified Development Company (CDC) that works in conjunction with financial institutions to provide financing assistance to small businesses throughout the entire state of Illinois, and parts of Missouri, Indiana, Iowa, and Kentucky. Growth Corp is committed to the promotion of business expansion and job creation through the 504 Loan Program. For more information, please call (217) 787-7557 or visit

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    Prosecutions for Bank Fraud Decline Sharply

    A new analysis of Justice Department data has revealed a steady decline in federal prosecutions for financial institution fraud during the past decade. The finding included crimes committed both within and against banks. The decline is in sharp contrast to the marked increase in prosecutions for other crimes which have doubled over the past decade.
    See Report.

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    Safe Deposit Fundamentals, Compliance, Legal & Security Issues Scheduled for November 29–December 1

    CBAI is pleased to offer
    “Safe Deposit Fundamentals, Compliance, Legal & Security Issues” in three locations statewide. Are your internal safe deposit procedures now in compliance with all state, federal, and security regulations? Do you follow correct day-to-day operating procedures? This timely and comprehensive presentation contains important information about your “Most Frequently Asked” operations and compliance questions. It covers the USA Patriot Act, Suspicious Activity Reporting, Bank Protection Act, OCC, FDIC, NCUA, and ADA regulatory requirements, plus recommended procedures for renting, surrendering, box access, key control, deceased renters, living trusts, payable-on-death accounts, delinquent boxes, record retention, unclaimed property, and many other legal and operation issues. David McGuinn, a nationally known expert in the area of safe deposit, provides clear concise answers to complicated questions regarding your institution's responsibility and potential liability. He also identifies and discusses various compliance issues and provides current examples relating to each regulatory, operations, and security topic. McGuinn, president and founder of Safe Deposit Specialists, is a former banker with more than 40 years of safe deposit experience.

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    Consumer Credit Reports and Credit Scores Scheduled for November 29–December 1

    CBAI is pleased to offer
    “Consumer Credit Reports and Credit Scores” in three locations statewide. This one-half day seminar addresses two key topics. The first topic deals with and discusses credit reports, what they are, what is in them, and what is not included in the reports. It also looks at how the bureaus sort, store, and retrieve data. It reviews what information is really needed to get a complete report, how to pull a report correctly, how to get the correct information, how to pull the report without damaging the consumers' credit files, and how to read a credit report. Lastly, it reviews the different types of inquiries that do not count against the consumers' score.The second key topic is credit scores. It provides a brief history of credit scores. It examines the different models offered by Fair Isaac, Experian, TU, and Equifax. It then reviews how each bureau changed the scoring when they bought the program from FICO and how they are the same. Samples of actual files and their scores or lack of scores is also provided. Finally, this course shows you how you can explain scores and help your customers to correct and increase their scores. Leading this seminar is Larry Nelson, owner of Kewanee Credit Bureau.

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    Account Titling Scheduled for December 6-8

    “Account Titling” will be held in three locations this December. 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 operational issues tellers face daily. All new account representatives, tellers, and head tellers would benefit from attending this seminar. Leading this seminar is Bryan Fetty of 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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    Impaired Loans Scheduled for December 6 & 7

    CBAI has scheduled
    “Impaired Loans” seminars in two locations this December. This program is designed to respond to today’s economic and regulatory environment. Safety and Soundness exams have created tremendous stress in the banking community. The economic down-turn seemed to be triggered by the collapse of the subprime mortgage market. Income-producing properties appear to be the next great challenge for community bankers. Loans that have been rated as “pass” credits are now being rated as “substandard” credits. Cash flow and appraisal reviews are the major cause of loan downgrades. Banks are faced with the question of should we form a “special assets” function? We also discuss impaired asset reduction requirements for banks under administrative actions. Topics covered include preparing for a safety and soundness exam, managing impaired commercial real estate loans, responding to regulatory orders, documenting the impaired loan process, and workout guidelines and strategies. Senior lenders, special asset managers, CEOs, board chairs, loan review officers, and credit administrators all benefit from attending this seminar. Leading this seminar is David Kemp, president of Bankers Management, Inc., College Park, GA, a nationally recognized company in financial services training and bank consulting.

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    The Ins and Outs of Auditing Lending Compliance Scheduled for December 8

    CBAI is pleased to offer
    “The Ins and Outs of Auditing Lending Compliance” in Springfield this December. In this program, attendees learn audit skills necessary to examine loan files for compliance with major loan regulations, including Truth in Lending (Regulation Z), Real Estate Settlement Procedures Act (RESPA), Equal Credit Opportunity Act (Regulation B), Flood Protection Act, Homeowner's Protection Act (PMI Law), Fair Housing Act, variable rate real estate lending, and fair lending principals. Attendees also learn techniques for implementing a risk based loan compliance program and selecting files and records for compliance testing. This seminar should be attended by compliance officers and compliance auditors. Leading this seminar is Tim Tedrick, partner at WIPFLi, LLP, who specializes in compliance, consulting, and assistance. He performs internal audit and compliance exams for all sizes of financial institutions in five states.

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    ACT Appraisal


    First Data Internet Banking Suite


    CBAI EVENTS December 13
    with Dr. Kevin Elko
    Community Bank Directors' Conference

    Crowne Plaza, Springfield

    Finer Points Blog





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