Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                       December 14, 2011 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois

  • CBAI Member Bankers Testify Before House Financial Services Committee
  • Visit to Washington Garners Support for Community Bank Initiatives
  • CBAI Reminder: Legislation Effective January 1, 2012
  • FHFA Sues City of Chicago Over Vacant Buildings Ordinance
  • CSBS Issues White Paper on Community Banks and Capital
  • Communities First Act Helps Ag Lending
  • 2012 CBAI Washington Visitation Dates Set
  • Dodd-Frank Updates Available on St. Louis Fed Web Site
  • Report: Retailers Not Passing on Interchange Savings
  • USDA Forecasts Strong Farm Income
  • Illinois Farmers Agree – Regulations are Biggest Threat
  • How Europe’s Bank Meltdown Could Hit Home
  • Beware of Fraudulent "ACH and Wire Transfers" E-Mails
  • "Go Local" Campaign Continues to Expand
  • Deadline Nears for Ending Paper Savings Bond Sales at Financial Institutions
  • CBSC Marketing Partners Among Top Companies in FinTech 100
  • Baker Market Update
  • Elder Financial Exploitation Training Now Available
  • Compliance Institute (Operations/Deposit) Scheduled for January 10-11
  • Community Bank Directors’ College Set for January 18 & 19
  • Compliance for Lenders to be Held January 23-25


  • CBAI Member Bankers Testify Before House Financial Services Committee

    CBAI's Greg Ohlendorf of Beecher and James Renn of Lisle testified on Monday, December 5, in Chicago before the House Financial Services Committee (HFSC). The hearing, titled "Regulatory Reform: Examining How New Regulations are Impacting Financial Institutions, Small Businesses, and Consumers in Illinois," enabled Committee members to hear first-hand about the Chicago region's economic conditions and discuss the impact of excessive regulations on the operations of local financial institutions.
    Read More.

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    Visit to Washington Garners Support for Community Bank Initiatives

    CBAI's David Schroeder, Vice President Federal Governmental Relations, visited Washington, D.C., in late November to build further congressional support for several important legislative initiatives. CBAI's 2011 Federal Policy Priorities include addressing excessive bank regulation and harsh regulatory examinations as well as support for legislation that enables community banks to better serve their customers and communities. Several beneficial bills have been introduced in both the U. S. House of Representatives and Senate, and Schroeder encouraged each and every member of the Illinois Congressional delegation to support and co-sponsor these measures.
    Read More.

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    CBAI Reminder: Legislation Effective January 1, 2012

    Although many of the bills that were passed during the Illinois General Assembly’s Spring Session in 2011 are already effective, at least 19 bills were enacted with a delayed effective date of January 1, 2012. You can find summaries of those soon-to-be effective laws by
    clicking here.

    The first legislation summarized (Public Act 97-016), although not banking related, is included as an item of general interest. With the start of the New Year in Illinois, it will be a violation for occupants in the back seat of a passenger vehicle to not be wearing seat belts.

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    FHFA Sues City of Chicago Over Vacant Buildings Ordinance

    The Federal Housing Finance Agency (FHFA), which regulates Fannie Mae, Freddie Mac, and the 12 Federal Home Loan Banks, announced on December 12, 2011, that it has filed a lawsuit against the City of Chicago to prevent enforcement of the city’s recently amended Vacant Buildings Ordinance. The FHFA noted that the ordinance would impose ownership responsibilities on Freddie and Fannie for vacant properties they hold mortgages, thereby creating greater risks and liabilities and making them subject to the regulation of the Chicago Department of Buildings instead of the FHFA.

    The suit alleges that the ordinance impermissibly encroaches on FHFA’s role as sole regulator of Fannie and Freddie, and the $500 registration fee for each vacant property represents a tax precluded by Congress. Adopted in November, the ordinance is the result of negotiations between the City of Chicago and the following mega banks: Bank of America, JP Morgan Chase, Wells Fargo, and PNC. As part of the negotiations, all parties agreed to pursue similar legislation in the state legislature. CBAI opposes the ordinance and any efforts to expand these anti-lender provisions to the rest of the state.
    See FHFA Release.

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    CSBS Issues White Paper on Community Banks and Capital

    The Conference of State Bank Supervisors (CSBS) last week released a white paper concerning capital formation at community banks, including the obstacles inhibiting capital investment and potential solutions to ensure more efficient capital flow to community banks.
    See CSBS Release and White Paper.

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    Communities First Act Helps Ag Lending

    The ICBA-advocated Communities First Act (H.R. 1697/S. 1600) includes provisions specifically benefiting community banks involved in agricultural lending, according to the
    latest in-depth article on Community Banker Today. The article notes the act would help community banks participate in the USDA’s Business and Industry Loan Program and would create greater parity with tax-advantaged Farm Credit System institutions. Agriculture-focused community banks can use a customizable letter to urge members of Congress to sign on as cosponsors to this critical legislation. Read Article. Contact Congress.

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    2012 CBAI Washington Visitation 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 (
    kraigl@cbai.com) or David Schroeder, VP Federal Governmental Relations, at 847/909-8341 (davids@cbai.com).

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    Dodd-Frank Updates Available on St. Louis Fed Web Site

    The St. Louis Federal Reserve Bank has developed an excellent resource for tracking the progress of proposals and rules relating to the Wall Street Reform Act. Please note that the vast majority of the provisions of the Act do not relate to community banks. There are, however, adverse aspects that both CBAI and ICBA are striving to mitigate or eliminate via rule writing or new legislation.
    See Resource.

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    Report: Retailers Not Passing on Interchange Savings

    Retailers have not passed on their debit-card-interchange savings to customers despite earning windfall profits from the Durbin amendment, according to a new study. The Electronic Payments Coalition noted in its
    “Where’s My Debit Discount?” report and video that customers are paying an average of 1.7 percent more for the same items since the Oct. 1 effective date. The report notes that at least 76 percent of retailers included in the research have not passed promised savings to consumers despite receiving $825 million to date in windfall profits from the price-fixing plan. The findings come two weeks after merchant organizations filed a lawsuit against the Federal Reserve that claims they should be paying even less in debit card interchange.

    The issue was also featured in a Wall Street Journal report, which notes that card companies used to provide merchant discounts on debit card fees on small transactions. But those discounts are gone since the Fed implemented the Durbin amendment capping debit interchange prices.

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    USDA Forecasts Strong Farm Income

    In a recent news release, U.S. Department of Agriculture Secretary Tom Vilsack forecast strong farm income for 2011, noting that farmers are earning 28 percent more for their products than they made in 2010.
    See USDA Release.

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    Illinois Farmers Agree – Regulations are Biggest Threat

    Agriculture and community banking share a common concern. In a recent survey conducted by the Illinois Farm Bureau, farmers identified government regulations as the most significant threat to farm profitability in the next decade. Other concerns included higher input costs, lower commodity prices, and high land costs and high cash rent prices.
    See IFB Release.

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    How Europe’s Bank Meltdown Could Hit Home

    In a MarketWatch commentary yesterday, David Weidner details how the European debt crisis and banking sector weakness could cause U.S. megabanks to teeter. He noted that the crisis has already resulted in tighter U.S. credit and less liquidity for stocks and bonds as financing asset-backed securities, corporate bonds and equities is becoming more expensive and requiring more collateral.

    Weidner concluded that the large U.S. banks could get stung not only by their sovereign debt holdings but also by their exposure to hedge funds and insurance and credit default swaps; the result would be lost jobs, lost credit, and further foreclosures.
    See Commentary.

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    Beware of Fraudulent "ACH and Wire Transfers" E-Mails

    The Federal Deposit Insurance Corporation (FDIC) has received numerous reports of fraudulent e-mails that have the appearance of being from the FDIC.

    The e-mails appear to be sent from various "@fdic.gov" e-mail addresses, such as "protection@fdic.gov," "admin@administration.fdic.gov," or "service@admin.fdic.gov."

    They have various subject lines such as "Update for your banking account," "ACH and Wire transfers disabled," and "Banking security update."

    The fraudulent messages state:

    "Dear clients,

    Your account ACH and Wire transactions have been temporarily suspended for your Security, due to the expiration of your security version. To download and install the newest Updates, follow this link. As soon as it is set up, your transaction abilities will be fully restored. Best regards, Online security department, Federal Deposit Insurance Corporation."

    These e-mails and links are fraudulent and were not sent by the FDIC. Recipients should consider these e-mails an attempt to collect personal or confidential information, or to load malicious software onto end users' computers. Recipients should NOT access the link provided within the body of the e-mails and should NOT install any related files or software updates.

    Financial institutions and consumers should be aware that these fraudulent e-mails may be modified over time with other subject lines, sender names, and narratives. The FDIC does not directly contact bank customers, nor does the FDIC request bank customers to install software upgrades.

      Information about counterfeit items, cyber-fraud incidents, and other fraudulent activity may be forwarded to the FDIC's Cyber-Fraud and Financial Crimes Section, 3501 North Fairfax Drive, CH-11034, Arlington, Virginia 22226, or transmitted electronically to alert@fdic.gov. Questions related to federal deposit insurance or consumer issues should be submitted to the FDIC using an online form that can be accessed at http://www2.fdic.gov/starsmail/index.asp.

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    "Go Local" Campaign Continues to Expand

    The ICBA/CBAI "Go Local" Campaign is building momentum across the country. For ICBA's latest blog,
    click here. Please share with CBAI examples of how you are using the ICBA/CBAI “Go Local” campaign to let your communities know that doing business with a community bank really does make a difference. Send your activities to cbaicom@cbai.com.

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    Deadline Nears for Ending Paper Savings Bond Sales at Financial Institutions

    With the end of over-the-counter sales of paper savings bonds only two weeks away, financial institutions are encouraged to continue preparing employees and customers for the upcoming transition to electronic savings bonds. Savings bonds are popular gifts so financial institutions may see an increase in inquiries during the holiday season.

    As a reminder, financial institutions must stop accepting applications for paper bonds after December 31, but are encouraged to continue redeeming paper bonds for customers. The U.S. Department of the Treasury is offering new resources and materials to help financial institutions address customer inquiries and manage internal processes, including:

      • An updated FAQ document that covers administrative topics;
      Tip sheets for customers on how to set up a TreasuryDirect account to purchase electronic savings bonds and make gift purchases; and
      • New statement messages and social media messages to remind customers of the approaching deadline.
    Download these resources at http://treasurydirect.gov/instit/savbond/otc/otcendtoolkit.htm. Also, please remind customers that they can go to www.treasurydirect.gov where they can buy, manage and redeem electronic savings bonds and other Treasury securities online, 24/7.

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    CBSC Marketing Partners Among Top Companies in FinTech 100

    Community BancService Corporation, CBAI's affiliate that specializes in partnering with "best-of-breed" companies to offer quality services to CBAI members, recently announced that five of its partners are listed among the FinTech 100. Selected by American Banker, these companies are recognized as leading technology providers that are financially successful. Congratulations to the following companies on this great achievement!
    Read More.

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    Baker Market Update

    Information received since the Federal Open Market Committee met in November suggests that the economy has been expanding moderately, notwithstanding some apparent slowing in global growth. While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated.
    Read More.

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    Elder Financial Exploitation Training Now Available

    Under the new Elder Financial Exploitation Training Rule, all bank employees and officers who have direct customer contact must successfully complete financial exploitation training by February 1, 2012 – or within six months after assuming a new position. Additionally, affected employees and officers must take refresher training every three years.

    To ensure your bank is in compliance with this law; CBAI offers a convenient, 60-minute, on-line course through BankersEdge. Engaging and informative, the BankersEdge Elder Abuse and Financial Exploitation course meets Illinois regulation requirements and will teach your employees how to recognize the indicators of elder financial exploitation; report financial exploitation of older adults in suspect situations; and help prevent financial exploitation by taking precautionary measures. As a CBAI member, you qualify for an exclusive rate on this training through our industry-leading partner, BankersEdge. For a limited time, train your entire bank for only $249!
    Click here for more information and to register now!

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    Compliance Institute (Operations/Deposit) Set for January 10-11

    Community banks are constantly faced with a bewildering array of ever-changing regulations. In response to this training need, CBAI is pleased to present the
    “Compliance Institute” this January and April. An introductory course for those compliance officers who are either new to banking or new to their positions, this institute is designed to provide a comprehensive understanding of the major regulatory compliance regulations that have been determined to be "must knows" for all compliance officers. The school has been divided into two sessions, Operations/Deposit Compliance and Lending Compliance. Registrants can attend one or both sessions, dependent upon need. Session I, Operations/Deposit Compliance, addresses topics including compliance management, Bank Secrecy Act, Truth in Savings Act, Regulation CC, and the Electronic Funds Transfer Act. Topics covered in Lending Compliance, offered in April, include Regulation Z, Community Reinvestment Act, Home Mortgage Disclosure Act, Fair Credit Reporting Act, and BSA. Bill Elliott, senior consultant and manager of compliance, and Adam Witmer, CRCM, consultant, both of Young & Associates, Inc., Kent, Ohio, lead this institute.

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    Community Bank Directors’ College Scheduled for January 18 & 19

    CBAI is proud to offer the second session of the “Community Bank Directors’ College.” The
    Directors’ College was developed in close conjunction with both state and federal regulators, and is designed to teach individuals how to become a more effective, capable, and supportive member of a bank’s board of directors. It is our goal to graduate directors who will return to your bank more active, more knowledgeable, and more decisive. In effect, they will be an even bigger asset to your community bank. The Community Bank Directors’ College provides a thorough understanding of bank operations and bank directors’ responsibilities. The college is recommended for both new and seasoned bank directors. The college is structured as two, two day sessions offered on an annual basis. The second session is being held January 18 & 19, 2012, at the Hilton Garden Inn in Springfield. Participants of the Community Bank Directors’ College qualify for 14 hours of CPE credit.

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    Compliance for Lenders to be Held January 23-25

    This January, CBAI will offer
    “Compliance for Lenders” in three locations statewide. The compliance officer is responsible for administering your bank’s compliance program including policies and procedures. Each employee of the bank has a duty to have a working knowledge of the compliance issues that pertain to his or her assigned position description. The challenge is to ensure that lending personnel have the right information at the right time. This one-day program provides an in-depth discussion of the current hot buttons of the financial regulators as related to compliance; up-to-date information on compliance issues and developments in bank regulations that relate to lending; and a review of the major substantive requirements of each compliance act or regulation that relate to lending. By attending this valuable program, lenders will gain knowledge about regulatory compliance issues and how to properly comply with them and help reduce the possibility that inadvertent compliance errors occur within the bank. Leading this seminar is Bill Elliott, senior consultant and manager of compliance with Young & Associates, Inc., Kent, Ohio.

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