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Community Bankers Association of Illinois
Community Bankers Association of Illinois    Community Bankers Association of Illinois CBAI E-Newsletter Sponsor - SHAZAM
 
     A Bi-Weekly News Bulletin for CBAI Members                     December 24, 2013

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • CBAI Foundation Announces New Scholarship!
  • ICBA and CBAI Urge FASB to Revise Credit Loss Model Proposal
  • A Behind-the-Scenes Look at Credit Union Influence in Washington
  • ICBA Establishes Mortgage Rules Resource Page
  • Congressmen Ask Regulators to Address the Volcker Rule Impact on Community Banks
  • Target Data Breach: “What Should Banks Do?”
  • OCC Publishes Semiannual Risk Assessment Report
  • ICBA Community Banking Live 2014 Convention -- Make Plans Now to Attend
  • EMV: Proponent Predicts 'Many Flavors' of Adoption in 2014
  • Regulators Release Annual CRA Asset Threshold for Community Banks
  • Mobile Banking to Accelerate in 2014
  • FRB Payments Study Offers Expanded View of U.S. Noncash Payment Trends
  • Baker Market Update
  • Customizable Op-Ed Urges More Flexible Community-Bank Regulation
  • Federal Reserve Banks Paint Mixed Picture of Farm Income, Farmland Values
  • "Dissecting Wire Fraud: How It Happens and How To Prevent It"
  • Coalition Promotes Transparency in Patent Demand Letters
  • Social Media: Final Guidelines onConsumer Compliance Risk Management Guidance
  • Mortgage Loan Compliance Seminar Set for January 6 & 7, 2014
  • Compliance Institute (Operations/Deposit) to be Held January 8-9, 2014
  • Community Bank Directors’ College Scheduled for January 15-16, 2014


  • CBAI Foundation Announces New Scholarship!

    On December 12 the board of directors of Community BancService Corporation (CBSC) unanimously voted to pledge $100,000 over five years to the CBAI Foundation for Community Banking, thereby joining its marketing partners, SHAZAM® and BancVue in providing named annual scholarships. The scholarship is for the children and grandchildren of community bankers and provides $1,000 per year for four years of continuing education. To learn how your bank may become eligible to nominate someone from your bank for one of these scholarships,
    Click Here.

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    ICBA and CBAI Urge FASB to Revise Credit Loss Model Proposal

    Last week ICBA and 41 state banking associations including CBAI submitted a letter to the Financial Accounting Standards Board in response to their proposed current expected credit loss model proposal. The letter addresses concerns over changes to the loan and security impairment model and its reliance on complex forecasting techniques that are difficult and expensive to adopt while producing an outcome that may not reflect the true expected losses for financial instruments held by community banks. The letter encourages FASB to consider an alternative that relies on historical losses built up in a ratable fashion that better matches loss expectations with the earning potential of the asset.
    See Letter.

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    A Behind-the-Scenes Look at Credit Union Influence in Washington

    With nearly 100 million depositors and more than $1 trillion in assets, the nation’s 6,800 credit unions have maintained a friendly relationship with their federal regulator which has helped them protect their tax-exempt status despite straying from common bond and expanding into full banking services. CBAI has long advocated that credit unions pay taxes in their earnings.
    See Slate Article.

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    ICBA Establishes Mortgage Rules Resource Page

    Early this year the CFPB issued six final rules that will impact the mortgage market for years to come. ICBA has developed a resource page to help community bankers understand the rules and prepare for implementation. CFPB has also developed a guidance section.
    See ICBA Resource Page. See CFPB Guidance Section.

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    Congressmen Ask Regulators to Address the Volcker Rule Impact on Community Banks

    Illinois Senator Mark Kirk and Congressmen Peter Roskam, Randy Hultgren, and Bill Foster, have called on federal banking regulators to address the impact of certain provisions of the Volcker Rule that could create severe unintended consequences for hundreds of community banks. The provisions which were recently released could require many community banks to take unanticipated losses on their holdings of collateralized debt obligations (CDOs) backed by bank-issued trust preferred securities (TruPS).
    Read More.

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    Target Data Breach: “What Should Banks Do?”

    The massive Target data breach affecting 40 million credit and debit cards used at its stores between November 27 and December 15 has generated debate over what issuing banks should do. The responses are mixed. Most are taking a wait and see approach while closely monitoring accounts for suspicious activity.
    See AB Article.

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    OCC Publishes Semiannual Risk Assessment Report

    The Comptroller of the Currency released its semiannual assessment of risk for national banks and federal savings associations last week. Due to slow economic growth and prolonged low interest rates, the OCC considers risk management a top priority. The report provides data in four main areas: operating environment; condition and performance of the banking system; funding, liquidity, and interest rate risk; and regulatory actions. The Report is intended as a resource to financial institutions, examiners, and the public.
    See OCC Report.

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    ICBA Community Banking Live 2014 Convention -- Make Plans Now to Attend

    Make Plans Now to Attend! ICBA Community Banking Live 2014® will be like no community banking conference you’ve attended. We are again setting the standard, raising the bar and creating a masterpiece that will be the community banking event of the year and you’re invited!

    Why Attend?

      1. Access to DYNAMIC industry leaders

      2. Connect with community bankers from all over the country who share your zest for our DISTINCT industry

      3. Choices of dozens of INTERACTIVE educational workshops and roundtables

      4. Wake up each day in a place so MAGICAL that you might just find yourself smiling just listening to the waves lap against the sand

      5. Participate in the world’s largest most COMPREHENSIVE gathering of community bankers in world

      6. Explore hundreds of products and services ESSENTIAL for your bank
    Learn More and Register Today!

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    EMV: Proponent Predicts 'Many Flavors' of Adoption in 2014

    While the U.S. migration toward EMV card technology may have been jolted by a July court ruling, Randy Vanderhoof of the Smart Card Alliance contends the movement toward EMV will accelerate in 2014.

    In spite of the card brands' claims that a ruling by the
    U.S. District Court for the District of Columbia against the Federal Reserve had stunted migration toward the Europay, MasterCard, Visa standard, progress is being made, says Vanderhoof, executive director of the Smart Card Alliance. Read More.

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    Regulators Release Annual CRA Asset Threshold for Community Banks

    Last week federal regulators announced the annual adjustment to the asset-size thresholds used to define small and intermediate institutions under the Community Reinvestment Act (CRA) regulations, effective January 1, 2014.
    See Release.

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    Mobile Banking to Accelerate in 2014

    From 2012 to 2013 smart phone ownership in the U.S. increased more than 25 percent, and 48 percent of smart phone owners used mobile banking in the past 12 months. Predictions indicate that 2014 will be a big year for mobile banking.
    See Tech Article.

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    FRB Payments Study Offers Expanded View of U.S. Noncash Payment Trends

    The 2013 Federal Reserve Payments Study shows that card payments--credit and debit--now account for more than two-thirds of all noncash payments, while the number of checks paid continued to decline.
    See FRB Study.

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    Baker Market Update

    “To taper, or not to taper: that is the question. Whether ‘tis nobler in the mind to suffer the slings and arrows of quantitative easing, or to take arms against a sea of improving economic fundamentals.” Okay, Ben Bernanke didn’t really say that following the conclusion of this year’s final FOMC meeting, but, being a Princeton man, he was probably thinking it.
    See Baker Market Update.

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    Customizable Op-Ed Urges More Flexible Community-Bank Regulation

    Following numerous reports on community banking and its impact on the economy, ICBA is offering community bankers a
    customizable op-ed they can use to spread the community-banking story in their local media outlets. The op-ed expresses support for policies that would encourage the formation of more community banks.

    In addition to discussing the benefits of community banks to economic growth and stability, the customizable op-ed also advocates reducing the regulatory red tape that is inhibiting the formation of new community banks. It expresses support for more flexible regulatory policies that are tailored to the risk profiles and business plans of both new bank applicants and existing community banks. Access the Customizable Op-Ed.

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    Federal Reserve Banks Paint Mixed Picture of Farm Income, Farmland Values

    Third-quarter
    reports on farm income and farmland values from three Midwest-based Federal Reserve banks paint a mixed picture. Falling crop prices dragged farm income lower, the Kansas City Fed’s Survey of Agricultural Credit Conditions indicated, but farmland value gains did not moderate much. The St. Louis Fed’s Ag Survey, on the other hand, showed farmland values down and incomes up. Farmland values in the Chicago Fed’s district gained 14 percent in the third quarter, according to a survey for the bank’s Ag Letter, with most crop farmers expecting net cash earnings to be lower in the fall and winter, but some cattle and hog operators seeing higher net earnings relative to a year ago.

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    "Dissecting Wire Fraud: How It Happens and How To Prevent It"

    A
    white paper created by associate member Guardian Analytics provides examples of actual fraud cases that illustrate the breadth of schemes in play, available fraud-prevention solutions, and the strengths, weaknesses, and limitations of each. It also explains how a behavior-based fraud prevention strategy can detect wire fraud regardless of how the wire request was submitted or what fraud scheme is in play.

    The paper provides a solid overview of the wire- fraud ecosystem, including:

    1. The myriad routes criminals can take to a fraudulent wire, including many methods of compromise, different points of compromise, and multiple methods for initiating a wire.
    2. Example fraud schemes including ones that defeat out of band authentications, compromise email accounts, target customer service, and defeat dual controls.
    3. The total cost of fraudulent wires that are not detected in time.
    4. Available solutions for preventing wire fraud, their strengths and weaknesses.
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    Coalition Promotes Transparency in Patent Demand Letters

    ICBA and a coalition of other trade groups urged Congress to direct the Federal Trade Commission to go after patent-assertion entities’ unfair and deceptive demand letters. In a joint letter to Senate Commerce Committee leaders, the coalition also expressed support for legislative language that would require these entities to provide minimum disclosures to better identify themselves, the patent in question and the specific nature of the infringement being alleged.

    The coalition letter notes that demand letters often allege that the mere use of everyday technology violates the patent holders’ rights. They also use the threat of litigation to extract a “licensing fee” from recipient business that often settle the claims rather than run the risk of litigation.

    The House of Representatives recently passed legislation to address the increasing problem of abusive patent-infringement demands. The Innovation Act of 2013 (H.R. 3309) includes provisions that would make it easier for community banks and other small businesses to challenge the validity of frivolous patent claims.

    ICBA is submitting a statement for the record for today’s Senate Judiciary Committee on protecting small businesses from patent abuse.
    Read the Coalition Letter.

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    Social Media: Final Guidelines on Consumer Compliance Risk Management Guidance

    The Office of the Comptroller of the Currency (OCC), in collaboration with the other members of the Federal Financial Institutions Examination Council (FFIEC), has
    published in the Federal Register final supervisory guidance titled “Social Media: Consumer Compliance Risk Management Guidance” (guidance).

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    Mortgage Loan Compliance Seminar Set for January 6 & 7, 2014

    During the last few years, both Congress and the various federal regulators have crafted revisions to lending regulations and have added new regulations as well. This has resulted in additional regulatory issues in every mortgage-loan transaction. As a result, lenders have been struggling to determine what they should do to assure that they make a safe and sound loan for the bank, and do so in a manner that will not create regulatory problems for the bank. The year 2014 will continue this process with new rules and mandates. This
    seminar will cover all aspects of mortgage compliance that a lender should know, including the 2014 rules and regulations as they now stand. This seminar is designed to discuss the compliance issues from the perspective of mortgage lenders and lending management. It also assists compliance officers, senior management, bank trainers, loan auditors, loan operations personnel, and others involved in the mortgage-lending compliance process to understand all of the new requirements and to share this information with others inside the bank. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance at Young & Associates, Inc., Kent, OH.

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    Compliance Institute (Operations/Deposit) to be Held January 8-9, 2014

    Community banks are aced with a wide 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. 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. Bill Elliott, CRCM, senior consultant and manager of compliance, and Adam Witmer, CRCM, consultant, both of Young & Associates, Inc., Kent, OH, lead this institute.

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    Community Bank Directors’ College Scheduled for January 15-16, 2014

    The
    Community Bank Directors’ College has been developed in close conjunction with state and federal regulators, and it's designed to teach individuals how to become a more effective, capable, and supportive member of a bank’s board of directors. Our goal is to graduate directors who 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 Directors’ College is offered once every two years and provides a thorough understanding of bank operations and bank directors’ responsibilities. The college is recommended for both new and seasoned bank directors. It is structured as two, two-day sessions offered on an annual basis. The second session, which may be attended as a stand-alone course, is being held at the Northfield Center in Springfield, Illinois, on January 15-16, 2014. Topics covered in the second session include financial management of community banks, regulatory exams, C.A.M.E.L.S., enforcement actions, and understanding shareholder value. It also examines understanding your community bank’s risk, strategic planning, community bank compensation, and an exam workshop with representatives from the FDIC, Office of the Comptroller of the Currency, Illinois Department of Financial and Professional Regulation, and the Federal Reserve Bank of Chicago.

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