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           December 2, 2009 Graphic
Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • House Committee Passes Systemic Risk Legislation
  • Big Banks Try to Defend Their Giant Size
  • FDIC-Insured Institutions Earned $2.8 Billion in Third Quarter
  • Thrifts Post Breakeven Third Quarter
  • Farmland Values Continue to Decline in Chicago Fed District
  • Agencies Extend Date to Implement Internet Gambling Act
  • IRS Releases New Guidance on NOL Carryback
  • OCC Announces Fee Schedule for 2010
  • ICBA President Cam Fine Discusses Tiered Regulation
  • OCC Newsletter Focuses on Bank Stabilization
  • CBAI's Annual Community Bank Directors’ Conference Next Week
  • Account Titling Seminars December 9, 10, & 11
  • Compliance Institute in January

  • House Committee Passes Systemic Risk Legislation

    The U.S. House Financial Services Committee today approved H.R. 3996, the Financial Stability Improvement Act. Several CBAI and ICBA priorities are contained in the measure, including a provision sponsored by Illinois congressmen Luis Gutierrez (D-Chicago) and Don Manzullo (R-Rockford) to broaden the FDIC deposit-insurance assessment base to assets minus tangible capital, rather than domestic deposits. If enacted, this revision will return $4.5 billion to community banks over the next three years and allow lower premiums for 98 percent of the nation’s community banks. Community bankers can determine the savings for their respective banks by accessing
    ICBA’s Spreadsheet.

    This is a big victory for community banks! The largest banks would be required to pay a greater proportion of each assessment than currently required while community banks would pay less. As a result, only ICBA, CBAI and the other state community banking associations support this important measure. CBAI thanks the scores of community bankers in Illinois who contacted their congressmen in support of this provision.

    The bill also requires the too-big-to-fail banks (more than $50 billion in assets) to hold more capital, pay into a new systemic-risk fund, and face restrictions on interaffiliate activities. In addition, it gives the FDIC the authority to dismantle systemically risky firms, and it also merges the Office of Thrift Supervision and the Office of the Comptroller of the Currency. The bill now goes to the House floor where it will likely be bundled with several other financial reform bills into one large measure. A final vote in the House could occur by the end of next week. More information.

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    Big Banks Try to Defend Their Giant Size

    The chief executives of Citigroup and Wells Fargo were in St. Louis recently and attempted to defend their giant banks against claims that they are too big, too powerful, and too dependent on government support. Their strained arguments run counter to congressional and regulatory calls for breaking up the too-big-to-fail banks, a position long-supported by CBAI.
    See Full Article.

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    FDIC-Insured Institutions Earned $2.8 Billion in Third Quarter

    Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC)
    reported aggregate net income of $2.8 billion in the third quarter of 2009, but loan balances declined by the largest percentage since quarterly reporting began in 1984. Quarterly earnings were more than three times the $879 million the industry earned a year earlier and represented an improvement over the industry's $4.3 billion net loss in the second quarter of 2009. More than 26 percent of all insured institutions reported a net loss in the latest quarter, up slightly from nearly 25 percent a year earlier.

    The third quarter 2009 FDIC Quarterly Banking Profile (QBP) is now available online. The QBP provides the earliest comprehensive summary of financial results for all FDIC-insured institutions. This report card on industry status and performance includes written analyses, graphs and statistical tables. In addition to the QBP, you may be interested in these other related products that have been updated to reflect this quarter’s data.

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    Thrifts Post Breakeven Third Quarter

    The Office of Thrift Supervision (OTS) reported on November 24, 2009, that U.S. thrift institutions broke even for the second consecutive quarter. Earnings were buoyed primarily by higher net interest margins but continued to be hindered by an additional $4.9 billion in loan loss provisions.

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    Farmland Values Continue to Decline in Chicago Fed District

    According to the Federal Reserve Bank of Chicago, agricultural land values in the third quarter of 2009 were four percent below the values for the third quarter of 2008. However, the value of “good” farmland increased by two percent compared to the second quarter of 2009. The findings are based on a survey of 225 agricultural bankers on October 1, 2009. Illinois had the smallest slip in loan repayment rates and no change in the level of loan renewals and extensions from a year ago.

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    Agencies Extend Date to Implement Internet Gambling Act

    On November 27, 2009, the Department of the Treasury and the Federal Reserve Board released a joint final rule to extend the compliance date for their joint regulation implementing certain provisions of the Unlawful Internet Gambling Enforcement Act by six months to June 1, 2010.

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    IRS Releases New Guidance on NOL Carryback

    The IRS released new guidance on the CBAI and ICBA-advocated net operating loss five-year carryback. ICBA worked with policymakers to expand the NOL relief, which will allow many more community banks to receive a tax refund by offsetting 2008 or 2009 losses against profits in the previous five years. The NOL relief also will help community banks better use their deferred-tax assets and help preserve bank regulatory capital.

    Although the law, which President Obama signed November 6, prohibits TARP recipients from receiving the NOL relief, CBAI and ICBA continue to work with policymakers to remove that restriction for community banks and to allow the NOL relief to apply through tax year 2010. ICBA and Grant Thornton LLP are hosting an upcoming audio conference on the law. Tax Refunds for Community Banks: Benefiting from the New Net Operating Loss Tax Law is scheduled for 2 p.m. (Eastern time) Monday, December 7.
    Read IRS Guidance. Register for Audio Conference.

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    OCC Announces Fee Schedule for 2010

    The OCC has released the 2010 fee assessment schedule for national banks. Assessments are due March 31 and September 30 based on call report information as of December 31 and June 30, respectively.
    See OCC Bulletin.

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    ICBA President Cam Fine Discusses Tiered Regulation

    Despite what some big banks claimed in slick marketing and advertising campaigns during our industry’s merger-frenzy a decade ago, they are not and never have been community banks.

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    OCC Newsletter Focuses on Bank Stabilization

    The Office of the Comptroller of the Currency (OCC) has
    released the fall 2009 edition of Community Developments focusing on bank strategies to mitigate the impacts of foreclosed properties on communities across the country.

    This issue of Community Developments highlights the emerging work of innovative community partnerships and the tools and resources available to help them return foreclosed properties to the productive housing stock. It describes multiple strategies for managing and renewing real estate owned properties held by national banks and other lenders, including donations, discounted sales, and property rehabilitation. It also describes how federal funds are being used to stabilize neighborhoods nationwide. In some cases, the community stabilization efforts of national banks can also receive positive CRA consideration.

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    CBAI's Annual Community Bank Directors’ Conference Next Week

    CBAI's highly popular Annual Directors' Conference, scheduled for December 10 in Springfield, is a must-attend event for community bank directors this year. Titled “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 to help community bankers benefit their banks' bottom lines. CBAI has gathered top banking experts to make this conference a must-attend for all directors. Jim Mathis, a nationally-recognized speaker, reveals what it takes to re-invent the bank 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 help enact needed financial restructuring reforms; Don Hutson, CPA from BKD, LLP, discusses 10 things essential issues regarding 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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    Account Titling Seminars December 9, 10, & 11

    Next week, CBAI is pleased to offer
    "Account Titling" in three locations. Designed for new account representatives, tellers, and head tellers, this one-day seminar explores different types of account relationships for personal, business, and association accounts. Trust accounts, representative payee accounts, IOLTA accounts, and minor accounts are all addressed. Other topics covered include consent to transfer issues, the Uniform Transfer to Minors Act, authorized signer requirements, and fundamentals of checking account law. Issues regarding check collection, including final payment issues, check collection rules, and delays are discussed, as well. Ann Brode, founder of Brode Consulting Services, a bank consulting firm located in Ravenna, OH, leads this seminar. Brode has been in banking since 1973 in both regional and community banks.

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    Compliance Institute in January

    As the
    Community Bankers for Compliance Program has evolved, we have identified a need for a basic, introductory class for those compliance officers who are either new to banking or new to their positions. To meet this need, we have created a comprehensive compliance program which is divided into two separate sessions (Session 1: Operations/Deposit Compliance – January 13-14, and Session 2: Lending Compliance – April 6-8). Each session is designed to provide a comprehensive understanding of the major regulatory compliance regulations that have been determined to be “must knows” for compliance officers.

    The Compliance Institute has been designed to provide maximum flexibility to the bank. Attendees can attend one or both sessions depending upon their individual needs and/or the bank’s needs. This will allow for more customized compliance training and will maximize this valuable compliance training opportunity.

    This institute is conducted by Bill Elliott, senior consultant and manager of compliance, and Bryan K. Bradley, CRCM, senior consultant, both of Young & Associates, Inc. of Kent, OH, a nationally recognized compliance consulting firm specializing in community banks.

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