A Bi-Weekly News Bulletin for CBAI Members February 13, 2019
 CBAI Community Bankers Meet with New CFPB Director Kathy Kraninger A delegation of CBAI community bankers from around the state met with the new CFPB Director Kathy Kraninger in Chicago on February 5, 2019. The meeting was the latest of CBAI member meetings with leaders of the Bureau, having met previously with Directors Elizabeth Warren and Richard Cordray. The session was an important listening opportunity for the new director, as she was very interested in learning about any and all issues relating to community banking and the CFPB. Read More. Back to top “Bank On” Legislation Would Give More Illinois Residents Access to Banking CBAI is pleased to join Illinois Comptroller Susana Mendoza and her office in their efforts to promote a program designed to provide unbanked individuals access to financial products. Comptroller Mendoza introduced legislation that would give more Illinois residents access to banking by partnering with community banks and others in the community. Senate Bill 1332 would expand access to banking in Illinois by using Bank On, a proven, national model which aims to connect these consumers with reliable, affordable and equitable financial products. Read More. Back to top ICBA’s Rebeca Romero Rainey: “Our Efforts are Paying Off” ICBA President Rebeca Romero Rainey notes that lobbying efforts by community bankers continue to reap positive results in 2019 as evidenced by the passage of the new farm bill. She emphasizes that the measure includes commodity price protections that will give producers and community banks greater business-planning certainty over the next five years which is essential during an era of low commodity prices, sharply lower net farm income and foreign trade uncertainties. It also maintains a strong crop insurance program, increases USDA guaranteed farm loan limits to $1.75 million, and provides for the possible increase in guaranteed USDA rural development loans—all of which are community bank priorities. Romero Rainey concludes that other successes are on the horizon. Read More. Back to top CBAI Urges Deposit Insurance Approvals for De Novo Community Banks In a February 4, 2019, comment letter, the Community Bankers Association of Illinois (CBAI) urged the Federal Deposit Insurance Corporation (FDIC) to approve many more applications for deposit insurance for community banks. CBAI highlighted its years-long support for de novos and recounted its past frustrations and disappointment that since the financial crisis, so few applications for deposit insurance have been approved by the FDIC. Newly chartered community banks are needed to maintain a growing, evolving and vibrant banking profession. Read CBAI Comment Letter. Back to top FDIC Chairman Prioritizes Regulatory Relief for Community Banks The FDIC is working to reduce regulatory burden for community banks, said Chairman Jelena McWilliams, who spoke to bankers and reporters in Milwaukee on February 5. She said she is concerned about bank consolidation. Also, she said rules around brokered deposits should be updated, and that while deposit insurance premium rebates are forthcoming, details and timing remain uncertain. McWilliams, confirmed the 21st Chair of the FDIC on May 24, 2018, said her staff is looking at every regulation to identify those that can be culled. Read More. Back to top
Community Bankers React to Proposal to Raise Minimum Wage to $15 Community bankers are making their voices heard as the Illinois General Assembly rushes to implement a $15 an hour statewide minimum wage. The CBAI governmental relations team outlines the messages your fellow community bankers and our statehouse lobbyists are relaying to our elected officials in the hopes they will slow down the process and take time to consider the true impact of a $15 minimum wage. Read More. Back to top The “C” Conference Offered February 20 in Springfield CBAI is excited to announce a new conference, The “C” Conference. Designed for C-level community bankers, the event will be held on February 20, 2019, at the Crowne Plaza in Springfield and includes inspiring and educational general sessions on “Qualities of High Performing Communities Banks,” by David Kemp, Bankers Management, Inc.; “Economic Update” by THE BAKER GROUP; and “Culture Leader, Culture Warrior, Culture You” by Kirk Weisler of Team Dynamics. The jam-packed agenda also includes two rounds of concurrent session on topics important to CEO’s, CFO’s, COO’s and senior lenders. An opportunity to network with your peers will be held at the luncheon, as well as the complimentary social event the evening prior. For more information and to register, please contact CBAI at 800/736-2224 or via email Tracy McQuinn. For more information or to register, please Click Here. Back to top Fed’s Bowman: Agencies Have Obligation to Community Banks Federal Reserve Governor Michelle “Miki” Bowman stated this week that regulators have an obligation to tailor their regulations to the smaller size and less-complex risk profiles of community banks. She said, “If we keep our focus on appropriately tailoring regulatory requirements for community banks so they may continue to prudently thrive, then community bankers should be able to devote more resources and time to serving their customers and communities.” Bowman also indicated that she plans to travel widely and listen to community bankers and other stakeholders as the first person to fill the Fed’s CBAI and ICBA-advocated community banking seat. “I will take back the knowledge I gain from these discussions and use it to improve our work.” CBAI and ICBA have urged President Trump to renominate Bowman for a full Fed term. Her current term ends on January 31, 2020. Read Bowman’s Speech. Back to top U.S. House Panel Met Today on Cannabis Banking The House Financial Services Committee met today on banking cannabis-related businesses. ICBA supports legislation to establish a safe harbor from federal sanctions for financial institutions that serve cannabis-related businesses in states where cannabis is legal. CBAI concurs with that approach. Greg Deckard of State Bank Northwest in Spokane Valley, Washington, testified on behalf of ICBA. Hearings also addressed affordable housing in rural America, credit bureaus, diversity trends, and Federal Reserve Chairman Jerome Powell’s monetary policy update. View Hearing Schedule. Read ICBA’s Cannabis Policy. Back to top Investment News from THE BAKER GROUP Baker Market Update Hopes for an announcement recently that would avoid another partial government shutdown (PGS) over border security funding appear to have been dashed over the weekend and it looks like it’ll be back to the ‘ol drawing board. Meanwhile, it’s back to the ol’ checkerboard in Beijing as tariff talks between Chinese and American officials continue. The former set of bureaucrats has a deadline of February 16 if another PGS is to be avoided while the latter group has until March 1 to stave off highertariff triggers. See Baker Market Update. Back to top Economic Picture Remains Strong: Indicators Economic indicators released Friday, including some delayed due to the partial government shutdown, indicated that employers and consumers are shrugging off the temporary halt in federal operations.
Fed Report: Banks Tighten CRE, Credit Card Standards Banks tightened standards for commercial real estate loans in January while demand for business loans generally weakened, according to the Federal Reserve’s survey of senior loan officers. For loans to households, banks reported weaker demand and said standards were basically unchanged, except for tighter standards on credit cards. Banks also said they expect to tighten standards for all categories of business loans, credit card loans and jumbo mortgages in 2019. Read Fed Report. Back to top CSBS Study: Bank Structures Change as They Embrace Technology According to a recent community bank case study competition from the Conference of State Bank Supervisors (CSBS), community banks are making structural changes as they fully embrace technology solutions. As technology solutions have become mission critical, technology-related roles are less likely to be a piece of someone’s job. Instead, they fall under officer titles such as “Innovation Officer” and “Chief Technology Officer.” CSBS has sponsored the case study competition for four years, asking undergraduate students to partner with a community bank to explore a key issue. The 2018 case study competition focused on banks’ use of technology, with a record 51 participating teams from 45 academic institutions in 24 states. Read More. See Case Study Results. Back to top Technology’s Impact on Farming and the Rural Midwest On November 27, 2018, the Federal Reserve Bank of Chicago held a conference to explore the opportunities and challenges presented by new technologies to farms and rural areas in the Midwest and other parts of the U.S. Experts from academia, industry, and policy institutions gathered to discuss how technological advances have reshaped the rural economy and how they may affect its future. Federal Reserve economists rendered the following conclusions from the conference: Over the past five decades, great strides in agricultural productivity have been made, in large part because of technological advancements. These productivity gains have helped create larger and more specialized farms while lowering the need for farm labor. Although agricultural jobs have dwindled and farm incomes have dropped (contributing to rural population declines), conference participants agreed that innovations in agricultural technologies and improved internet access in rural areas have the potential to bring new kinds of skilled employment with higher earnings to the Midwest. Read Report. Back to top CBAI Announces After-Dinner Presentation at 2019 Spring Group Meetings CBAI leaders and executive staff are visiting 11 locations on the Group Meeting tour this spring. Bankers from nearly 200 banks participate in these enjoyable and informative events each year. Consisting of an optional golf outing and a dinner meeting, Group Meetings also provide an excellent opportunity to get the latest information on key banking issues and catch up with friends and peers. (Note: The Group 1 & 2 Meeting will follow a different format). This year’s after-dinner presentation is titled, “Hindsight – Insight – Foresight,” and will be conducted by an analyst from The BAKER GROUP, who provides an update on market conditions, Fed policy, regulatory hot-topics and industry trends for community banks. The discussion includes asset/liability management and investment strategy recommendations for 2019 and thoughts on liquidity risk management throughout the economic cycle. THE BAKER GROUP is celebrating their 40th Anniversary and has been a valued partner with CBAI since 1983. This highly-skilled organization provides hundreds of community banks the full array of institutional broker/dealer services, including asset/liability management, portfolio analysis and investment brokerage. The opening portion of each Group Meeting focuses on critical legislative and association issues. CBAI President Kraig Lounsberry will provide updates on Association projects and community banking in general; and Senior Vice President of Governmental Relations Jerry Peck will offer an up-to-the-minute report of banking-related legislative activities. Look for registration information in early March, see the schedule of Group Meetings that follows, and make plans now to attend! See Group Meeting Schedule. Back to top 2019 CBAI Compensation Survey Now Available Online Ensure your bank has the competitive edge in recruiting top talent! Complete the 2019 Compensation Survey quickly and easily by April 16, 2019, and receive free results. (Non-participants pay $300). Conducted by BalancedComp and sponsored by iZale Financial Services, the compensation survey is now available on CBAI’s website. Click Here to Read More and Complete the Survey. Back to top Submit a Nomination for the 2019 Excellence & Innovation BKD Award Nominations are now being accepted for the 2019 Excellence & Innovation BKD Award, presented by CBAI. This award recognizes CBAI member banks that go above and beyond to demonstrate their commitment to their customers, employees, shareholders and the community through innovative outreach programs. Since 1999, CBAI and BKD have honored financial institutions for their efforts to build a healthy future for themselves and their communities by developing an innovative way to serve customers or enhance corporate citizenship. Institutions may nominate themselves and do not need to be a BKD client to participate. The deadline to submit is Monday, June 3, 2019. The winner will be announced at CBAI’s 45th Annual Convention & Expo, September 19-12, 2019. The winning institution receives a $1,000 donation to the charity of its choice as well as an award symbolizing its innovation and excellence. See More Information. Download Entry Form. Back to top CBAI LEGAL: Consider Employee Expense Reimbursement Policy Legislation effective January 1 may provide incentive for banks to adopt policies governing expense reimbursement to employees. Read Most Recent CBAI LEGAL. Back to top CBIS: Great American’s Recent Acquisition of ABA Insurance Services The American Financial Group, Inc., the holding company of Great American Insurance Group, acquired ABA Insurance Services December 1, 2018, from American Bankers Mutual Insurance. Therefore, ABA Insurance Services will continue to exist as a separate brand and become Great American Insurance Group’s 34th specialty property and casualty business. The change in ownership requires that existing policies transition from Everest National paper to Great American Insurance Company at renewal. Great American and its pooling affiliates are rated A+ (Superior) by A.M. Best, and coverage provided under the Great American policies will be substantially similar to those of Everest National. American Bankers Mutual will continue to maintain a reinsurance position. Read More from CBIS. Back to top CFPB Offers Rural and Underserved Areas Tool The Consumer Financial Protection Bureau (CFPB) is offering a tool to help creditors determine which properties are located in a “rural” or “underserved” area as defined in 12 CFR 1026.35(b)(2)(iv)(A) and (B). A creditor may rely on this tool to provide a safe harbor determination that a property is located in a rural or underserved area. However, the tool is not applicable to the exemption from the § 1026.35(c)(4) requirement for an additional appraisal, which is based on “rural county” and not “rural area.” The CFPB publishes a list of counties that are entirely rural to facilitate compliance with the exemption in § 1026.35(c)(4)(vii)(H). Read More. Back to top Community Banking Week in Illinois is Coming! April 7 – 13, 2019, is the 29th Anniversary of Community Banking Week in Illinois. This year’s theme is “Sharing Your Dreams.” Invite the friends and neighbors of your community bank to help celebrate the independent spirit that is the hallmark of locally-run banks. For your FREE kit, contact Bobbi Watson at bobbiw@cbai.com today! Back to top Natural Gas Prices Are Low – Lock in Your Rate Now! For CBAI member banks, this may be a good time to think about locking in a fixed-price for natural gas. Among the natural gas marketers serving Illinois, there is a wide range of prices. Because natural gas is a commodity, prices rise and fall throughout the year, sometimes dramatically. “Natural gas prices finished last week at their lowest price in four months, even as a polar vortex brought the most frigid weather temperatures in a generation to the Midwest,” said Justin Cheger, vice president of operations at Stone River Group, CBSC’s preferred-provider for energy. Cheger explained bankers have several price options for natural gas. They can select a variable rate contract that allows the cost of gas to float with the market, or a fixed rate for a short or long term that eliminates exposure to volatile markets. “Today, the best fixed rate is ranging from $0.350 to $0.359 per therm, and a banker could lock in that rate for a year or two.” Cheger said. He added, “During the past 12 months, the rate per therm has ranged from $0.379 to $0.442. Locking in now at a low rate might be the best option for community banks and small businesses.” He noted that banks served by Ameren need to act soon. On March 1, 2019, all Ameren contracts automatically renew for one year. For more information or to receive a no-obligation proposal, please contact Justin Cheger at Stone River Group via email at justincheger@thestonerivergroup.com or by telephone at 217/671-9525. To expedite the proposal process, you are encouraged to complete and submit a customer information profile here. Back to top Wolters Kluwer: Online Loan Applications Capability Financial technologies can simplify and speed up the ways in which consumers connect to and conduct business with lenders. Increasingly, consumers are embracing the power, ease and convenience of their digital devices for banking transactions large and small. Learn how a new online application tool from CBSC partner Wolters Kluwer is helping lenders leverage the latest technology to benefit their customers. Read More. Back to top .BANK Auctioning Domain Names The operator of .BANK domains, fTLD Registry Services, is auctioning off several domain names from its list of reserved names. For an opportunity to register for one or more of these domain names, participation in the auction is required. Read More. Back to top Director Evaluation Forms Now Available In his latest Gerrish’s Musings newsletter, Jeff Gerrish writes “We have recently received a number of requests for copies of director evaluation forms. There are generally two approaches to director evaluations: self-evaluations and peer evaluations. The names are apt descriptions of the process. In a self-evaluation, a director evaluates his or her own effectiveness as a director. This self-evaluation is often combined with a “sit down” with the chairman or lead outside director to see if he or she agrees with the individual director’s self-assessment. In a peer evaluation, one director evaluates one of the other directors. Director evaluations are an important part of corporate governance. They are very effective in keeping directors accountable and engaged. Some boards utilize only self-evaluations, other boards only peer evaluations, and some utilize both. If you do not already utilize director evaluations, consider the process. It is a fairly simple means of carrying out a key component of corporate governance.” Click Here for Director Evaluation Forms. Back to top Harland Clarke: Instant Issuance Saves the Day The perfect 10th wedding anniversary evening was all planned out until a missing wallet threw a giant wrench in the plans. Luckily all it took was a quick trip to the local bank branch to save the day. Read More. Back to top Lender’s Guide to Mortgage Loan Compliance Set for February 26 & 27 During the last few years, both Congress and federal regulators have crafted revisions to many of the regulations that have been a part of our lending lives. This has resulted in many additional regulatory issues in every mortgage loan transaction. As a result, lenders have been struggling to determine what they should do to assure that they not only make a safe and sound loan for the bank, but also do so in a manner that will not create regulatory difficulties. This two-day seminar covers all aspects of mortgage compliance that a lender should know, including all the current rules and recent changes. All subjects that are covered include all the latest information available. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance, Young & Associates, Inc. Back to top Seminar for the Community Bank Attorney To Be Held March 1 in Springfield This seminar assists community bank attorneys with obtaining the latest information regarding the myriad of legislative, legal and regulatory mandates facing community banks. It also meets the Supreme Court of Illinois’ requirements for Minimum Continuing Legal Education (MCLE). Entitled, “Seminar for the Community Bank Attorney,” CBAI has developed this comprehensive one-day education session which utilizes the expertise of a number of attorneys who specialize in banking law and related topics. CBAI General Counsel Jerry Cavanaugh speaks on “Recent State Legislation and Case Law Affecting Financial Institutions.” Back to top FDIC & CBAI Community Bank Directors’ Workshop Set for March 4 in Springfield Being a member of a community bank's board of directors is a challenging and rewarding experience. The community bank director has duties to the institution, its stockholders and its depositors. And, he or she has responsibilities to the public-at-large. To meet these duties and responsibilities, a director must be knowledgeable and active. CBAI and the FDIC have joined together for the Directors' Workshop. Representatives from the FDIC discuss hot banking topics to make this comprehensive, one-day workshop a must-attend. Back to top |
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