Governor Quinn Signs CBAI Initiative HB 4677

August 28, 2014

Governor Quinn signed into law HB 4677 (P.A. 98-1067) on Tuesday. HB 4677 is trailer legislation for a 2013 CBAI initiative (HB 1335/ P.A. 98-0387) that amended the “good funds” disbursement authorization provisions of the Title Insurance Act to allow financial institutions and title companies that know each other and both agree to use cashier’s checks, teller’s checks and certified checks as settlement funds in transactions greater than $50,000. At the request of the Illinois Land Title Association, HB 4677 removes the provision that the title company and financial institution be “known to each other” and adds a provision that in order to use cashiers, tellers or certified checks as settlement funds, the funds must be used to disburse a loan and closing costs funded by the financial institution. Finally, HB 4677 removes a sunset provision that would have repealed all the new changes to the statute.

HB 4677 will finalize changes that have been sought by CBAI for five years to amend the settlement funds section of the Title Insurance Act and allow financial institutions and title companies to agree to the use of funds other than wire transfers or collected funds in transactions greater than $50,000. This will allow for more flexibility for community banks and title companies and will reduce closing costs for consumers.

CBAI appreciates the hard work and effort by both of the sponsors, Representative Ron Sandack (R- Downers Grove) and Senator John Mulroe (D-Chicago). CBAI would also like to thank Governor Quinn for understanding the significance of this bill and community banking in Illinois.


CBAI Leadership Bankers and Staff Meet with Senator Durbin

August 21, 2014

CBAI leadership bankers and staff met with Illinois Senator Richard Durbin on August 21st to discuss issues of importance to Illinois community banks. The Bank of Springfield hosted this roundtable discussion during the Senate’s August recess.


CBAI thanked Senator Durbin for cosponsoring the Brown and Vitter Too-Big-To-Fail bill (S. 798) last year and for cosponsoring the Privacy Notice Modernization Act (S. 635) after meeting with CBAI in Washington D.C. this spring. The Privacy Notice Modernization Act eliminates the requirement that financial institutions mail annual privacy notices for most community banks. This legislation passed the U. S. House last year and CBAI urged Senator Durbin to press for passage in the Senate in the remaining months of the 113th Congress.

CBAI bankers expressed support for other legislation including:

    S. 1349 – the Community Lending Enhancement and Regulatory Relief Act of 2013 which will provide much needed regulatory relief for community banks particularly with respect to Qualified Mortgage status in the Ability-to-Repay rules for mortgages held in portfolio, and mortgage escrow and servicing requirements.
    S. 727 – the Financial Institution Fairness and Reform Act which establishes standards for regulators including firm deadlines for exit interviews and examination results, establishes a FFIEC Ombudsman separate from the prudential regulators, grants financial institutions the right to appeal material supervisory determinations, requires the Ombudsman to determine the merits of an appeal, and binds the agency after a hearing before an administrative law judge.
    S. 2252 – the Community Bank Preservation Act of 2014 amends the Federal Reserve Act to require membership on the Fed’s Board of Governors to include at least one person with a demonstrated experience working in or supervising community banks having less than $10 billion in total assets.
The wide-ranging discussion included legislation that will allow states to collect sales tax on internet sales; challenges in residential mortgage lending with all of the new regulatory requirements; the competitive tax and funding advantage of the Farm Credit System lenders and how they have long strayed from their original mission; and how to best address the needs of the un-banked and under-banked particularly with short-term, small-dollar-amount loans.

CBAI leadership bankers and staff thanked Senator Durbin and his capable staff for participating in this roundtable discussion.


CBAI Bankers Celebrate ICBA’s Midwest Community Bank Day

August 19, 2014

CBAI bankers helped celebrate ICBA’s Midwest Community Bank Day at the historic Flossmoor Country Club. ICBA’s Midwest Regional Vice President David Hibbs welcomed the participants and provided an overview of the day’s events.


The program included a discussion of opportunities for community banks in SBA lending provided by G. Arne Monson of Holtmeyer & Monson; an update about payment trends, opportunities, and emerging technologies in debit and credit cards provided by Julie Hanson of ICBA Bancard & TCM Bank, N.A.; and a federal legislative and political update provided by Courtney Schoenborn Vice President of ICBA’s Political Programs.

After the presentations and a buffet lunch the participants hit the links to play this course which was honored with Golf Digest’s Renovation of the Year award. Flossmoor’s list of great players includes Chick Evans, Bobby Jones, Francis Oulmet, Jack Hutchinson and Max Marston.








CBAI’s members will have an opportunity to play this impressive course during CBAI’s 40th Annual Convention (September 18th-20th). CBAI thanks Greg Ohlendorf, president and CEO of First Community Bank and Trust in Beecher, for providing our members with this great opportunity to play at Flossmoor Country Club.


FHLB-Chicago Chairman Steve Rosenbaum Responds to Call for System Consolidation

Steve Rosenbaum, President and CEO of CBAI member Prospect Federal Savings in Worth, and Chairman of the Federal Home Loan Bank of Chicago and its’ Council of FHLBanks, thoughtfully responded to a call for consolidation in the FHLB System by the ABA-affiliated North Carolina Bankers Association. Read BankThink article.

Rosenbaum countered Woodward’s proposed halving the number of FHLBanks by highlighting that each of the 12 Banks have diverse memberships and a cooperative structure that reflects their regional nature and a focus on serving the needs of their members and local communities.

He noted that the current FHLB System has worked well for more than eight decades. Throughout the most recent financial crisis the FHLBanks remained a critical source of liquidity for members and the entire financial system. Unlike the too-big-to-fail banks and financial firms FHLBanks did not require taxpayer-funded bailouts.

For many years the individual FHLBanks have had the ability to voluntarily consolidate if their Boards of Directors felt that it was in the best interests of their members and communities. Rosenbaum said, “[T]he power of doing so voluntarily rests in the hands of the institutions that own and make up the national network of regional cooperatives.”

CBAI supports Rosenbaum’s position on System consolidation and his important service on the FHLB-Chicago and Council Board which benefit Illinois community banks.


CBAI Urges the CFPB to Exempt Community Banks from Redundant Annual Privacy Notice Requirements

July 7, 2014

In a recent Comment Letter, CBAI urged the Consumer Financial Protection Bureau (CFPB) to exempt community banks from redundant annual privacy notice requirements because they represent an unnecessary regulatory burden on community banks and information overload for their customers.

CBAI recommended that community banks be exempt from these requirements so long as they delivered their privacy policies when the accounts were opened, the privacy policies have not changed, and the customers do not have the opportunity to opt-out because  community banks only share nonpublic personal information with nonaffiliated third parties performing services or functions on their behalf.

If these exemption requirements are met then community banks should only be required to provide their privacy policies on their websites, and in response to in-person, e-mail, telephone, and regular or express mail requests.