The Official Publication of the Illinois Bankers Association
July-August 2019 ilbanker.com
Diversity and Inclusion Requires Leadership
Also in this issue:
SPRING GOLF OUTING HIGHLIGHTS STATE LEGISLATIVE SESSION WRAP-UP
ADDRESS SERVICE REQUESTED ILLINOIS BANKERS ASSOCIATION 524 S. SECOND ST., STE. 600 SPRINGFIELD IL 62701-1749
Connecting Bankers. Advancing Banking.®
July - August 2019 • Vol. 104 / No. 4 • ilbanker.com
TABLE OF CONTENTS
12 28 DEPARTMENTS 5 Message from the President and CEO 6 Compliance Corner 8 Washington Update: Cannabis Conundrum
20
32
28 Preferred Vendor Spotlight
FEATURES
34 News & Notes
12 Diversity and Inclusion Requires Leadership
36 Ad Index
14 Annual Conference Coverage
38 On the Move
18 IBA Asks State Lawmakers to Tax Credit Unions
40 Associate Member News
20 Spring Golf Outing Highlights
40 New Associate Members
22 Legislative Wrap-Up and Women’s Legislative Event Highlights
40 New Member Banks
30 Rethinking Talent
41 Events Calendar 42 The Last Page
32 Banking on Solar July-August 2019 •
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OFFICERS AND EXECUTIVE COMMITTEE MEMBERS
BOARD OF DIRECTORS REGION 1
REGION 4
Clark Delanois The Northern Trust Company, Chicago
Tom Gihl Illinois National Bank, Springfield
Martin J. Noll Oak Park
Anthony G. Nestler Hickory Point Bank and Trust, Decatur
REGION 2
Kevin L. Olson Chairman Grundy Bank, Morris
Rick M. Francois American Community Bank & Trust, Woodstock Betsy Johnson Forreston State Bank REGION 3
C. Brant Ahrens Chairman-Elect CIBC, Chicago
Michelle L. Gross Vice Chairman State Bank of Bement
Thomas J. Chamberlain Iroquois Federal Savings & Loan, Danville Tyler Rouse First Federal Savings Bank of ChampaignUrbana
REGION 5 T.J. Burge Community Partners Savings Bank, Salem Richard Knebel The Bradford National Bank, Greenville AT-LARGE CATEGORY Christopher P. Barton State Bank of Geneva Dane Cleven Community Savings Bank, Chicago
Erich J. Bloxdorf, Executive Vice President & COO Mary Curl, Executive Assistant & HR Manager Pam Macha, Springfield Office Coordinator Legal and Compliance Bruce Jay Baker, Executive Vice President & General Counsel Carolyn Settanni, Vice President and Assistant General Counsel Carly Berard, Assistant Counsel Amy Giacomucci, Law Assistant Bank and Partner Relations Julie Clark, Vice President
Thomas J. Chamberlain Member-at-Large Iroquois Federal Savings & Loan, Danville
Megan Collins Bank of America, Chicago
Steven F. Rosenbaum Hoyne Savings Bank, Chicago
William Fanter, U.S. Bank N.A., Chicago
Pamela A. ShararStoppel Wheaton Bank and Trust Company
Jeffery L. Fauver Catlin Bank James R. Hannon First Security Trust and Savings Bank, Elmwood Park Daniel J. Hollowed Cornerstone National Bank & Trust Company, Palatine
Simon P. Yohanan First Bank of Highland Park, Northbrook FLA Chairman Matt Wyatt TheBANK of Edwardsville
James H. Huiskamp Blackhawk Bank and Trust, Milan
Two Offices to Serve You! Springfield Office: 800-783-2265 • Chicago Office: 800-878-2265 To connect with our staff, use this email format: firstinitiallastname@ilbanker.com Linda Koch, CAE, President & CEO
Betsy Johnson Member-at-Large Forreston State Bank
Richard J. Mahoney First Midwest Bank, Chicago
ILLINOIS BANKERS ASSOCIATION STAFF DIRECTORY
Executive Administration
William P. Gleason Treasurer The Leaders Bank, Oak Brook
Gary S. Collins Old Second National Bank, Aurora
Jeff Bowden, Senior Banking Advisor (jeff.bowden47@ comcast.net) David Barbeau, Senior Banking Advisor (dbarbeau@htc.net) Sarah Cowan, Membership and Government Relations Assistant
Communications/Marketing/ Associate Membership Debbie Jemison, CAE, Vice President Tammy Squires, Assistant Vice President Robin Lane, Director, Associate Membership Finance and Administration Mark Bennett, CPA, CFO and Vice President
Illinois Bankers Business Services, Inc. Brian Hoffman, President Phil Talley, Vice President, Insurance Services Casey Widholm, Marketing Manager Illinois Bankers Education Services, Inc. Callan Stapleton, Vice President
Marcia Stratton, CPA, Director
Kevin Klug, Assistant Vice President
Marie Ann South, Financial Assistant
Bob Anderson, Manager of Education and Training
Government Relations
Cassie Mattson, Manager, Event Management and FLA
Ben Jackson, Vice President Aimee Winebaugh, Director Kirsten Davis-Franklin, Manager, Grassroots and PAC Sarah Cowan, Membership and Government Relations Assistant
Denise Perez, Education Coordinator / Chicago Office Coordinator Amy Sale, Education Assistant Illinois Bankers Group Insurance Trust Erich Bloxdorf, Plan Administrator Robert Penwell, Relationship Manager Hillary Meyers, Trust Manager
Daniel P. Daly Immediate Past Chairman SENB Bank, Moline
Linda Koch Secretary IBA President and CEO, Springfield
Editorial Offices 524 S. Second St., Ste. 600 Springfield, IL 62701-1705 217-789-9340 FAX 217-789-5410 www.ilbanker.com Debbie Jemison, Editor With the exception of official announcements, the Illinois Bankers Association disclaims all responsibility for opinions expressed and statements made in articles published in Illinois Banker. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Illinois Banker (ISSN 0019-185X) is published bi-monthly and is available at a cost of $45 per year for members and $90 per year for nonmembers. Regular issue single copy price is $8.50. Postmaster, send address change to Illinois Bankers Association, 524 S. Second St., Ste. 600, Springfield, IL 62701-1705. News items from members of the Illinois Bankers Association are invited and are due on the first of the month preceding publication. Š Copyright 2019 by Illinois Bankers Association (unless individual articles list copyright). Reproduction of any material in the Illinois Banker is strictly prohibited without written permission of the publisher.
MESSAGE It’s Time!
Linda Koch
IBA President and CEO
It is time for Congress and the Illinois General Assembly to make credit unions pay state and federal income taxes, and the Illinois Bankers Association won’t stop fighting until this happens! (See our most recent study on page 18 reviewing Illinois’ 16 largest credit unions and their estimated federal income taxes, as well as our letter to Governor Pritzker asking state lawmakers to tax credit unions.) Today’s credit union industry – especially the large bank-like credit unions – hardly resembles the mom-and-pop lenders that inspired their industry’s tax exemption decades ago. The credit union industry has evolved into a $1.4 trillion industry that provides services that are identical to taxpaying community banks and savings institutions. Illinois’ credit union industry alone has grown from just $724 million in assets in 1967 to a $46.7 billion today. There are 313 credit unions (5% of the industry) in the country with more than $1B in assets, including eight credit unions in Illinois – a tremendous increase from 1999 when there were only 20 credit unions of this size. Yet, this 5% enjoys 75% of their industry’s tax exemption. Simply put, the large credit unions are leveraging their tax exemption to get larger! Increasingly, there are many compelling reasons for taxing large bank-like credit unions, and lawmakers are finally starting to take note. When Congress exempted credit unions from federal income taxes in 1934, they intended for them to serve people from communities of modest means. Clearly, policymakers NEVER intended for credit unions to use their government tax subsidies to: Surpass $1 trillion as an industry! Advertise membership in states where they have no physical presence within hundreds of miles, e.g., PenFed Credit Union marketing free membership to Illinoisans. Pay for naming rights to sports stadiums – like Illinois’ Credit Union 1 that paid $9.3 million for the naming rights to the University of Illinois at Chicago’s UIC Pavilion, and CEFCU that paid $8.7 million for exclusive naming rights for the San Jose State University’s football stadium, in California. Pay for exclusive sponsorship deals – like Scott Credit Union that paid millions for exclusive sponsorship deals with the St. Louis Blues and St. Louis Cardinals. Acquire taxpaying banks in cash deals, permanently removing taxpaying entities from the tax rolls, as in the case of Advia, a $1.7 billion Michigan-based credit union, that announced its purchase of Golden Eagle Community Bank, a $167 million asset community bank in Woodstock, Ill. We also are certain that Congress never intended for taxpayers to pick up the credit union industry’s tab to the tune of more than $3 billion a year. So, it’s time, Illinois bankers! It’s time to educate lawmakers and let them know that the tax subsidy for credit unions is an unnecessary waste of taxpayer resources and a direct attack on local community banks unable to compete with government subsidized competition! Illinois Bankers, please take a moment to bookmark our informative credit union webpage at www.ilbanker.com/Advocacy/Credit-Unions and check back often for more updates. Help us get the word out!
The IBA is excited to announce the launch of the Illinois Bankers Scholarship Fund! It’s been a longtime goal of the IBA to attract quality talent to the banking industry, and this is the next step in achieving that goal. The scholarship complements our other talent pool-building efforts like the Future Leaders Alliance, BankTalentHQ and our partnerships with BankWork$, colleges and universities that provide skills and training for students interested in working in the financial industry. See page 16-17 for more details.
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COMPLIANCE CORNER By the IBA Law Department
QUESTION A farmer wired money from his account at our bank to purchase hemp seed. The farmer said he was awarded a license from Illinois to produce hemp on one acre of land. Should we file a suspicious activity report (SAR)? ANSWER
Yes, we recommend filing a SAR in relation to a transaction to purchase hemp seed, unless your customer is an institution of higher learning or a state agricultural department that is growing hemp for research purposes. While Illinois has begun issuing licenses for hemp cultivation, Illinois’ licensing program has not yet been approved by the U.S. Department of Agriculture (USDA), and producing hemp without a USDA-approved license is “unlawful” under federal law. With the passage of the federal Agriculture Improvement Act of 2018 (the 2018 Farm Bill), hemp no longer is an illegal controlled substance under the federal Controlled Substances Act. Similarly, Illinois enacted legislation in 2018 (the Industrial Hemp Act) that removed industrial hemp from the state’s general prohibition against manufacturing, delivering or possessing “cannabis.” Under both Illinois and federal law, “hemp” or “industrial hemp” means “the plant Cannabis sativa L. and any part of that plant . . . with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”
However, the federal 2018 Farm Bill also provides that “it shall be unlawful to produce hemp” without a license issued by the USDA or by a state that has been approved to issue licenses by the USDA. While the Illinois Department of Agriculture has already begun issuing hemp cultivation licenses, to our knowledge the USDA has not approved Illinois’ hemp licensing program to date. In fact, the USDA’s website states that it will not review or approve any state hemp programs until it finalizes its own regulations later in 2019 or 2020. Accordingly, the USDA’s position is that during the 2019 planting season, hemp growers may obtain licenses only under a 2014 Farm Bill program, such as Illinois’ Industrial Hemp Pilot Program – which permits only institutions of higher learning or state agricultural departments to grow hemp – and such hemp must be grown exclusively for research purposes. The SAR reporting rules apply to transactions of over $5,000 that involve “funds derived from illegal activities . . . as part of a plan to violate or evade any Federal law
or regulation.” Your customer may have a hemp cultivation license issued by Illinois, but the USDA has not approved Illinois’ licensing program (except with respect to hemp grown by institutions of higher learning or the Illinois Department of Agriculture itself). Consequently, your customer’s hemp production activities are “unlawful” for purposes of federal law, and we believe that the hemp seed purchase is an “illegal activity” necessitating a SAR filing if the transaction exceeds the $5,000 threshold. We note that this customer does not pose the same risks as a cannabis producer or distributor operating under the Illinois medical cannabis law. In this case, your customer is not engaged in the production of an illegal controlled substance, assuming that the hemp it grows does not exceed the 0.3% THC threshold set by both federal and Illinois law. However, until the USDA approves Illinois’ industrial hemp licensing program, we recommend filing SARs when the customer’s transactions exceed the $5,000 SAR filing threshold.
QUESTION A local nursing home is requesting customer records on behalf of a government agency for Medicaid asset verification purposes. Are we required to provide customer records without a power of attorney from the customer? Can we charge for providing the documents? The nursing home claims we cannot charge them because the records are for a government agency. ANSWER
No, a bank is not required to – and should not – provide customer records for Medicaid asset verification purposes to a nursing home in the absence of a valid power of attorney
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or customer authorization. An Illinois law that became effective in 2019 created a statutory “consent and authorization form” for customers to use when authorizing the disclosure
of their financial records to the Illinois Department of Human Services or the Illinois Department of Healthcare and Family Services for purposes of establishing the customer’s eligibility
for “Medicaid and Medicaid longterm care benefits for long-term care services.” The statutory form can be found in the Illinois Banking Act, 205 ILCS 5/48.1(b)(20). Importantly, this law prohibits banks from providing a customer’s financial
records directly to a long-term care facility – the financial records are to be provided directly to the Illinois agencies responsible for Medicaid eligibility determinations. Additionally, the law permits your bank to seek reimbursement from your customer
for “all costs reasonably necessary and directly incurred in searching for, reproducing, and disclosing a customer’s financial records,” and you may delay delivery of the financial records until “final reimbursement of all costs is received.”
QUESTION Can we accept payments after sending a customer a 1099-C cancellation of debt form? After determining we were unlikely to collect anything more from a borrower who is a farmer, we issued a 1099-C, listing identifiable event code “G” for a discharge of indebtedness. We noted the debt as “charged off” but did not make any alterations to the face of note or surrender it to the borrower. Recently, we were notified by a grain elevator that it has a large check payable to the borrower and our bank. Assuming we have the right to deposit the check, may we credit these funds to the outstanding loan balance? ANSWER
In our view, accepting payment on this debt after issuing a 1099-C due to “identifiable event G” may expose your bank to a claim that it can no longer collect on the debt, in which case it would not be entitled to apply the check to the outstanding loan balance. For debts exceeding $600, a creditor is required to issue a 1099-C when an “identifiable event” occurs, irrespective of whether “an actual discharge of indebtedness has occurred on or before the date on which the identifiable event has occurred.” The IRS regulations recognize seven identifiable events – for example, a discharge in bankruptcy, an expiration of the statute of limitations to collect a debt, and an agreement between a debtor and a creditor to extinguish a debt, among others. Identifiable event G is “a discharge of indebtedness pursuant to a decision by the creditor,
or the application of a defined policy of the creditor, to discontinue collection activity and discharge debt.” In 2015, an Illinois appellate court considered for the first time the effect of a creditor filing a 1099-C on a debtor’s subsequent liability for a debt. The court noted that while a majority of courts in other states have held that a 1099-C is not evidence of a creditor’s intent to discharge a debt, a minority of courts have held that filing a 1099-C creates a rebuttable presumption of a debtor’s intent to discharge a debt. The Illinois appellate court went further than the minority, holding that filing a 1099-C does more than create a rebuttable presumption of a creditor’s intent to discharge a debt; it requires the creditor who filed a 1099-C to prove that it did not discharge the debt. In other words, under the court’s reasoning, when a bank files a 1099-C
form under identifiable event G, it is “representing and acknowledging” that an “outright discharge” has occurred as a matter of law, unless the bank can establish factually that it did not discharge the debt (a much higher standard than simply proving intent). Here, under the Illinois appellate court’s ruling, your filing of the 1099C under identifiable event G – which states on its face that the debt was discharged – creates a strong basis for a finding by an Illinois court that the debt was discharged, in which case your bank would not be entitled to collect on the check that was made payable to both the borrower and your bank. Needless to say, however, this is a complicated question that is dependent on both facts and law, and we recommend reviewing this matter with your bank counsel.
About the IBA Law Department Our IBA Law Department provides many resources to help our bank members meet their compliance challenges, including a toll-free Compliance Hotline (1-800-GO-TO-IBA) and a dedicated compliance website (www.GoToIBA.com). We also publish a free weekly e-newsletter highlighting the latest regulatory developments, select recent Q&As, and other useful information – let us know if you want to subscribe! Note: This information does not constitute legal advice. You should consult bank counsel for legal advice, even if the facts are similar to those discussed above.
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WASHINGTON UPDATE By Rob Nichols, President and CEO, American Bankers Association
Solving the Banking Industry’s Cannabis Conundrum While there is still a healthy – and appropriate – debate on whether cannabis should be legalized at the federal level, there is growing consensus that something must be done to address the cannabis conundrum affecting banks. The need for a solution is growing increasingly urgent. With marijuana now legal in 33 states and the District of Columbia in some form – a number that is likely to grow – more banks are having to choose between serving the banking needs of their customers and community, and following federal law. Even banks that have no desire to bank a marijuana grower or dispensary are at risk of violating antimoney laundering laws if an existing customer is found to have a tangential connection to a cannabis business. In fact, a recent ABA survey found that three in four ABA members have had to close an existing account, terminate a banking relationship or turn away a potential customer because of a connection to cannabis. These include a bank that ended its relationship with a retail strip mall after it leased space to a medical marijuana shop and another that turned down a loan to a fencing company that was hired to build a fence around a marijuana growing facility. Some banks have even had to end long-time customer relationships with law firms because those firms took on marijuana businesses as clients. Leaving the cannabis industry – whose sales are estimated to reach $24 billion by 2025 – unbanked has troubling implications. Such businesses have resorted to dealing entirely in cash, which can make them lucrative targets for criminals and create potential public safety risks for local communities. They are also harder to monitor for compliance with tax laws or irregular financial activity.
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These facts likely explain why an overwhelming majority of the banks – 99 percent in our survey – want Congress to resolve the conflict between state and federal law. The good news is that legislation is moving. The House Financial Services Committee held its first-ever hearing on this topic earlier this year and soon after passed the ABA-backed Secure and Fair Enforcement Banking Act – an important step toward providing regulatory and legal clarity – with a strong, bipartisan 45-15 vote. A House floor vote could happen in the coming weeks. The SAFE Act specifies that proceeds from cannabis-related legitimate businesses would not be considered unlawful under federal money laundering rules or other laws, and it would direct regulators to issue guidance and exam procedures for banks that serve cannabisrelated legitimate businesses. Similar legislation has been introduced in the Senate. While the path forward in that chamber will take more work, we are hopeful that a bill can pass there as well.
To be clear, ABA is not taking a position on the legalization of marijuana. But we believe that allowing cannabis businesses access to the regulated banking system in states where they have been legalized would make them safer, bring more transparency and accountability to the industry and better protect communities. These are worthy goals. Successful enactment of cannabis banking legislation this year would serve another worthy goal: Demonstrating that bipartisan solutions to societal problems are still within reach, even with a divided Congress. Our experience with S. 2155, last year’s landmark regulatory reform law, proved that Washington can work and that banking is bipartisan. We look forward to replicating that success this year on this important policy issue and others. E-mail Rob Nichols at nichols@aba.com.
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Diversity and Inclusion Requires Leadership By Cedric D. Thurman, Chief Diversity Officer, Federal Home Loan Bank of Chicago
When people hear the terms “diversity and inclusion” there can be a number of initial reactions. For some, the terms mean a conversation about people; for others, it means a conversation about “specific people.” In some cases, when people hear “diversity and inclusion” they believe you aren’t talking about them, as they don’t see themselves in the conversation. Others believe the terms mean there is about to be a conversation about them and their voice is going to be heard. Interestingly, the terms “diversity and inclusion” tend to evoke immediate reactions that can be very different, and as a result, have the exact opposite impact of what the terms are designed to mean. What does “diversity” and “inclusion” mean?
Diversity in its simplest form means differences, anything that makes someone different from someone else. Inclusion at its core is about being a part of something, in some senses, belonging. I know a diversity and inclusion consultant who has a great way of describing diversity and inclusion – diversity is the mix, inclusion is making the mix work. I believe inclusion is all about the culture you create and maintain. If you create the right culture, you attract a diverse mix of employees who are excited to work at the organization because of the culture. You can also maintain a diverse mix of clients who realizes their needs are met by the innovative solutions and great customer service provided to them. So, if it is important to have a mix and to make that mix work, does everyone understand that is what the organization is trying to do? Does everyone understand the impact diversity and inclusion has on the business? If terms like diversity and inclusion are used organizationally, and your employees don’t understand what you mean when you say diversity and inclusion, it can lead to confusion, both internally and externally. For a number of years, organizations have touted their commitment to diversity
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and inclusion, but if one were to ask employees and/or customers of those organizations about that commitment, you would probably get a wide range of responses about that commitment based upon how diversity and inclusion has or hasn’t impacted them. In order for diversity and inclusion to have meaning organizationally, everyone has to be on the same page regarding what the terms mean and why the organization believes diversity and inclusion are important to the business strategy. In my role as Chief Diversity Officer of the Federal Home Loan Bank of Chicago (FHLBank Chicago), a big part of my job is to make sure everyone knows what we are talking about when we say “diversity and inclusion.” Additionally, my role is to provide transparency on why diversity and inclusion is important to the FHLBank Chicago, both internally and externally.
Diversity and Inclusion Leadership
In order to provide clarity about diversity and inclusion, I start with our leaders because they set the tone for the organization. Employees look to the leaders and model the behaviors they see. Our members will listen to our leaders to see if what we say is important actually manifests itself in our interactions with them. A few of
the FHLBank Chicago leaders discuss diversity and inclusion based on the different areas they focus on. Michael Ericson, Executive Vice President, Group Head of our Members and Markets business, explained the importance of diversity and inclusion as, “Diversity and inclusion fosters a deeper range of creativity and expertise to help meet the demands of our members. These attributes drive product innovation and member solutions supportive of and responsive to our members’ needs. This in turn, drives business development, growth, and reinvestment back to our members and the communities they serve.” When John Stocchetti, Executive Vice President, Group Head Mortgage Partnership Finance Program, thinks about diversity and inclusion and its importance to our business, John says, “Diversity and inclusion makes for better idea generation and creativity, stronger products and services, a better operating model, and a more sustainable business mode. While this is true for any business, it is particularly true for financial services providers and for a cooperative such as the FHLBank Chicago that has a mission focus.” Michael and John both have profit and loss responsibility at the FHLBank Chicago and understand the value we bring to our members and the communities they serve is tied to our ability to have a diverse and inclusive organization. As an organization, we know and see the importance of having a diverse mix of talented people who feel they are valued for the talents they possess and different perspectives they bring. So if diversity is about differences and inclusion is about belonging and being a part of something, why do some people see themselves in the terms and others don’t? Why do some people think of themselves as part of the conversation and others don’t? Think of the implications of this disconnect
in messaging from a business sense. In the financial services sector, we serve members every day. That network has a diverse set of needs and options in how their needs can be met. If an organization’s culture has members questioning if their needs can be met by the organization or questioning if their business “belongs” with an institution that doesn’t understand their needs and/or the markets they serve, the institution is going to have a revenue issue. A part of this revenue issue could be members feeling they don’t belong. How might that happen? It stems from something every institution knows is important, customer service. Great customer service will have members committed to an institution for years; poor customer service will have members leave quickly. What differentiates great customer service from poor customer service? Highly engaged employees who are allowed to think creatively to meet the members needs and are in an inclusive environment. When employees feel they belong, they make sure members share that same feeling.
Creating a Culture that Lives Diversity and Inclusion
Kim Cullotta, Chief Human Resources Officer at the FHLBank Chicago, explained, “Embracing a diverse workforce is important, but fostering inclusion is one of the key elements that make up a high performing culture. It’s crucial that organizations are intentional about creating a culture that allows employees of all backgrounds, experiences, and thoughts to bring their authentic selves to work. Organizations have to create and promote inclusive policies and practices to support a high performing culture.” Every organization wants a high performing culture. Research shows high performing cultures breed greater innovation and creativity,
which attracts diverse talent. In our case, we recognize in order to achieve our mission, we have to have a high performing culture. The needs of our members are varied, the markets they serve are diverse – urban, rural, mature, growing, and the list goes on. One thing we know for sure, in order to effectively meet the diverse needs of our members, we have to have partnerships that allow us to better understand those needs. When Roger Lundstrom, Chief Finance Officer and Group Head Member, Community and Financial Services, reflects on diversity and inclusion, he thinks about our partnerships with our members. Roger says, “Our work recognizes the depth and breadth of knowledge our member financial institutions and community organizations have for the communities they serve. We learn from these partnerships to design programs and products that build the capacity and reach of our members to serve the most disadvantaged and underserved populations and businesses. Inclusivity of those marginalized strengthens a community, creating opportunities for all. The investment in the community actually makes our financial institutions stronger.” Innovation, creativity, high performing culture, better operating model, responsiveness to member needs, and stronger financial
institutions are all by products of a diverse and inclusive culture. In order to have a diverse and inclusive culture, leaders need to lead.
Conclusion
This article has focused on how leaders at the FHLBank Chicago think about diversity and inclusion and its impact on our business. Our President and CEO, Matt Feldman, describes the role leaders play in diversity and inclusion, “Leaders have an essential role to play in any change in culture, but that role is even more critical when the desired change is as profound as creating an atmosphere that supports inclusion and appreciates the many diverse aspects of our society as this goes far beyond the traditional concept of culture in business. This culture change is directed at helping us build awareness and respect for our differences in a way that improves understanding, enhances creativity, and strengthens engagement with others. Leaders need to believe in and live the culture they want to see.” About the author: As SVP and Chief Diversity Officer at the FHLBC, Cedric Thurman is responsible for shaping the Bank’s culture to provide opportunities for all employees and help the Bank be a catalyst for change for its member institutions and the communities they serve. He may be reached at cthurman@fhlbc.com.
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ANNUAL CONFERENCE
We had a great time at our Annual Conference in Austin!
Watch for full coverage of the event in our next Illinois Banker magazine.
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IBA Asks State Lawmakers to Tax Credit Unions The Illinois Bankers Association delivered a letter to Governor Pritzker and the four state legislative leaders explaining our opposition to the progressive income tax constitutional amendment. We also asked policymakers to promote fair competition by subjecting credit unions to state taxation. The IBA’s letter encourages the state’s leadership to tax credit unions – particularly the large, aggressive credit unions that compete directly with community banks – as part of their revenue package. “Credit unions are becoming increasingly aggressive, competing unfairly with community banks, particularly for business loans,” said IBA 2018-2019 Chairman Dan Daly, President and CEO of SENB Bank in Moline. “They are using their taxpayer subsidies to buy multimillion-dollar professional sports sponsorship packages, cherry-pick loans for wealthier borrowers, and even buy community banks.” “Enough is enough,” said Daly. “It’s time for state and federal lawmakers to treat all financial institutions fairly, by requiring the rapidly-growing credit union industry to play by the same taxation rules as community banks and thrifts.”
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The IBA’s letter, included here, highlights the fact that relatively few credit unions are living up to their mission to serve individuals of modest means. It also explains that credit unions are acquiring community banks at an alarming rate – taking these banks off the tax rolls permanently. Now, it’s your turn: we ask all bankers to share this letter with their local lawmakers – immediately – and educate them about the tax disparity between credit unions and banks.
Here are some resources to help guide your conversation: Customizable letter to lawmakers on credit union taxation www.ilbanker.com/Portals/1/Advocacy/ CU-Customizable-Letter.pdf IBA Credit Union Resource page – watch for more information on this page coming soon www.ilbanker.com/Advocacy/Credit-Unions
The IBA recently commissioned a new study that highlights information on the largest Illinois-headquartered credit unions. For the full report, visit our Credit Union Resource page.
If you have questions and/or receive legislator feedback, please contact our Government Relations team via email – Ben Jackson bjackson@ilbanker.com or Aimee Winebaugh awinebaugh@ilbanker.com or call 217-789-9340.
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Spring Golf Outing Highlights Congratulations to our Winners!! The 20th Annual Spring Golf Outing was held on May 6 at St. Clair Country Club. We were fortunate to have not only outstanding weather but a great turnout! Almost 90 bankers and Associate Members came to Belleville to enjoy a kickstart to summer with a round of golf, networking and an opportunity to catch up on the latest IBA and legislative news. Be sure to mark your calendars for the Fall Golf Outing on September 16 at Pekin Country Club! First Place: Matt Wyatt, TheBANK of Edwardsville, Kyle David, TheBANK of Edwardsville, Bob Mueller, TheBANK of Edwardsville and Larry Nesbitt, First Bankers’ Banc Securities, Inc.
Mulligan Drawing Winner: Chase Matticks, Central Bank of St. Louis
Second Place Tom Dolson, Peoples National Bank, N.A., Bo Baer, Peoples National Bank, N.A. Terry Visintine, Peoples National Bank, N.A. and Kyle Gansauer (not pictured), Peoples National Bank, N.A. Annual Conference Complimentary Registration Winner Adam Huskamp, TheBANK of Edwardsville
Closest to the Pin: Gary Genenbacher, BKD, LLP with the IBA’s Julie Clark
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Third Place: Herb Henson, The Clay City Banking Company, Jeff Harn, The Clay City Banking Company, Tim Henry, United Bankers Bank, Heather Steger, United Bankers Bank
Thank you to Hole Exhibitors Cummings Ristau and Scheffel Boyle, and to all of our wonderful sponsors for supporting the Spring Golf Outing!
IBA President and CEO Linda Koch welcomes the group.
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LEGISLATIVE HIGHLIGHTS
State Legislative Session Wrap-Up Budget & Capital Plan
The Illinois General Assembly has wrapped up its work for the spring. Lawmakers completed a $40 billion state budget, a $45 billion capital plan (covering both “horizontal” and “vertical” state infrastructure), as well as passed gaming expansion and legalization of recreational cannabis. Gaming expansion includes numerous new casinos throughout the state, expanded video gaming, and sports betting legalization. Budget negotiations did result in some business-friendly provisions, including phasing out the corporate franchise tax, sales tax incentives for Illinois-based data centers, and reinstatement of the manufacturers purchasing credit.
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Taxation
Taxes and fees were raised to pay for infrastructure and balance the budget. Among other tax and fee hikes, lawmakers approved a cigarette tax hike, doubled the motor fuel tax, raised license plate fees, and approved a fix to require online “internet marketplaces” such as Amazon to collect and remit Illinois use and sales taxes. And of course, the General Assembly passed a constitutional amendment that would eliminate Illinois’ flat income tax, allowing it to be replaced with a graduated income tax. This constitutional change must now be approved by voters in 2020. Companion bills were also passed setting the income tax rates and setting up a property tax relief task force.
IBA Taxation Opposition
The IBA worked diligently to ensure that our industry was protected throughout the spring as the General Assembly sought new revenue. We were the only banking trade association to publicly oppose the graduated tax constitutional amendment while it was debated in the General Assembly. We also successfully defeated numerous taxes that directly or indirectly impact our members’ bottom line, including financial transaction taxes, an income tax surcharge on passive investment income, and a tax on corporate stock buybacks.
Banking Industry Legislation
Facing a more progressive-leaning General Assembly and Governor, the
LEGISLATIVE HIGHLIGHTS spring was certainly a challenge with regard to banking legislation. New lawmakers, in particular, attempted to lambast our industry with specialpurpose legislation imposing new requirements, taxes, and regulations on our industry and businesses in general. The IBA is proud that we maintained our traditional strength in Springfield despite this tough environment!
The Setbacks…
The session was not without setbacks. We worked with the CBAI and credit unions on reforms to Illinois Unclaimed Property law, yet the legislation did not pass due to revenue concerns in the House. House leadership also added language into the last-minute budget deal that extends collection of graduated foreclosure filing fees by three years.
…Outweighed by the Many Victories However, the setbacks are far outweighed by the many victories
the IBA secured. We worked with the CBAI and credit unions to pass legislation mandating that the Secretary of State implement an electronic lien and titling system for vehicles by July 1, 2021. We also successfully supported legislation to study and promote blockchain banking applications and the fintech industry in Illinois, and to prohibit local governments from regulating and taxing blockchain applications. We defeated another dangerous bill to impose new cybersecurity requirements on banks and insurance companies as well. We successfully stopped eleventhhour attempts to weaken banking industry protections when banks turn over records to state agencies to verify assets for Medicaid applications. We stripped language from a bill that would have added “loan modification services,” to the definition of a covered real estate transaction under the Human Rights Act, which could have
Along with celebrating a successful legislative session, the IBA also celebrated Vice President of Government Relations Ben Jackson’s decade of service to the Illinois banking industry – with many more years to come!
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LEGISLATIVE HIGHLIGHTS had a chilling effect on banks working with their customers to modify delinquent mortgages. We favorably negotiated legislation that requires data collectors to report data breaches to the Attorney General. And we again defeated a proposal to create a stateowned bank. Recreational Marijuana Passes General Assembly; Includes IBARequested Banking Protections Recreational cannabis was a linchpin of the new budget, with tax revenue expected to exceed $1 billion or more according to various estimates. HB 1438, the comprehensive recreational cannabis bill that passed the General Assembly will allow recreational cannabis sales to go live January 1, although the application and approval process could delay the program from becoming fully operational on that date. The IBA worked for several months
to successfully negotiate language into the bill’s banking section to ensure that financial institutions cannot be prosecuted under state law for providing services to marijuanarelated businesses. (Note: this language does not protect financial institutions from federal criminal, civil, or regulatory repercussions). The IBA’s language also allows financial institutions to receive and request confidential application and business information when servicing or evaluating cannabis licensees. Spring Session is Over, but our Credit Union Campaign is Just Beginning! During the progressive tax debate, the Illinois Bankers Association delivered a letter to Governor Pritzker and the four state legislative leaders explaining our opposition to the proposed progressive income tax constitutional amendment. (See page 18)
We also asked policymakers to promote fair competition by subjecting credit unions to state taxation. The IBA’s letter encourages the state’s leadership to tax credit unions – particularly the large, aggressive credit unions that compete directly with community banks – as part of their revenue package. Now that lawmakers have returned home, let’s keep up the momentum! All bankers should share our letter with their local lawmakers in the coming weeks! Resources, including a customizable letter to lawmakers on credit union taxation, can be found on the IBA’s Credit Union Resource page – www.ilbanker.com/advocacy/ credit-unions Contact the IBA Government Relations team at 217-789-9340 to share your lawmakers’ views on taxing large credit unions.
Local bankers provided important background information for the City Treasurer and her staff.
IBA Meets with City of Chicago Treasurer Melissa Conyears-Ervin The IBA and its member banks held a private meeting with City of Chicago Treasurer Melissa Conyears-Ervin soon after her election, and before her swearing-in. We met members of Conyears-Ervin’s transition team, and we discussed numerous issues relevant to the Treasurer’s office and the banking industry. The Treasurer’s priorities include helping the unbanked and underbanked access banking services and providing affordable housing through mortgage borrowing assistance programs. We discussed forming subject-matter task forces on these issues and working with the Treasurer’s office to build trust between banks and underrepresented communities. She pledged to take a collaborative approach with the banking industry along with other stakeholders. Bankers encouraged the Treasurer-elect to work with the industry – instead of against us – when seeking changes to investment-related ordinances or rules.
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As the City Treasurer is typically a thought leader on banking policies in the city and that influence extends throughout the entire state, including the state legislature, the IBA will continue to maintain this important working relationship.
Treasurer Melissa Conyears-Ervin explained her priorities and her intentions to work with the banking industry to achieve them.
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LEGISLATIVE HIGHLIGHTS
IBA Raises A Glass to Ladies in Leadership! The IBA held an event to connect the women of the banking industry with women legislators to have a discussion about the challenges that arise as a woman leader. We were thrilled to highlight some of the banking industry’s inspiring female leaders in a banker panel moderated by Senator Melinda Bush and featuring Charie Zanck from American Community Bank, Carol Jo Fritts from First Neighbor Bank, N.A., and Shelia Burcham from Community Trust Bank. These trailblazing women shared their stories of being female leaders in the banking industry, as well as tips on how to advance as a leader and as a banker.
Charie Zanck then moderated a legislator panel including Senator Melinda Bush, Senator Sue Rezin, Representative Tony McCombie, and Representative Terri Bryant. The legislators shared some of their challenges in both government and their outside professions and how they overcame the challenges and advanced as a leader. The IBA is proud to work on behalf of the many incredible female leaders in the banking industry and General Assembly. Special thanks to our sponsors: BMO Harris Bank N.A., Northern Trust Company, and BankTalent HQ!
Banker panelists from left to right: Shelia Burcham with Community Trust Bank, Carol Jo Fritts with First Neighbor Bank, N.A., Charie Zanck with American Community Bank & Trust, and moderator Sen. Melinda Bush.
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LEGISLATIVE HIGHLIGHTS
A special toast was given to IBA’s President and CEO Linda Koch, pictured left, for her trailblazing leadership throughout her career on behalf of the banking industry.
Director of Government Relations Aimee Winebaugh, inset right, provided a timely legislative update.
Below legislator panelists from left to right: Rep. Tony McCombie, Rep. Terry Bryant, Sen. Sue Rezin, and Sen. Melinda Bush.
Above ladies in banking listening to the powerhouse panelists.
PREFERRED VENDOR By Brian Hoffman, President, Illinois Bankers Business Services
Floodplain Consultants Premier provider of flood zone certification
Since 1991, Floodplain Consultants Inc. (FCI) has been providing flood zone certifications and consulting on the National Flood Insurance Program (NFIP). FCI has been a Preferred Vendor of the Illinois Bankers Association since 2006. FCI serves more than 300 financial institutions across the country. With over 28 years of experience, FCI distinguishes itself from competitors by offering industry leading accuracy and customer care via proprietary processes and
technology. The company has completed over 1 million flood certificates and conducted thousands of site inspections. They provide flood zone certification, census tract, floodplain management, life-of-loan services, and flood guidance. From a compliance standpoint, FCI keeps its lending clients informed about map changes, and invites lenders to contact them for customized reports as needed. In addition, FCI has partnered with several loan origination systems, including Encompass 360, Calyx, BytePro, and Fiserv EZ lender. What makes FCI different is that its team will meet with customers or lenders in person or be readily available by phone. Their goal is to
“Before our company met Craig Callahan and began using Floodplain Consultants Inc. we were concerned with the accuracy of flood determinations received prior to closing and with receiving updated life of loan updates postclosing. Flood Non-Compliance can be costly and we wanted to choose a flood determination vendor that could provide the accuracy as well as exceptional customer service. I think what made the biggest difference for us was that Craig took the time to explain what sets FCI apart from the other flood companies. He explained very specific scenarios and was very patient with our decision. He reached out to us, asking if he could help… but not in a sales pitch manner. We are confident and pleased in our partnership with Floodplain Consultants Inc.“ Mary T. Sexton, SVP - BancMac /Community Banc Mortgage Corp. & Staci McDaniel, VP – United Community Bank
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contribute to the client’s bottom line through partnership versus a short-term transaction-oriented approach. They understand that some lenders can be reluctant to change flood certification vendors, but, with their experience, they know how to make the process easy and well worth the effort. To learn more about Floodplain Consultants Inc. and how you can try their service free for 30 days, please contact bhoffman@ilbanker. com or Craig Callahan, Floodplain VP Business Development & Marketing, at ccallahan@ floodplain.com or 800-945-0246.
“Craig and his staff have been great to work with! Their software is easy to use and response times for flood determinations are very good. Unlike other service providers, if a structure is questionable as to its location near a flood area, they will personally visit the site to make accurate determinations. They are also a knowledgeable resource for us when we have questions about other requirements of the flood regulations and provide our customers with a helpful packet of information when a property is determined to be in a special flood hazard area.” Lori Pieper – Chief Credit Officer – Community State Bank
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Rethinking Talent in the Future of Banking By Joe Salesky, CRMNEXT
Nearly half of all employees in banking believe that their current skill set will be redundant in the next few years, according to the Capgemini Digital Transformation Institute. As automation technology increasingly takes over routine tasks previously held by bank team members, it frees employees up for higher-level activities. But are today’s bankers equipped with the skills they need to thrive in the banks of tomorrow? Bank leadership would be wise to take a fresh look at the role of talent as they prepare for the future of work. Do skills need to evolve? Are there new programs that need to be implemented? Does the organization itself need to adjust?
Digital-First Mindset
The terms “digital talent” and “banking talent” will become one and the same as we look toward the bank of tomorrow. Technology will only continue to evolve more rapidly, its impact on banking rising exponentially. All bank employees must be or become digitally proficient – able to quickly adapt to new technologies and future innovations. As codeless design configuration becomes the norm, displacing the need for a bevvy of traditional programmers, banks can tap their digital talent (aka everyone) to create, test and refine new automation capabilities and experiences. One’s ability to “befriend the machine,” as Fast Company so aptly puts it, will differentiate the future employee in banking.
Customer-Centric
Beyond the digital fluency required of all bank employees, the soft skills most in demand across all industries are customercentricity and a passion for learning, according to Capgemini’s Digital Talent Gap report, followed closely by collaboration and flexibility. This certainly holds true in banking. As automation takes over up to 30
percent of the work in banks, according to McKinsey, the role of front-line and back-office employees is rapidly shifting from transactional to relational - requiring team members to develop a new set of interpersonal skills. With the introduction of new technology platforms, suddenly any teller can be a financial consultant - ushering in a new era in scalable relationship banking. Thanks to automation and work simplification, all employees have the tools to become a universal banker - leveraging data-science based insights and customer conversations to recommend a mix of products tailored to each individual’s unique financial needs. Bank leadership should actively coach their staff on how to engage with customers and what questions to ask in order to facilitate relationship growth.
Agile and Adaptable
The structure of banks is also going to change, becoming more fluid as agile, cross-functional teams replace siloed departments. The employee who will succeed in this banking environment is comfortable with ambiguity, quick to think-outside-the-box, and able to forecast and adapt to the changes in customer expectations. Future bankers must also be able to flex with the organization, adopting new roles as needed to tackle problems and design superior customer experiences. One recent EY article suggests that the bank employees of the future will have four to five “careers” within the bank, as opposed to following the traditional, hierarchical route.
Career Driven
Creating meaningful career options for bank employees is especially important today, with low unemployment rates and the tight job market making turnover in staff particularly detrimental to banks. Not only does knowledge walk out the door with attrition, but the cost of recruiting, hiring and training a new employee is an average of $4,000 per hire, according to Atrivity. • 30 •
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Deloitte describes the HR impact of automation as “creating value for customers and meaningful work for employees by focusing on problem solving and creativity.” By up-leveling work as a result of automation, banks are able to chart a career path for employees paved with engagement and value-add contributions - increasing job satisfaction, improving performance and growing tenure.
Stated another way, Capgemini reports that “skill redundancy fears or lack of faith in their organization’s up-skilling efforts” could cause six out of ten digitally fluent employees to switch jobs. In order to recruit and retain top talent for the future, banks must prioritize and invest in substantive learning and development programs today.
Continual Learners
New work often requires new skills. According to the top consulting firms, the key attributes banks should be looking for in talent are less industry-centric; rather focused around more intangible qualities such as problem solving and creativity. Because technology will continue to change rapidly, the ideal banker of the future is a tech-savvy, lifelong learner who is
Lifelong learning is the last piece of the puzzle. A 2016 Pew Research Center survey, The State of American Jobs, found that 87 percent of workers believe it will be critical for them to get ongoing training and develop new job skills throughout their work life in order to keep up with changes in the workplace.
Conclusion
collaborative and able to manage change in a fluid environment. As automation increasingly finds it foothold in financial services, it enables banks to increase productivity, simplify work processes and improve customer service - growing deposits and revenue without growing costs. That’s a future to look forward to. About the author: Joe Salesky is the CEO of CRMNEXT, a leading CRM solution provider custom-built for financial services. A seasoned leader in digital transformation and financial services, Salesky has been granted 21 patents for technology broadly used by consumers and large enterprises, including mobile banking and the original patent for web conferencing. He can be reached at joe.salesky@crmnext. com. IBA Associate Member
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Banking on Solar at Midland By Joe Gordon, SunVest Solar
Entering Midland States Bank’s corporate headquarters in Effingham, Ill., no one would suspect that over 300 solar panels are helping to power approximately 15% of the building’s electrical load, but Lee Harms, Facilities Director for Midland States Bank, is ecstatic for each and every panel. “As a community bank, we understand that our vitality depends on the well-being of the communities we serve. We certainly had the environment in mind but with a project of this size there is a certain ROI that we needed to meet, too. With the State of Illinois solar incentives and Federal tax credits offered, we knew we had a great opportunity.” In 2018, Midland States Bank installed solar electric systems at ten locations across Illinois. Altogether, Midland purchased 336-kilowatts of solar --
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enough to generate almost half a million kilowatt hours of electricity per year -- to offset about 20% of the combined facility loads. The project was designed and installed by IBA Associate Member SunVest Solar, a seasoned commercial solar developer headquartered in Wisconsin with offices in Geneva, Illinois. Solar panels are made of silicon wafers that have been coated with special chemicals teeming with electrons. When sunlight strikes the panels, it loosens the electrons and generates a current. The current is sent through wiring to an inverter and then on to the building’s main electrical panel where it’s used immediately. If the solar produces more energy than the building needs, then it winds its way onto the grid where the utility provides kilowatt-hour credits toward the building’s electric bills.
The Solar Myths:
Midland’s use of solar may sound novel in Illinois banking circles, but on a national scale solar is a mainstream technology. It’s one of the most rapidly-growing industries in the U.S., according to the Solar Energy Industries Association (SEIA). In 2018, solar accounted for almost onethird of all new electric capacity installed in the U.S. and the market is expected to double in the next five years. At the time of this article, the solar industry accounts for the creation of one out of every 20 new jobs in the U.S. This illustrates how fast solar is growing across the country, but many still wonder how solar performs right here in Illinois. There are a few incorrect beliefs on this topic that are based on misinformation instead of fact. These beliefs are called “The Solar Myths.”
Myth #1:
“Illinois is too cloudy and too snowy for solar.” Fact: The U.S. National Renewable Energy Labs (NREL) is a solar thinktank which tracks the quantity and intensity of sunlight around the world. According to NREL, Illinois has as much solar irradiance as Northern Spain, proving Illinois has an abundance of sunshine. In addition, Illinois’ snowy seasons coincide with the cloudiest weather and shortest days of the year, so even during periods of heavy snow accumulation the overall impact on the annual solar performance is quite minimal. Myth #2:
“Solar panels weigh too much and require the roof to be structurally reinforced.” Fact: The panels and racking weigh only 4 to 6 pounds per square foot, making them safe for almost any roof without the need for reinforcement. Myth #3:
“Solar is too difficult to operate and maintain.”
Incentives Create Solar Gains
Midland’s insightful decision to go solar was only surpassed by its timing to do so. Current solar incentives are at their highest levels in Illinois history. The Illinois Future Energy Jobs Act (“FEJA”, Senate Bill 2814) mandates that by 2025, 25% of all the electricity generated in Illinois must come from environmentally friendly sources. The bill calls for the creation of 3,000 new Megawatts of solar. With just 100 Megawatts of solar installed in Illinois to date, there is vast potential for market growth. Experts predict the solar construction will create 35,000 jobs, catapulting Illinois to the top of the country in solar activity. “We were excited about the opportunity for job creation throughout the state,” Lee Harms explains. “The team from SunVest took the time to explain the benefits and the state incentive programs. This project came from a good, sound business perspective.” Illinois businesses can capitalize on four solar incentives: a 30% Federal tax credit, a one-year accelerated depreciation, a cash grant from the electric utility and a cash carbon-offset called a Solar Renewable Energy Credit (SREC). These incentives will pay 95% to 100% of the cost of the system and drive the payback down
to roughly 3 to 4.5 years, depending on the size of system and electricity rate.
Solar’s Bottom Line Worth Bringing Up
Illinois banks don’t necessarily need to install solar to capture its benefits. If banks seize the initiative to consult their commercial clients about solar energy’s lucrative incentives and returns then that advice can serve to expand and deepen the bank’s relationships with this important market segment. After all, companies need to pay their electric bills, and solar delivers a savvy, creative way to parlay those expenses into long-term profits while the incentives pay for all the costs. Solar is also a durable, reliable asset which banks can finance to grow their loan portfolios. Harms sums it up perfectly: “Our sustainability project showcases Midland’s values. Innovation is at the root of our approach to opportunities, both internal and external. This solar project showcases that.” About the author: Joe Gordon is Senior Project Developer at SunVest Solar. He may be reached at jgordon@sunvest.com or 312-320-5205. IBA Associate Member
Fact: Solar components have very few moving parts, and therefore do not require much maintenance over the system’s 30-year design life. The panels do not even need to be washed, since the snow and rain in Illinois’ climate help keep the panels clean and performing better year-round. At Midland, SunVest added Solar Optimizers to every panel to boost the system’s performance and monitoring capabilities. Lee Harms remarks, “We were pleasantly surprised by how smart these panels are. We can easily identify the panels that are performing to our expectations.”
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NEWS & NOTES
Robin Lane and Philip Talley Join IBA Staff Robin Lane joined the Illinois Bankers Association team as the Director of Associate Membership on July 1. A graduate of the University of Illinois, Springfield, with a Bachelor of Arts in Communications, she brings over 20 years of association experience. Locally, she worked at the Illinois Realtors and the Independent Insurance Agents associations as well as the Homebuilders and the Pharmaceutical Associations in Tampa. Recently relocated from Tampa, Fla., Robin is proud to focus
on exceptional contributions to members and the success of IBA. Personally, she enjoys spending time with family and her active son at the hockey rink. Working with rescue animals is her passion. Philip Talley joined the IBA team as the Vice President of Insurance Services on May 1. He is a graduate of the University of Illinois, Springfield, with a Bachelor of Arts in Political Science. With nearly 30 years of experience in various aspects of the insurance field, he has
developed a diverse and versatile array of experience and skills. He is licensed in all lines of insurance, and he truly enjoys helping employers with their business insurance and employee benefits. Philip has an unwavering commitment to providing the highest quality of customer service. Throughout his career, he has worked extensively with statewide associations, and he is a firm believer in the value and benefits of association sponsored insurance plans. Philip was born and raised in the Chicago suburbs, but currently resides in Springfield. He is looking forward to traveling the state to meet IBA members and to assist them with all of their insurance needs. Phil and his wife Kate have two children.
Harold Henry Inducted into the 50 Year Club Harold Henry, Vice President and Commercial Banking Officer, was inducted into the IBA’s 50 Year Club on May 8. The 50 Year Club is exclusively for those who have worked in the banking industry for 50 years. Beginning his career as a messenger at Bank One, formerly Marine Bank of Springfield, Henry served many roles during his 30-year tenure there, including managing over 900 ATMs in Illinois, Indiana, and Wisconsin. Henry started at Town and Country Bank in January 2005 as commercial banking officer and has been a key component to the company’s significant growth as he led the market with the use of the first remote teller technology. Linda Koch, IBA, and, from Town and Country Bank, Steve Gnuse, David Kirschner, Harold Henry, Micah Bartlett, and Dana Dow.
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NEWS & NOTES
Regulatory Compliance Series Graduates Front Row: Katie Hart, North Shore Trust & Savings, Heather Bartlow, CIBC, Elisabeth Faford, First Trust Bank of Illinois, Sidali Aitelhadj, GN Bank. Back Row: Pete Hoglund, CIBC, Michael Greenlief, Jr., Artisan Advisors, LLC, Tara Muilkens, Heritage Bank of Schaumburg, Christine Humble, Old Second National Bank
IBA Welcomes Rehwinkel as New Director of Banking, IDFPR The IBA congratulates Chasse Rehwinkel on being nominated to serve as the Director of Banking at the Illinois Department of Financial and Professional Regulation. Rehwinkel currently serves as the Chief Economist and Director of the Bond Division for the Illinois Office of Comptroller. Prior to that, he was the Director of Policy at the Illinois State Treasurer’s office.
The Illinois Bankers Association has enjoyed a strong working relationship with Rehwinkel throughout his public service career. Among other initiatives, the IBA collaborated with Rehwinkel and his team at the Treasurer’s office to pass the Illinois ABLE Act, creating individual savings and investment accounts for individuals with disabilities. This year we
also worked with Rehwinkel and the Comptroller’s staff to pass legislation seeking to expand the Bank On program to better serve the underbanked and unbanked in urban and rural areas of Illinois. The IBA has met with Rehwinkel and will keep an open dialogue to talk about banking industry examination concerns and opportunities for further collaboration.
ADVERTISING INDEX American Bankers Association 800-226-5377 www.aba.com 29, 31, 37 Bankers’ Bank (Wisconsin) 800-388-5550 www.bankersbank.com 35 BankTalentHQ www.banktalenthq.com/specialoffer 9 BOK Financial Institutional Advisors 866-440-6515 www.bokfinancial.com/institutions 15 Floodplain Consultants 800-945-0246 www.floodplain.com 29 Howard & Howard 312-372-4000 www.howardandhoward.com 2 Illinois Bankers Group Insurance Trust 217-789-9340 www.ilbanker.com/Insurance/Insurance-Trust 43 MIB-Midwest Independent Bank 800-347-4642 www.mibanc.com Back Cover United Bankers’ Bank 630-441-5564 www.ubb.com 39 Wipfli 800-486-3454 www.wipfli.com 10
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ON THE MOVE Belleville
Galesburg
Ronald R. Stephens has been promoted to President and Chief Executive Officer of the Bank of Belleville as well as its holding company, Belleville Bancorp Inc., while longtime CEO Kevin M. Pesko will remain with the bank as Market President of St. Clair County. In addition, Wade C. Weitlauf has joined the bank as its Chief Lending Officer.
Doug Sanders, President and CEO of F&M Bank announced that Cindy Greene has been hired as Vice President, Treasury Management.
BANK OF BELLEVILLE
Peterson
Newburgh
Bloomington, MN
F&M BANK
Highland Park
FIRST BANK OF HIGHLAND PARK First Bank Chicago, a Division of First Bank of Highland Park, welcomed Brian Bock as Vice President/ Middle Market Banking and Simon Yohanan as SVP/Managing Director, Middle Market Banking.
UNITED BANKERS’ BANK Tollefsrud
Hladio
Greene
Hoffman
Bryan Grove, Chairman of the United Bankers’ Bancorporation, Inc. (UBBI) Board of Directors, formally announced that John Peterson will serve as UBB’s Interim President and CEO following the retirement of William “Bill” Rosacker on April 30, 2019. In addition, the bank announced the retirement of Conrad Newburgh, Executive Vice President, Chief Credit Officer, along with the promotion of his successor, Dawn Tollefsrud.
Chicago BYLINE BANK
Byline Bank welcomed Matthew Sloan as Senior Vice President, Division Head, Commercial Banking.
Marr
Waldron
Decatur
HICKORY POINT BANK
Terry Atwood has been named Vice President in the Trust and Wealth Management Division; Dave Brandon has been named Assistant Vice President in the Trust and Wealth Management Division; and Libby Spellman has been named Assistant Vice President, Corporate Communications. Westphal
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Lena
CITIZENS STATE BANK
Allison Palmer has been hired as Marketing Coordinator.
Madison, WI BANKERS’ BANK
Matthew Hladio has been promoted to Executive Vice President and Chief Commercial Banking Officer, and Andrew Hoffman has been promoted to Vice President. In addition, Garrett Marr has been promoted to First Vice President; Michelle Waldron has been promoted to First Vice President; and Mark Westphal has been promoted to Assistant Vice President.
Mattoon
FIRST MID WEALTH MANAGEMENT
Andrew ‘Andy’ Cave has been hired as Senior Vice President, Business Development and Strategy. Prior to joining First Mid, he served as President of Soy Capital Bank and Trust, and has played an integral role in the Soy Capital conversion to First Mid.
FIRST MID BANK & TRUST
First Mid welcomed Brooke DeBoer as Branch Manager of the Bloomington banking center located at 2306 E Washington Street.
Ottawa
Rosemont
Ottawa Bancorp, Inc., the holding company for Ottawa Savings Bank, FSB announced that Jon Kranov, President and Chief Executive Officer of the Company and the bank, will retire from those positions effective August 16, 2019. Following his retirement, Kranov will continue to serve as Chairman of the company’s Board of Directors and as a member of the bank’s board. The Board of Directors has appointed Craig M. Hepner to serve as President and Chief Executive Officer of the company and the bank effective upon Kranov’s retirement.
Steven M. Vernon III to Senior Vice President and Division Manager of Commercial Real Estate; Jason Chess to first Vice President of Commercial Banking; and Brad Kranich to Vice President of Commercial Banking.
OTTAWA BANCORP, INC.
Pinckneyville
SIGNATURE BANK
Marlow
Tiemann
Steeleville
FIRST NATIONAL BANK OF STEELEVILLE First National Bank of Steeleville CEO Robert Koopman announced the promotion of Klay Tiemann from Vice President to Senior Vice President, Loan Officer and Branch Manager, and the promotion of Karen Jacobus from Vice President to Senior Vice President and Cashier.
Jacobus
MURPHY-WALL STATE BANK AND TRUST COMPANY After nearly 45 years of dedicated service with Murphy-Wall State Bank, SVP/Controller/ISO Kathy Marlow has retired, with her final day on April 26, 2019. Marlow began her career at Murphy-Wall State Bank in June of 1974 as a bookkeeper and later became a teller. In 1987, she was promoted to Assistant Cashier, acting as head of the proof dept. and as the bank’s Student Loan Officer. She accepted a promotion to AVP of operations in 1996 and in March 1999, became VP and Data Processing/Bookkeeping Supervisor. She was then promoted to Senior Operations Officer in September 2010 and assumed the leading officer duties for the bank’s ACH Origination operations. Her final promotion came in 2015 when named Senior Vice President/Controller/Information Security Officer. During her career in the banking industry, she served on the Illinois Bankers Association’s Technology and Operations Committee and attended IBA’s Technology & Operations Forum.
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WELCOME
NEW MEMBER BANKS First Savings Bank of Hegewisch First State Bank of Van Orin When your bank’s a member, you’re a member!
ASSOCIATE MEMBER NEWS Abrigo Abrigo has announced a partnership with Q6 Cyber. Q6 Cyber’s cuttingedge proprietary technology monitors the “Digital Underground” - a vast universe of online sites, marketplaces, communities, and forums where hackers, fraudsters, and cybercriminals operate and interact. Cinnaire Cinnaire was recently recognized as a 2019 Best Nonprofit to Work For by the Nonprofit Times. This is the fifth time Cinnaire has been selected, with a 2019 ranking of #31 of the top 50 Best Nonprofits overall and #17 on the Best Medium Nonprofits (50-249 employees). Additionally, Josh Ghena has been promoted to Vice President, Asset Management, in the company’s Grand Rapids, Mich., office, and Ainsworth Thompson has joined the company as an Underwriter in the company’s Chicago office. FF&S FF&S (Financial Forms & Systems) has rebranded, and their new company name is Spry. The new company website is sprybrands.com. Levin Ginsburg Roenan Patt has joined the firm as an Associate in its Litigation Practice Group.
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NEW ASSOCIATE MEMBERS Detalus Saint Louis, MO www.detalus.com Detalus Advisors is an investment management firm that specializes in serving the needs of financial institutions. Our team is comprised of former bankers and regulators that understand the challenges present in the financial services industry. Detalus has $2.1 billion in assets under management. Funnelback Seattle, WA www.funnelback.com Funnelback is a website search and enterprise search platform that combines a powerful machine learning algorithm with a comprehensive insight engine to empower your visitors, customers and team. In the knowledge economy, extracting meaning from overwhelming data has never been more important. We start with search. Then we transform business. Ironcore Inc. Onalaska, WI www.ironcore-inc.com Ironcore Inc. is a provider of hosted technology services and Business Continuity solutions for businesses of all types and sizes. Our mission is to deliver strong customer service, trusted vCIO advice, and secure managed IT solutions. Kaufman Hall Skokie, IL www.kaufmanhall.com Kaufman Hall’s Axiom Financial Institutions Suite empowers finance to analyze results, model and forecast scenarios, and optimize institutional decision making. Solutions for budgeting and forecasting, funds transfer pricing and profitability management, reporting and analytics, and more are delivered on a single, unified platform.
Risk Management Association Philadelphia, PA www.rmahq.org The Risk Management Association (RMA) is a not-for-profit, memberdriven professional association serving the financial services industry. Its sole purpose is to advance the use of sound risk management principles in the financial services industry. Tillable Chicago, IL www.tillable.com Tillable is changing the way U.S. farmland is rented, making it easier than ever for landowners and farmers to grow. Tillable is the first true online marketplace for farmland, shining a light on farmland’s true value, and protecting it for years to come through data collection and management tools, all in one resource. Vantage Point Solutions Mitchell, SD www.vantagepnt.com Vantage Point offers a comprehensive line of customerfocused, technology-driven solutions including regulatory compliance, auditing, cybersecurity testing, network planning, independent credit review and risk management, Some of our services include: Penetration Tests; Vulnerability Assessments; BSA/ AML, Deposits, Loans, ACH and IT Audits.
EVENTS CALENDAR
SEMINARS, CONFERENCES AND FORUMS
AUG 1 AUG 2
AUG 7
Commercial Real Estate Lending Workshop – Oak Brook AUG 9 CFO Forum – Springfield AUG 14 Advanced Personal & Business Tax Return Analysis – Springfield AUG 15 Advanced Personal & Business Tax Return Analysis – Oak Brook AUG 15 Small Bank CEO Forum – Nashville, IL AUG 16 Tech & Ops Forum – Bloomington AUG 21-22 Ag Banking Conference – Springfield AUG 23 CFO Forum – Schaumburg AUG 28 Performing Your ACH Audit – Springfield AUG 29 Performing Your ACH Audit – Oak Brook AUG 29 Small Bank CEO Forum – Bloomington SEP 12 Basics of Banking – Springfield SEP 13 Basics of Banking – Oak Brook SEP 24-25 Women in Banking Conference – Springfield SEP 24 Getting Noticed in an Over-Banked Market – Springfield SEP 25 Getting Noticed in an Over-Banked Market – Oak Brook SEP 26-27 Commercial Lending Workshop – Springfield
WEBINARS JUL 29
JUL 30 JUL 30 JUL 31 AUG 1
CRE Appraisals: Regulations and the Review Process* Business Development for All Responsible Parties* Writing High-Impact Executive Summaries* Untangling the Web of Fee Disclosures* Accounts Receivable and Inventory Financing*
AUG 5 AUG 6 AUG 6 AUG 7 AUG 8 AUG 9 AUG 13 AUG 13 AUG 14 AUG 14 AUG 15 AUG 15 AUG 19 AUG 20 AUG 21 AUG 21 AUG 22 AUG 26 AUG 27 AUG 28 AUG 29 AUG 29
Excel Explained: Intermediate Pivot Tables* Unclaimed Property Compliance for Financial Institutions* Assessing Your Bank’s Call Center to Take it to the Next Level* Director Compensation and Compensation Committee Best Practices* Excel Explained: Budget Spreadsheets* Creating Effective Anti-Harassment Policies and Process* Deposit Compliance Issues* ACH Exception Processing* Call Report: Lending Schedules for Banks* Critical Risk Management Issues Facing Corporate Trustees Providing Accurate and Timely Adverse Action Notices* Marketing & Advertising Compliance* Compliance Management* Vendor Management: How Model Risk Fits In* How to Analyze the Purchase of an Existing Business* Endorsements: Consumers, Businesses and Fiduciaries* The ACH Audit & Risk Assessment: What You Need to Know* SSAE18, SOC 1, SOC 2: What Do I Need? * Driving Results with Your Bank’s Data* W-9, W-8BEN and W-8BEN-E Forms and Info* Writing Effective Email* Compliance Rules for Commercial Loans Secured by Real Estate* What to Do When a Customer Dies* Dealing with Appraisals: Regulations and Requirements*
SEP 5 SEP 10 SEP 17 SEP 18 SEP 18 SEP 19 SEP 24
Developments in Life Insurance Planning Feedback and Coaching* Top Trends That Will Disrupt & Define Retail Banking, Part 1 Identifying, Registering & Auditing Your Third Party Senders Thirty (30) Steps to Audit Your Safe Deposit Area* Top Trends That Will Disrupt & Define Retail Banking, Part 2 Quarterly Compliance Briefing: Fall 2019*
IBA * Total Training Solutions Graduate School of Banking American Bankers Association
ABA ONLINE TRAINING COURSES AUG 5
Building Customer Relationships** Basic Administrative Duties of a Trustee Managing the Bank’s Investment Portfolio
AUG 12 AUG 26 SEP 3 SEP 9 SEP 23 SEP 30
CRCM Exam Online Prep Marketing Management The Banking Industry** IRA Online Institute Analyzing Bank Performance Legal Foundations in Banking Introduction to Trust Products & Services The Mortgage Lending Business Introduction to Agricultural Lending
** Banking Fundamentals Curriculum (formerly Principles of Banking)
UPCOMING EVENTS August 21-22 Ag Banking Conference Crowne Plaza Springfield September 9-11 Washington Visit Washington, D.C. September 16 Fall Golf Outing Pekin Country Club
September 24-25 Women in Banking Conference Crowne Plaza Springfield Springfield October 3 BankTech Conference Hyatt Regency Lisle Lisle
October 29 Fall Compliance Conference DoubleTree by Hilton Collinsville November 6 Midwest Bank Leaders Conference Hyatt Regency Lisle Lisle
December 5 Chicago Area Chapter Holiday Breakfast Sheraton Lisle Naperville Lisle December 6 Bank Counsel Conference Renaissance Chicago Downtown Hotel Chicago
REGISTER TODAY AT ILBANKER.COM! July-August 2019 •
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