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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                   November 28, 2012 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Community Bank Directors’ Conference Scheduled for December 4th!
  • Urge Congress to Block Credit Union Expansion of Powers
  • Staff Visit to Washington Reinforces Support for Community Bank Initiatives
  • ICBA Offers 10 Reasons Not To Expand Credit Union Biz-Lending Authority
  • America’s Real Debt Crisis Needs Real Leadership Attention
  • Dysfunction Continues in Congress
  • Baker Market Update
  • Fannie Mae: Economy Grows But Future Uncertain
  • Rural Mainstreet Economic Index Climbs for Third Straight Month
  • Farmland Values Continue to Increase
  • CRE Vacancies Declining and Rents Rising
  • Mortgages Held by Community Banks Outperformed Fixed-rate, Prime Loans
  • Mortgage Rates Reach Record Lows
  • Senate Confirms Gruenberg and Hoenig
  • Now That the Election is Over, It's Back to Work
  • Season's Greetings from the ICBA Chairman
  • Welch Systems Announces Year End Sale Incentives!
  • Banking Magazine Searching for Outstanding Bank Philanthropists
  • Fourth Quarter 2012 FREE Community Banking Ads Available
  • Auditing for Fair Lending Compliance and UDAAP Set for December 4
  • Account Titling Set for December 4, 5 & 6
  • Impaired Loans to be Held December 10 & 11
  • Relationship Selling Scheduled for December 11


  • Community Bank Directors’ Conference Scheduled for December 4th!

    There is still time to register for
    CBAI's Annual Directors' Conference, scheduled for next Tuesday, December 4, 2012, at the Crowne Plaza in Springfield.

    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 navigate these turbulent times, and provides answers as to how community banks can prepare for and shape the future of the financial services system to benefit their bottom lines.

    CBAI has gathered top banking experts to make this conference a must-attend. Jim Mathis, founder of the Mathis Group, discusses reinventing your community bank, Ed Krei of THE BAKER GROUP helps prepare your bank for the uncertain times ahead, Kraig Lounsberry and David Schroeder of the CBAI governmental relations staff provide a legislative and elections update, Mike Mahorney of Nicoud Insurance and Matt Maris of Rogers Benefit Group address healthcare reform, and Jeff Rigsby of CB Resource, Inc., and Kent Fisher of Vavrinek, Trine, Day & Co., LLP, share an overview of the impact of Basel III. The conference also includes a mini-exposition center featuring the latest products and services pertinent to community banks.

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    Urge Congress to Block Credit Union Expansion of Powers

    With the 112th Congress winding down, credit union representatives are on Capitol Hill aggressively pushing for legislation which would more than double the statutory cap on credit union business lending. ICBA and CBAI oppose The Small Business Lending Enhancement Act (H.R. 1418 and S. 2231). This legislation would not expand small-business credit, would come at a high cost to taxpayers, and would harm taxpaying community banks.
    Read CBAI Action Alert.

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    Staff Visit to Washington Reinforces Support for Community Bank Initiatives

    CBAI's David Schroeder, vice president of federal governmental relations, recently called on lawmakers in Washington, D.C. to strongly urge every member of the Illinois Congressional delegation to support CBAI’s positions on legislative and regulatory initiatives. As the 112th Congress nears the end, the laser focus is on what legislation must pass, what must be stopped, and what else Congress must do to support community banks in their efforts to encourage additional small business lending, fuel job creation, and help create economic stability.
    Read More.

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    ICBA Offers 10 Reasons Not To Expand Credit Union Biz-Lending Authority

    ICBA
    released a paper featuring 10 reasons why raising the cap on credit union member business lending is bad public policy. The paper notes that raising the cap would not expand small-business credit, would come at a high cost to taxpayers and would harm taxpaying community banks.

    With just a couple of weeks remaining in the lame duck Congress, ICBA and community bankers must remain vigilant in blocking the credit union lobby from expanding its business-lending authority while separately advocating a TAG extension. Oppose Credit Union Power Grab. Tell Congress to Extend TAG.

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    America’s Real Debt Crisis Needs Real Leadership Attention

    While the lame-duck Congress debates the $600 billion fiscal cliff, our nation’s real debt crisis continues to mount, now at an estimated $87 trillion ($16 trillion federal budget deficit, $43 trillion in unfunded Medicare liabilities, $21 trillion in unfunded Social Security liabilities, and $7 trillion in unfunded federal employees’ retirement benefits). How troubling is this number? To collect enough revenue just to avoid going deeper into debt would require more than $8 trillion in tax revenues annually. Unfortunately, even if the government confiscated all the earnings of people who make more than $66,000 per year plus all of the corporate taxable income, the U.S. would still be short of the mark by more than $1 trillion.

    America needs real leadership to rise up to this occasion, for the sake of this generation and future generations. Community banks have contributed significantly to the economic development and prosperity of America, and this profession has a vested interest in the resolution of our nation’s debt crisis. As a result, CBAI plans to weigh in with our elected officials on this critical issue.
    See Forbes Article.

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    Dysfunction Continues in Congress

    Just three weeks after the elections in which both parties swore they had learned the lesson that Americans want them to work together for the good of our country, the U.S. Senate yesterday demonstrated that the political dysfunction continues with the defeat of a bipartisan bill to increase the price of duck stamps. The underlying issue involves a debate over proposed changes to the Senate’s filibuster rules.
    See Duck Stamp Article.

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    Baker Market Update

    As frightening as a plunge off of the fiscal cliff might be, there’s something much worse on the horizon. While it's disconcerting to contemplate the EU being crushed under the weight of its own indebtedness, there are worse things happening.
    Read More.

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    Fannie Mae: Economy Grows But Future Uncertain

    According to Fannie Mae’s Economic and Research group, economic activity picked up in the third quarter but continues to reflect a sluggish recovery. Consumer spending was the biggest factor for growth, but confidence may weaken due to the looming fiscal cliff and debt ceiling debate.
    See Fannie Mae Release.

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    Rural Mainstreet Economic Index Climbs for Third Straight Month

    The November survey of rural Midwest community bank CEOs found that economic conditions improved for the third straight month with farm land prices accelerating for the 34th consecutive month. Overall, rural businesses have remained financially healthy despite the 2012 drought.
    See Mainstreet Index Report.

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    Farmland Values Continue to Increase

    According to the Federal Reserve Bank of Chicago’s quarterly survey of agricultural bankers, farmland values continued to climb in the third quarter of 2012 and are expected to continue rising in the fourth quarter. The quarterly gain in the value of “good” farmland was 5 percent.

    In addition the survey found that demand for non-real estate loans was lower during the third quarter compared to a year ago, and the average loan-to-deposit ratio of 67.5 percent was also lower than a year ago.
    See Fed AgLetter.

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    CRE Vacancies Declining and Rents Rising

    The National Association of Realtors this week reported that most of the major commercial real estate sectors are gradually improving based on its quarterly CRE forecast. The report indicates that vacancy rates are projected to fall from an estimated 16.7 percent to 15.7 percent by the fourth quarter of 2013, while office rent is expected to increase 2.0 percent this year and 2.5 percent in 2013. Vacancy rates are also expected to decline for retail and multifamily markets.
    See NAR Release.

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    Mortgages Held by Community Banks Outperformed Fixed-rate, Prime Loans

    During her
    remarks at the Community Bank Symposium held in Chicago on November 9, 2012, Fed Governor Elizabeth Duke said, “In fact, over the last several years, on average, mortgages held by community banks outperformed even fixed-rate, prime loans, the best performing mortgage category. I think this statistic by itself is a strong testament to the responsible lending practices of community banks.” She added, “Having confirmed these conditions, I am convinced that the best course for policymakers would be to abandon efforts for a one-size-fits-all approach to mortgage lending” She advocated for a separate set of rules for mortgage loans held by community banks.

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    Mortgage Rates Reach Record Lows

    Last week Freddie Mac published the results of its Primary Mortgage Market Survey which revealed record low fixed mortgage rates for the second consecutive week.
    See Freddie Mac Release.

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    Senate Confirms Gruenberg and Hoenig

    The U.S. Senate has confirmed Martin Gruenberg as chairman of the FDIC and Thomas Hoenig as vice chairman. Gruenberg had been serving as acting chairman since former chairman Sheila Bair stepped down in 2011. He was nominated to serve as chairman last year, but the Senate had delayed his confirmation until after the election earlier this month.

    “The FDIC’s mission of maintaining public confidence in the system has never been more important,” Gruenberg said. “It is a privilege to have the opportunity to lead this great public institution.”

    Hoenig, who previously served as president of the Kansas City Fed, said, “I am honored to serve as the vice chairman of the FDIC at such a pivotal time for our country’s banking system and look forward to working with my colleagues at the FDIC and other banking agencies.”

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    Now That the Election is Over, It's Back to Work

    ICBA's Cam Fine offers his thoughts on the post election by citing a quote from President Warren Harding, “America’s present need is not heroics but healing; not nostrums but normalcy; not revolution but restoration.”
    See Finer Points.

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    Season's Greetings from the ICBA Chairman

    ICBA Chairman Jeff Gerhart reminds us that in December the spirit of thankfulness and goodwill toward all surrounds us. It is a good time to reflect on the many ways that community bankers stay involved within their communities.
    See Gerhart's Comments.

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    Welch Systems Announces Year End Sale Incentives!

    Welch Systems, a CBSC preferred partner since 1982, recently announced special incentives on the purchase of new Talaris money handling equipment. Welch is offering a $1,500 trade-in value for the old currency counter toward the purchase of a new Talaris coin sorter. Additionally, Welch is offering a $5,000.00 discount on the cost of purchasing a new Talaris self-service QuickChange machine. These special incentives expire on December 31, 2012.
    Click Here for additional details.

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    Banking Magazine Searching for Outstanding Bank Philanthropists

    NorthWestern Financial Review is searching for submissions on noteworthy philanthropic actions/events/fundraisers by Illinois community banks. If this fits your bank, please contact Matthew Doffing, NorthWestern Financial Review, 952-835-2275, or
    matt@nfr.com.

    And, don’t forget that nominations are now being taken for the 2013 BKD Award, co-sponsored by CBAI and accounting firm BKD, LLP, to honor outstanding banks through philanthropy, civic pride, or innovative products/services. Learn More.

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    Fourth Quarter 2012 FREE Community Banking Ads Available

    New ads are now available to wish your bank customers a safe holiday season.
    View Ads. To order, please contact the CBAI Department of Communications at 800/736-2224 or cbaicom@cbai.com.

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    Auditing for Fair Lending Compliance and UDAAP Set for December 4

    Over the last several years, the regulators have been increasingly critical of fair lending issues within banks, and have been increasing pressure for banks to make self assessments – some of which might be privileged. In addition to fair lending, the regulators have stepped up enforcement regarding Unfair and Deceptive Act and Abusive Practices (UDAAP). Part of the day discusses the audit process for UDAAP. As a UDAAP violation can happen in almost any interaction with a customer, there are unique issues that make completion of the audit a challenge. This full-day auditing seminar provides vital regulatory background information, as well as involves a thorough discussion of the Interagency Fair Lending Examination Procedures, and the examination procedures that have been created for UDAAP. This
    seminar is based on the most recent incarnation of each of the procedures, to assure that your audit meets current standards. In addition, the seminar manual is tailored to provide useful fair lending audit checklists for your use. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance with Young & Associates, Inc., Kent, OH.

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    Account Titling Set for December 4, 5 & 6

    CBAI is offering “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 of Young & Associates, Inc., Kent, OH.

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    Impaired Loans to be Held December 10 & 11

    CBAI is pleased to offer “Impaired Loans” 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. This program discusses 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. 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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    Relationship Selling Scheduled for December 11

    Selling in a bank environment must be an extension of helping customers.
    Relationship Selling builds the framework for understanding the sales process. Topics covered in this one-day seminar include retaining and increasing “share of wallet” from current customers; developing and using relationship selling skills; identifying, clarifying, and confirming customer needs using effective communication skills; recommending the appropriate product/service; maximizing moments of opportunity; handling objections and obstacles; asking for a commitment; and following up for add-on and value-added opportunities. 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 banks today in attracting and building relationships with their customers.

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