CBAI Urges the FHFA to Withdraw Harmful Proposed Membership Rule

January 7, 2015

CBAI submitted a comment letter to the Federal Housing Finance Agency (“FHFA”) concerning its harmful proposed changes to Federal Home Loan Bank (“FHLB”) membership rules. These proposed changes will have a profound impact on the FHLB System, FHLBanks and FHLB Members, by imposing ongoing requirements that all FHLB Members would need to meet in order to maintain their membership.

The impact of the Proposed Rule include: increased regulatory burden on community banks and thrifts; difficulty in Member balance sheet management; the stability of the System and its continued reliability as a funding partner, particularly in times of economic stress; uncertainty about continuing Member access to liquidity; the future value of FHLBank membership; and the impacts on housing and community development throughout the System.

CBAI previously raised concerns about the FHFA’s 2010 Advanced Notice of Proposed Rulemaking (“ANPR”) on this subject and CBAI has again called on the FHFA to formally withdraw the harmful Proposed Rule. Read CBAI’s Comment Letter.


CBAI Applauds New Law Improving Community Bank Access to Capital

December 22, 2014

CBAI applauds the recent enactment of a 2014 CBAI Federal Policy Priority for tiered regulation by increasing the Federal Reserve’s Small Bank Holding Company Policy Statement asset exemption from $500 million to $1 billion and also allowing small savings and loan holding companies to be covered by the Policy Statement provisions. It is estimated that 600 more bank and savings and loan holding companies will benefit from this increased threshold and that the Policy Statement will now cover close to 90% of all bank HCs and 75% of all savings and loan HCs. The Federal Reserve must propose a revised Policy Statement for comment within six months of the enactment of this legislation.

The ICBA has published a document answering frequently asked questions about this legislation. Read ICBA FAQ Document.


CBAI Meets with New Illinois Congressmen Robert Dold (R-10th) and Mike Bost (R-12th)

December 15, 2014

Community Bankers Association of Illinois (CBAI) staff and leadership bankers, Todd Grayson (President of South Central Bank, N.A., Chicago and Chairman of CBAI) and David Pirsein (President of First National Bank in Pinckneyville and CBAI Southern Illinois Regional Vice Chairman) respectively, met with Illinois’ new Congressmen Robert Dold (R-10th) and Mike Bost (R-12th) to review CBAI's Federal Policy Priorities.

CBAI’s long history of exclusively representing the interests of Illinois community banks was highlighted during these meetings, including the associations cooperative relationship with the Independent Community Bankers of America (ICBA) and how this relationship has strengthened community banking's influence at the national level to the benefit of Illinois community banks.

The substantive issues discussed during the meetings included addressing the risks posed by too-big-to-fail banks and financial firms, the need for regulatory relief and tiered regulation for community banks, credit union taxation, the Farm Credit System’s expansionist agenda, and other issues contained in CBAI’s 2014 Federal Policy Priorities. Read CBAI’s 2014 Federal Policy Priorities.


Congressman-elect Robert Dold defeated Democrat Congressman Brad Schneider in the 10th Congressional District which includes Chicago’s northern suburbs. Dold is a small business owner and previously served in the United States House of Representatives from 2010-2012. During his previous term in Congress he was a member of the House Financial Services Committee and was a strong supporter of Illinois community banks. CBAI is pleased to announce that Bob Dold will be rejoining the House Financial Services Committee and looks forward to again working with him on this important Committee.

Congressman-elect Mike Bost defeated Democrat Congressman Bill Enyart in the 12th Congressional District which is located in southwestern Illinois. Mike’s background includes owning a small business and serving in the Illinois House from 1995-present. CBAI’s state Governmental Relations staff has enjoyed a good working relationship with Representative Bost. CBAI is also pleased to report that Bost has been named to the House Agriculture Committee.

CBAi sincerely appreciates Illinois’ newest Congressmen committing their time to meet with leadership bankers and staff to learn more about Illinois community banks and CBAI's federal policy priorities.

We look forward to meeting with every member of the Illinois Congressional delegation during CBAI’s 33rd Annual Call on Washington, April 28 – May 1, 2015. Please save the Date! Your participation in the legislative process is vital to making sure the voice of Illinois community banks is heard in Washington, D.C.


We’ve Had Enough of Wall Street!

December 10, 2014

The Obama Administration has chosen yet another Wall Street insider, Antonio Weiss of the global investment banking firm Lazard, for the position of Under Secretary of Treasury for Domestic Finance. CBAI believes that this and previous Wall Street nominees ignore the importance of Main Street community banks to the nation’s financial services profession, small business job creation, and the inconvenient fact that Wall Street greed and abuse caused the financial crisis and the Great Recession. The Administration is ill-advised to exclusively rely on Wall Street insiders who represent a narrow, and often times flawed and biased perspective.

Mr. Weiss joins a growing list of Administration-supported Wall Street insiders including: Mary Joe White to the Securities and Exchange Commission (SEC) (a former white collar defense attorney for Morgan Stanley and Bank of America’s Ken Lewis); Jack Lew to Treasury Secretary (a former Chief Operating Officer of one of Citi Group’s trading groups); Stanley Fisher to Vice Chairman of the Federal Reserve Board (a former executive of Citi Group); and Gary Gensler, the former Chairman of the Commodities Future Trading Commission and a former partner of Goldman Sachs.

Senior Administration officials defend the background of nominees as relevant to their recommended positions; however, the latest appointment of Weiss is especially troubling. The Treasury Under Secretary for Domestic Finance plays a leading role in developing policies that will impact the full spectrum of the U.S. financial system, which includes the nation’s 6,500 community banks. To be effective in that role, CBAI believes that any Under Secretary should have a broad background in financial services, with the critical inclusion of community banking, which is so important to small business creation, job development, and the overall economic vitality of the hundreds of communities throughout our great nation. In addition, an understanding of small and mid-market agricultural lending and financing is crucial to the development of sound and balanced financial regulatory policy with regard to the thousands of agricultural banks in rural communities throughout America.

CBAI is not questioning the background and professional experience of these nominated individuals, rather the Administration’s failure to nurture, encourage, recognize, and include in top positions, highly qualified community bankers who play an important role (every single day) in their communities, our financial system and the nation’s economy. It is time community bankers are recognized for their accomplishments and the valuable role they play in guiding our nation’s financial services profession and our economy. Their advice and counsel is desperately needed at the highest levels of this and future administrations.

Rectifying the current and unfortunate situation should start with the withdrawal of Weiss nomination and replacing him with someone more qualified who understands the community bank model. Additionally, the President should appoint Federal Reserve Board governors who have community bank experience and create an Assistant Secretary of the Treasury for Community Banking to ensure that community banks are well represented in the policy making process. These steps are long overdue, but they would represent the beginning of a welcome reversal of the disturbing trend of Wall Street-dominated nominations.


Webinar – The Impact of Proposed New FHLB-Chicago Membership Rules

Earlier this fall, the Federal Housing Finance Agency (“FHFA”) released proposed rulemaking regarding changes to Federal Home Loan Bank (“FHLB”) membership rules. These proposed changes would represent a fundamental change to the FHLBank System by imposing ongoing requirements that all FHLB members would need to meet in order to maintain their membership. If implemented, these requirements would, among other problems, greatly undermine the reliability of the FHLBs as sources of liquidity for members, particularly in times of economic stress and especially for smaller members that lack alternative liquidity sources.

The FHFA has requested comments on this proposed rule by January 12, 2015. CBAI will be commenting on the proposed rules and encourage CBAI members that are also FHLB-C members to participate in this webinar and submit their comments. This FHLB-Chicago webinar will be held on Thursday, December 11, 2014, from 9:00-9:30am CST and will explain the proposed rule, encourage members to make their voices heard, and answer questions about the rule.

After registering, you will receive a confirmation email containing information about joining the webinar.

To register for the FHLB-Chicago webinar, click here.