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CBAI Urges Support for Crop Insurance in the Farm Bill

The Community Bankers Association of Illinois (CBAI) joined with 417 state and national organizations in signing a letter to the U.S. House of Representatives urging support for crop insurance in the Agricultural and Nutrition Act of 2018 - H.R. 2 (Farm Bill or Bill). The letter highlighted the importance of crop insurance as a critically important risk management tool for farmers, ranchers and the lenders that finance their operations. The letter urges lawmakers to oppose harmful amendments to the Bill that would reduce or limit participation in crop insurance, make insurance more expensive in times of economic downturn, and harm private-sector delivery. Read Comment Letter.

CBAI has been actively engaged in the development of a robust Farm Bill. In a July 31, 2017 letter to the Illinois members of the U. S. House Agriculture Committee, CBAI urged the adoption of a new multi-year farm bill which incorporates several broad principals to prevent a future farm credit crisis and enable produces and lenders to engage in sound planning and business decision making. The number one principal stated in that letter was “providing producers ample funds for commodities, crop insurance and credit programs to help them weather a potential farm income or farm credit crisis.” Read Letters to Illinois Ag Committee Members.

During the floor debate on the Farm Bill in the House, a harmful amendment that would have phased out the discount that farmers receive when they pay their crop insurance bill, and simultaneously phasing out the reimbursement to the private sector for efficiently and effectively delivering crop insurance to farmers, was offered and soundly defeated by a bipartisan 380-34 vote. No Illinois member of the U.S. House voted in favor of this harmful amendment.

While the Farm Bill was offered and defeated in the House on May 18th by a vote of 198-213, a motion to reconsider the Bill was passed and negotiations continue. The House is planning a second vote on June 22nd and the Agriculture Committee Chairman Michael Conway (R-TX-11th) said that the House would deliver legislation by the September 30th deadline.

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CBAI Meets with the FDIC’s New Chicago Regional Director

The Community Bankers Association of Illinois’ David Schroeder, Senior Vice President Federal Governmental Relations, met with John P. Conneely, the new Chicago Regional CBAIMeetingwithFDIC0518Director of the Federal Deposit Insurance Corporation (FDIC). Conneely was named Chicago Regional Director in October of 2017, and assumed his new responsibilities at the beginning of the year. Conneely had been with the FDIC for 28 years, most recently as Deputy Regional Director in the Division of Risk Management Supervision (RMS) in the New York Region. His prior responsibilities included: Assistant Regional Director in the New York Region, Associate Director for Complex Financial Institution branch in RMS, and Acting Deputy Director in the Division of Insurance and Research. Conneely assumed the position formerly held by M. Anthony Lowe who was named Director of the Office of Ombudsman.

During a lengthy discussion, Conneely was interested in hearing about our members’ experience with the FDIC. He emphasized the importance of raising and pursuing examination and other issues if they are unresolved. He hoped there are no concerns about retaliation but recommended bankers use the FDIC’s Ombudsman (Dan Marcotte in the Chicago Region) for a confidential discussion and to benefit from Dan’s perspective within the FDIC.

Schroeder explained CBAI’s positions on broad issues including: fintech companies, blockchain/Bitcoin, payment system improvements, CRA modernization, and customer data security/data sharing/and liability. A specific issue discussed was needed changes to the National Rate Cap on Deposits which is frustrating some community bankers in their efforts to retain deposits, fund loans, increase profitability and grow capital – within safety and soundness guidelines. This led to discussing Conneely’s concerns about liquidity in a rising rate environment, which we understand is now a significant focus during regulatory examinations.

Schroeder reviewed several of CBAI Governmental Relations events including the Capital Conference in Springfield and our Call on Washington. With the imminent vote on the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) in the House that afternoon Schroeder reviewed CBAI significant efforts with Democrats and Republicans alike in Congress to enact this long-overdue and well-deserved community bank regulatory relief.

CBAI looks forward to working with Chicago Regional Director John Conneely.

May 24, 2018

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Community-Bank Regulatory Relief Passes the U.S. House

This week the United States House of Representatives passed legislation to bring much-needed regulatory relief to the nation’s community banks. The Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) is a carefully constructed bipartisan bill that includes common-sense improvements to financial regulation that will allow community banks to better serve their customers and communities. For consumers it will open the door for more creditworthy borrowers and businesses, and will contribute to local economic growth and job creation. Here is what it means for your bank.

Community banks are the economic lifeblood of local communities. While holding less than 20 percent of the nation’s banking assets, community banks fund more than 60 percent of small-business loans and more than 80 percent of U.S. agricultural loans. Further, community banks operate in many areas where large banks do not, serving as the only physical banking presence in nearly one in five U.S. counties, according to the FDIC.

The 258-159 bipartisan vote in the U.S. House yesterday was preceded by a 67-31 bipartisan vote in the U.S. Senate in March. Those members of the Illinois Congressional Delegation voting in favor of this common-sense regulatory relief for community banks were: Mike Bost (R-12th), Danny Davis (D-7th), Rodney Davis (R-13th), Bill Foster (D-11th), Randy Hultgren (R-14th), Adam Kinzinger (R-16th), Darin LaHood (R-18th), Peter Roskam (R-6th), Bradley Schneider (D-10th), and John Shimkus (R-15th). The legislation is now headed to the President’s desk for his signature.

“This bipartisan vote in the House is another important step toward achieving a tiered regulatory system that appropriately differentiates between local community banks and the Wall Street megabanks. This is the best opportunity we’ve had in over a decade for meaningful regulatory relief to allow community banks to better serve their customers and communities. We look forward to the President signing this legislation into law,” said CBAI President Kraig Lounsberry.

Beneficial provisions in this legislation for community banks include:

  • Granting “Qualified Mortgage” (QM) status for portfolio mortgage loans at most community banks;
  • Increasing exemption thresholds for Home Mortgage Disclosure Act (HMDA) reporting;
  • Exempting certain community-bank loans from escrow requirements;
  • Simplifying community-bank capital requirements;
  • Increasing eligibility for a short-form Call Report to restore proportionality to quarterly reporting;
  • Expanding eligibility for the 18-month regulatory-examination cycle to more community banks;
  • Easing appraisal requirements to facilitate mortgage credit in local communities;
  • Exempting most community banks from the Volcker Rule;
  • Expanding access to the Federal Reserve’s Small Bank Holding Company Policy Statement to help more community banks build capital; and
  • Improving regulatory treatment of reciprocal deposits and certain municipal securities.
CBAI worked closely and tirelessly with both Democrats and Republicans in Congress, and the Independent Community Bankers of America (ICBA), to help to pass this important legislation which provides long-overdue, well-deserved and meaningful regulatory relief to Illinois community banks. CBAI extends its thanks to all community bankers who engaged in the grassroots lobbying process to enlighten their lawmakers and encourage their support.

May 22, 2018

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CBAI Meets with OCC’s Office of Innovation

The Community Bankers Association of Illinois' David Schroeder, Senior Vice President Federal Governmental Relations, participated in the March 21, 2018 Office of Comptroller of the Currency’s (OCC) Office of Innovation Office Hours event by meeting with senior OCC Innovation and Central District staff. The meeting was timely and very informative considering the many new developments in financial technology (fintech) which are being driven by consumer expectations. Fintech is rapidly moving into every area of financial services and it is critically important for community bankers to be aware of fintech opportunities and challenges and incorporate them into their community banks’ strategic planning.

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Topics covered during Schroeder’s meeting included the rapid rise of fintechs, how the pace of fintech development is different than prior technology developments, the different approaches taken by large versus small banks (go-it-alone or partner), opportunities for partnerships with fintechs, risk factors to consider in the development of a fintech strategy, the importance of communicating early and often with bank’s regulators, and the challenges of customer data sharing with fintechs (data ownership and rights, privacy concerns, and liability for mishandling and misuse).

Also discussed during the meeting were the recent changes in leadership in the OCC and its impact on the OCC’s fintech initiatives, the status of the lawsuit against the OCC by the Conference of State Bank Supervisors challenging the OCC’s authority to approve special purpose national bank charters for fintechs, coordination among regulators on fintech supervision and regulation, and the importance of the regulators sharing success stories or problems/issues as additional guidance for the community banks they regulate. Read OCC’s FAQs on Partnering with Fintechs.

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CBAI Action Alert: Urge Senators Durbin and Duckworth to Support Community Bank Regulatory Relief

Please Contact Senators Durbin and Duckworth Today!

The Time Is Now for Community Bank Regulatory Relief!

Only five minutes of your time is urgently needed - right now.

The United States Senate is poised to vote on significant bipartisan community bank regulatory relief - the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155). Please contact Illinois' Senator Richard Durbin and Senator Tammy Duckworth and ask them to support this critically important legislation. Take Action Now!

This bi-partisan legislation provides long-overdue, meaningful, and well-deserved community-bank regulatory relief including:

  • Granting “Qualified Mortgage” (QM) status for portfolio mortgage loans by community banks (fewer than $10 billion in assets)
  • Exempting certain community bank loans from escrow requirements (banks fewer than $10 billion in assets);
  • Increasing exemption thresholds for Home Mortgage Disclosure Act (HMDA) reporting (500 open-end and 500 closed-end loans);
  • Simplifying community-bank capital requirements (bans less than $10 billion in assets);
  • Increasing eligibility for a short-form Call Report to restore proportionality to community-bank quarterly reporting (banks fewer than $5 billion in assets);
  • Expanding eligibility for the 18-month regulatory examination cycle for community banks (banks fewer than $3 billion in assets);
  • Easing appraisal requirements to facilitate mortgage credit in local communities;
  • Exempting community banks from the Volcker Rule (banks fewer than $10 billion in assets);
  • Improving regulatory treatment of reciprocal deposits and certain municipal securities.

Please share this Action Alert with your board members and senior management.

We need a strong response from all Illinois community bankers. Take Action Now!

Thank you for responding.