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CMS Lists Banks Participating in Payroll Gap Assistance Loans

This is just a reminder that in 2015 the Illinois Department of Central Management Services (CMS) created a website listing financial institutions that will participate in Payroll Gap Assistance (PGA) Loans if the ongoing budget impasse or court rulings prevent the State of Illinois from issuing paychecks to state employees. In June, the Governor and the Legislature agreed to a six month “stop gap” budget that is scheduled to expire December 31, 2016. It does not seem likely a deal will be reached for a state budget prior to the expiration of this temporary budget, and the issue of paying state employees could be revisited. Illinois community banks that would like to be listed on the CMS site should complete the registration form.

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CBAI Promotes Community Banks and Their Small Business Lending

The Daily Herald, suburban Chicago’s information source newspaper, recently interviewed CBAI’s David Schroeder on community banks and small business lending. In the subsequent article titled A Look at Community Banks and Small Business Lending, Schroeder stated that community banks have earned a strong reputation as lenders of choice for small businesses. He emphasized that community banks’ ability to maintain dominance in small business lending underscores the importance they place on customer-focused relationships that can’t be matched by the mega banks and online lenders. He also noted that small businesses can best help themselves by working with local community bank lenders that support their business model. Read Daily Herald Article

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CBAI Thanks Congressman Hultgren for Pressing Regulators on Call Report Regulatory Relief

RandyHultgrenCBAI thanks Illinois Congressman Randy Hultgren (R-14th) for leading a Member Letter to the banking regulators questioning their reluctance to provide meaningful Call Report regulatory relief. Congressman Hultgren reiterated the purpose of his legislation, the Community Bank Reporting Relief Act (H.R. 4500), which would require the Agencies to issue regulations allowing for a short-form call report for highly-rated and well-capitalized community banks to use for the first and third quarter. In the Member Letter, Congressman Hultgren put forth specific questions regarding the regulator's objections and concerns to implementing a short-form report. Read Member Letter.

CBAI has been a strong proponent of Call Report regulatory relief. In an October 14th detailed comment letter, CBAI urged the regulators to provide additional Call Report regulatory relief for well-capitalized and highly-rated community banks under $10 billion in assets. This was the latest in a series of CBAI initiatives supporting Call Report relief dating back to support for an ICBA petition in August of 2014, an EGRPRA comment letter to FFIEC in September of 2014, and a comment letter to FFIEC in November of 2015. Read CBAI’s Comment Letter to the Regulators.

November 16, 2016

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CBAI Meets with IDFPR and its New Chicago District Manager for Bank & Thrift Supervision

On Monday, November 7, 2016, CBAI member and ICBA leadership banker Greg Ohlendorf – President and CEO of First Community Bank and Trust in Beecher, and CBAI Vice President of Federal Governmental Relations – David Schroeder, met with the Illinois Department of Financial and Professional Regulation’s Secretary – Bryan Schneider, Director of Division of Banking (via teleconference) – Kerri Doll, and the Department’s new Chicago District Manager for Bank & Thrift Supervision – Paul Ward, to discuss a variety of issues of importance to Illinois community banks.

Ohlendorf began the meeting by discussing his bank’s experience with a recent state examination and recommended several areas of improvement to reduce future examination burden. Director Schneider discussed the Department’s efforts to hire additional personnel and more efficiently utilize the resources they currently have. There was also a discussion on Director Schneider’s involvement with the Conference of State Bank Supervisors and a recent article he wrote on fintech regulation.

Schroeder welcomed this opportunity to discuss CBAI’s federal government relations activities. He highlighted the importance of the Associations exclusive representation of Illinois community banks and also CBAI being the only state banking trade association to have someone exclusively dedicated to the federal agenda. Schroeder stated that he travels to Washington, D.C. on a quarterly basis and visits with every office of the Illinois Congressional Delegation as well as our national association (ICBA) and various federal regulators.

There were a wide range of issues discussed at this meeting.

    CBAI is concerns that the scope, severity and duration of the fraud and scandal at Wells Fargo, the second largest bank in the country, will negatively impact the prospects for regulatory relief for well-deserving community banks. Schroeder encouraged the Department to do it is able to help prevent this from occurring.

    Ohlendorf and ICBA’s Vice President of Accounting and Capital Policy, James Kendrick held a CBAI Convention Breakout Session on advocacy success with FASB’s CECL proposal. Ohlendorf urged the Department to thoughtfully implement the new accounting rules with the hard-won community bank concessions in mind.

    CBAI encouraged the CFPB, in a recent comment letter, to exempt community banks under $10 billion in assets from the proposed payday and vehicle title lending rules. These proposed rules will impact community bank small-dollar consumer lending. The proposed exemption requirements are ridiculously complicated, and the penalty for noncompliance is so punitive (unfair and deceptive practice), that community banks will be forced to stop making these types of consumer loans in the communities.

    CBAI encouraged the federal regulators, in a recent comment letter, to provide broad community bank Call Report regulatory relief for well capitalized and highly rated community banks by only requiring a very limited number of schedules to be reported during the first and third quarters.

    Also, CBAI urged the Department of Treasury/IRS, in a recent comment letter, to withdraw a proposal that would increase estate taxes and further consolidation among family-owned community banks by disallowing valuation discounts for minority and non-marketable interests.

CBAI appreciated this opportunity to be introduced to Paul Ward and to share with the IDFPR our position on important federal issues and challenges facing Illinois community banks.

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CBAI Urges Treasury/IRS to Withdraw Proposed Estate Tax Increase

The Community Bankers Association of Illinois urged the United States Department of Treasury and the Internal Revenue Service to withdraw their flawed and ill-conceived proposed regulations to increase taxes on the transfer of family-owned community banks, and other family-owned business entities, from one generation to the next. The proposed rulemaking, under Section 2704 of the IRS Code, would disallow valuation discounts for minority interests or interests that are not marketable. This would increase the tax on many estates by more than 30 percent, resulting in forced sales and bank consolidation. Read CBAI’s Comment Letter.

November 2, 2016