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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    December 20, 2017

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Tax Relief and Reform Legislation Passes Congress!
  • Fine: 2017 a Turning Point for Community Banks
  • CBAI’s Call on Washington - Rescheduled
  • House Bill Would Delay HMDA Implementation
  • House Ag Committee Launches Farm Bill Site
  • ICBA Urges Real-Time Payments Role in Fed Meeting
  • Investment News From THE BAKER GROUP
  • Fed Hikes Key Rate
  • The ISM Manufacturing Index Declined to 58.2 in November
  • FDIC Releases Financial Crisis History
  • CBSC Announces Formation of the CBSC Payments Task Force
  • How Are Community Banks Doing?
  • Start Playing Offense in Digital Payments
  • CBAI LEGAL: Bank Boards and Weather-Related Closings
  • CBIS: What to Make of the Bitcoin Frenzy
  • Compliance for Lenders Slated for January 8, 9 and 31
  • Compliance Institute – Operations/Deposit Set for January 17-18
  • Ag Lenders’ Conference Scheduled for January 29
  • CBC Program: Reg E and Reg DD Seminar to be Held for January 30 & 31


  • Tax Relief and Reform Legislation Passes Congress!

    President Trump Expected to Promptly Sign the Measure

    CBAI congratulates the United States House and Senate for passing the most sweeping tax relief and reform since 1986 (H.R. 1 -- the Tax Cuts and Jobs Act). In today’s early hours (Wednesday, December 20th), the bill passed the Senate by a vote of 51 to 48, and early this afternoon the House passed the bill by a vote of 224 to 201. The measure now heads to President Trump’s desk for his signature.

    At the core of this legislation is a large and permanent reduction in the corporate tax rate from 35% to 21%. The bill also reduces the individual rates for all income levels. Other provisions in the legislation that are of interest to community banks relate to the Subchapter “S” pass-through rate, business interest deduction, mortgage interest deduction, estate taxes, corporate Alternative Minimum Tax, and tax deductions for FDIC premiums.

    While this legislation includes many provisions supported by CBAI and community banks, there are several sections we do not agree with, and several of our priorities were not addressed. CBAI sincerely appreciates the many community bankers who engaged in this effort and responded to our Action Alerts. CBAI will continue to work with the Illinois Congressional Delegation, the Independent Community Bankers of America (ICBA), and community bankers to gain additional tax and regulatory relief for Illinois community banks.

    ICBA has prepared an analysis of the tax reform measure called the Community Bank Scorecard. Read More. See Community Bank Scorecard.

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    Fine: 2017 a Turning Point for Community Banks

    This year has been a turning point for the community banking profession, ICBA President and CEO Cam Fine wrote in a message to community bankers last week. ICBA, CBAI, and community bankers are poised to deliver bipartisan regulatory relief through the Senate, capping a successful 2017.

    “I cannot even begin to express my full gratitude and admiration for the men and women who call themselves community bankers,” Fine wrote. “We can, and should, be proud of our many advocacy achievements in 2017. But we cannot let up now—not when it matters most.” Read Fine’s Message.

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    CBAI’s Call on Washington - Rescheduled

    The release of the Congressional Schedule for 2108 revealed that both the U.S. House and Senate would not be in session during CBAI’s planned Call on Washington which we hold in conjunction with the Independent Community Bankers of America’s (ICBA) Capital Summit. This news has prompted ICBA and CBAI to change the date when our members will be bringing their message to the nation’s capital and their lawmakers and regulators.

    The new date will be Sunday, April 8 – Wednesday April 11, 2018

    The location remains the same – Grand Hyatt Hotel, Washington, D.C.

    We look forward your joining us at CBAI 36th Annual Call on Washington.

    If you have any questions or comments regarding Call on Washington, please contact David Schroeder, Kraig Lounsberry, or Jessie Schmidt, or at 800/736-2224.

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    House Bill Would Delay HMDA Implementation

    CBAI and ICBA-advocated legislation to delay the Consumer Financial Protection Bureau’s Home Mortgage Disclosure Act final rule was introduced in the House by representative Tom Emmer (R-Minn.). H.R. 4648 would bar supervisory or enforcement actions for data collected before January 1, 2019, or data reported before January 1, 2020. It also would suspend new data-sharing requirements.

    Delaying and expanding exemptions for the new HMDA rule, which is slated to take effect at the start of 2018, are key priorities of ICBA’s Plan for Prosperity platform. ICBA recently called on CFPB Acting Director Mick Mulvaney to use the bureau’s authority to delay the effective date by one year, which followed a similar letter from 28 House Republicans, and also advocated an increase in the reporting threshold to 1,000 closed-end mortgages and 2,000 open-end lines of credit.

    Meanwhile, there are several congressional efforts to increase HMDA exemption thresholds, including the bipartisan Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) regulatory relief package that passed the Senate Banking Committee on December 5, as well as the Financial CHOICE Act and CLEAR Relief Act. CBAI and ICBA will continue pursuing all available legislative and regulatory avenues to delay and mitigate the impact of the HMDA rule. See Letter to CFPB. Read H.R. 4648.

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    House Ag Committee Launches Farm Bill Site

    The House Agriculture Committee posted a section on its website focused on the 2018 farm bill. Chairman Michael Conaway (R-Texas) said he is committed to completing the new bill before the 2014 farm bill expires on September 30, 2018. Conaway and Senate Agriculture Committee Chairman Pat Roberts (R-Kansas) have said they plan to move on the farm bill in early 2018. Visit Farm Bill Site.

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    ICBA Urges Real-Time Payments Role in Fed Meeting

    ICBA met with Kansas City Fed President and CEO Esther George recently to discuss its support for the Fed serving an operational role in the delivery of real-time payments. Specifically, ICBA and other financial services groups urged the Fed to serve as an on-ramp or bridge to real-time payments, an operator for real-time payments, and an operator of payments directories that could link to financial institutions.

    In the meeting, ICBA officials led by Rebeca Romero Rainey—chairman and CEO of Centinel Bank of Taos, N.M., and future ICBA president and CEO—noted that no market-driven entity has the reach or ability to connect every financial institution. The meeting follows the coalition’s April 2017 letter noting that the Fed provides safety, integrity and equitable access to all financial institutions, which is why it serves an operational role for checks, ACH payments and wire transfers. See April 2017 Letter to Fed.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    To those brimming with Christmas spirit, who is more reviled; the Grinch, or Ebenezer Scrooge? Well, those two Christmas- carol- curmudgeons are getting a public relations gift this year. By voting against Janet Yellen on the occasion of her fifth and final rate hike, Neel Kashkari and Charles Evans moved to the top of the bah-humbug heap. See Baker Market Update.

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    Fed Hikes Key Rate

    Increases 2018 Economic Growth Forecast

    Federal Reserve monetary policymakers last Wednesday nudged up their key interest rate again and sharply increased their forecast for the economy's performance in 2018 as Congress neared passage of a large tax cut package.

    Fed officials voted 7-2 after a two-day meeting to increase the rate by a quarter of a percentage point to a target range between 1.25% and 1.5%. The move was opposed by two regional Fed bank presidents, Neel Kashkari of Minneapolis and Charles L. Evans of Chicago, who preferred not to increase the short-term federal funds rate. The rate is a benchmark for consumer and business lending. Read More.

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    The ISM Manufacturing Index Declined to 58.2 in November

    Manufacturing activity continues to hum along heading into the final month of 2017. And barring a sharp decline in December, the ISM manufacturing index will average the highest for a calendar year going back to 2004. In November, the ISM manufacturing index declined slightly from October, but the underlying mix of growth was positive, and strength remains broad-based with 14 of 18 industries reporting growth in November (two reported declines). The supplier deliveries index was the primary driver of the modest slowdown in the pace of growth in November (readings above 50 signal expansion, so a decline above 50 represents continued growth, but at a slower pace), but that is a function of boosted readings in September and October as manufacturers worked to fill hurricane related backlogs.

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    FDIC Releases Financial Crisis History

    The FDIC has released a history of the financial crisis that focuses on its response and lessons learned from its experience. “Crisis and Response: An FDIC History, 2008–2013” reviews the origins of the crisis, the FDIC’s use of emergency authorities to respond to financial market illiquidity, the problems of systemically important financial institutions, and more. See FDIC Report.

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    CBSC Announces Formation of the CBSC Payments Task Force

    During CBAI leadership meetings recently, CBAI Chairman Gregg Roegge of Rushville State Bank announced the formation of a new work group called the CBSC Payments Task Force. The purpose of the Task Force is to advise the CBSC board on matters related to payments security and to emphasize the need for community banks to continue to have non-discriminatory access to the payments system. Read More.

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    How Are Community Banks Doing?

    The outlook is improving for community banks, according to the fifth annual CSBS and Federal Reserve Survey. The recently released report, which surveyed 661 community banks in 37 states, showed a transition to some stability in 2016 from previous years. Banks remained a strong lending source in their communities, bolstered by strong relationships. Compliance costs continued to grow but showed signs of ebbing. See Survey Results.

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    Start Playing Offense in Digital Payments

    Are you playing offense when it comes to your community bank’s digital payments strategy? In a recent article, ICBA Bancard President and CEO Tina Giorgio discusses how to strike a balance between high-tech and high-touch. Read Article.

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    CBAI LEGAL: Bank Boards and Weather-Related Closings

    Some differences exist between the composition and requirements for boards of directors of state-chartered banks and national banks. Also, any bank may close in the event of hazardous winter weather conditions. See Most Recent CBAI LEGAL.

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    CBIS: What to Make of the Bitcoin Frenzy

    A few months back, Community BancInsurance Services (CBIS) wrote a piece on bitcoin and what regulators were saying about the cryptocurrency’s implications for community banks. At the beginning of 2017, the value of a single bitcoin, which its proponents describe as an alternative asset class, was about $900. As of this writing it was nearly $19,300.

    As financial-institution insurance specialists, CBIS Gallagher is not in the business of predicting market bubbles. We’re risk managers, and as such our temperament is most often in lock step with our community bank partners. By nature, we are wary, extremely so, of unnecessary risk. Read More.

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    Compliance for Lenders Slated for January 8, 9 and 31

    Each bank employee has a duty to master a working knowledge of the compliance issues that pertain to his or her assigned position description. And with a relatively new set of Dodd-Frank rules and the even newer TRID rules, the life of a lender is getting more and more complex. The challenge is to ensure that lending personnel have the right information at the right time. This one-day program provides an overview of the current "hot-button" changes that are part of the lender's responsibilities; an overview of the lender's responsibility for assuring that all the TRID rules are met; an overview of the Loan Estimate and the Closing Disclosure; and up-to-date information on other compliance issues and other developments in bank regulations that relate to lending. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance with Young & Associates, Inc., Kent, OH.

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    Compliance Institute – Operations/Deposit Set for January 17-18

    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 & June. 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. Attendees can attend one or both sessions, dependent upon need. Offered in January, session I, Operations/Deposit Compliance, addresses topics including compliance management, privacy of customer information, Fair Credit Reporting Act, Customer Identification Program, Bank Secrecy Act, Regulation D: Reserve Requirements, Regulation DD: Truth in Savings Act, Regulation CC: Expedited Funds Availability Act, and Regulation E: Electronic Funds Transfer Act. Topics covered in Lending Compliance, offered in June, include Regulation B and the Fair Housing Act: Fair Lending, Regulation X: Real Estate Settlement Procedures Act, National Flood Insurance Program, Regulation C: Home Mortgage Disclosure Act, compliance management, privacy of customer information, FCRA and Regulation V (lending portion only), and Customer Identification Program (BSA). This year, due to the massive size of regulations, Regulation Z (Truth in Lending) will be covered in its entirety in a separate program called Reg Z University. This three-day program will be offered April 16-18, 2018. Bill Elliott, CRCM, senior consultant and manager of compliance, and Dale Neiss, consultant, both of Young & Associates, Inc., Kent, Oh, lead this institute.

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    Ag Lenders’ Conference Scheduled for January 29

    This jammed-packed day looks at a variety of issues facing agricultural lenders. Attend CBAI’s 2018 Ag Lenders’ Conference to develop the skills and tools to better understand the issues affecting your farm and agribusiness customers and to meet their credit needs. A mini-expo featuring the latest in products and services for ag lenders also highlights the day. Speakers and topics include “Bullish on Agriculture - 2018 & Beyond” with Tyne Morgan, Host, U.S. Farm Report & Farm Journal Broadcast, South Bend, IN; “Estate Planning Trends for Family Farms” with Curt W. Ferguson, The Farmers' Estate Planning Attorney, Salem, IL; “Weather Outlook & Forecasting for 2018” with Eric Snodgrass, Director of Undergraduate Studies Department of Atmospheric Science, University of Illinois, Champaign; “Forces Shaping Future Farmland Markets” with Dr. Bruce J. Sherrick Ph.D., Marjorie and Jerry Fruin Professor of Land Economics & Director of the TIAA Center for Farmland Research in the Department of Agricultural and Consumer Economics at the University of Illinois, Champaign; and “The Joys of Stress” with David Okerlund, professional speaker.

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    CBC Program: Reg E and Reg DD Seminar to be Held for January 30 & 31

    The Regulation E presentation will be limited to Subpart A, which is the portion of the regulation that discusses electronic issues such as distribution of electronic cards, error resolution, disclosures, and similar subjects. Included in this portion of the presentation will be all of the April 1, 2018 changes. While the changes are not critical, bankers should know what they are. If the changes do not impact your bank right now, they may in the future, and having the appropriate knowledge base will assist your bank with any current or future decisions regarding new electronic products. We will cover Regulation DD in its entirety. Note that both regulations cover overdrafts, and we will include the new proposed forms for overdraft programs in the presentation. The subjects for the regulatory update will be determined by circumstances and releases from the various agencies. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance with Young & Associates, Inc., Kent, OH.

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