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 18, 2009 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • CBAI Staff Works Capitol Hill

  •         -CBAI and ICBA Lobby Against Overdraft Restrictions
            -House Committee Working on a Systemic Risk/TBTF Measure
            -Amendments Introduced to End TBTF and Prevent Future Bailouts

  • ICBA and CBAI Have Deep Concerns with Dodd Single-Regulator Plan
  • FDIC Approves Three-Year Prepayment Plan
  • Baker Market Update
  • Federal Agencies Issue Final Rule for Mortgage Loans
  • ICBA and CBAI Back Permanent Estate-Tax Relief
  • Fed Guidance Provides Reg Z Relief
  • Fed Criticized for Handling of AIG
  • CBAI Members Re-elected to Chicago FHLB Board
  • Comptroller Urges Global Mortgage Underwriting Standards
  • St. Louis Fed President Addresses Economy
  • Corn Harvest Passes Halfway Mark
  • Five Tips to Get Your Bank Back in a Growth Mode
  • New Free Ads for CBAI Members Now Available
  • CBAI Annual Scholarship Program Underway; No Cost to Participate
  • Keys to Survival in Fiduciary Administration in Current Climate
  • CBAI Branch Managers’/Supervisors’ Skills December 3
  • Community Bank Directors’ Conference Set for December 10
  • CBIS Announces Exclusive New Service for Bank Customers
  • Rewarding Cardholders Never Looked So Profitable
  • FREE WEBINAR: The UCC Amendment Minefield


  • CBAI Staff Works Capitol Hill

    On Monday and Tuesday of this week, CBAI President Bob Wingert and Senior Vice President of Governmental Relations Kraig Lounsberry attended an ICBA issues briefing for state community banking associations in Washington, D. C. They met privately with several members of the Illinois congressional delegation on financial reform issues including too-big-to-fail and systemic risk, FDIC deposit insurance, overdraft programs, and ways to strengthen bank capital.

    CBAI representatives urged delegation members to support an amendment offered by Rep. Gutierrez (D-Illinois) to base FDIC assessments on total assets less tangible capital whereby the giant banks will pay a greater proportion of each assessment and community banks will pay less; to support an amendment offered by Rep. Kanjorski (D-Pennsylvania) to allow regulators to break up systemically dangerous institutions; to enable capital-stressed community banks to access TARP on reasonable terms; to permit banks to amortize loan losses for up to 10 years; to allow banks to count 100% of the allowance for loan and lease losses as Tier 2 capital; to permit banks that have taken TARP funds to be eligible for the net operating loss carry forward provisions recently enacted into law; and to oppose restrictions on overdraft programs. The community bank agenda was well received by the Illinois delegation.

      -CBAI and ICBA Lobby Against Overdraft Restrictions
      CBAI and ICBA this week expressed opposition to proposed restrictions on overdraft protection programs. ICBA submitted a
      written statement to Congress stating that the restrictions will cause community banks to abandon discretionary and automated overdraft programs, resulting in a dramatic increase in returned checks and debit-card transactions. CBAI President Bob Wingert and CBAI Senior Vice President of Governmental Relations Kraig Lounsberry met with several Illinois congressmen in Washington this week to convey community bank concerns regarding the imposition of price controls and numerical limits on overdrafts.

      Meanwhile, the Federal Reserve last week announced final rules that prohibit banks from charging overdraft fees on ATM and one-time debit card transactions unless the consumer consents to the overdraft service.

      -House Committee Working on a Systemic Risk/TBTF Measure
      The House Financial Services Committee yesterday rejected a systemic risk plan supported by Wall Street in favor of a tougher process that includes a resolution fund pre-funded by the TBTF banks for use in the event of a big bank failure. Other amendments will be offered today and tomorrow to give regulators stronger powers to break up firms that pose a risk to the nation’s financial and economic system. Another amendment would change the FDIC assessment method from domestic deposits to total assets less tangible capital.

      CBAI and ICBA support these measures, and CBAI executive staff members Bob Wingert and Kraig Lounsberry were in Washington on Monday and Tuesday lobbying committee members to adopt the amendments. More.

      -Amendments Introduced to End TBTF and Prevent Future Bailouts
      CBAI and ICBA applaud the introduction of amendments today during the House Financial Services Committee markup of financial reform legislation to help prevent future bailouts, protect taxpayer dollars and end too-big-to-fail. More.

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    ICBA and CBAI Have Deep Concerns with Dodd Single-Regulator Plan

    ICBA and CBAI expressed serious concerns with draft legislation introduced by Senate Banking Committee Chairman Christopher Dodd (D-Conn.) that would establish a single federal bank regulator. “ICBA adamantly opposes a single federal banking regulator,” the association said in a statement. “The concept is a deeply flawed approach that would disadvantage our nation’s more than 8,000 community banks.”
    More.

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    FDIC Approves Three-Year Prepayment Plan
    Banks Will Prepay Regular Assessments Through 2012 on Dec. 30

    The FDIC Board of Directors voted unanimously for a final rule requiring that banks prepay three years of regular assessments to fund the Deposit Insurance Fund. The agency also approved a joint final rule on the Secure and Fair Enforcement for Mortgage Act.
    More.

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    Baker Market Update

    Treasuries are changed little last week; the latest consumer sentiments unexpectedly fell for the second straight month; retail sales for the month of October are expected to rebound.
    More.

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    Federal Agencies Issue Final Rule for Mortgage Loans

    The federal bank and thrift regulatory agencies have issued a final rule providing that mortgage loans modified under the U.S. Department of the Treasury’s Home Affordable Mortgage Program (HAMP) will generally retain the risk weight appropriate to the mortgage loan prior to modification. The agencies adopted as final their interim final rule issued on June 30, 2009, with one modification. The final rule clarifies that mortgage loans whose HAMP modifications are in the trial period, and not yet permanent, qualify for the risk-based capital treatment contained in the rule. The final rule, issued by the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of Thrift Supervision, will take effect 30 days after publication in the Federal Register, which is expected shortly.

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    ICBA and CBAI Back Permanent Estate-Tax Relief

    As part of continuing efforts to enact estate-tax relief and provide greater certainty in estate planning, ICBA, state community banking associations, and other members of the Family Business Estate Tax Coalition voiced support for legislation to implement a permanent estate tax rate and exemption level. The bipartisan Estate Tax Relief Act of 2009 (H.R. 3905) would increase the exemption level to $5 million and reduce the rate to 35 percent. Both would be phased-in over 10 years.

    In a
    joint letter to the bill’s sponsors, ICBA said it supports these measures, which would help family businesses and farms that are struggling to expand their businesses and create jobs. ICBA and the coalition will continue their efforts to get the best possible estate tax reform. The bill’s sponsors are Reps. Shelley Berkley (D-Nev.), Kevin Brady (R-Texas), Artur Davis (D-Ala.) and Devin Nunes (R-Calif.).

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    Fed Guidance Provides Reg Z Relief
    Balloon Payment Loans Maturing in Less Than Seven Years Not Prohibited

    The Federal Reserve has clarified that the July 2008 revisions to Regulation Z regarding repayment ability for higher-priced mortgage loans do not prohibit community banks from offering balloon residential mortgages that mature in less than seven years.

    Issuing a set of questions and answers, the Federal Reserve noted that, while creditors have an affirmative duty to engage in prudent underwriting, they are not required to verify that consumers have the assets and/or income at the time of consummation that would be sufficient to pay the balloon payment when it is due.

    Rather, the Federal Reserve said the creditor should verify that the consumer would likely be able to satisfy the balloon payment obligation by refinancing the loan or through income or assets other than the loan collateral. The creditor is not required to predict the consumer’s future financial circumstances, interest rate environment and home values.

    The Federal Reserve’s guidance was issued in response to a recent meeting with ICBA.

    This guidance does not address the burden of creating escrow accounts for loans that meet the definition of “higher-cost.” ICBA continues to work with policymakers to limit this requirement for community banks.

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    Fed Criticized for Handling of AIG

    Neil Barofsky, special inspector general for the financial bailout, said this week that federal regulators failed to negotiate concessions from 16 banks that were counterparties to AIG insurance contracts. As a result, the banks were paid 100 cents on the dollar for the underlying assets that were insured by AIG via credit default swaps that totaled about $62 billion.
    More.

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    CBAI Members Re-elected to Chicago FHLB Board

    The Chicago FHLB
    announced this week that Roger Lehmann, President and CEO of The Harvard State Bank, was elected to a one year term: and Steven Rosenbaum, President and CEO of Prospect Federal Savings Bank in Worth, was elected to a four year term, effective January 1, 2010. CBAI congratulates both bankers on their election and for their willingness to represent the community banking profession on the Chicago FHLB Board.

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    Comptroller Urges Global Mortgage Underwriting Standards

    U. S. Comptroller John Dugan said yesterday that bank regulators around the world should set minimum mortgage underwriting standards for all mortgages made in their respective countries. He recognized that each country has its own unique credit culture and there will be variances. He identified at least three underwriting standards that should be mandated in the United States: 1) verification of income and assets; 2) meaningful down payments; and 3) for mortgages with payments that increase over time, qualify borrowers on ability to pay the later, higher payments.
    More.

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    St. Louis Fed President Addresses Economy

    In a speech today in St. Louis, James Bullard indicated that policy makers may not start to raise interest rates until early 2012. He also noted that too-big-to-fail is intolerable, and it must be addressed by creating a resolution regime for both giant banks and nonbanks in the so-called shadow banking system.
    More.

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    Corn Harvest Passes Halfway Mark

    Farmers took advantage of good weather last week to increase the corn harvest to 52% and soybean harvest to 90% of the crop in the bin.
    More.

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    Five Tips to Get Your Bank Back in a Growth Mode

    CBAI Associate Member Northstar Strategies
    presents the latest in its “Winning Strategies for Community Banks” series.

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    New Free Ads for CBAI Members Now Available

    This quarter’s free statement
    stuffer/newspaper ads are ready!

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    CBAI Annual Scholarship Program Underway; No Cost to Participate

    Each year, CBAI makes available 13 scholarships for Illinois high school seniors. You can be a hero by sponsoring one of the winners! The program is free to CBAI member banks. To order information, contact Bobbi Watson at
    bobbiw@cbai.com or 800/736-2224.

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    Keys to Survival in Fiduciary Administration in Current Climate

    CBAI is pleased to offer
    “Keys to Survival in Fiduciary Administration in the Current Environment” in two locations this December. In these uncertain times, fiduciary administration has become a minefield. One slip-up can be costly to your bank's bottom line, as well as its reputation. How can you be pro-active in this process? What is necessary before you accept an account, and what is necessary oversight on an ongoing basis? This seminar helps you avoid potentially costly missteps in the current litigious environment while still meeting the expectations of your clients. Those institutions that understand these underlying risks can improve their bottom lines by steering clear of the potential problems that fiduciaries often face. We discuss the perils of not developing a matrix, as well as the positives in establishing your individualized approach to risk. Topics covered include board and committee oversight, establishing a risk-based approach to fiduciary administration, issues in developing a risk matrix, documentation of fiduciary activities, and the importance of investment process and conduct.

    Leading this seminar are Roger A. Pond and Becky T. Kelly, partners in The Fiduciary Education Center, LLC, which was established in 2002 to provide specialized group training for bank trust audiences and other fiduciary professionals.

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    CBAI Branch Managers’/Supervisors’ Skills December 3

    CBAI is pleased to offer
    “Branch Managers’/Supervisors’ Skills” in Springfield this December. Want to improve your leadership skills; remember names, faces, and lists; improve your telephone etiquette; polish your public speaking skills; and kick start your customer service efforts? Then attending this very lively and timely session gives you that and more! Charles Williams is an enthusiastic trainer with more experience in bank and financial training than we can list. He discusses overcoming complacency, physical security issues, consumer and commercial lending, as well as marketing your business and helping you learn how to make customers WANT to do business with you. He's been a regular for CBAI training for years and now, for the first time, he is incorporating all his skills and experiences to help you become a superstar branch manager. This is one session you want to make plans for and bring others for a full day of learning, laughing and improving! You won't want to miss this session!

    Charles Williams is president of Marketing Advertising Consulting Service, Inc. (MACS!) in Chauncey, Georgia. He is a former banker, successful businessman, and author.

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    Community Bank Directors’ Conference Set for December 10

    Register today for
    CBAI's Annual Directors' Conference on December 10 in Springfield entitled “Community Banking in a New World.” This comprehensive one-day conference discusses the factors that are changing the way community banks do business, concentrates on the new ways the best minds in community banking are finding to reckon with these turbulent times, and provides answers as to how community bank can prepare for and shape the future of the financial services system to benefit your bottom line. CBAI gathered top banking experts to make this conference a must-attend for all directors. Jim Mathis, a nationally-recognized speaker, talks about what it takes to re-invent yourself for the new-world of community banking; Jeff Caughron of The Baker Group provides up-to-the minute information on the economy and investment strategies that make sense today; veteran Capitol Hill spokesman Steve Verdier outlines actions community banks should take to impact financial restructuring proposals; Don Hutson, CPA from BKD, LLP, discusses 10 things you need to know about current regulatory exams; and Don Shafer of BancVue presents innovative solutions for meeting customer needs. A mini-exposition featuring the latest products and services designed for community banks also highlights the conference.

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    CBIS Announces Exclusive New Service for Bank Customers

    CBIS now offers an exclusive new service that is available for bank customers, called Legacy Safeguard! This new service has been endorsed by CBAI because of the unique way it helps bank customers leave a lasting legacy.
    Click here to read more.

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    Rewarding Cardholders Never Looked So Profitable

    The state of the economy has affected the way consumers spend their dollars. Consumers are steering away from credit and, in an effort to be more conscious with their spending, are falling back on their debit cards. Debit card spending topped credit card spend for the first time ever in Q4 of 2008 and continued to surpass by almost 15% at the start of 2009. As debit card use increases, consumers are shopping for a financial home that offers the best rewards available.
    Click here to read more.

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    FREE WEBINAR: The UCC Amendment Minefield

    Register now for an encore presentation of this year’s most popular UCC web seminar. The free session will address: When filing a UCC-3 amendment is required, or at least advisable; the practical effect of various amendment actions; and best practice recommendations for specific amendment situations. Dates: December 2, 2009 at 3:00pm EST, or December 3, 2009 at 10:00am EST.
    Register Now!

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    CBAI

           

    CBAI's PROFESSIONAL DEVELOPMENT PROGRAMS THROUGH 12/30/09



    TELEPHONE/WEBCASTS THROUGH 12/30/09




    Other CBAI Events

    11/17-28 CBAI's Women in Banking Conference, Springfield


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