Independent Banker (Sepetember 2009)

8/13/2019 Independent Banker (Sepetember 2009)

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TOO

TO

icba.org

THE SPIRIT OF ENTREPRENEURIAL BANKING IN AMERICA

Plus:

Innovative Ad Campaigns

Strategic-Planning RoundtableOptimizing Efficiency Ratios

CONGRESS IS POISED TO TAME THE DINO-BANKS

ntents | Zoom in | Zoom out Search Issue | Next PageFor navigation instructions please click here

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2009 Goldleaf Financial Solutions, Inc. All rights reserved.

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ICBAIndependentBanker 35

OUT

Gettin

gtheWo

rd

ByAlanLenhoff

ICBAIndependent BankerAdvertising All-Stars

F U R V V Y M M UN IT Y B N K U E V R IE T Y F RE T I V E MRK E T IN

IDEASAND MEDIATO CREATE TOP-NOTCH ADVERTISING CAMPAIGNS

35

Doing business with-out advertising is like

winking at someone

in the dark. You know what youare doing, but nobody else does.

Its not clear who said that

first, but any business that offers

products or services, includingcommunity banks, can appreci-

ate the sentiment.

IC BA Independent Bank er chos efour commun ity ba n k

advertising campaigns to spot-

light for their creativity and

effectiveness as part of its annualadvertising showcase. Each cam-

paign reflects different goals,

philosophies and creativity. Onecampaign is by a 157-year-old

community bank; another bank

was chartered in 2005. A third

bank seeks a bigger footholdin mortgage lending; a fourth

strives to solidify dominance in

small business lending.What all four campaigns have

in common is creative but rigor-

ous marketing strategies imple-

mented through a variety ofapproaches. Every community

bank is unique. So is every Main

Street market. No one marketingstrategy or advertising campaign

i s un i v er s a ll y a ppl i ca bl e. But

as these advertising campaignsshow, creativity and dedication

can help any community bank

increase its impact and market

share.

OUT

TOO TO

F I N A N C I A L R E G U L A T O R Y R E F O R M

Financial regulatoryreform leg-islation aiming to subdue sys-

temically dangerous, sometimes

predatory institutions is in thea r ms ofC on g r ess .Thi s mon th

con g r es s i ona l l ea der s, fr es hfrom town hall meetings during

an August recess and after sev-

eral summer hearings on the

Obama administrations blueprint for change, planto roll up their policymaking sleeves to fashion

together a consensus over a catalog of complex and

potentially far-reaching proposals that could leadto final legislation.

22 ICBAIndependentBanker

We should not be forced to choose between allowinga company to fall into a rapid and chaotic dissolution

or supporting the company with taxpayer money.That is unacceptable. There is too much at stake.

P B OJ

THE ERA OF TOOBIGTOFAIL FINANCIAL INSTITUTIONS, WHEREGIANT DINOSAUR BANKS AND NONBANKS WERE ALLOWEDTO FEAST AND GROW WITH ABANDON, COULD BE IN ECLIPSE.

CONGRESS SETS OFF TO TAME THE DINO-BANKS

By Steve Verdier

ICBAIndependentBanker 23

2 ICBA IndependentBanker September 2009

contentsCOVERSTORY

Making DangerousDino-Banks Disappear

Congress is looking to find a consensus this

fall on the historic financial regulatory reform

legislation, a crucial opportunity for America

to end too big to fail. Review the state of play

for the financial reform legislation, ICBAs

core principles on the issue and how your

community bank can get involved.

BY STEVE VERDIER

22

9

11

12

50

52

54

16

18

FEATURES

Getting the Word OutFour innovative advertising and

marketing campaigns won community

banks new customers and profits.

BY ALAN LENHOFF

Planning PowerDont yawn: Strategic planning can positionyour community bank for profitability and

productivity. Five ICBA members explain how.

BY ELLEN RYAN

COLUMNS

From the TopRegulatory relief and lower premiums

will help us help small businesses.

BY R. MICHAEL S. MENZIES SR.

Fine PointsGet ready for a busy legislative

congressional agenda this fall.

BY CAMDEN R. FINE

Washington WatchThe trouble with the Consumer Financial

Protection Agency as currently proposed.

BY JASON KR ATOVIL

Lender LifeHow changes to Regulation Z will

affect your mortgage-loan process.

BY BILL ELLIOTT

Portfolio ManagementWhy mortgages can be an attractive

institutional investment right now.

BY JIM REBER

Vantage PointBest practices for optimizing

your banks efficiency ratio.

BY KEVIN TWEDDLE

WITH INTEREST

NewslinesOn Capitol Hill, ICBA testifies on

taxes and the financial overhaul.

Tech TalkHow some banks are using Twitter.

BY SCOTT MILLS

Plus Tool Shop:Checking-account

rewards, quick demographic reports,

automated CD receipts and help

with SBA construction-loan oversight.

DEPARTMENTS

Advertiser Index

15 Minutes With Idaho community banker John Evans talks

about working with family and motivating staff.

55

56

35

47




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insurance. Because coverage thats not perfectly tailored to your bank is bound to

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ICBA onlineV I S I T I C B A . O R G F O R T H E L A T E S T N E W S A N D A D V O C A C Y

R E S O U R C E S A S C O N G R E S S D E B A T E S P O L I C Y S T E P S T O T A K E

T O E N A C T F I N A N C I A L R E G U L A T O R Y R E F O R M .



_____

One Mission. Community Banks.

Each year, ICBA recognizes community

banks for performing extraordinary acts of

kindnessrepairing homes, serving meals,

sponsoring local fundraisers, revitalizing

Main Street.

Now, its your turn to be recognized.

Nominate your banks community service

program for the 2010 ICBA National

Community Bank Service Awards.

Visitwww.icba.org/goto/awardsto

download the 2010 National CommunityBank Service Awards nomination form.

Nominations are due on December 4, 2009.

The community

youserve

CONSUMER INFORMATIONVIDEOS FOR YOUTUBEICBA released three Money 101 videos on YouTube

for consumers that promote the trusted financial

expertise and service that community banks provide.

The videos, prepared to reach consumers researching

financial topics online, take a lighthearted approach to

information on buying a home, saving for the future and

building a relationship with a local community banker.

ICBA encourages community bankers and their staff

to share the videos online. Check them out at icba.org/

youtube.

CONSUMER SCAM RELEASEICBA produced another consumer news release

offering tips to guard against loan scams. The release,

Keep Your Personal Information Secure, outlines 10

warning signs of fraudulent solicitations purporting to

assist borrowers facing foreclosure or financial trouble.

Community banks can tailor the release for distribution

in their marketplaces.

Find the release in the Consumer Education &

Resources section.

ICBA REDESIGNS HOME PAGEICBA recently completed the first phase in a Web-site

redesign. The ICBA home page was reorganized to help

community bankers more easily find the information they

need. The site also offers an improved site search engine

and landing pages. Look for more changes to come.

_________
http://www.icba.org/http://www.icba.org/http://www.icba.org/http://www.icba.org/youtubehttp://www.icba.org/goto/awardshttp://www.icba.org/goto/awardshttp://www.icba.org/youtubehttp://www.icba.org/youtubehttp://www.icba.org/http://www.icba.org/http://www.icba.org/youtubehttp://www.icba.org/goto/awardshttp://www.icba.org/youtube


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www.icba.org ICBA IndependentBanker 5LENDER

EQUAL HOUSING



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Young & Associates, Inc.Consultants to the Financial Industry

Strategic Planning

Regulatory Assistance

Stock Valuations

Capital Markets

Expansion &

De Novo Bank Charters

Internal Audit

Information Technology

Recruitment &

Human Resources

Lending &

Loan Review Services

Compliance

Policy Development

ICBA HEADQUARTERS/EDITORIAL OFFICE

1615 L St. NW Suite 900Washington, DC 20036-5623

No. 09VOL.5

9

CUSTOM PUBLISHING

GLC Custom Publishing900 Skokie Boulevard,Suite 200Northbrook, IL 60062(800) 641-3912

P R E S I D E N T A N D C E O

John Cimba

V I C E P R E S I D E N T O F

P R O J E C T M A N A G E M E N T

A N D P L A N N I N G

Rob Davis

MAGAZINE STAFF

S E N I O R V I C E P R E S I D E N T/C O M M U N I C A T I O N S

Karen Tyson

V I C E P R E S I D E N T/ P U B L I C A T I O N STimothy Cook

A S S O C I A T E D I R E C T O R/ P U B L I C A T I O N SEllen Ryan

A S S I S T A N T D I R E C T O R/P U B L I C A T I O N SThomas Warren

C O M M U N I C A T I O N S C O O R D I N A T O R

Michele Matthews

A C C O U N T I N G C O O R D I N A T OR

Kim Schneider

D A T A C O O R D I N A TO RCindy Meyer

S U B S C R I P T I O NS C O O R D I N A T OR

Diane Meyer

M A N A G I N G E D I T O R

Alan Lenhoff

A R T D I R E C T O R

Olivia Roszkowska

D I R E C T O R O F P R O D U C T I O N

Monty George

A D I N S E R T I O N C O O R D I N A T O R

Tracy Cimba

ICBA EXECUTIVE COMMITTEE

C H A I R M A N

R. Michael S. Menzies Sr.

C H A I R M A N - E L E C TJames D. MacPhee

V I C E C H A I R M A N

Salvatore Marranca

S E C R E T A R Y

Wayne A. Cottle

T R E A S U R E R

Larry W. Winum

P R E S I D E N T A N D C E O

Camden R. Fine

D I R E C T O R A T - L A R G E

Jack E. Hopkins

D I R E C T O R A T - L A R G ECharles F. Harper

I M M E D I A T E P A S T

C H A I R M A N

Cynthia A. Blankenship

P A S T C H A I R M A N

Terry J. Jorde

P A S T C H A I R M A N

David E. Hayes

C O R P O R A T E S E C R E T A R Y

Mark A. Raitor

ADVERTISING SALES

James G. Elliott Co. Inc.626 Wilshire Blvd., Suite 500Los Angeles, CA 90017

P R I N C I P A L

James G. Elliott

G E N E R A L M A N A G E R

Dennis Connaughton

N A T I O N A L A C C O U N T

M A N A G E R

Ted Hemminger(213) 624-0900, ext. [email protected]

S A L E S D I R E C T O R

Bob Washburn(213) 624-0900, ext. [email protected]

(202) 659-8111(800) 422-8439E-mail:[email protected]

icba.org

Published by

the Independent

Community Bankers

of America

Periodicals postage paid at Sauk Centre, MN, and additional mailing offices.ICBA Independent Banker

(SSN-0019-3674) is published by Independent Community Bankers of America, 518 Lincoln Road, Sauk

Centre, MN 56378-1653. Member subscriptions, $40 per year. Additional member subscriptions, $20. All

other subscriptions, $75. POSTMASTER: Address changes toICBA Independent Banker, P.O. Box 267, Sauk

Centre, MN 56378. Copyright 2009 ICBA. All rights reserved.

THE SPIRIT OF ENTREPRENEURIAL BANKING IN AMERICA



_________

______________

______________

__________________
mailto:[email protected]:[email protected]:[email protected]://www.icba.org/mailto:[email protected]:[email protected]:[email protected]://www.younginc.com/http://www.younginc.com/http://www.icba.org/mailto:[email protected]:[email protected]:[email protected]


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www.icba.org ICBA IndependentBanker 9

ToP

From the

B Y R . M I C H A E L S . M E N Z I E S S R . , C H A I R M A N O F I C B A

HELPING SMALL BUSINESSA good customer named Fran came into my com-

munitybankthisweek.Hercompanysnatural-health

products sell wonderfully, but she says she would be

"going broke" if not for a loan from my community

bank. Her loan is paying for inventory, employees,

marketing and more.Smallbusinesseslikeherscreate

95ofevery100new jobs.Just imaginehow fastwed

getoutofthisrecessionifeveryFraninAmericacould

borrowenoughcapitaland saveenoughassetstohire,

buyand createtocapacity.

Community banks use both flexibility and tools

suchasSmallBusinessAdministrationprograms to

solvesuchdilemmas.Ourcompetitiveadvantagelies

incrafting creativesolutionsforeachcustomerwhile

remaining prudentaboutriskand return.

Februarys $787-billion Economic Recovery and

Reinvestment Act contained several ICBA-backed

tax-relief measures, including immediate $250,000expensing,thefirst-timehomebuyertaxcredit,alter-

native minimum tax relief and municipal-bond ini-

tiatives. But the country needs more. You and I

know thatsmallbusinesses likeFranscan turn this

economyaround,buttheycantdoitwithoutmoreof

aboost.Thatboostwillcomefrom uscommunity

bankersand from Congressand theWhiteHouse.

Howcan Washingtonhelpsmallbusinessesgrow

and thrive? For most, taxes are the second-biggest

budget bite after labor costs. So lets urge improve-

mentslikethese:

taxreliefforsmallbusinesses,whichemployhalfofprivate-sectorworkers,

abroad five-yearnetoperating losscarryback,

a homebuyer tax credit raised to $15,000 and

extended through2010,

increased SBAprogram lending,and

preferred stock flexibility and IRA shareholder

investments for Subchapter S corporations to help

businessesraisecapital.

Thats how small businesses like Frans can save

money.Theyalsoneed toborrowmoney,ofcourse,

and for that they come to uscommunity banks.

After all, we make half of all small-business loans

under$100,000.Butweresmallbusinesses,too,and

weneed helptohelpothers.

Some of that help would

come from H.R. 2897, the

Bank Accountability and Risk

AssessmentActof2009,sponsored

by Rep. LuisV. Gutierrez (D-Ill.).

This bill would broaden the

assessmentbaseforFDICdeposit

insurancesothatsome8,000com-

munity banks would pay lower

premiums.TheregularFDICpre-

mium is still based on domestic

deposits.Wed havemoremoney

tolend ifthepremium werebased

onassetslessTier1capital,asthe

billcallsfor.

H.R. 2897 would also create a

systemic-risk premium for too-

big-to-fail institutions, makingthem more accountable to the

FDIC and taxpayers. Lets sup-

port this legislation that would

make the behemoths pay their

fair shareor closer to itand

takesomeresponsibilityfortheir

effect on the economy and citi-

zens wallets. If your representa-

tive isntacosponsor,askhim or

hertobecomeoneand makethis

billintolaw.

Tax relief for small businesses,regulatory relief for community

banks, freed-up capital to lend for

jobretention,economicgrowthand

prosperitythatswhatwillgetour

economybackon track.Letswork

togethertomakethem happen.

R. Michael S. Menzies Sr.is ICBA

chairmanandpresidentandCEO

of EastonBankandrustCo. in

Easton, Md.

Tax relief forsmall businesses,regulatory relief

for communitybanks, freed-upcapital to lend

for job retention,economic growthand prosperity

thats what willget our economy

back on track.




12/60

you now morethan ever.

Your communityneeds

With so many mega banks facing economic crisis, consumers are desperately looking for

stability, a safe place for their money and a neighbor they can trust. As a cornerstone of

your community, you have a unique opportunity to provide the security they seek.

In turn, ICBA Services Network provides a full suite of offerings designed to keep you

stable, solvent and prosperous: investment products, credit and payment services, lendingsolutions and insurance programs. Like you, weve been around a long time and well be

here when you need us.

ICBA Bancard & TCM Bank

ICBA Securities

ICBA MortgageICBA Financial Services

ICBA Reinsurance

One Mission.Community Banks.

1-866-THE-ICBA

www.icba.org/servicesnetwork

Galen PeltonGrant County Bank, Ulysses, KS


http://www.icba.org/servicesnetworkhttp://www.icba.org/servicesnetwork


13/60


AUTUMN FOR TOO-BIG-TO-FAIL?

Camden R. Fineispresident

andCEO of ICBA. Reach him at

[email protected].

Aftera long Augustofscorching town-hallmeet-

ingsintheirhomedistricts,membersofCongressare

returning thismonthtothehighlyuncertainpolitical

climate of Washington, D.C. This years remaining

agendaforCongressand theObamaadministration,

ambitious and wide-ranging, includes substantial

issuessuchashealthcare,cap-and-trade legislation,

anenergybilland the2010federalbudget.Enacting

financialregulatoryreform thataddressesthedangers

from too-big-to-failinstitutionsisalsoatoppriority

ofboththeadministrationand theCongress.

The administrations sweeping regulatory reform

plan,thesubjectofcongressionalhearingsthatICBA

participated in this summer, represents the most

far-reaching financial legislation in 75 years. At its

heart, the plan endorses many vital ICBA policy

recommendations to rein in the megabanks and

unregulated nonbanksthathavebroughtAmericans

somuchanxietyand painduring thepasttwoyears.Communitybankersshould becautiousand vigi-

lant but also confident and hopeful that our posi-

tionsonhowtodealwithtoo-big-to-failwillhavean

impactonthenationaldebate.Thepoliticalcredibil-

ity and influence of community bankers and ICBA

havenever beengreater in thenationscapital.True

to ICBAs messages, community banks are widely

regarded astrusted,common-sensefinancialprovid-

ersthatneverwavered from serving and safeguarding

theircustomerslong-term interests.

As a result, theoutlook for community bankings

policyobjectivesinWashingtoninstarkcontrasttoWallStreetsisbright.MostofICBAsmajorpolicy

recommendations have had powerful allies in the

administration and Congress from the outset. The

administrations reform plan, which has some trou-

bling and seriousflaws,incorporatesmostofICBAs

keypolicyrecommendations.(Seethecoverstoryon

page22and WashingtonWatchonpage12.)

But, ofcourse, its the finaldetails thatmatter. In

particular, how the statutory provisions are written

and fitted together will determine how well they

address too-big-to-fail. Itsstillearly inthe lawmak-

ing process.Many legislatorsarestill learning about

this issue and forming opinions about broad policy

objectivesaswellasspecificmeasures.

As with any legislation, how

quickly the financial reform

policymaking wheels will turn

in Congress is uncertain. Its too

soon to know if lawmakers can

complete such a complex pack-

age of financial reforms this year.

Legislationcould moveforward in

a piecemeal fashion with a series

oftargeted billsthisyearand next.

However, Americans are paying

closeattentionto thisdebate,and

lawmakersknowit.Americantax-

payers know that too-big-to-fail

wasamajorfactorinthefinancial

crisis and severely complicated

the governments efforts to fix it.

Taxpayers know intuitively that

until too-big-to-fail is resolved,theirmoneyisatrisk.

After25yearsofwarning poli-

cymakers about the dangers of

too-big-to-fail,communitybank-

ersand ICBAhaveagoldenoppor-

tunitytoensurethatWashington

fixes itproperly.Soplease follow

thedebateonCapitolHillclosely

this fall with your staff and col-

leagues. Look for alerts from

ICBA and be ready to respond,

both in support of constructiveproposals and in opposition to

harmfulones.

The momentum to solve too-

big-to-failisours.Whetherfinan-

cial reform happens this year or

next,letsgetthejobdoneright!

Fine

B Y C A M D E N R . FI N E , P R E S I D E N T A N D C E O O F I C B APoints

Taxpayers knowintuitively that

until too-big-to-failis resolved, theirmoney is at risk.



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14/60

ecause much ink has been sponsides of the political spectrumdetermine Obamas eco ic idoly,e can begin to get a sense o

wcommunity banking could befected by his adistrtion. The ecomic reforms Obama prposed n

h e campaign trailn d his work in theS. Seate, XCFX-

ecause much ink has been sponsides of the political spectrumdetermine Obamas eco ic idoly,e can begin to get a sense owcommunity banking could befected by his adistrtion. The eco

mic reforms Obama prposed one campaign trail and his work ine U.S. Seate, icling involvementthe oments economic oncen

AsPresident Obamas proposalsfor the sweeping financialregulatory reform package move

this fall from recommendations

to draft legislation, several crucial

ICBA policy measures, including

some that would begin to addresssystemic risks posed by too-big-to-

fail institutions, are making signi-

ficant headway. But more changes

areneeded tothehistoriclegislative

package, including additional too-

big-to-fail measures that ICBA is

recommending. (Read this months

coverstory.)

One partof the administrations

regulatory reform package, to

create the new Consumer Finan-

cial Protection Agency (CFPA), isperhapsitsmostdangerouselement.

ICBAand ourmembersaresparing

no efforts to educate legislators

about the potential problems for

consumersand thefinancialsystem

suchanextremelypowerfulagency,

initsproposed form,could create.

ensuring that standard consumer

financial product or service, or

so-called plain-vanilla products,

are available to consumers.

ICBA agrees with policymakers

that existing regulatory gaps in

regulating nonbanks and WallStreet firms need to be closed.

However,communitybankershave

alwaysoffered theircustomersthe

safestand mostsound productsand

services.ICBAhasbeenvigorously

explaining why the CFPA, as

proposed, is a classic example of

a well-intended idea that would

likelyresultinharm forconsumers

and the already highly regulated

community banks serving them

honestlyand well.By separating consumer policy

from safety-and-soundness super-

vision of community banks by

existing regulators, the CFPA

would create more regulatory

confusion without improving

consumer protections. Increased

regulatorycostsand potentialnew

legal liabilities would be borne by

all consumers, with the conse-

quence of making many financial

produc ts and services more

expensive for all Americans and,

possibly,unaffordableforsome.

As first envisioned by the

administration, the agency would

have regulatory power over any

firm directlyorindirectlyproviding

awidearrayofconsumerfinancial

products and services. The agency

would have sole responsibilityfor examining and enforcing all

consumer financial protection

functions. The proposed agencys

reach would extend far beyond

mortgagesand real-estatefinancing,

including consumerloans,payment

cards, overdraft protection, credit

insurance and investment and

advisory services. It would have

the power to interpret and update

regulations for existing consumer

financial-services laws,from TruthinLending toRESPAtoconsumer

privacy to HOEPA and Truth in

Savings. Itcould establishruleson

compensation.And itcould impose

cease-and-desist orders and huge

finesand penalties.

ICBA has expressed concern to

the administration and Congress

about imposing a one-size-fits-all

regulatory approach to address

problems created by nonbank

financialproviders.Acorefunction

oftheagencywould betopromote

simplicityoffinancialproductsby

The Consumer FinancialProtection Agency wouldcreate more regulatory

confusion without improvingconsumer protections.

ASCURRENTLYPROPOSED,THECONSUMER FINANCIALPROTECTIONAGENCYWOULDHARMCONSUMERSANDTHEFINANCIAL SYSTEMINMYRIADWAYS.ICBAANDCOMMUNITYBANKERSARELEADING THEEFFORTTO

ENSURETHEBESTPUBLICPOLICYWINSOUT.

ConsumerAgency Angst

w a s h i n g t o n

BY JASONKRATOVIL

Jason Kratovilis ICBAvice

presidentof

congressionalpolicy.

Reach him atjason.

[email protected] .




___

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Rock Solid Financial Analytics

Like too-big-to-fail financial firmswielding excessive power in themarketplace, the agency wouldhave too much concentratedregulatory authority.

ICBA has made great strides

in educating lawmakers to agree

thatcommunitybanksworkwith

their customers to ensure that

they are well informed about

the products and services they

choose and that they are capable

ofmanaging them.CFPA would,

in effect, penalize community

banksand theircustomersforthe

deceptivepracticesofothers.And

liketoo-big-to-failfinancialfirms

wielding excessive power in the

marketplace, the agency would

have too much concentrated

regulatoryauthority.

Instead, ICBA has promoted

a more targeted and balanced

approach. The association

has strongly advocated that

supervision and enforcement

of consumer protections forcommunity banks stay with

existing regulators and that the

CFPA and existing banking

regulatorsjointlyhandleallother

consumer-protection rulemaking.

Thiswould eliminatetheneed for

an appeals process to adjudicate

possible conflicts between a

banks primary regulator and the

agency.

In July, ICBA Chairman Mike

Menzies,echoing FederalReserve

Chairman Ben Bernanke, ex-

plained to the House Committee

on Financial Services the serious

problems that would arise by

splitting safety-and-soundness

and consumer-protection regula-

tory functions. Menzies empha-

sized that consumer protections

should focusonbringing unregu-

lated nonbankentitiesinlinewith

thestandard ofcommunitybanks.

For example, the association

advocates that lawmakers not

requirefinancial-serviceproviders

to provide the basic plain-vanilla

financial products that commu-

nity banks provide, but simply

require nonbank financial-

services providers to inform

consumers that those products

areavailableinthemarketplace.

ICBA and its members have

conveyed these concerns and

recommendationstotheirrepre-

sentatives before and during the

August congressional recess.

Hous e Fin an ci al S ervi ce s

Committee Chairman Barney

Frank (D-Mass.) said the CFPA

would not target community

banksastheadministrationfirst

proposed. However, lawmakers

will be working out the details

ofthenewagencythisfall.

Makeyourpositionknownontheproposed

ConsumerFinancialProtectionAgency

and otherregulatoryreform issuestoyour

representativesinWashington.Pleaseencourage

yourstaffand board memberstobecome

involved aswell.

Forasampleletteropposing theCFPAand forotherinformationontheproposed

agency,visitICBAsGrassrootsAdvocacyCenter

at icba.org.ClickonRegulatoryRestructuring

onthehomepage,and scrolldowntofind a

linktoadownloadableLettertoCongress:

RegulatoryRestructuring: Enhancing Consumer

FinancialProductsRegulation.

w a s h i n g t o n



________________________________
http://www.fimacsolutions.com/http://www.icba.org/http://www.icba.org/http://www.icba.org/http://www.icba.org/http://www.icba.org/http://www.icba.org/http://www.fimacsolutions.com/http://www.fimacsolutions.com/http://www.icba.org/


17/60


N e w s l i n e s

T e c h T a l k

with

16

18

20

ICBA Chairman Mike Menzies to Congress: Our economy ... needs a realcop on the beatplus small-business tax relief.

How banks are using Twitter for public communications.

Interest

A checking-rewards program, demographic reports and automatedsafekeeping receipts.

T o o l S h o p




18/60


Interestwith

Taking measures to reduce systemic risk andeliminating too-big-to-fail is the best way toprotect consumers. Our economy needsmore than an early warning about possible

problems; it needs a real cop on the beat.

M M , I C B A

More Tax Relief Needed,

ICBA Tells Congress

ICBA Chairman Mike Menzies

urged Congress to craft a finan-

cial-services regulatory reform

program withmore safeguards

such as procedures to downsize

too-big-to-fail institutions in

an orderly wayto reduce the

risksof overconcentration toour

nationsfinancialsystem.

While praising the Obama

administrations support in its

draft program for ICBAs idea

Because the weakened economyneedsmorehelp,ICBAurged law-

makerstocomplementaggressive

monetary easing by the Federal

ReserveBoard byenacting avari-

ety of small-business tax-relief

measures. Testifying before the

HouseSmallBusinessCommittee,

Paul Merski, ICBA senior vice

president and chief economist,

outlined severalnewpolicymea-

sures that would expand on the

ICBAtax-reliefrecommendations

included in FebruarysEconomic

Recovery and Reinvestment Act.

O N THE H ILL

For details,seeICBAs

fulltestimonyon icba.org.

for additional supervisory costs

and complications.

Menzies also outlined ICBAs

objections to the Consumer

Financial Protection Agency

as currently proposed to target

less-regulated nonbank financial

entities that betrayed the trust of

theircustomers.Rulewriting and

supervisionforcommunitybanks

should remainwithexisting bank-

ing agencies that coordinate both

safetyand soundnessreviewsand

consumer-protection enforce-

ment,hesaid: Clearlyafinancial

institutionthatdoesnotadhereto

consumerprotectionrulesalsohas

asafetyand soundnessproblem.

For more on this topic,seetheFrom theTopcolumnonpage9,or

read ICBAsJuly15testimonyonlinetitled, Economic Recovery: TaxStimulus Items that Benefited Small Business with a Look Ahead.

ICBA Urges Improvements tothe Regulatory Overhaul Plan

of imposing higher capital and

liquidity requirements on too-

big-to-fail institutions, Menzies

explained totheHouseFinancial

Services Committee the need to

establish a separate systemic-risk

reserve fund to resolve overly

large banks and nonbank finan-

cial firms. Also, he said, addi-

tional fees should beassessed on

any insured bank affiliated with

a systemic-risk institution to pay

O N THE H ILL

Those new measures include

expanding the net operating loss

carryback to five years or more,

boosting the first-time home-

buyertaxcreditand allowing IRSshareholderinvestmentsand pre-

ferred stock issuesbySubchapter

Scorporations.

Merski added that unduly bur-

densomeand overlyaggressivebank

exams and onerous new regula-

tionsoncommunitybanksmustbe

avoided to support small business

lending and economicstrength.

Rep.Nydia

Velazquez and

ICBAsPaulMerski

N e w s l i n e s


http://www.icba.org/http://www.icba.org/http://www.icba.org/


19/60



_________________________
http://www.harlandfinancialsolutions.com/http://www.harlandfinancialsolutions.com/http://www.harlandfinancialsolutions.com/


20/60


?BynowyouknowthatTwitteristhehotnewpubliccom-municationmedium whereusers,

bothindividualsand organiza-

tions,postmessages(ortweets)

with140orfewercharacters.

Financialinstitutionsofallsizes

arecreating Twitteraccountsto

communicatewithcustomers

and thepublic.Theadoptionofthisplatform mayprovetobe

thefastestofanytechnologyor

communicationtoolinbanking.

Asonemightexpect,theuse

ofTwitteraccountsbycommu-

nitybanksvariestremendously,

asoutlined inTheBanking

Twittersphere,areportpub-

lished inMaybytheWilliam

MillsAgency,whichexamined

1,176 tweetsbymorethan60

financialinstitutionsovera30-dayperiod.

Thesurveyrevealed thatcom-

munitybanksand creditunions,

inparticular,tend tobeahead

ofthecurveinusing Twitter

Interestwith

BY SCOTT MILLS tosharenewsand information.

Institutionsareshowing Twitter

personas,orstyles,inhowthey

communicate,and thereare

marked differencesinaverage

numberoftweetsgenerated by

big banks,regionalbanksand

communitybanks.

Followerscanbecustomers,

potentialcustomers,vendorsand

others.Somefinancialinstitu-

tionsuseTwitterasawaytorecruitnewmembersbysharing

newaccountpromotionsand

rates,whileothersuseittoretain

customersbysharing financial

tipsorcommunitynews.Some

organizationsdiscussbestprac-

ticesamong theirpeers.

Hereareseveralwayscommu-

nitybanksareusing Twitter:

Largebanksposted anaverage

of53 tweetspermonth,fol-

lowed bycreditunionswith22.5and communitybanks

with8.4.

Themostcommontweetby

communitybankswasareply

toatweetfrom someoneelse.

Othertypesoftweetsbycom-

munitybanksincluded these:

links to Web addresses

(24.7percent),

corporation news,such

asearningsstatementsor

hirings(8.1percent),

chatter,suchascomments

ontheweatherorgeneral

greetings(6.5percent),product promotions

(2.7percent),

industry news,suchas

commentsontherecession,

regulationsorpersonal-

financeissues(2.1percent)

and

vendor discussions,such

asupdatesonnewtechnol-

ogy(0.1percent).

Anexampleofacommu-

nitybankusing Twitteris

NorthAdams,Mass.-based

MountainOneFinancialPartners,

aholding companywithfour

communitybanks.Liz

Bissell,vicepresident,says

MountainOnehasfourTwitter

personastyles.

Bisselladvocatescreating an

editorialcalendarforsending

tweetsregularly,establishing

aformalbankpolicyonusing

Twitterand educating employ-

eesonuseand thebanksgoals.Bissellsayshercompanyspolicy

includesactivitiesrelated to

Facebookand LinkedIn.

Asonepublicrelationsand

communicationstoolofmany,

Twitterwilllikelygrowin

importancetocommunitybanks.

Touseitmosteffectively,com-

munitybanksshould promote

theirTwitteraddressacrossall

appropriatecustomertouch

points,including theirWebsite,ads,branchesand employee

e-mailsignatures.

BecauseTwitterisanopen

platform,anyonecanfollowyour

communitybank.Oncebegun,

theserviceshould beregularly

used and monitored.Bissellsays

MountainOnesmarketing team

typicallyspendsabout30min-

utesadaymanaging Twitter.

Internalresourcesconcern

manycommunitybanks,as

doesthelearning curveto

usetheplatform effectively.

e c h a l k

Many community banks are adopting Twitter for public communication

Do YouTweet

more resourcesForacopyoftheMountainOne

Bankpolicyoranemployee

social-mediapolicy,contact

[email protected].



______________
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


21/60

However,numeroustoolscan

maketheprocesseasier,includ-

ing TweetDeck,TweetSheep,

HootSuiteand ReTweetRank.

Twitterprovidesanew

opportunitytocommunicate

withcustomersand prospects,

AsurveybytheWilliam MillsAgencyfound sixtypes

ofTwitterpersonasthatcommunitybanksadopt.

Problem SolversUseTwitterforcustomerserviceand tointeractwithcustomers.

example tweet:@BofA_help: @kittenfacedI workfor

BankofAmerica,isthereanything I candotohelp? Did the

transpost,oraretheypending?

Community ActivistsPromotelocaleventsand

philanthropic activities,send weatherforecastsand more.

example tweet:@1stMarinerBankMakesuretomakeit

totheSt.PatrickParadeinBaltimorethisSunday! Weare

aproud supporter.

InformersActasconsumeradvocatesorpersonal-

financeadvisers.

example tweet:@mycucommunityGoodbyetobusiness

cards? Professionalssharetheircontactinfo& moreviaSMS

http://www.contxts.com.

CommunicatorsCharacterized byfrequentretweetsand replies.Thesebanksliketoengageindiscussionsor

sayhellotofriends.

example tweet:@tonicreditunionInteresting

thermalblindsvs.heatersidea.Howdoesthatwork?

Social ButterfliesHaveTwittermanagerswho

usetheiraccountspersonally(moresothan

corporately).

example tweet:@scheckingSchecking wantstoknow

ifyousawusinUnionSquarethispastweekend!

SidelinersPostfiveorfewertweetsin30days.In

general,thesebankshavereserved theirnameonTwitter

and areusing itasaplaceholder.

Texas Digitals VitalCASTis a state-of-

the-art digital signage solution that will

excite, inform and motivate your bank

customers.

Attention-grabbing, professional content

can be created, changed as needed, and

deployed in a matter of minutes to one or

more LCD or plasma displays.

Indoor and outdoor displays ensure

you reach your customers regardless of

service channel.

Call us today for aNo-Risk Consultation

to find out how you can increase cross-

sell of your full line of banking products

and customer satisfaction with VitalCAST

digital signage.

800.693.2628

VitalCASTDigital SignageTurns your lobby and drive-thru signage

into full-motion brochures that get results

VitalCAST delivers multiple messages on one screen to keep your customers

informed. New products and services, customer/employee recognition and even

television can be displayed side by side on LCD or plasma displays to enhance your

marketing efforts and motivate your customers while waiting in line.

particularlyyoungerones.In

somecases,communitybanksare

interacting withasmanycustom-

ersviaTwitterastheydoattheir

branches.Asconsumercom-

municationspreferencesevolve,

Twittercould createnewwaysfor

communitybankstomaintaintheir

customerrelationships.

Scott Millsispresidentof William Mills

Agency, apublic relations andmarketing

rm inAtlantathatserves thenancial

industry. His witterhandleis @wmaScott.



__________

_______________
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22/60


Interestwith o o l S h o p

Th e Ba ncVue premium-

rewards progra m allows

accountholders to tailor how

they receive loyalty rewards.

Accountholders, for example,

can receive rewards in an

automatic savings account, as

iTunes downloads or as funds

directed to charities.

AP P L E AD V E R ISIN G

Fast Demographic Reports

SB A O N E S O U RCE

SBA Construction Loan

SBA OneSource in Denver

is offering a new construc-

t io n l ending service man -

agemen t fo r Small Business

Administration7(a) loans.The

outsourceservicehelpslenders

cost-effectively oversee con-

struction projects that receiveFor details: sbaonesource.com.

B ANCV U E L D.

Checking Rewards Program Branding

BancVue Ltd. , an ICB A

Preferred Service Provider

for premium-rewards check-

ing,is launching anationwide

brandin g an d adve rti si ng

ca mpa ign. Th e brand name

Kasasa identifies BancVues

account-rewards progra m ,

wh ic h a ll ows c omm unity

b an ks t o generate deposit

growthand encourageaccount

ho lders to use cost-efficient

paymentoptions.

BancVuesupportsthe Kasasa

brand wi th l oc al advert is -

ing campaigns for participat-

ing banks. Company officials

say a limited number of banks

will have their names associ-

ate d with the Kasasa brand-

ing and advertisi ng campaigns

launched inAugust.For more:kasasa.com/learn.

Automated Safe-keeping Receipt forNonbrokered CDs

Q WI CK RA E

For more:qwickrate.com.

QwickRate, ICBAs Preferred

Service Provider for non-

brokered CDs, introduced a

feature that automates safe-

keeping receipts fo r issuersand investors. The feature,

called Safekeeping Receipt,

frees institutions fro m relying

on paper and postage receipt

docu ments, further eliminat-

ing time and cost fro m direct

CD transactions. The ICBA-

QwickRate pro gram provides

members with discounts on

subscriptionsto the companys

nationwide nonbrokered CD

marketplace.

Customized household and marketdemographicreportsareavail-

able from Apple Adver tis ing in Asheville, N.C. Delivered within

eight hours, eachreportcostslessthan$250 and can featurecensus

data for single-county or multiple-county marketplaces and cur-

rentdata orthree-yearprojected trends. Household data can cover

income, age, debt and financial pro duct use. Other information

includes data on number ofbranchesand aggregate deposits.

INADDITIONTOUNMATCHEDSERVICEANDEXPERTISE,COMMUNITYBANKSOFFERAMONG THEBESTIFNOTTHEVERYBESTPRODUCTSANDWARESAVAILABLEINTHEFINANCIAL SERVICESINDUSTRY.THEYDOTHISTHROUGH ARANGEOFBUSINESSPARTNERSHIPSANDSPECIALIZEDOUTSOURCEDPROVIDERS.THISMONTHSTOOLSHOP HIGHLIGHTSCOMPANIESTHATCONTINUETOINNOVATEANDIMPROVETHEIRWARESFOR THEBENEFITOFCOMMUNITYBANKS.

For information:appleadv.com/demostudy.

SBA financing. T he s ervi ce

helps evaluate the status of

contractor license and insur-

ancestatus, achievequickSBA

l oan appro vals and handle

compliance and cost reviews.

Management Service


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23/60


2

009,

FannieMae.

Registeredtra

demarks.

MakingHomeAffordableisatrademarkofth

eUnitedStatesDepartmentoftheTreasuryandisused

underlicense.

w w w . e f a n n i e m a e . c o m

Together...

Making

Home

Affordable

In communities across the country, Fannie Mae is committed to working with partners

like you. As part of the Making Home AffordableSM

Program, we offer community bankstools to support Home Affordable Refinance and Home Affordable Modification. With our

Refi PlusTM options, you can help Fannie Mae borrowers refinance to reduce their monthly

payments or move into a more stable loan structure, even if their loan is not in your servicing

portfolio. And our new loan modification process can help keep struggling borrowers in their

homes by making mortgage payments more affordable. For more information, please visit

www.efanniemae.comorwww.financialstability.gov.

For further details on how the ICBA/Fannie Mae alliance can help you in todays challenging market,contact your customer account manager or Tammy Trefny at 312-368-6218 or tammy_ [email protected].



________________________

___________________
http://www.efanniemae.com/http://www.efanniemae.com/http://www.financialstability.gov/mailto:[email protected]:[email protected]://www.efanniemae.com/http://www.efanniemae.com/mailto:[email protected]://www.financialstability.gov/http://www.efanniemae.com/


24/60

TOO

F I N A N C I A L R E G U L A T O R Y R E F O R M

Financial regulatory reform leg-

islation aiming to subdue sys-

temically dangerous, sometimes

predatory institutions is in the

arms of Congress. This month

congressional leaders, fresh

from townhallmeetingsduring

anAugustrecessand aftersev-

eral summer hearings on the

Obamaadministrationsblueprintforchange,plan

to roll up their policymaking sleeves to fashion

togetheraconsensusoveracatalog ofcomplexand

potentially far-reaching proposals that could lead

tofinallegislation.


THEERAOFTOOBIGTOFAILFINANCIALINSTITUTIONS,WHEREGIANT DINOSAUR BANKS AND NONBANKS WERE ALLOWEDTO FEAST AND GROW WITH ABANDON, COULD BE IN ECLIPSE.

CONGRESS SETS OFF TO TAME THE DINO-BANKS

By Steve Verdier




25/60

We should not be forced to choose between allowinga company to fall into a rapid and chaotic dissolution

or supporting the company with taxpayer money.That is unacceptable. There is too much at stake.

P B O J





26/60



___________
http://www.visa.com/payrollhttp://www.visa.com/payroll


27/60

Join the debate.Makeyourpositionon financialregulatory

reform knowntoyourcongressionalrepresentatives inWashington,

and encourageyourstaffand directorstogetinvolved aswell.

To help the nations community bankers easily and effectively

communicate with members of Congress, ICBA has developed a

rangeofcustomizableletters,positionsummariesand background

information on financial regulatory reform. Visit icba.org and

click on the Regulatory Restructuring link under the Grassroots

AdvocacyCenter.

Resources to Contact Your Representatives

inJune.Thestakesareveryhigh.The[publicpolicy]

processpresentsbothopportunitiesand risks.Wehave

anopportunitytoaddresstoo-big-to-failand finally

free our financial and economic markets from its

dangerousgrip.

Sofar,congressionalcommitteesoverseeing finan-

cial regulation have held public hearings with top

Treasuryand banking agencyofficialsinresponseto

thepresidentsplan.Thosehearings, inwhichICBA

has participated, have aired variousviewpoints. A

fewnarrowlytargeted billshavebeenintroduced anddebated.However,nospecificcomprehensivelegisla-

tivepackagehasbeenintroduced inCongress,and a

majorityoflawmakershavenottakendefinitiveposi-

tionsonarangeofpolicyoptions,including thepiv-

otalmeasurestheyllsupporttoend too-big-to-fail.

In congressional testimony last October through

thisJuly,ICBAhasoutlined coreprinciplestoguide

policymakers on financial regulatory reform. Those

principles includeaiming newregulatoryreformsat

too-big-to-failbanksand nonbanks,supporting mul-

tiple federalbanking agencies,maintaining thedual

Nearly every pillar of our

nations regulatory framework

faces the potential for a substan-tial,evenaradicaloverhaul.New

regulatory standards, authorities

and governmentbodiesarebeing

considered. Whatever final leg-

islativepackage thatmay emerge

from the Congress could, for

better or worse, in large mea-

sure determine how safely, resil-

ientlyand effectivelyournations

modernfinancialsystem recovers

long term from thetoo-big-to-fail

contagion that was the primary

underlying cause of the financial

marketscrisis.

Lawmakers must consider a

hostoftechnicallyand philosoph-

ically complex policy questions

covering new regulatory ground:

What regulatory gaps must be

closed? Howwillsystemicriskbe

monitored and addressed? How

should nonbank activities be

regulated? How should financial

consumers be better protected?

Individual lawmakers and fed-eral banking agency chiefs have

weighed in with a few different

ideas, as ICBA has with specific

core policy recommendations.

For Main Street America and

community banks, however, the

success or failure of any final

and inevitably huge financial

regulatory reform package will

be judged by how effectively it

addressesor eliminates, as

ICBA is working forthe ongo-ing systemic dangers created by

immense and complex bank and

nonbankcompanies.Ourcountry

will likelylivewiththe legislative

resultsforgenerationstocome.

America now stands at a his-

toric crossroads with financial

regulatory reform, wrote ICBA

Presidentand CEOCamdenFine

in an open letter to the nations

communitybanksaftertheObama

administration introduced its

financial regulatory reform plan

READ MORE:

ICBA Core

Principles

Financial

Regulatory

Reform

on page 26


(continued onpage28)


http://www.icba.org/http://www.icba.org/http://www.icba.org/http://www.icba.org/http://www.icba.org/http://www.icba.org/http://www.icba.org/http://www.icba.org/


28/60

ICBA .

SYSTEMIC RISK. Place systemic-risk insti-

tutions under immediate prudential supervi-

sion by a federal agency. Vest the FDIC with

authority to resolve and unwind systemically

dangerous institutions. Impose higher capital

and strongerrisk-managementrequirementson

too-big-to-failinstitutions.Eventually,downsize

institutions that could jeopardize our entire

financialsystem iftheyfailed.

DUAL BANKING. Maintain the system of

federal and state bank charters to promote

a diversity of consumer choice and financial

institutions.Having multiplecharteroptions

both federal and stateis essential for main-

taining an innovative and resilient regulatory

system.

REGULATORY DIVERSITY. Continue mul-

tiplefederalbanking regulators.Having multiple

federal agencies regulating depository institu-

tions providesvaluable regulatory checks and

balancesand promotesbest practicesbyallow-ing multipleviewpointsmuchlikehaving mul-

tiplebranchesofgovernment.

DEPOSIT INSURANCE ACCESS. Maintain

FDIC deposit insurance for all federal and

state chartered banks. Deposit insurance as an

explicit government guarantee has been the

stabilizing forceofournationsbanking system

for75years.

DEPOSIT INSURANCE ASSESSMENTS.

Chargesystemic-riskinstitutionsadditional

FDIC-insurance pre miums for the extra

risks they pose to the Deposit Insurance

Fund. Broaden the FDIC assessment base

to include all assets of insured institutions

minus their tangible equity. The amount of

assets an institution holds more accurately

gauges an institutions risk to the DIF than

the amount of its deposits. Create a spe-

cial reserve fund that remains adequately

capitalized by systemically risky financial

institutions.

CONSUMER PROTECTION. Federal bank-

ing regulators should continue both safety and

soundness oversight and consumer-protection

regulationforcommercialbanksand savingsinsti-

tutions. Limit consumer-protection supervision

by a proposed Consumer Financial Protection

Agency to unregulated nonbank financial com-

panies,and developoverallconsumerprotection

rulesthrougharegulatorycoordinating commis-

sionthatincludesfederalbanking agencies.

DEPOSIT CONCENTRATION. Reduce or

strengthenthe10-percentdepositconcentration

cap.Thecurrenteconomiccrisishighlights the

dangers of concentration of financial resources

intoofewhands.

THRIFTS. Because savings institutions play an

essentialrole inproviding residentialmortgage

credit in the United States, the thrift charter

should not be eliminated, and the Office of

Thrift Supervision should not be merged into

theOfficeoftheComptrolleroftheCurrency.

GSE FUNDING.Preservetheroleofthehousing

government-sponsored enterprises. To provide

safe and needed home loans to their custom-

ers, many community banks rely on Fannie

Mae,FreddieMacand theFederalHomeLoan

Banks for liquidity and asset-liability manage-

mentthroughtheadvancewindow.

BANKINGAND COMMERCE.Closetheindus-trial loan company loophole to maintain the

separation of banking and commerce. Mixing

banking and commercehas a history of failure

throughouttheworld and has led to inefficient

economiesand prolonged and deeprecessions.

NEW TREASURY OFFICE.EstablishanOffice

ofCommunityFinancialInstitutionswithinthe

TreasuryDepartment.Theoffice,whichshould

be headed by an assistant Treasury secretary,

would ensure that the unique needs and inter-

estsofcommunitybanksarebeing considered.

ICBA Core PrinciplesFinancial Regulatory Reform





29/60


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30/60

banking system and ensuring that

thelargestinstitutionsadequately

contribute to the FDICs risk-

based assessments.

Among those principles ofmost fundamental importance

to community banks and Main

Street America are ICBAs spe-

cificrecommendationstoaddress

systemic risks posed by too-

big-to-fail banks and nonbank

financial companies. As a result,

the Obama administration and

several key congressional leaders

have publicly embraced many of

ICBAs core policy priorities on

regulatory reform, particularly

thosedealing withtoo-big-to-fail.

ICBA has received support from

the administration and congres-

sionalalliestocreateconsolidated

systemic-risk supervision and

imposehighercapitaland liquid-

ity reserve requirements on too-

big-to-failbanksand nonbanks.

ICBAhasalsowontheadminis-

trationsearlysupporttoestablisha segregated systemic-risk fund

for nondepository institutions to

coverresolutionexpensesaswell

as a systemic-risk premium for

large depository institutions to

cover their risks to the Deposit

Insurance Fund. As Treasury

Secretary Timothy Geithner told

the House Financial Services

Committee, Right now in the

currentsystem,itsfundamentally

unfairbecausesmallerbanksare

forced toabsorbadisproportion-

ate cost of intervention needed

toprotectthesystem from,often,mistakesmadeby

largerinstitutions.

Last month, the administration also endorsed an

ICBApolicyprioritytocreateatwo-tiered feestruc-

ture for regulatory examinations and complianceoversight that would reflect the systemic risk the

largestbankspresent.Asmoreevidencethatcommu-

nitybankersvoicesarebeing heard inWashington,

the administration proposed that banks with over

$10 billion in assets would see their regulatory

fee increases under the current banking agencies

and any proposed Consumer Financial Protection

Agency.Bankswithunder$10billioninassetsunder

the administrations proposal would pay less for the

proportionally lower risk and regulatory costs they

create.

Additionally, the plan would require that fees

assessed onnationalbankswithlessthan$10billion

inassetscould notbehigherthantheaveragecharged

bystatesforbanksofsimilarsize,whichwould lower

the fees for many community banks. The Federal

ReserveortheFDICwould havenobasistoimpose

newfeesoncommunitybanksundertheproposal.

TheproposaladoptstheICBAviewpointthatany

firm that engages in risky activities, or becomes so

large that its instability presents a risk to the entire

financial system, should pay regulatory fees com-

mensuratewiththeriskand regulatorycostsitposes.

Clear evidence that community bankersvoices are

being heard inWashington: MichaelS.Barr,assistantTreasurysecretaryforfinancialinstitutions,told the

Washington Post: The largest institutions require

greateroversightand intermsofconsumers,theyare

reaching many, many more with more complicated

products.

Some of these ICBA policy recommendations

are incorporated in legislation introduced in the

House of Representatives and the Senate. Rep. Luis

Gutierrez (D-Ill.), chairman of the House Financial

ServicesSubcommitteeonFinancialInstitutionsand

Consumer Credit, introduced a bill (H.R. 2897)

that would broaden the assessment base forFDIC deposit insurance

premiumsand create

a separate risk-based

assessment for federally

insured too-big-to-fail banks.

Sens.MarkWarner(D-Va.) and Bob

Corker(R-Tenn.),bothSenateBanking

Committee members, introduced a

bill (S. 1540) that would give the

FDIC the authority to resolve,

or wind down, bank hold-

ing companies. Rep. Dennis

Cardoza(D-Calif.) introduced

a bill (H.R. 2676) to create a

America now stands at a historic crossroadswith financial regulatory reform. The

stakes are very high. The process presentsboth opportunities and risks. We have anopportunity to address too-big-to-fail and

finally free our financial and economicmarkets from its dangerous grip.

I C B A P C E OC F , J


Read about

ICBAs efforts

on the pro-

posed Consumer

Financial

Protection Agency

in Washington

Watch on

page 12.




31/60

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The community

youserve

One Mission. Community Banks.

Each year, ICBA recognizes community

banks for performing extraordinary acts of

kindnessrepairing homes, serving meals,

sponsoring local fundraisers, revitalizing

Main Street.

Now, its your turn to be recognized.

Nominate your banks community service

program for the 2010 ICBA National

Community Bank Service Awards.

Visitwww.icba.org/goto/awardsto

download the 2010 National Community

Bank Service Awards nomination form.

Nominations are due on December 4, 2009.



new assistant Treasury secretary position to enhance

thevoiceofournationscommunitybankswithinthe

TreasuryDepartment.

TheObamaadministrationand severalseniorlaw-

makershavealsobacked ICBAsrecommendationto

givetheFDICspecialresolutionauthoritytoresolve

and unwind systemically dangerous financial firms.

But some lawmakers, including House Financial

Services Committee Chairman Barney Frank

(D-Mass.), have questioned whether such authority

and proceduresshould beaddressed inseparateleg-

islation.ICBAcontinuestoadvocatethathaving clear

authorityand proceduresinplace

tounwind systemicallydangerous

institutions is an essential regu-

latory component of addressing

too-big-to-fail in a cohesive andcomprehensiveway.

In testimonybefore theHouse

Financial Services Committee in

July, ICBA Chairman R. Michael

S. Menzies Sr. outlined critical

ICBA recommendations tomake

the administrations regulatory

reform plan effective in address-

ing the causes of the financial

crisiswithoutcreating unintended

problems for community banks

and Main Street America. For

example, ICBA recommends

that lawmakers designate the

Federal Reserve as the nations

primary systemic-risk regulator

and enhance the authority and

dutiesofaproposed councilthat

would overseetheFedssystemic-

(continued onpage33)

Even in the midst of this economic crisis, thenations community banks continue to help their

customers and communities recover. Its vital thatCongress does its part by ending too-big-to-fail and

reducing systemic risk in order to protect consumers,local communities, and our entire financial system

from the destabilizing effects that occur when agiant institution runs into trouble.

I C B A C R . M M , C I C B A , J
http://www.icba.org/goto/awardshttp://www.icba.org/goto/awards


33/60



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34/60



__________________

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35/60


risk actions. The Financial Services Oversight Council

proposed bytheadministrationshould alsoberesponsible

foridentifying gapsinregulationand recommending which

nonbankentitiesshould bebroughtundertheFedscon-

solidated supervision.

Tomaketoo-big-to-failregulationeffective,ICBAalso

believes that Congress should require regulators to pub-

licly identify systemically risky institutions. Congress

should also establish clear principles to identify them,

and ICBAhaspresented specificguidelines,whethersuch

an institution be a bank or nonbank. Additionally, each

large financial institution should develop an insolvency

contingencyplanthataresolutionauthoritycould usein

theeventofitsfailure.

In addition to raising the capital, liquidity and risk-managementstandardsofthelargestfinancialinstitutions,

however, ICBA also has made it clear to policymakers

that downsizing systemic-risk institutions is an essential

step. Financial holding company premiums and capital

requirements should be increased, on a graduated basis,

forinstitutions$100billioninassetsand largertoprotect

againstthepotentiallyhugelossestheycould generateand

todiscourage excessive growth. ICBA spelled out a five-

year downsizing process for systemic-risk institutions,

including measurestogivetheU.S.DepartmentofJustice

antitrust-likepowersoverthelargestfinancialinstitutions.

Anunwinding processshould allowcommunitybankstoacquirepiecesofdownsized institutions.

As with any legislation, how quickly the policymak-

ing wheels for financial regulatory reform will turn in

Congress, particularly in the Senate, is uncertain. The

Obama administration and some congressional leaders

want to pursue the ambitious timetable of enacting a

financialreform packagebyNewYears.Withtheterrible

aftermathofthefinancialmarketscrisisand itslingering

economicfallout,Congresshaspowerfulincentivetoact.

For if policymakers had not allowed a few banks and

nonbanks to swell unrestrained to monster proportions,

thecrisisofthepastthreeyearswould neverhavepushed

Americasfinancialsystem tothebrinkofcollapseasitdid.

TheObamaadministrationagrees,asdomanymembers

ofCongressand avastnumberof

Americans. Continued pressure

and vigilancefrom ICBAand the

nations community banks could

end too-big-to-fail.Thedaysofdino-bankscould be

numbered.Ourcountryand Main

StreetAmericawillbesaferwhen

they become fossils of a wilder,

moreperilousfinancialpast.

Steve Verdieris seniorvicepresident

anddirectorof congressional affairs.

Reach him [email protected].

Community bankers have spent the past25 years warning policymakers of the

systemic risk presented by the unbridledgrowth of the nations largest banks and

financial firms. Congress should requirethe financial agencies to identify, regulate,assess and eventually break up institutions

posing a risk to our entire economy.

C B A , C

I C B A , M



____________

________________

_____________
http://www.icba.org/mailto:[email protected]://www.holtandmon.com/mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://www.holtandmon.com/http://www.holtandmon.com/mailto:[email protected]:[email protected]://www.icba.org/


36/60

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OUT

Gettin

g theWo

rd

By Alan Lenhoff

ICBA Independent BankerAdvertising All-Stars

FOUR SAVVY COMMUNITY BANKS USE A VARIETY OF CREATIVE MARKETING

IDEASAND MEDIATO CREATE TOP-NOTCH ADVERTISING CAMPAIGNS

35

Doing business with-

outadvertising islike

winking at someone

inthedark.Youknowwhatyou

aredoing,butnobodyelsedoes.

Its not clear who said that

first,butanybusinessthatoffers

products or services, including

community banks, can appreci-

atethesentiment.

ICBA Independent Banker

chose four community bank

advertising campaigns to spot-

light for their creativity and

effectiveness aspartofitsannual

advertising showcase. Each cam-

paign reflects different goals,

philosophiesand creativity.One

campaign is by a 157-year-old

community bank; another bank

was chartered in 2005. A third

bank seeks a bigger foothold

in mortgage lending; a fourth

strives to solidify dominance in

smallbusinesslending.

Whatallfourcampaignshave

incommon iscreativebutrigor-

ous marketing strategies imple-

mented through a variety of

approaches. Every community

bankisunique.SoiseveryMain

Streetmarket.Noonemarketing

strategyoradvertising campaign

is universally applicable. But

as these advertising campaigns

show, creativity and dedication

can help any community bank

increase its impact and market

share.

OUT




38/60


FIRST BANK FINANCIAL CENTRE

O C O N O M O W O C , W I S .

Located about 30 miles

west of Milwaukee, Oco-

nomowoc is a thriving

town that predates the Civil War

and has become an exurban bed-

room community. There, First

Bank Financial Centre began

reaching out this past spring to

servemoreconsumersinthegrow-

ing nearbypopulationcenters.

For many years, says Jodi

Schwefel, First Bank Financials

marketing director, we consid-

ered ourselvesacommerciallend-

ing bank.Buteconomictimesdo

not now warrant a great deal of

commercial loans.Toreposition

and expand the$650million-asset

community banks balance sheet,

she says, First Bank Financial

aimed to increase its residential

mortgagelending.

Schwefel and her colleagues

created an advertising campaignthat addressed homebuyers

through print, broadcast, online

and in-branch outlets. The

mixed-mediacampaignstroveto

raiseawarenessamong customers

and noncustomersthatFirstBank

Financial offers home-mortgage

loansand,asaresult,increasethe

banksportfolioofthoseloans.

Featuring the slogan Home

LoanSale,thecampaignstressed

thevalue ofdoing business witha community bankpersonal

assistance and advice, free

pre-approvals, fast loan deci-

sions, people you know and

trust. Schwefel also used a logo

celebrating thebanks150thanni-

versary to underline the themes

of safety, soundness and relation-

shipbanking.

The campaign consisted of

twoweeksofnewspaperadver-

tising intwocountiesthatinclude

much of suburban Milwaukee,

atwo-weekradiocampaignon

two major AM and FM stations

intheMilwaukeearea,anad onFirstBankFinancials

Web site that offered $100 off

closing costs for consumers who

applied online,

a mass e-mail to First Bank

Financialcustomerswhodid not

have a mortgage loan with the

bankand

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