November 8, 2013
Steve Rosenbaum, President of Prospect Federal Savings in Worth, won re-election to a four year term to the Board of Directors of the Federal Home Loan Bank of Chicago. CBAI’s Board of Directors unanimously supported Rosenbaum’s re-election and congratulates him on this important accomplishment.
Rosenbaum is the current Vice Chairman of the FHLB-Chicago where he serves as Chairman of the Human Resources and Compensation Committee, and as a member of the Executive & Governance and Audit Committees. In addition, he is one of three members from the FHLB-Chicago serving on the Council of Federal Home Loan Banks which represents the positions and views of the Council's members to Washington policymakers.
Rosenbaum is a strong supporter of community banks. He believes his knowledge of the FHLB-Chicago will be valuable to his continued service on the Board and to help the Bank carry out its member focused mission.
Other CBAI members serving on the Chicago FHLB board are Jim Ashworth, President of CNB Bank and Trust, N.A., Carlinville; and Roger Lehmann, Chairman and CEO of Harvard State Bank.
November 1, 2013
On November 1, 2013, CBAI members and staff attended the 9th Annual Community Bankers Symposium which was jointly sponsored by the Federal Reserve Bank of Chicago, the FDIC, and the OCC. The symposium was titled GPS for Success: Navigating the New Community Banking Environment. Kevin Bertsch, Associate Director of the FRB, presented a View from the Board of Governors, and highlighted the following with insightful graphs and statistics to support the Fed’s observations.
- Community bank performance and conditions are improving.
- Community banks have taken steps to address the crisis.
- The number of problem banks is declining.
- Challenges to return to historic performance levels remain including: tighter margins, pre-provision operating income is lower, interest rate risks, and lending has still not recovered.
- Supervisory priorities reflect current conditions including: loan portfolio quality and adequacy of reserves, managing interest rate risk, and risk mitigation before entering new lines of business.
- The Federal Reserve’s is making efforts to improve the supervisory programs for community banks.
This material is appropriate to inform your Board on community banks’ progress in addressing the financial crisis and the current state of the profession. See FRB Presentation Report.
October 18, 2013
Representatives from CBAI met this week with Federal Reserve Bank of Chicago President and CEO Charles L. Evans. Participating in the meeting were: David Schroeder, CBAI’s Vice President Federal Governmental Relations; Greg Ohlendorf, Fed Reserve (and CBAI) bank member, President and CEO of First Community Bank and Trust in Beecher; and Chairman of the ICBA’s Policy Development Committee; Julie Williams, Fed Reserve SVP (Community Bank and Consumer Compliance Division / Supervision and Regulation); and Steven Durfey, SVP (Risk Specialist Division / Supervision and Regulation). A wide range of topics were discussed during the meeting including: the new Fed Chairman nomination, monetary policy, too-big-to-fail, regulatory relief, tiered regulation for community banks, and final observations on Basel III.
Schroeder stated that for the first time CBAI has included in its Federal Policy Priorities opposition to excessive central bank monetary policy intervention. The sustained record-low interest rates are negatively impacting community banks, senior citizens and savers. Admittedly, in a recession, an accommodative monetary policy can assist in an economic recovery. However, continued years of low interest rates are not temporary intervention but long-term manipulation. The longer interest rate normalization is delayed the longer community banks will be harmed by low net interest margins and earnings, negatively impacting their ability to serve their customers and communities.
Ohlendorf said that a priority for Congress and banking regulators should be the continued reform of our financial system to significantly reduce the probability and severity of a future financial crisis. An unfortunate result of the previous financial crisis is that the largest banks have grown larger and remain candidates for future bailouts. The mega banks, not community banks, caused the recent financial crisis, and we must all be protected from a repeat of the massive financial destruction they caused.
Both Schroeder and Ohlendorf highlighted the need for regulatory relief and tiered regulation for community banks. The financial crisis clearly demonstrated that the relationship-based business model of community banks is very different from the Wall Street mega banks and that difference should be reflected in the regulations. Tiered regulation for community banks has recently established a welcomed and necessary beachhead. Now is the time to broaden that beachhead and ensure that every new banking law, rule, and regulation clearly distinguishes and appropriately regulates community banks.
Schroeder and Ohlendorf thanked the Fed Reserve officers for participating in this meeting and promised future opportunities to discuss issues of importance to Illinois community banks.