Community Bankers Association of Illinois


September 2, 2008 - - - The Community Bankers Association of Illinois announced today that CBAI will introduce legislation to deter future irresponsible statements from investment advisors regarding the safety of deposits in federally-insured financial institutions. The legislative proposal is one response to the recent correspondence from Kollar Financial Strategies, LLC ("Kollar") in which the safety of deposits at 190 financial institutions was called into question based on investment ratings used by Kollar.

"At the core of community banking are the special trust and confidence that individuals and businesses have in us," said Kent Siltman, Chairman of CBAI and President of Citizens First State Bank in Walnut, Illinois. "There is perhaps no higher duty for the Community Bankers Association of Illinois than defending the reputation and franchise of each of our financial institutions, and there is no organization more motivated or better suited to perform that duty than CBAI. This legislative initiative is one more example of that."

CBAI, which is preparing to host its 34th annual Convention and Exposition in Springfield on September 11th - 13th, was founded in 1974 and has grown to become the largest state-organized trade association representing financial institutions in Illinois. In fact, with its 475 members, CBAI is the largest such association in the United States outside of Texas.

The legislation would amend Illinois' existing "Derogatory Statements About Banks Act" to provide additional prohibitions and to mandate new disclosures that investment advisors would be required to make if they call into question the safety of deposits in federally-insured financial institutions.

"This is not censorship," explained CBAI General Counsel Jerry Cavanaugh, one of the co-authors of the legislation. "We are not putting any investment rating services out of business, and financial advisors are still free to make accurate, general statements about federal deposit insurance and the potential exposure of uninsured funds. But when you try to link an arbitrary investment rating to the overall fiscal health or to the safety of deposits in a financial institution, then you are way out of line."

"As bankers, we are very familiar with mandatory disclosures to customers," added CBAI Chairman Siltman. "There is nothing unfair about requiring an advisor to disclose thorough and accurate information when that advisor is attempting to influence any customer to not do business with our financial institutions."

For more information about CBAI's legislative proposal, please contact CBAI General Counsel Cavanaugh, CBAI's Senior Vice President for Governmental Relations Kraig Lounsberry or CBAI's Vice President for Governmental Relations Megan Stieren.

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