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 17, 2008 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • Fed Funds Rate and Discount Rate Lowered
  • CBAI and ICBA Disappointed with Premium Increases/Urge Lower Rates
  • Economy Weak in 2009 According to Chicago Fed Symposium
  • Housing Permits and Starts Hit Record Lows in November
  • Baker Market Update
  • Consumer Prices Fall Record 1.7% in November
  • FDIC Names Banks Opting Out of TLG Programs
  • FDIC Debt Guarantee Guidance Released
  • ICBA Supports New “TALF” Program
  • FDIC Reminds Public of Increased Deposit Insurance Coverage
  • Fannie Mae Offers Help to Avoid Foreclosures
  • Most States Experiencing Tight Fiscal Conditions
  • ICBA Submits Policy Proposals to Obama’s Transition Team
  • U. S. Government Releases FY2008 Financials
  • Now Updated With 2008 Deposit Data: CBSC Market Analysis Service
  • NEW CBAI PROGRAM HELPS DIRECTORS SAVE MONEY!
  • ADA Amendments Act Effective January 1, 2009
  • FRAUD ALERT: Reduce Daily Withdrawal Limit and Reduce Exposure to Debit Fraud Losses!
  • The Compliance Institute Set for January
  • Directors’ Telephone/Webcast Series Scheduled for 2009


  • Fed Funds Rate and Discount Rate Lowered

    On December 16 the Federal Open Market Committee (FOMC) established a target range for the fed funds rate of 0 to ¼ percent. The Committee acknowledged that financial markets remain strained, and economic activity has further weakened.

    Meanwhile, the Federal Reserve Board approved a 75-basis-point decrease in the discount rate to ½ percent.
    More information.

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    CBAI and ICBA Disappointed with Premium Increases

    On December 16 the FDIC
    approved its final rule regarding deposit insurance premiums for the first quarter of 2009. Both CBAI and ICBA expressed disappointment in the seven basis point increase. Premiums for Risk Category 1 banks will increase from the current five to seven basis points to 12 to 14 basis points. Read ICBA statement. Today, the ICBA urged the FDIC to lower the rates.

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    Economy Weak in 2009 According to Chicago Fed Symposium

    Participants in the annual Economic Outlook Symposium of the Chicago Federal Reserve Bank held on December 5 predicted that during 2009 the U. S. will experience slow economic growth, lower inflation, and higher unemployment.
    More details.

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    Housing Permits and Starts Hit Record Lows in November

    The U. S. Commerce Department
    announced this week that housing permits and starts fell more than expected in November. The new annual rate of 625,000 for starts was the lowest since the department began tracking the data in 1959.

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    Baker Market Update

    Fed Lowers Overnight Rate to Range of 0% - 0.25%; Signals Asset Purchases. For more details,
    click here.

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    Consumer Prices Fall Record 1.7% in November

    The Labor Department announced that the CPI experienced the largest decline in November since it began publishing seasonally adjusted changes in February, 1947.
    More.

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    FDIC Names Banks Opting Out of TLG Programs

    The FDIC published on its web-site lists of financial institutions that have opted out of the Temporary Liquidity Guarantee Program's
    Debt Guarantee Program and Transaction Account Guarantee Program as of Dec. 10, 2008. More than 3,100 institutions and holding companies opted out of the Debt Guarantee Program, and approximately 860 institutions opted out of the Transaction Account Guarantee Program. For rest of story and links, click here.

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    FDIC Debt Guarantee Guidance Released

    The FDIC released
    guidance on reporting debt instruments under the Temporary Liquidity Guarantee Program’s guarantee of newly issued senior unsecured debt. Entities that participate in the Debt Guarantee Program are required to notify the FDIC of any guaranteed debt issuances and pay associated assessment premiums.

    The Financial Institution Letter includes guidelines for registering debt issued under the program. Participating entities that issue FDIC-guaranteed debt after Dec. 5 must register that issuance via FDICconnect within five calendar days. Financial institutions issuing long-term nonguaranteed debt must pay a fee in six equal monthly installments beginning Dec. 19.

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    ICBA Supports New “TALF” Program

    Community bankers may have to become familiar with yet another government acronym added to the growing alphabet soup of financial relief programs: “TALF.” The
    Term Asset-Backed Securities Loan Facility, announced Nov. 25 by the Federal Reserve and U.S. Treasury, will extend up to $200 billion in nonrecourse loans to holders of high-quality asset-backed securities backed by consumer and small business loans in a bid to free up the frozen asset-backed securities market. The Treasury Department’s Troubled Asset Relief Program (TARP) will extend $20 billion in funds to support the initiative. Click here for more info.

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    FDIC Reminds Public of Increased Deposit Insurance Coverage

    In a
    news release last week the FDIC reiterated the guaranteed insurance protections for depositors in insured financial institutions. A CNBC survey found that 31 percent of consumers are only somewhat confident or not confident that their money is safe in insured institutions.

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    Fannie Mae Offers Help to Avoid Foreclosures

    Fannie Mae
    announced actions to complement its streamlined loan modification program that are intended to reach borrowers earlier with foreclosure prevention options. The policy changes should help Fannie Mae servicers to provide uniform foreclosure options to troubled borrowers.

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    Most States Experiencing Tight Fiscal Conditions

    According to the National Governors Association and the National Association of State Budget Officers, the fiscal conditions of most states will continue to deteriorate in fiscal 2009, and spending will decline for the first time since 1983. Many states expect to make significant budget cuts in the next few years.
    More information.

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    ICBA Submits Policy Proposals to Obama’s Transition Team

    ICBA delivered a
    memo to President-elect Obama’s Treasury transition team that explains the importance of community banks in economic development and identifies the critical issues facing community banks. Among the proposals, ICBA recommends creating an assistant secretary position for community banks, checking overzealous examiners that exacerbate the credit crunch, providing TARP access to Sub S banks and mutual institutions, and levying a too-big-to-fail deposit insurance premium on the largest banks.

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    U. S. Government Releases FY2008 Financials

    On December 15 the Treasury and Office of Management and Budget (OMB)
    released the FY08 financials for the U. S. government, including both short- and long-term projections. The projected costs for Medicare, Medicaid, and other social programs were described as much greater than anticipated resources. Currently, those programs account for 40 percent of all government expenditures compared to just 16 percent 40 years ago.

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    Now Updated With 2008 Deposit Data: CBSC Market Analysis Service

    Every November, the FDIC publishes branch-level deposit information for the 12-month period ending June 30. You can obtain the five-year deposit history for all of your competitors with one phone call! This data is only released once a year, so this is the latest deposit history available! For more information,
    click here.

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    NEW CBAI PROGRAM HELPS DIRECTORS SAVE MONEY!

    CBAI and Midwest Office Supply, the association’s preferred provider of office products, have developed a
    program that enables the board members of CBAI member banks to purchase office supplies and furniture at deeply discounted prices that are usually reserved exclusively for CBAI member banks.

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    ADA Amendments Act Effective January 1, 2009

    Changes to the Americans with Disabilities Act will go into effect beginning in 2009, and employers need to be aware that the standard for what is classified as a disability has been altered significantly.
    More.

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    FRAUD ALERT: Reduce Daily Withdrawal Limit and Reduce Exposure to Debit Fraud Losses!

    Community banks are scaling back the daily amount customers can withdraw using signature-based debit cards in an effort to reduce exposure to debit fraud. Bankers recognize that a dramatic increase in debit card fraud nationally can adversely impact their banks and they are taking steps to protect the bank and its customers.
    Click here to read more.

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    The Compliance Institute Set for January

    To meet the need for a basic/introductory class for new compliance officers, internal auditors, and compliance back-up personnel, CBAI presents a comprehensive compliance program which is divided into two separate sessions. Session 1 focuses on Operations/Deposit Compliance and is scheduled for January 14 & 15, 2009; Session 2 focuses on Lending Compliance and is offered April 7 & 8, 2009. Each session is designed to provide through understanding of the major regulatory compliance regulations that have been determined to be “must knows” for compliance officers. Designed to provide maximum flexibility to the bank, attendees can attend one or both sessions, or different individuals may attend each session. For more details,
    click here.

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    Directors’ Telephone/Webcast Series Scheduled for 2009

    Designed to deliver cost-effective director training for community banks, the Director’s Telephone Webcast Series consists of six seminars offered every other month during 2009. The topics and speakers are: “Staying profitable in 2009” with Jeff Gerrish; “Red Flags in Board Reports” by Ann Brode; “Directors and Key Committees” with Gary Young; “The Directors’ Role, Responsibilities, and Liability in Today’s Banking World” by John Oliver; “Current Issues and Future Challenges” with Jeff Gerrish; and The Effective Board Package” by Ann Brode. A bank receives a significant discount by registering for the series, but may choose to register for only one seminar. Also, keep in mind you may train as many individuals as you like for one set price. Travel costs and time lost from work are minimized. For details,
    click here.

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