Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois Community Bankers Association of Illinois
 
     A Bi-Weekly News Bulletin for CBAI Members           November 17, 2010 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • Community Banks Have Been Here Before, and Prospered!
  • CBAI Member Responds to Newspaper Article: Editor Issues “Regrets”
  • FDIC Board Votes to Lower Assessments
  • Roger Lehmann Re-elected to Chicago FHLB Board
  • ICBA: Financial Stability Council Should Cast Wide Net
  • CBAI Urges Congressmen to Include IOLTAs in FDIC Guarantee
  • Viewpoint: A Twelve-Step Program for Housing Finance
  • ICBA Backs Extension of Successful BABs Program
  • Banking's History Assures the Industry Has a Future
  • Community Bank Lobby Well-Positioned Following Landmark Elections
  • BAKER Market Update
  • Reduce Your Bank’s Electricity Rates
  • Notice Requirements for Noninterest-bearing Transaction Accounts
  • Site of CBAI 2011 Convention Is Home to Harley-Davidson Museum
  • Branch Managers Seminar Set for November 30
  • Impaired Loans Seminar Scheduled for December 1-2
  • Account Titling Scheduled for December 7-9


  • Community Banks Have Been Here Before, and Prospered!

    Former banker and industry leader Jim Ghiglieri of Shazam, Inc., explains his reasons for optimism despite the challenges facing community bankers. “The early ‘80s saw the prime rate increase to a high of 18.5%. Certificates of Deposits were paying over 15% and mortgage rates were 21%. All of this was done to break the back of inflation and it was successful. Over 1,500 institutions failed, mostly savings and loan institutions but also banks in Texas and in the Midwest farm states. These were horrible, devastating times for the industry and it was widely believed that we were moving toward the Canadian bank model where only a handful of huge, national banks would survive. Of course, a review of the results of that period showed a very different outcome. Community banks became our nation’s small business lenders."
    More.

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    CBAI Member Responds to Newspaper Article: Editor Issues “Regrets”

    While it is common for newspapers to print corrections when the facts of a published story are proven inaccurate, it is rare that a newspaper editor expresses regrets at publishing an article and does so on the front page of the paper. That happened this month in Centralia, Illinois. The Centralia Sentinel published an Associated Press (AP) distributed story titled “ Small banks failing; large firms improve”. Taking exception to its inaccuracies and implications, Ms. Sheila Burcham, CEO at Community Trust Bank, Irvington, drafted a letter to the editor stating “...the author’s careless assertions…unfairly compromises the reputation of small banks to the advantage of large banks." To read the original AP story,
    click here. To read Ms. Burcham’s response, click here.

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    FDIC Board Votes to Lower Assessments

    The FDIC Board voted to implement a CBAI-supported provision in the Dodd-Frank Wall Street Reform Act which will significantly reduce deposit insurance premiums paid by community banks. The Board voted to approve a proposed rule to change the deposit insurance assessment base from Total Domestic Deposits to Total Assets less Tangible Capital. ICBA estimates this change will save community banks $4.5 billion during the next three years.
    Read More.

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    Roger Lehmann Re-elected to Chicago FHLB Board

    Former CBAI Chairman Roger Lehmann of the Harvard State Bank has been re-elected to the board of the Chicago Federal Home Loan Bank. Endorsed by CBAI, Lehmann's final term is for four years and will commence on January 1, 2011. CBAI congratulates him and expresses appreciation to all CBAI members who supported his candidacy.

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    ICBA: Financial Stability Council Should Cast Wide Net

    ICBA said the Financial Stability Oversight Council’s process for determining which nonbank financial institutions should be considered systemically important should be broad enough to include as many large or interconnected nonbank financial firms that pose systemic risks as possible. In a comment letter to the council, ICBA wrote that the list should include large investment banks, insurance companies, hedge funds, private equity funds, venture capital firms, mutual funds (particularly money market mutual funds), industrial loan companies, special purpose vehicles, and nonbank mortgage origination companies.
    Read ICBA Letter.

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    CBAI Urges Congressmen to Include IOLTAs in FDIC Guarantee

    CBAI urged the Illinois Congressional delegation to cosponsor H.R. 6398, legislation that would add Interest on Lawyer's Trust Accounts (IOLTAs) to the extension of the Transaction Account Guarantee (TAG) program. The TAG was implemented during the financial crisis to enhance confidence and liquidity in the banking system. The current TAG program provides for unlimited FDIC insurance for covered accounts including IOLTAs. The Wall Street Reform Act included an extension of the TAG program for two years, beginning January 1, 2011, but unfortunately did not include IOLTAs.
    More.

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    Viewpoint: A Twelve-Step Program for Housing Finance

    "In Denmark, we always say that we are the socialists and America is the land of free markets. But now I see that in mortgage finance, it is the opposite!" according to the chief executive of a Danish mortgage bank as recalled by Allex Pollock, former president and chief executive of the Federal Home Loan Bank of Chicago. Pollock lays out a strategy to save housing finance from a third failure.
    More.

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    ICBA Backs Extension of Successful BABs Program

    Treasury
    announced that more than $150 billion in Build America Bonds have been issued through Oct. 31. Treasury noted that Obama administration’s fiscal 2011 budget proposes making the program permanent with a 28 percent subsidy rate and expanding eligible uses of the bonds. ICBA continues to press Congress to extend the BABs program with other important tax measures during the lame-duck session. The program has allowed many community banks to help finance state and local projects at more reasonable costs. Read ICBA Letter.

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    Banking's History Assures the Industry Has a Future

    Former Federal Reserve governor Mark Olsen’s optimism for the future of banking is taken from its past. He states “The lesson is clear. The banking industry has faced serious problems in the last 40 years but has been up to the challenge of putting itself back on firm and profitable footing. So how should bankers respond to the challenges generated by today's soft economy, residue of bad real estate loans and massive new banking law? Remember, in tough economic times, the bank charter and accompanying deposit insurance are still viewed as sources of strength and stability. It won't be easy, but based on how we have dealt with past crises, we can have confidence in our industry's future.”
    More.

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    Community Bank Lobby Well-Positioned Following Landmark Elections

    The recent landmark midterm elections significantly changed the makeup of Congress, which will have an impact on the community banking industry’s policy objectives. ICBA and CBAI remain well-positioned to represent community banks on Capitol Hill and advance the industry’s policy objectives. The community banking lobby has developed and maintained positive relationships with Congress and will continue working with lawmakers in the days, weeks and years ahead. For comprehensive coverage of the elections, read
    ICBA’s special report analyzing the impact on community banks.

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    BAKER Market Update

    Stocks, commodities, and Treasury prices pushed lower this week, helped by speculation China will raise interest rates to temper local inflation.The S&P index, having hit a two-year high last Friday, is off about 2% since then, potentially marking the largest weekly loss since mid August.
    More.

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    Reduce Your Bank’s Electricity Rates

    CBSC, Ameren Energy Marketing, and The Stone River Group have partnered to offer CBAI members Special Discounts on electricity rates.
    See Release.

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    Notice Requirements for Noninterest-bearing Transaction Accounts

    Implementation Date: December 31, 2010… The final rule imposes three notice and disclosure requirements to ensure that Insured Depository Institutions (IDIs) and depositors are aware of and understand the types of accounts that will be covered by this temporary deposit insurance coverage for noninterest-bearing transaction accounts.
    More.

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    Site of CBAI 2011 Convention Is Home to Harley-Davidson Museum

    Milwaukee, WI, the site of CBAI’s 37th Annual Convention & Expo, is also home to the
    Harley-Davidson Museum. Much more than a nostalgia trip for motorcycle enthusiasts, the museum offers a glimpse of American history as you’ve never seen it. Home to more than 450 cycles and thousands of artifacts, the museum’s unique exhibits tell the stories of the extraordinary people, products, history, and culture of Harley-Davidson. Exhibits include Harley-Davidson and the Military, Women at the Handlebars, the Harley-Davidson Journey, the Motorcyle Gallery, the Design Lab, the Engine Room, and the Experience Gallery, where you can sit on, touch, and admire the bikes. The Harley-Davidson Museum is just one of the city’s unique attractions, so mark September 22-24, 2011, on your calendar today for a convention (and a city) you won’t want to miss!

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    Branch Managers Seminar Set for November 30

    CBAI is pleased to offer “
    Branch Managers in Today’s Environment,” scheduled for November 30 in Springfield. Today's branch manager is faced with a multitude of “real-world” challenges and opportunities. This fast-paced, results-oriented series focuses on critical success elements for managing and leading a sales and service team. The workshop is full of checklists, job aids, case studies, examples, and “real-world” situations. Topics covered include time management, ensuring security, deposit compliance, regulatory adherence, motivating today’s diverse employees, leading the sales and service initiative, exploring proven ways for growing, and retaining deposits and fee income. Also addressed are conducting productive, energized sales-team meetings, getting customers for life, using referrals for revenue growth, branch best practices, and more. Leading this seminar is Dianne Barton, founder and president of Performance Solutions, Inc., Kennesaw, GA, a training and consulting company that specializes in providing solutions to the key challenges facing community banks today in attracting, selling, and servicing their customers.

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    Impaired Loans Seminar Scheduled for December 1-2

    On December 1-2, CBAI will offer
    “Impaired Loans” in two locations. 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 downturn has 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 down grades. Banks are faced with the question of whether banks should form a “special assets” function. Also discussed is impaired asset-reduction requirements for banks under administrative actions. 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. Kemp is also lead faculty member at CBAI’s Community Bankers School.

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    Account Titling Scheduled for December 7-9

    CBAI is also pleased to offer
    “Account Titling” 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 brings more than 26 years of banking experience to Young & Associates, Inc. Fetty works in the product division and assists with product development and management for all the major divisions of the company. In addition, he consults with banks, performs in-bank training, presents seminars, and assists with the development and maintenance of the corporate website.

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