Enhancing Credit Opportunities in Rural America Act of 2019

Farm Credit System H.R. 1872, the Enhancing Credit Opportunities for Rural America Act H.R. 7996 / S. 4470, Rural Equal Aid Act of 2020 S. 1641, ECORA Act of 2019

Client expense: $2,940,000 · Firm income: Not reported

Government targets: HOUSE OF REPRESENTATIVES, SENATE, Treasury, Dept of

H.R. 1872/S. 1641 ECORA Act

Client expense: $380,000 · Firm income: Not reported

Government targets: Consumer Financial Protection Bureau (CFPB), Federal Housing Finance Agency (FHFA), Federal Reserve System, HOUSE OF REPRESENTATIVES, SENATE, Securities & Exchange Commission (SEC), Treasury, Dept of

Issues related to H.R. 1872 (entire bill)

Client expense: Not reported · Firm income: $10,000

Government targets: HOUSE OF REPRESENTATIVES, SENATE

- Issues related to agricultural mortgage loans; H.R. 1872, S. 1641

Client expense: $410,000 · Firm income: Not reported

Government targets: Commerce, Dept of (DOC), HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), Internal Revenue Service (IRS), Labor, Dept of (DOL), SENATE, Securities & Exchange Commission (SEC), Treasury, Dept of, U.S. Trade Representative (USTR)

Farm Credit System H.R. 1872, the Enhancing Credit Opportunities for Rural America Act H.R. 7996 / S. 4470, Rural Equal Aid Act of 2020 S. 1641, ECORA Act of 2019

Client expense: $2,930,000 · Firm income: Not reported

HR 1872 The Enhancing Credit Opportunities for Rural America (ECORA) Act S. 1641 ECORA Enhancing Credit Opportunities in Rural America Act Enhancements to Paycheck Protection Program for farmers by allowing gross income calculations Enhancing USDA loan programs Oppose Farm Credit System (FCS) expansion efforts Oppose Livestock Dealer Trust legislation Paycheck Protection Program Producer Flexibility Act Regulatory Oversight of Farm Loans - Support forbearance Support and Recommendations - USDA OneRD Support for Maintaining Crop Insurance Funding

Client expense: $840,000 · Firm income: Not reported

Government targets: Agriculture, Dept of (USDA), Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Federal Emergency Management Agency (FEMA), Federal Housing Finance Agency (FHFA), Federal Reserve System, HOUSE OF REPRESENTATIVES, Office of the Comptroller of the Currency (OCC), SENATE, Small Business Administration (SBA), Treasury, Dept of, White House Office

H.R. 748 CARES Act, Tax Provisions H.R. 1872 Enhancing Credit Opportunities in Rural America Act H.R. 6776 JOBS Credit Act of 2020 H.R. 7894 PPP Small Business Enhancement Act S. 3612 Small Business Expense Protection Act of 2020 Credit Union Tax Exemption Deductibility of Expenses Covered by PPP Loans Net Operating Loss Carrybacks

Client expense: $840,000 · Firm income: Not reported

Government targets: Agriculture, Dept of (USDA), Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Federal Emergency Management Agency (FEMA), Federal Housing Finance Agency (FHFA), Federal Reserve System, HOUSE OF REPRESENTATIVES, Office of the Comptroller of the Currency (OCC), SENATE, Small Business Administration (SBA), Treasury, Dept of, White House Office

Community Bankers Association of Illinois 2020 Federal Policy Priorities - Support The Independent Community Bankers of Americas Legislative and Regulatory Agenda Contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity Completing the Implementation of the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) Support Additional Meaningful Regulatory Relief for Community Banks Oppose Credit Unions Expanded Powers Close the Industrial Loan Company (ILC) Regulatory Loophole Oppose Farm Credit Systems Expanded Powers Support the Federal Reserves Role in Payments System Improvement Support Modernizing the Community Reinvestment Act (CRA) Modify the FDICs Brokered Deposit Rule Support Safe Harbor for Banking Cannabis-Related Businesses Support De Novo Community Bank Formation, the Dual Banking System and Charter Choice Support Sound Principles for GSE Reform Support the Federal Home Loan Banks Support Agriculture and Rural America Support Enhanced Data, Cyber and Payment Card Security (Data Security) Support Consumer Financial Protection Bureau Reform and Meaningful Exemptions for Community Banks Support the Community Bank Positions on Emerging Issues OCCs Special Purpose Fintech National Bank (SPNBs) Fintech Charters FASBs Current Expected Credit Loss Model CFPBs Customer Data Sharing CFPBs Small-Dollar Consumer Lending CFPB's Small Business Data Collection Federal Reserves Modernize Reg CC Finally Address the Risks of Too-Big-To-Fail Banks and Financial Firms to Protect Our Financial System, the Economy, and American Taxpayers from Future Bailouts (House, Senate, CFPB, OCC, FDIC, Federal Reserve, FHFA) Legislation and Regulation - S. 4117 - Paycheck Protection Small Business Forgiveness Act (All Sections) Regarding Paycheck Protection Program (PPP) loans of $150,000 and under qualifying for forgiveness with one-page application (Senate) H.R. 7777 - Paycheck Protection Small Business Forgiveness Act (All Sections) Regarding Paycheck Protection Program (PPP) loans of $150,000 and under provided automatic forgiveness (House) Closing the Industrial Loan Company (ILC) loophole - discussion draft of legislation (House) Closing the Industrial Loan Company (ILC) loophole - Wirecard AG and Wirecard Bank in Germany and similarities with U.S. ILCs and their holding companies (House) Community Bank top priorities for pandemic relief measures - 1) Cosponsor legislation in the Senate and House (S. 4117 and H.R. 7777), which would create a presumption of compliance and forgiveness based on the borrowers certification that the funds were used in accordance with the terms of the program for PPP loans with an original balance of $150,000 or less; 2) Allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses. (S. 3612/H.R. 6821); 3) Support local regions by raising the current bank-qualified municipal bond annual issuance limit to $50 million from $10 million to expedite low-cost funding for local projects; 4) Enact bank capital and accounting relief measures to support borrowers and lenders facing historically challenging circumstances by extending Troubled Debt Restructuring (TDR), suspending the Current Expected Credit Loss (CECL) requirements, and making the 8% Community Bank Leverage Ratio (CBLR) permanent for institutions of $10 billion or less in assets; 5) Create capacity for additional lending by requiring SBA to purchase PPP loan at par; 6) Create a liability safe harbor for businesses from COVID-19-related lawsuits; 7) Support rural America by allowing interest on loans secured by agricultural real estate or primary residences in rural communities to be tax-exempt (ECORA, S. 1641/H.R. 1872), providing direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhance USDA guaranteed lending programs; 8) Expand the Employee Retention Tax Credit (ERTC) created by the CARES Act (H.R. 6776); 9) Enact an Industrial Loan Company moratorium of at least three years on the FDICs approval of deposit insurance applications. (A three-year moratorium was included in the Dodd-Frank Act as an appropriate response to a highly uncertain economic environment); 10) Extend the QM patch to January 2022 to help avoid additional disruption to the housing market. (House and Senate) Second Initiative - Community Bank top priorities for pandemic relief measures - 1) Support Sen. Cramers legislation (S. 4117), which would create a presumption of compliance and forgiveness based on the borrowers certification that the funds were used in accordance with the terms of the program for PPP loans with an original balance of $150,000 or less-allowing business owners to focus on their businesses and the safety of their employees and customers (protections against fraud and misrepresentation still apply). 2) Support Sen. Kings legislation (S. 4171), which would require Treasury or SBA (not a third-party) to create an easy-to-use online loan forgiveness calculator to help clear up what is a very confusing and complex application process. This would ensure borrowers and lenders protection and accuracy. 3) Support Rep. Houlahans legislation (H.R. 7777), which would create a presumption of compliance and forgiveness based on the borrowers certification that the funds were used in accordance with the terms of the program for PPP loans with an original balance of $150,000 or less-allowing business owners to focus on their businesses and the safety of their employees and customers (protections against fraud and misrepresentation still apply). 4) Support Rep. Wagners legislation (H.R. 7413), which would require Treasury or SBA (not a third-party) to create an easy-to-use online loan forgiveness calculator to help clear up what is a very confusing and complex application process. This would ensure borrowers and lenders protection and accuracy. 5) Create capacity for additional lending by requiring SBA to purchase PPP loans at par (minus the amount that has been forgiven). 6) Ensure PPP loans are not included in regulatory asset threshold calculations. If PPP lending causes our assets to exceed certain thresholds, additional regulations and supervision are triggered, causing many community banks to face costly, burdensome and unintended consequences. 7) Support Sen. Cornyns legislation (S. 3612), which would allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses, as they ordinarily would. Without this, the value of a PPP loan is effectively reduced and tax preparation is unnecessarily cumbersome. 8) Support Rep. Holdings legislation (H.R. 6821), which would allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses, as they ordinarily would. Without this, the value of a PPP loan is effectively reduced and tax preparation is unnecessarily cumbersome. 9) Enact bank capital and accounting relief measures to support borrowers and lenders facing historically challenging circumstances by extending TDR, suspending CECL and making the 8% CBLR permanent for institutions of $10 billion or less in assets. Banks strong capitalization at the beginning of the crisis means that capital and accounting could be implemented without compromising safety and soundness. 10) Create a liability safe harbor for businesses from COVID-19-related lawsuits. Community banks and small businesses have every incentive to ensure the personal safety of their employees and customers. Fear of opportunistic class actions or other suits will inhibit the restoration of economic activity. 11) Support rural America by passing Rep. Watkinss ECORA Act (H.R. 1872), which exempts interest on most agricultural loans from taxable income (lowering interest rates for farmers, ranchers and rural homeowners), provides direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhances USDA guaranteed lending programs. (House, Senate) FHFA/Fannie/Freddie .50% residential mortgage guarantee fee increase with a September 1, 2020 implementation date (FHFA, Federal Reserve, OCC, House, Senate) S. 2939 - Eliminating Corporate Shadow Banking Act of 2019 (all Sections) Regarding closing the Industrial Loan Company loophole - consolidated holding company supervision by the Federal Reserve (Senate) Revised FDIC Guidelines for Appeals of Material Supervisory Determinations (FDIC) Letters - Comment Letter to the Federal Deposit Insurance Corporation (FDIC) regarding: Proposed Rule - Parent Companies of Industrial Banks and Industrial Loan Companies; RIN 3064-AF31 (FDIC, House, Federal Reserve) Addendum to Comment Letter to the Federal Deposit Insurance Corporation (FDIC) regarding: Proposed Rule - Parent Companies of Industrial Banks and Industrial Loan Companies; RIN 3064-AF31 (FDIC, House, Federal Reserve) Comment Letter to the National Credit Union Administration (NCUA) regarding: Subordinated Debt; Proposed Rule RIN 3133-AF08 (NCUA) Comment Letter to the Consumer Financial Protection Bureau (CFPB) regarding: Request for Information on Equal Credit Opportunity and Regulation B; Docket No CFPB-2020-0026 (CFPB) Action Alerts - Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) Action Alert regarding FHFA/Fannie/Freddie .50% residential mortgage guarantee fee increase with a September 1, 2020 implementation date (House, Senate) #2 Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) Miscellaneous - OCC proposal to issue payments charters (OCC) Beneficial ownership reporting regulatory relief (with FinCEN - not a community bank responsibility) (House) Postal Service financial services [banking] pilot program (House) Community Reinvestment Act (CRA) modernization (joint rulemaking) (House) Payments System Improvements (Federal Reserve FedNow Service) (House) FinCEN breach of information on Suspicious Activity Reports (SARs) (FDIC) Expiration of time to receive, and delivery of, Economic Impact Payments (EIPs) (House, Senate)

Community Bankers Association of Illinois 2020 Federal Policy Priorities - Support The Independent Community Bankers of Americas Legislative and Regulatory Agenda Contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity Completing the Implementation of the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) Support Additional Meaningful Regulatory Relief for Community Banks Oppose Credit Unions Expanded Powers Close the Industrial Loan Company (ILC) Regulatory Loophole Oppose Farm Credit Systems Expanded Powers Support the Federal Reserves Role in Payments System Improvement Support Modernizing the Community Reinvestment Act (CRA) Modify the FDICs Brokered Deposit Rule Support Safe Harbor for Banking Cannabis-Related Businesses Support De Novo Community Bank Formation, the Dual Banking System and Charter Choice Support Sound Principles for GSE Reform Support the Federal Home Loan Banks Support Agriculture and Rural America Support Enhanced Data, Cyber and Payment Card Security (Data Security) Support Consumer Financial Protection Bureau Reform and Meaningful Exemptions for Community Banks Support the Community Bank Positions on Emerging Issues OCCs Special Purpose Fintech National Bank (SPNBs) Fintech Charters FASBs Current Expected Credit Loss Model CFPBs Customer Data Sharing CFPBs Small-Dollar Consumer Lending CFPB's Small Business Data Collection Federal Reserves Modernize Reg CC Finally Address the Risks of Too-Big-To-Fail Banks and Financial Firms to Protect Our Financial System, the Economy, and American Taxpayers from Future Bailouts (House, Senate, CFPB, OCC, FDIC, Federal Reserve, FHFA) Legislation and Regulation - S. 4117 - Paycheck Protection Small Business Forgiveness Act (All Sections) Regarding Paycheck Protection Program (PPP) loans of $150,000 and under qualifying for forgiveness with one-page application (Senate) H.R. 7777 - Paycheck Protection Small Business Forgiveness Act (All Sections) Regarding Paycheck Protection Program (PPP) loans of $150,000 and under provided automatic forgiveness (House) Closing the Industrial Loan Company (ILC) loophole - discussion draft of legislation (House) Closing the Industrial Loan Company (ILC) loophole - Wirecard AG and Wirecard Bank in Germany and similarities with U.S. ILCs and their holding companies (House) Community Bank top priorities for pandemic relief measures - 1) Cosponsor legislation in the Senate and House (S. 4117 and H.R. 7777), which would create a presumption of compliance and forgiveness based on the borrowers certification that the funds were used in accordance with the terms of the program for PPP loans with an original balance of $150,000 or less; 2) Allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses. (S. 3612/H.R. 6821); 3) Support local regions by raising the current bank-qualified municipal bond annual issuance limit to $50 million from $10 million to expedite low-cost funding for local projects; 4) Enact bank capital and accounting relief measures to support borrowers and lenders facing historically challenging circumstances by extending Troubled Debt Restructuring (TDR), suspending the Current Expected Credit Loss (CECL) requirements, and making the 8% Community Bank Leverage Ratio (CBLR) permanent for institutions of $10 billion or less in assets; 5) Create capacity for additional lending by requiring SBA to purchase PPP loan at par; 6) Create a liability safe harbor for businesses from COVID-19-related lawsuits; 7) Support rural America by allowing interest on loans secured by agricultural real estate or primary residences in rural communities to be tax-exempt (ECORA, S. 1641/H.R. 1872), providing direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhance USDA guaranteed lending programs; 8) Expand the Employee Retention Tax Credit (ERTC) created by the CARES Act (H.R. 6776); 9) Enact an Industrial Loan Company moratorium of at least three years on the FDICs approval of deposit insurance applications. (A three-year moratorium was included in the Dodd-Frank Act as an appropriate response to a highly uncertain economic environment); 10) Extend the QM patch to January 2022 to help avoid additional disruption to the housing market. (House and Senate) Second Initiative - Community Bank top priorities for pandemic relief measures - 1) Support Sen. Cramers legislation (S. 4117), which would create a presumption of compliance and forgiveness based on the borrowers certification that the funds were used in accordance with the terms of the program for PPP loans with an original balance of $150,000 or less-allowing business owners to focus on their businesses and the safety of their employees and customers (protections against fraud and misrepresentation still apply). 2) Support Sen. Kings legislation (S. 4171), which would require Treasury or SBA (not a third-party) to create an easy-to-use online loan forgiveness calculator to help clear up what is a very confusing and complex application process. This would ensure borrowers and lenders protection and accuracy. 3) Support Rep. Houlahans legislation (H.R. 7777), which would create a presumption of compliance and forgiveness based on the borrowers certification that the funds were used in accordance with the terms of the program for PPP loans with an original balance of $150,000 or less-allowing business owners to focus on their businesses and the safety of their employees and customers (protections against fraud and misrepresentation still apply). 4) Support Rep. Wagners legislation (H.R. 7413), which would require Treasury or SBA (not a third-party) to create an easy-to-use online loan forgiveness calculator to help clear up what is a very confusing and complex application process. This would ensure borrowers and lenders protection and accuracy. 5) Create capacity for additional lending by requiring SBA to purchase PPP loans at par (minus the amount that has been forgiven). 6) Ensure PPP loans are not included in regulatory asset threshold calculations. If PPP lending causes our assets to exceed certain thresholds, additional regulations and supervision are triggered, causing many community banks to face costly, burdensome and unintended consequences. 7) Support Sen. Cornyns legislation (S. 3612), which would allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses, as they ordinarily would. Without this, the value of a PPP loan is effectively reduced and tax preparation is unnecessarily cumbersome. 8) Support Rep. Holdings legislation (H.R. 6821), which would allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses, as they ordinarily would. Without this, the value of a PPP loan is effectively reduced and tax preparation is unnecessarily cumbersome. 9) Enact bank capital and accounting relief measures to support borrowers and lenders facing historically challenging circumstances by extending TDR, suspending CECL and making the 8% CBLR permanent for institutions of $10 billion or less in assets. Banks strong capitalization at the beginning of the crisis means that capital and accounting could be implemented without compromising safety and soundness. 10) Create a liability safe harbor for businesses from COVID-19-related lawsuits. Community banks and small businesses have every incentive to ensure the personal safety of their employees and customers. Fear of opportunistic class actions or other suits will inhibit the restoration of economic activity. 11) Support rural America by passing Rep. Watkinss ECORA Act (H.R. 1872), which exempts interest on most agricultural loans from taxable income (lowering interest rates for farmers, ranchers and rural homeowners), provides direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhances USDA guaranteed lending programs. (House, Senate) FHFA/Fannie/Freddie .50% residential mortgage guarantee fee increase with a September 1, 2020 implementation date (FHFA, Federal Reserve, OCC, House, Senate) S. 2939 - Eliminating Corporate Shadow Banking Act of 2019 (all Sections) Regarding closing the Industrial Loan Company loophole - consolidated holding company supervision by the Federal Reserve (Senate) Revised FDIC Guidelines for Appeals of Material Supervisory Determinations (FDIC) Letters - Comment Letter to the Federal Deposit Insurance Corporation (FDIC) regarding: Proposed Rule - Parent Companies of Industrial Banks and Industrial Loan Companies; RIN 3064-AF31 (FDIC, House, Federal Reserve) Addendum to Comment Letter to the Federal Deposit Insurance Corporation (FDIC) regarding: Proposed Rule - Parent Companies of Industrial Banks and Industrial Loan Companies; RIN 3064-AF31 (FDIC, House, Federal Reserve) Comment Letter to the National Credit Union Administration (NCUA) regarding: Subordinated Debt; Proposed Rule RIN 3133-AF08 (NCUA) Comment Letter to the Consumer Financial Protection Bureau (CFPB) regarding: Request for Information on Equal Credit Opportunity and Regulation B; Docket No CFPB-2020-0026 (CFPB) Action Alerts - Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) Action Alert regarding FHFA/Fannie/Freddie .50% residential mortgage guarantee fee increase with a September 1, 2020 implementation date (House, Senate) #2 Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) Miscellaneous - OCC proposal to issue payments charters (OCC) Beneficial ownership reporting regulatory relief (with FinCEN - not a community bank responsibility) (House) Postal Service financial services [banking] pilot program (House) Community Reinvestment Act (CRA) modernization (joint rulemaking) (House) Payments System Improvements (Federal Reserve FedNow Service) (House) FinCEN breach of information on Suspicious Activity Reports (SARs) (FDIC) Expiration of time to receive, and delivery of, Economic Impact Payments (EIPs) (House, Senate)

Community Bankers Association of Illinois 2020 Federal Policy Priorities - Support The Independent Community Bankers of Americas Legislative and Regulatory Agenda Contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity Completing the Implementation of the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) Support Additional Meaningful Regulatory Relief for Community Banks Oppose Credit Unions Expanded Powers Oppose Farm Credit Systems Expanded Powers Support the Federal Reserves Role in Payments System Improvement Support Modernizing the Community Reinvestment Act (CRA) Support Agriculture and Rural America Finally Address the Risks of Too-Big-To-Fail Banks and Financial Firms to Protect Our Financial System, the Economy, and American Taxpayers from Future Bailouts (House, Senate, CFPB, OCC, FDIC, Federal Reserve, FHFA) Legislation and Regulation - Community Bank top priorities for pandemic relief measures - 1) Support local regions by raising the current bank-qualified municipal bond annual issuance limit to $50 million from $10 million to expedite low-cost funding for local projects; 2) Support rural America by allowing interest on loans secured by agricultural real estate or primary residences in rural communities to be tax-exempt (ECORA, S.1641/H.R. 1872), providing direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhance USDA guaranteed lending programs (House and Senate) Second Initiative - Community Bank top priorities for pandemic relief measures - 1) Support rural America by passing Rep. Watkinss ECORA Act (H.R. 1872), which exempts interest on most agricultural loans from taxable income (lowering interest rates for farmers, ranchers and rural homeowners), provides direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhances USDA guaranteed lending programs. (House, Senate) Letters - Comment Letter to the National Credit Union Administration (NCUA) regarding: Subordinated Debt; Proposed Rule RIN 3133-AF08 (NCUA) Action Alerts - Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) #2 Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) Miscellaneous - Community Reinvestment Act (CRA) modernization (joint rulemaking) (House) Payments System Improvements (Federal Reserve FedNow Service) (House)

Community Bankers Association of Illinois 2020 Federal Policy Priorities - Support The Independent Community Bankers of Americas Legislative and Regulatory Agenda Contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity Completing the Implementation of the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) Support Additional Meaningful Regulatory Relief for Community Banks Oppose Credit Unions Expanded Powers Oppose Farm Credit Systems Expanded Powers Support the Federal Reserves Role in Payments System Improvement Support Modernizing the Community Reinvestment Act (CRA) Support Safe Harbor for Banking Cannabis-Related Businesses Support Agriculture and Rural America Support Enhanced Data, Cyber and Payment Card Security (Data Security) Support Consumer Financial Protection Bureau Reform and Meaningful Exemptions for Community Banks Support the Community Bank Positions on Emerging Issues CFPBs Customer Data Sharing CFPBs Small Business Data Collection Finally Address the Risks of Too-Big-To-Fail Banks and Financial Firms to Protect Our Financial System, the Economy, and American Taxpayers from Future Bailouts (House, Senate, CFPB, OCC, FDIC, Federal Reserve, FHFA) Legislation and Regulation - S. 4117 - Paycheck Protection Small Business Forgiveness Act (All Sections) Regarding Paycheck Protection Program (PPP) loans of $150,000 and under qualifying for forgiveness with one-page application (Senate) H.R. 7777 - Paycheck Protection Small Business Forgiveness Act (All Sections) Regarding Paycheck Protection Program (PPP) loans of $150,000 and under provided automatic forgiveness (House) Community Bank top priorities for pandemic relief measures - 1) Cosponsor legislation in the Senate and House (S. 4117 and H.R. 7777), which would create a presumption of compliance and forgiveness based on the borrowers certification that the funds were used in accordance with the terms of the program for PPP loans with an original balance of $150,000 or less; 2) Allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses. (S. 3612/H.R. 6821); 3) Enact bank capital and accounting relief measures to support borrowers and lenders facing historically challenging circumstances by extending Troubled Debt Restructuring (TDR), suspending the Current Expected Credit Loss (CECL) requirements, and making the 8% Community Bank Leverage Ratio (CBLR) permanent for institutions of $10 billion or less in assets; 4) Create capacity for additional lending by requiring SBA to purchase PPP loan at par; 5) Create a liability safe harbor for businesses from COVID-19-related lawsuits; 6) Support rural America by allowing interest on loans secured by agricultural real estate or primary residences in rural communities to be tax-exempt (ECORA, S.1641/H.R. 1872), providing direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhance USDA guaranteed lending programs; 7) Expand the Employee Retention Tax Credit (ERTC) created by the CARES Act (H.R. 6776) (House and Senate) Second Initiative - Community Bank top priorities for pandemic relief measures - 1) Support Sen. Cramers legislation (S. 4117), which would create a presumption of compliance and forgiveness based on the borrowers certification that the funds were used in accordance with the terms of the program for PPP loans with an original balance of $150,000 or less-allowing business owners to focus on their businesses and the safety of their employees and customers (protections against fraud and misrepresentation still apply). 2) Support Sen. Kings legislation (S. 4171), which would require Treasury or SBA (not a third-party) to create an easy-to-use online loan forgiveness calculator to help clear up what is a very confusing and complex application process. This would ensure borrowers and lenders protection and accuracy. 3) Support Rep. Houlahans legislation (H.R. 7777), which would create a presumption of compliance and forgiveness based on the borrowers certification that the funds were used in accordance with the terms of the program for PPP loans with an original balance of $150,000 or less-allowing business owners to focus on their businesses and the safety of their employees and customers (protections against fraud and misrepresentation still apply). 4) Support Rep. Wagners legislation (H.R. 7413), which would require Treasury or SBA (not a third-party) to create an easy-to-use online loan forgiveness calculator to help clear up what is a very confusing and complex application process. This would ensure borrowers and lenders protection and accuracy. 5) Create capacity for additional lending by requiring SBA to purchase PPP loans at par (minus the amount that has been forgiven). 6) Ensure PPP loans are not included in regulatory asset threshold calculations. If PPP lending causes our assets to exceed certain thresholds, additional regulations and supervision are triggered, causing many community banks to face costly, burdensome and unintended consequences. 7) Support Sen. Cornyns legislation (S. 3612), which would allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses, as they ordinarily would. Without this, the value of a PPP loan is effectively reduced and tax preparation is unnecessarily cumbersome. 8) Support Rep. Holdings legislation (H.R. 6821), which would allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses, as they ordinarily would. Without this, the value of a PPP loan is effectively reduced and tax preparation is unnecessarily cumbersome. 9) Enact bank capital and accounting relief measures to support borrowers and lenders facing historically challenging circumstances by extending TDR, suspending CECL and making the 8% CBLR permanent for institutions of $10 billion or less in assets. Banks strong capitalization at the beginning of the crisis means that capital and accounting could be implemented without compromising safety and soundness. 10) Create a liability safe harbor for businesses from COVID-19-related lawsuits. Community banks and small businesses have every incentive to ensure the personal safety of their employees and customers. Fear of opportunistic class actions or other suits will inhibit the restoration of economic activity. 11) Support rural America by passing Rep. Watkinss ECORA Act (H.R. 1872), which exempts interest on most agricultural loans from taxable income (lowering interest rates for farmers, ranchers and rural homeowners), provides direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhances USDA guaranteed lending programs. (House, Senate) Letters - Comment Letter to the National Credit Union Administration (NCUA) regarding: Subordinated Debt; Proposed Rule RIN 3133-AF08 (NCUA) Comment Letter to the Consumer Financial Protection Bureau (CFPB) regarding: Request for Information on Equal Credit Opportunity and Regulation B; Docket No CFPB-2020-0026 (CFPB) Action Alerts - Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) #2 Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) Miscellaneous - OCC proposal to issue payments charters (OCC) Beneficial ownership reporting regulatory relief (with FinCEN - not a community bank responsibility) (House) Postal Service financial services [banking] pilot program (House) Community Reinvestment Act (CRA) modernization (joint rulemaking) (House) Payments System Improvements (Federal Reserve FedNow Service) (House)

Community Bankers Association of Illinois 2020 Federal Policy Priorities - Support The Independent Community Bankers of Americas Legislative and Regulatory Agenda Contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity Completing the Implementation of the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) Support Additional Meaningful Regulatory Relief for Community Banks Oppose Credit Unions Expanded Powers Oppose Farm Credit Systems Expanded Powers Support the Federal Reserves Role in Payments System Improvement Support Modernizing the Community Reinvestment Act (CRA) Support Safe Harbor for Banking Cannabis-Related Businesses Support Sound Principles for GSE Reform Support the Federal Home Loan Banks Support Agriculture and Rural America Support Enhanced Data, Cyber and Payment Card Security (Data Security) Support the Community Bank Positions on Emerging Issues CFPBs Customer Data Sharing CFPB's Small Business Data Collection Finally Address the Risks of Too-Big-To-Fail Banks and Financial Firms to Protect Our Financial System, the Economy, and American Taxpayers from Future Bailouts (House, Senate, CFPB, OCC, FDIC, Federal Reserve, FHFA) Legislation and Regulation - S. 4117 - Paycheck Protection Small Business Forgiveness Act (All Sections) Regarding Paycheck Protection Program (PPP) loans of $150,000 and under qualifying for forgiveness with one-page application (Senate) H.R. 7777 - Paycheck Protection Small Business Forgiveness Act (All Sections) Regarding Paycheck Protection Program (PPP) loans of $150,000 and under provided automatic forgiveness (House) Community Bank top priorities for pandemic relief measures - 1) Cosponsor legislation in the Senate and House (S. 4117 and H.R. 7777), which would create a presumption of compliance and forgiveness based on the borrowers certification that the funds were used in accordance with the terms of the program for PPP loans with an original balance of $150,000 or less; 2) Allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses. (S. 3612/H.R. 6821); 3) Support local regions by raising the current bank-qualified municipal bond annual issuance limit to $50 million from $10 million to expedite low-cost funding for local projects; 4) Enact bank capital and accounting relief measures to support borrowers and lenders facing historically challenging circumstances by extending Troubled Debt Restructuring (TDR), suspending the Current Expected Credit Loss (CECL) requirements, and making the 8% Community Bank Leverage Ratio (CBLR) permanent for institutions of $10 billion or less in assets; 5) Create capacity for additional lending by requiring SBA to purchase PPP loan at par; 6) Create a liability safe harbor for businesses from COVID-19-related lawsuits; 7) Support rural America by allowing interest on loans secured by agricultural real estate or primary residences in rural communities to be tax-exempt (ECORA, S. 1641/H.R. 1872), providing direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhance USDA guaranteed lending programs; 8) Expand the Employee Retention Tax Credit (ERTC) created by the CARES Act (H.R. 6776), 9) Extend the QM patch to January 2022 to help avoid additional disruption to the housing market. (House and Senate) Second Initiative - Community Bank top priorities for pandemic relief measures - 1) Support Sen. Cramers legislation (S. 4117), which would create a presumption of compliance and forgiveness based on the borrowers certification that the funds were used in accordance with the terms of the program for PPP loans with an original balance of $150,000 or less-allowing business owners to focus on their businesses and the safety of their employees and customers (protections against fraud and misrepresentation still apply). 2) Support Sen. Kings legislation (S. 4171), which would require Treasury or SBA (not a third-party) to create an easy-to-use online loan forgiveness calculator to help clear up what is a very confusing and complex application process. This would ensure borrowers and lenders protection and accuracy. 3) Support Rep. Houlahans legislation (H.R. 7777), which would create a presumption of compliance and forgiveness based on the borrowers certification that the funds were used in accordance with the terms of the program for PPP loans with an original balance of $150,000 or less-allowing business owners to focus on their businesses and the safety of their employees and customers (protections against fraud and misrepresentation still apply). 4) Support Rep. Wagners legislation (H.R. 7413), which would require Treasury or SBA (not a third-party) to create an easy-to-use online loan forgiveness calculator to help clear up what is a very confusing and complex application process. This would ensure borrowers and lenders protection and accuracy. 5) Create capacity for additional lending by requiring SBA to purchase PPP loans at par (minus the amount that has been forgiven). 6) Ensure PPP loans are not included in regulatory asset threshold calculations. If PPP lending causes our assets to exceed certain thresholds, additional regulations and supervision are triggered, causing many community banks to face costly, burdensome and unintended consequences. 7) Support Sen. Cornyns legislation (S. 3612), which would allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses, as they ordinarily would. Without this, the value of a PPP loan is effectively reduced and tax preparation is unnecessarily cumbersome. 8) Support Rep. Holdings legislation (H.R. 6821), which would allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses, as they ordinarily would. Without this, the value of a PPP loan is effectively reduced and tax preparation is unnecessarily cumbersome. 9) Enact bank capital and accounting relief measures to support borrowers and lenders facing historically challenging circumstances by extending TDR, suspending CECL and making the 8% CBLR permanent for institutions of $10 billion or less in assets. Banks strong capitalization at the beginning of the crisis means that capital and accounting could be implemented without compromising safety and soundness. 10) Create a liability safe harbor for businesses from COVID-19-related lawsuits. Community banks and small businesses have every incentive to ensure the personal safety of their employees and customers. Fear of opportunistic class actions or other suits will inhibit the restoration of economic activity. 11) Support rural America by passing Rep. Watkinss ECORA Act (H.R. 1872), which exempts interest on most agricultural loans from taxable income (lowering interest rates for farmers, ranchers and rural homeowners), provides direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhances USDA guaranteed lending programs. (House, Senate) Letters - Comment Letter to the National Credit Union Administration (NCUA) regarding: Subordinated Debt; Proposed Rule RIN 3133-AF08 (NCUA) Comment Letter to the Consumer Financial Protection Bureau (CFPB) regarding: Request for Information on Equal Credit Opportunity and Regulation B; Docket No CFPB-2020-0026 (CFPB) Action Alerts - Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) #2 Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) Miscellaneous - OCC proposal to issue payments charters (OCC) Beneficial ownership reporting regulatory relief (with FinCEN - not a community bank responsibility) (House) Postal Service financial services [banking] pilot program (House) Community Reinvestment Act (CRA) modernization (joint rulemaking) (House) Payments System Improvements (Federal Reserve FedNow Service) (House)

Community Bankers Association of Illinois 2020 Federal Policy Priorities - Support The Independent Community Bankers of Americas Legislative and Regulatory Agenda Contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity Completing the Implementation of the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) Support Additional Meaningful Regulatory Relief for Community Banks Oppose Credit Unions Expanded Powers Oppose Farm Credit Systems Expanded Powers Support Modernizing the Community Reinvestment Act (CRA) Finally Address the Risks of Too-Big-To-Fail Banks and Financial Firms to Protect Our Financial System, the Economy, and American Taxpayers from Future Bailouts (House, Senate, CFPB, OCC, FDIC, Federal Reserve, FHFA) Legislation and Regulation - Community Bank top priorities for pandemic relief measures - 1) Allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses. (S. 3612/H.R. 6821); 2) Support local regions by raising the current bank-qualified municipal bond annual issuance limit to $50 million from $10 million to expedite low-cost funding for local projects; 3) Support rural America by allowing interest on loans secured by agricultural real estate or primary residences in rural communities to be tax-exempt (ECORA, S.1641/H.R. 1872), providing direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhance USDA guaranteed lending programs; 4) Expand the Employee Retention Tax Credit (ERTC) created by the CARES Act (H.R. 6776) (House and Senate) Second Initiative - Community Bank top priorities for pandemic relief measures - 1) Support Sen. Cornyns legislation (S. 3612), which would allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses, as they ordinarily would. Without this, the value of a PPP loan is effectively reduced and tax preparation is unnecessarily cumbersome. 2) Support Rep. Holdings legislation (H.R. 6821), which would allow small business PPP borrowers that obtain loan forgiveness to deduct payroll and other business expenses, as they ordinarily would. Without this, the value of a PPP loan is effectively reduced and tax preparation is unnecessarily cumbersome. 3) Support rural America by passing Rep. Watkinss ECORA Act (H.R. 1872), which exempts interest on most agricultural loans from taxable income (lowering interest rates for farmers, ranchers and rural homeowners), provides direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhances USDA guaranteed lending programs. (House, Senate) Letters - Comment Letter to the National Credit Union Administration (NCUA) regarding: Subordinated Debt; Proposed Rule RIN 3133-AF08 (NCUA) Action Alerts - Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) #2 Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) Miscellaneous - Community Reinvestment Act (CRA) modernization (joint rulemaking) (House)

Community Bankers Association of Illinois 2020 Federal Policy Priorities - Support The Independent Community Bankers of Americas Legislative and Regulatory Agenda Contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity Completing the Implementation of the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) Support Additional Meaningful Regulatory Relief for Community Banks Oppose Credit Unions Expanded Powers Support the Federal Reserves Role in Payments System Improvement Support Modernizing the Community Reinvestment Act (CRA) Support Safe Harbor for Banking Cannabis-Related Businesses Support Sound Principles for GSE Reform Support the Federal Home Loan Banks Support Agriculture and Rural America Support Enhanced Data, Cyber and Payment Card Security (Data Security) Support Consumer Financial Protection Bureau Reform and Meaningful Exemptions for Community Banks Support the Community Bank Positions on Emerging Issues CFPBs Customer Data Sharing CFPBs Small-Dollar Consumer Lending Federal Reserves Modernize Reg CC Finally Address the Risks of Too-Big-To-Fail Banks and Financial Firms to Protect Our Financial System, the Economy, and American Taxpayers from Future Bailouts (House, Senate, CFPB, OCC, FDIC, Federal Reserve, FHFA) Legislation and Regulations - Community Bank top priorities for pandemic relief measures - 1) Support rural America by allowing interest on loans secured by agricultural real estate or primary residences in rural communities to be tax-exempt (ECORA, S.1641/H.R. 1872), providing direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhance USDA guaranteed lending programs; 2) Extend the QM patch to January 2022 to help avoid additional disruption to the housing market. (House and Senate) Second Initiative - Community Bank top priorities for pandemic relief measures - 1) Support rural America by passing Rep. Watkinss ECORA Act (H.R. 1872), which exempts interest on most agricultural loans from taxable income (lowering interest rates for farmers, ranchers and rural homeowners), provides direct assistance to farmers, ranchers and others involved in the food sector as needed, and enhances USDA guaranteed lending programs. (House, Senate) FHFA/Fannie/Freddie .50% residential mortgage guarantee fee increase with a September 1, 2020 implementation date (FHFA, Federal Reserve, OCC, House, Senate) Letters - Comment Letter to the National Credit Union Administration (NCUA) regarding: Subordinated Debt; Proposed Rule RIN 3133-AF08 (NCUA) Comment Letter to the Consumer Financial Protection Bureau (CFPB) regarding: Request for Information on Equal Credit Opportunity and Regulation B; Docket No CFPB-2020-0026 (CFPB) Action Alerts - Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) Action Alert regarding FHFA/Fannie/Freddie .50% residential mortgage guarantee fee increase with a September 1, 2020 implementation date (House, Senate) #2 Action Alert regarding urging Illinois Members of Congress to support additional pandemic relief as noted above in the Legislation and Regulation section of this filing (House, Senate) Miscellaneous - OCC proposal to issue payments charters (OCC) Postal Service financial services [banking] pilot program (House) Community Reinvestment Act (CRA) modernization (joint rulemaking)(House) Payments System Improvements (Federal Reserve FedNow Service) (House) Expiration of time to receive, and delivery of, Economic Impact Payments (EIPs) (House, Senate)

S. 1641 and H.R. 1872, the ECORA Act.

Client expense: Not reported · Firm income: Not reported

- Issues related to agricultural mortgage loans; H.R. 1872, S. 1641

Client expense: $310,000 · Firm income: Not reported

Government targets: Commerce, Dept of (DOC), HOUSE OF REPRESENTATIVES, Labor, Dept of (DOL), SENATE, Securities & Exchange Commission (SEC), Treasury, Dept of, U.S. Trade Representative (USTR)

- Issues related to agricultural mortgage loans; H.R. 1872, S. 1641

Client expense: $320,000 · Firm income: Not reported

Government targets: Commerce, Dept of (DOC), HOUSE OF REPRESENTATIVES, Labor, Dept of (DOL), SENATE, Securities & Exchange Commission (SEC), Treasury, Dept of, U.S. Trade Representative (USTR)

H.R. 1872/S. 1641 ECORA Act

Client expense: $390,000 · Firm income: Not reported

Government targets: Consumer Financial Protection Bureau (CFPB), Federal Housing Finance Agency (FHFA), Federal Reserve System, HOUSE OF REPRESENTATIVES, SENATE, Securities & Exchange Commission (SEC), Treasury, Dept of

HR 1872 The Enhancing Credit Opportunities for Rural America (ECORA) Act S. 1641 ECORA Enhancing Credit Opportunities in Rural America Act Exemption of USDA-guaranteed loans from National Environmental Protection Act Market Facilitation Payments Funding Paycheck Protection Program Producer Flexibility Act Regulatory Oversight of Farm Loans - Support forbearance Support for Maintaining Crop Insurance Funding USDA Lending Programs Enhancements

Client expense: $850,000 · Firm income: Not reported

Government targets: Agriculture, Dept of (USDA), Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Federal Emergency Management Agency (FEMA), Federal Housing Finance Agency (FHFA), Federal Reserve System, HOUSE OF REPRESENTATIVES, Housing & Urban Development, Dept of (HUD), Office of the Comptroller of the Currency (OCC), SENATE, Small Business Administration (SBA), Treasury, Dept of, White House Office

H.R. 216 Main Street Tax Certainty Act H.R. 748 CARES Act, Tax Provisions H.R. 1872 Enhancing Credit Opportunities in Rural America Act H.R. 6776 JOBS Credit Act of 2020 S. 1641 Enhancing Credit Opportunities in Rural America Act S. 3548 CARES Act, Tax Provisions S. 3612 Small Business Expense Protection Act of 2020 Credit Union Tax Exemption Deductibility of Expenses Covered by PPP Loans Net Operating Loss Carrybacks S. Corp Reforms

Client expense: $850,000 · Firm income: Not reported

Government targets: Agriculture, Dept of (USDA), Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Federal Emergency Management Agency (FEMA), Federal Housing Finance Agency (FHFA), Federal Reserve System, HOUSE OF REPRESENTATIVES, Housing & Urban Development, Dept of (HUD), Office of the Comptroller of the Currency (OCC), SENATE, Small Business Administration (SBA), Treasury, Dept of, White House Office

Farm Credit System H.R. 1872, the Enhancing Credit Opportunities for Rural America Act S. 1641, ECORA Act of 2019

Client expense: $2,730,000 · Firm income: Not reported

Farm Credit System H.R. 1872, the Enhancing Credit Opportunities for Rural America Act S. 1641, ECORA Act of 2019

Client expense: $2,400,000 · Firm income: Not reported

H.R. 216 Main Street Tax Certainty Act H.R. 748 CARES Act, Tax Provisions H.R. 1872 Enhancing Credit Opportunities in Rural America Act S. 1641 Enhancing Credit Opportunities in Rural America Act S. 3548 CARES Act, Tax Provisions Credit Union Tax Exemption Extension of Tax Filing Deadlines and Payment Deadlines During COVID-19 Emergency Farm Credit System Taxation Net Operating Loss Carrybacks S. Corp Reforms

Client expense: $930,000 · Firm income: Not reported

HR 1872 The Enhancing Credit Opportunities for Rural America (ECORA) Act S. 1641 ECORA Enhancing Credit Opportunities in Rural America Act Exemption of USDA-guaranteed loans from National Environmental Protection Act Food Supply Chain Hemp Market Facilitation Payments Funding Poultry Loans Guaranteed by Small Business Administration Regulatory Oversight of Farm Loans - Support forbearance Support for Maintaining Crop Insurance Funding Support for funding adequate staff levels for USDA program areas USDA Lending Programs Enhancements

Client expense: $930,000 · Firm income: Not reported

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The Federal Deposit Insurance Corporation (FDIC) Deposit Rate Caps (Rate Caps) impact community banks ability to grow and thrive. The flaws in how the Rate Caps are calculated include: not reflecting competitive funding or investment opportunities; the largest banks extensive branch networks and their too-big-to-fail subsidies have an outsized influence on the Rate Caps; promotional and negotiated rates are excluded which present an incomplete picture of the deposit-rate landscape; and credit unions are omitted which wrongly ignores thousands of financial institutions that are similar to community banks. Also, during safety and soundness examinations for well capitalized banks, FDIC examiners are using the flawed Rate Caps as a benchmark in the analysis of bank liquidity, which inevitably results in faulty conclusions that can impact liquidity in a banks CAMELS rating. Without taking a position on the legalization of cannabis, it is a matter of public safety to have a safe harbor from federal sanctions for financial institutions that choose to serve legally-compliant cannabis-related business in states where cannabis is legal. Newly chartered (de novo) community banks are vitally important to maintaining a strong, growing, evolving and vibrant banking profession in the face of industry consolidation. The Federal Deposit Insurance Corporation (FDIC) has indicated a change in direction to finally get back on the right course. These encouraging signs must be closely monitored to assure that many new banks are chartered each year to help maintain the vitality of the community banking profession. Hand in hand with renewed de novo bank formation is the importance of maintaining the dual banking system, which has served our nation well for over 150 years, where chartering and supervision is divided between the federal government and the states. Community banks should be able to choose the banking charter that best fits their unique business model. A banking system with multi-agency (state and federal) regulators and charter choice provides the necessary checks and balances on the immense power of the regulators, as well as improved rulemaking - as the benefit of each agencies expertise and experience is brought to bear on complex and controversial issues. The reform of the housing GSEs remains critically important to the future of the housing market and the U.S. economy. American homeowners have benefited from the critical role Fannie Mae and Freddie Mac have played in helping finance homeownership for many decades. The GSEs have provided a steady, reliable source of funding for home mortgage lending through all economic cycles and in all markets. Community banks depend on the GSEs for direct access to the secondary market without having to sell their loans through larger financial institutions that compete with them. The GSEs allow community banks to retain the servicing of the loans they sell, which helps to keep delinquencies and foreclosures low. And, unlike other private investors or aggregators, the GSEs have a mandate to serve all markets at all times which is critical to maintaining liquidity when the markets are experiencing financial stress. Most community banks are members and shareholders of their regional Federal Home Loan Bank (FHLB). The FHLBs provide short-term liquidity, long-term funding, mortgage-related products, and other financial services in order to help their members provide affordable credit to the local communities they serve. The regional structure, special functions and unique purpose of the FHLBs must be recognized and maintained by the Federal Housing Finance Agency (FHFA). As the Administration and Congress consider reforming the housing finance system, care must be taken not to harm the FHLBs. They must remain healthy, stable and reliable sources of funding for their members . However, given their unique relationship with thousands of community lenders, it may be appropriate for the FHLBs to support their members secondary market activities as aggregators or guarantors for residential mortgage loans, provided their current ability to serve their members is not impeded or threatened. Additionally, the FHFA should not impose an ongoing housing mission asset test on FHLB membership, which would undermine the reliability of FHLB funding. A vibrant agricultural and rural economy is vital to Americas prosperity. The multi-year Farm Bill provided a strong safety net for farmers and ranchers including adequate price-protection programs and enhanced USDA-guaranteed farm and business loan programs. These programs must be protected from further cuts or adverse changes that would discourage farmer and rancher participation or undermine private-sector delivery. Community banks are strong guardians of the security and confidentiality of their customers information and are on the frontline of defending against cyber security threats. Core data security principals in legislation and regulations must include the complete cost of data breaches being borne by that party that caused the breach; all participants in the payment system should be subject to verifiable Gramm-Leach-Bliley Act-like data security standards; a national data security breach and notification standard should replace the current patchwork of state laws; and any new data security standard proposals should ensure that community banks are not burdened with having to reassess existing critical systems, and implement and comply with new regulations, only to achieve the same superior results they currently attain. Regulations promulgated by the Consumer Financial Protection Bureau CFPB must provide community banks with the flexibility to meet the needs of its customers and they must not be burdened with additional and unnecessary regulatory requirements that would prevent them from serving their customers and communities. A one-size-fits-all approach to CFPB regulations harms the successful community bank business model. The CFPB should not be unduly influencing marketplace behavior by targeting financial institutions, products, services, and practices which it deems to be undesirable or inappropriate regardless of what consumers want. In reforming the CFPB, the single Director governance should be replaced by a five-member board or commission; a broader definition of firms that grant credit should be subject to the CFPB rules, they should be robustly supervised and examined; and the focus of any enhanced regulation of financial products should be on the mega banks and financial firms, the unregulated shadow financial industry and emerging Fintech companies. The CFPB, in the Dodd-Frank Act (Section 1022(b)(3)(A), has the statutory authority to exempt any class of providers [community banks] or any products or services from the rules it writes, but to-date the Bureau has been far too reticent to do so. The effective use of this authority will ensure community banks continue to be a healthy alternative to large banks and non-banks for consumers seeking to use responsible financial service providers. The Office of Comptroller of the Currency (OCC) intends to issue special purpose national banking charters to Fintech companies. The OCCs intentions, however, raise many concerns. The very legal authority permitting the OCC to charter Fintechs has been challenged by the Conference of State Bank Supervisors (CSBS) as being fatally flawed. A single regulator acting unilaterally in the chartering, examining, supervising and regulating Fintechs is not in the best interests of the profession, consumers and the economy. Congress must provide the explicit statutory authority to charter Fintechs. If the OCC moves forward, it must guarantee that Fintechs will comply with all banking laws, rules and regulations, and that they be held to the same rigorous safety and soundness standards (e.g., supervision and regulation) that are currently being required of community banks and bank holding companies. Fintechs cannot have the advantages of a national bank charter with limited requirements, regulations and liability. The Financial Accounting Standards Board (FASB) has approved significant revisions to the way community banks reserve for their loan losses (i.e., the Current Expected Credit Loss (CECL) Model). After significant community banker input, FASB agreed to address community banker concerns and revised their Model proposal. The revised CECL is more flexible and scalable for community banks by allowing them to evaluate and adjust loan loss amounts using qualitative factors, historic losses, and their current operating systems such as spreadsheets, narratives and other noncomplex estimation methods. Community bankers and Congress must continue to be vigilant to assure the Model implementation provides a clear, practical and easy-to-use methodologies for calculating expected losses which can be seamlessly incorporated into existing processes for community banks. There is an emerging threat to the security of consumer data from the proliferation of companies seeking to access bank customer account information (i.e., customer data sharing). The Consumer Financial Protection Bureau (CFPB) is responsible under the Dodd-Frank Act to promulgate this rule. While community banks support responsible innovation in financial products and services, the integrity of consumer data and privacy is only as strong as the weakest link. Community banks are financially sound and take great care in protecting consumer privacy, but non-bank entities are typically not well capitalized, have no significant assets and are financially unable to make restitution in the event of a loss. They must none-the-less be held responsible for ensuring the safety of the customer information they are accessing and be able to satisfy the liability for any financial harm which they cause community banks and their consumers. The Consumer Financial Protection Bureaus (CFPB) small-dollar lending rule was intended to address its concerns about consumer abuse caused by payday and vehicle title lenders. The proposed rule was too broadly drafted and would have ensnared sensible community bank small-dollar consumer lending. Some exemptions were granted for community banks after a burdensome rulemaking process. Subsequently, the new CFPB Director proposed eliminating the underwriting provision, and the delay in the payment provision was continued by a U.S. District Judge. A carefully monitoring and appropriate action will be required, as the implementation of the rule unfolds, to minimize any negative impact on community banks small-dollar consumer lending. While community banks represent less than 20% of banking industry assets, they make 60% of the small business loans and 80% of agricultural loans. The requirement for reporting small business data collection stems from Section 1071 of the Dodd-Frank Act and is meant to facilitate the enforcement of fair lending laws in small business lending. The data, however, clearly suggests fair lending is not a problem at community banks as they treat their customers honestly and fairly. The regulatory burden of the collection and reporting requirements fall disproportionately hard on community banks that lack scale and compliance resources, and Section 1071 should either be repealed or community banks should be provided with a meaningful exception. Fraud losses are increasing at community banks and Reg CC needs to keep pace with the technology that banks and their customers are using, both now and particularly as the payments system transitions to real-time. All banks, credit unions, and others who utilize the payments system should be operating on the same level playing field when it comes to return reasons for fraud and acknowledging and communicating about fraud. The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC) Legislation - Proposed legislation to amend the Bank Holding Company Act to regulate industrial bank holding companies (House, Senate, OCC) SAFE Banking Act (H.R. 1595 and S. 1200) (All Sections), cannabis banking safe harbor (House, Senate, OCC) Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House, Senate, OCC) Community Bank Access to Capital (S.1233) (All Sections), exempting banks under certain thresholds from Sarbanes-Oxley internal control attestations and FDIC annual reports, and revises the SECs definition of investor categories (House, Senate, OCC) Corporate Transparency Act of 2019 and Coordinating Oversight/Illicit Cash Act (H.R. 2513&14 and S. 2563) (All Sections), which amends the Bank Secrecy Act (BSA) to require beneficial ownership information to be collected by the Financial Crimes Enforcement Network (FinCEN) (House, Senate, OCC) Preserving Small Business Lending Act of 2020 (H.R. 5574) (All Sections), regarding Section 1071 of the Dodd-Frank Act about small business data collection (House, Senate, OCC) Letters - Letter to The Honorable Senator Mike D. Crapo regarding request for information about Concerns with Cannabis Banking Legislation (Senate) Comment Letter to the Office of the Comptroller of the Currency (OCC) regarding Permissible Interest on Loans that are Sold, Assigned, or Otherwise Transferred; Docket ID OCC-2019-0027 and RIN 1557-AE73 (OCC) Comment Letter to the Consumer Financial Protection Bureau (CFPB) regarding Request for Information Regarding the Integrated Mortgage Disclosure Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation (Z) Rule Assessment; Docket No. CFPB-2019-0055 (CFPB) Letter to the Federal Deposit Insurance Corporation (FDIC) regarding Deposit Insurance Applications for Industrial Loan Companies (FDIC, House) Action Alerts - Action Alert regarding tax-exempt credit unions purchasing taxpaying community banks and Congressional oversight of credit unions (House, Senate) Miscellaneous - Modernization of the CRA, OCC Comment Letter - Reforming the CRA Regulatory Framework, Docket ID OCC-2018-0008 and RIN 1557-AE34 (House) Modernization of the CRA (OCC) Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC) Rural America and Farm Credit System lenders (House, Senate, OCC) Community bank response to Coronavirus (House, Senate) Federal Reserves potential removal of Wells Fargo Asset Cap. (House) Current Expected Credit Loss (CECL) model (OCC)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC) Legislation - SAFE Banking Act (H.R. 1595 and S. 1200) (All Sections), cannabis banking safe harbor (House, Senate, OCC) Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House, Senate, OCC) Letters - None Action Alerts - Action Alert regarding tax-exempt credit unions purchasing taxpaying community banks and Congressional oversight of credit unions (House, Senate) Miscellaneous - Modernization of the CRA, OCC Comment Letter - Reforming the CRA Regulatory Framework, Docket ID OCC-2018-0008 and RIN 1557-AE34 (House) Modernization of the CRA (OCC) Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC) Rural America and Farm Credit System lenders (House, Senate, OCC) Community bank response to Coronavirus (House, Senate)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC) Legislation - SAFE Banking Act (H.R. 1595 and S. 1200) (All Sections), cannabis banking safe harbor (House, Senate, OCC) Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House, Senate, OCC) Letters - None Action Alerts - Action Alert regarding tax-exempt credit unions purchasing taxpaying community banks and Congressional oversight of credit unions (House, Senate) Miscellaneous - Modernization of the CRA, OCC Comment Letter - Reforming the CRA Regulatory Framework, Docket ID OCC-2018-0008 and RIN 1557-AE34 (House) Modernization of the CRA (OCC) Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC) Rural America and Farm Credit System lenders (House, Senate, OCC) Community bank response to Coronavirus (House, Senate)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The reform of the housing GSEs remains critically important to the future of the housing market and the U.S. economy. American homeowners have benefited from the critical role Fannie Mae and Freddie Mac have played in helping finance homeownership for many decades. The GSEs have provided a steady, reliable source of funding for home mortgage lending through all economic cycles and in all markets. Community banks depend on the GSEs for direct access to the secondary market without having to sell their loans through larger financial institutions that compete with them. The GSEs allow community banks to retain the servicing of the loans they sell, which helps to keep delinquencies and foreclosures low. And, unlike other private investors or aggregators, the GSEs have a mandate to serve all markets at all times which is critical to maintaining liquidity when the markets are experiencing financial stress. Most community banks are members and shareholders of their regional Federal Home Loan Bank (FHLB). The FHLBs provide short-term liquidity, long-term funding, mortgage-related products, and other financial services in order to help their members provide affordable credit to the local communities they serve. The regional structure, special functions and unique purpose of the FHLBs must be recognized and maintained by the Federal Housing Finance Agency (FHFA). As the Administration and Congress consider reforming the housing finance system, care must be taken not to harm the FHLBs. They must remain healthy, stable and reliable sources of funding for their members . However, given their unique relationship with thousands of community lenders, it may be appropriate for the FHLBs to support their members secondary market activities as aggregators or guarantors for residential mortgage loans, provided their current ability to serve their members is not impeded or threatened. Additionally, the FHFA should not impose an ongoing housing mission asset test on FHLB membership, which would undermine the reliability of FHLB funding. Community banks are strong guardians of the security and confidentiality of their customers information and are on the frontline of defending against cyber security threats. Core data security principals in legislation and regulations must include the complete cost of data breaches being borne by that party that caused the breach; all participants in the payment system should be subject to verifiable Gramm-Leach-Bliley Act-like data security standards; a national data security breach and notification standard should replace the current patchwork of state laws; and any new data security standard proposals should ensure that community banks are not burdened with having to reassess existing critical systems, and implement and comply with new regulations, only to achieve the same superior results they currently attain. Regulations promulgated by the Consumer Financial Protection Bureau CFPB must provide community banks with the flexibility to meet the needs of its customers and they must not be burdened with additional and unnecessary regulatory requirements that would prevent them from serving their customers and communities. A one-size-fits-all approach to CFPB regulations harms the successful community bank business model. The CFPB should not be unduly influencing marketplace behavior by targeting financial institutions, products, services, and practices which it deems to be undesirable or inappropriate regardless of what consumers want. In reforming the CFPB, the single Director governance should be replaced by a five-member board or commission; a broader definition of firms that grant credit should be subject to the CFPB rules, they should be robustly supervised and examined; and the focus of any enhanced regulation of financial products should be on the mega banks and financial firms, the unregulated shadow financial industry and emerging Fintech companies. The CFPB, in the Dodd-Frank Act (Section 1022(b)(3)(A), has the statutory authority to exempt any class of providers [community banks] or any products or services from the rules it writes, but to-date the Bureau has been far too reticent to do so. The effective use of this authority will ensure community banks continue to be a healthy alternative to large banks and non-banks for consumers seeking to use responsible financial service providers. There is an emerging threat to the security of consumer data from the proliferation of companies seeking to access bank customer account information (i.e., customer data sharing). The Consumer Financial Protection Bureau (CFPB) is responsible under the Dodd-Frank Act to promulgate this rule. While community banks support responsible innovation in financial products and services, the integrity of consumer data and privacy is only as strong as the weakest link. Community banks are financially sound and take great care in protecting consumer privacy, but non-bank entities are typically not well capitalized, have no significant assets and are financially unable to make restitution in the event of a loss. They must none-the-less be held responsible for ensuring the safety of the customer information they are accessing and be able to satisfy the liability for any financial harm which they cause community banks and their consumers. The Consumer Financial Protection Bureaus (CFPB) small-dollar lending rule was intended to address its concerns about consumer abuse caused by payday and vehicle title lenders. The proposed rule was too broadly drafted and would have ensnared sensible community bank small-dollar consumer lending. Some exemptions were granted for community banks after a burdensome rulemaking process. Subsequently, the new CFPB Director proposed eliminating the underwriting provision, and the delay in the payment provision was continued by a U.S. District Judge. A carefully monitoring and appropriate action will be required, as the implementation of the rule unfolds, to minimize any negative impact on community banks small-dollar consumer lending. The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC) Legislation - SAFE Banking Act (H.R. 1595 and S. 1200) (All Sections), cannabis banking safe harbor (House, Senate, OCC) Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House, Senate, OCC) Letters - Comment Letter to the Office of the Comptroller of the Currency (OCC) regarding Permissible Interest on Loans that are Sold, Assigned, or Otherwise Transferred; Docket ID OCC-2019-0027 and RIN 1557-AE73 (OCC) Comment Letter to the Consumer Financial Protection Bureau (CFPB) regarding Request for Information Regarding the Integrated Mortgage Disclosure Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation (Z) Rule Assessment; Docket No. CFPB-2019-0055 (CFPB) Action Alerts - Action Alert regarding tax-exempt credit unions purchasing taxpaying community banks and Congressional oversight of credit unions (House, Senate) Miscellaneous - Modernization of the CRA, OCC Comment Letter - Reforming the CRA Regulatory Framework, Docket ID OCC-2018-0008 and RIN 1557-AE34 (House) Modernization of the CRA (OCC) Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC) Rural America and Farm Credit System lenders (House, Senate, OCC) Community bank response to Coronavirus (House, Senate)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). Community banks are strong guardians of the security and confidentiality of their customers information and are on the frontline of defending against cyber security threats. Core data security principals in legislation and regulations must include the complete cost of data breaches being borne by that party that caused the breach; all participants in the payment system should be subject to verifiable Gramm-Leach-Bliley Act-like data security standards; a national data security breach and notification standard should replace the current patchwork of state laws; and any new data security standard proposals should ensure that community banks are not burdened with having to reassess existing critical systems, and implement and comply with new regulations, only to achieve the same superior results they currently attain. There is an emerging threat to the security of consumer data from the proliferation of companies seeking to access bank customer account information (i.e., customer data sharing). The Consumer Financial Protection Bureau (CFPB) is responsible under the Dodd-Frank Act to promulgate this rule. While community banks support responsible innovation in financial products and services, the integrity of consumer data and privacy is only as strong as the weakest link. Community banks are financially sound and take great care in protecting consumer privacy, but non-bank entities are typically not well capitalized, have no significant assets and are financially unable to make restitution in the event of a loss. They must none-the-less be held responsible for ensuring the safety of the customer information they are accessing and be able to satisfy the liability for any financial harm which they cause community banks and their consumers. While community banks represent less than 20% of banking industry assets, they make 60% of the small business loans and 80% of agricultural loans. The requirement for reporting small business data collection stems from Section 1071 of the Dodd-Frank Act and is meant to facilitate the enforcement of fair lending laws in small business lending. The data, however, clearly suggests fair lending is not a problem at community banks as they treat their customers honestly and fairly. The regulatory burden of the collection and reporting requirements fall disproportionately hard on community banks that lack scale and compliance resources, and Section 1071 should either be repealed or community banks should be provided with a meaningful exception. The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC) Legislation - SAFE Banking Act (H.R. 1595 and S. 1200) (All Sections), cannabis banking safe harbor (House, Senate, OCC) Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House, Senate, OCC) Corporate Transparency Act of 2019 and Coordinating Oversight/Illicit Cash Act (H.R. 2513&14 and S. 2563) (All Sections), which amends the Bank Secrecy Act (BSA) to require beneficial ownership information to be collected by the Financial Crimes Enforcement Network (FinCEN) (House, Senate, OCC) Preserving Small Business Lending Act of 2020 (H.R. 5574) (All Sections), regarding Section 1071 of the Dodd-Frank Act about small business data collection (House, Senate, OCC) Letters - Comment Letter to the Office of the Comptroller of the Currency (OCC) regarding Permissible Interest on Loans that are Sold, Assigned, or Otherwise Transferred; Docket ID OCC-2019-0027 and RIN 1557-AE73 (OCC) Action Alerts - Action Alert regarding tax-exempt credit unions purchasing taxpaying community banks and Congressional oversight of credit unions (House, Senate) Miscellaneous - Modernization of the CRA, OCC Comment Letter - Reforming the CRA Regulatory Framework, Docket ID OCC-2018-0008 and RIN 1557-AE34 (House) Modernization of the CRA (OCC) Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC) Rural America and Farm Credit System lenders (House, Senate, OCC) Community bank response to Coronavirus (House, Senate)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The reform of the housing GSEs remains critically important to the future of the housing market and the U.S. economy. American homeowners have benefited from the critical role Fannie Mae and Freddie Mac have played in helping finance homeownership for many decades. The GSEs have provided a steady, reliable source of funding for home mortgage lending through all economic cycles and in all markets. Community banks depend on the GSEs for direct access to the secondary market without having to sell their loans through larger financial institutions that compete with them. The GSEs allow community banks to retain the servicing of the loans they sell, which helps to keep delinquencies and foreclosures low. And, unlike other private investors or aggregators, the GSEs have a mandate to serve all markets at all times which is critical to maintaining liquidity when the markets are experiencing financial stress. Most community banks are members and shareholders of their regional Federal Home Loan Bank (FHLB). The FHLBs provide short-term liquidity, long-term funding, mortgage-related products, and other financial services in order to help their members provide affordable credit to the local communities they serve. The regional structure, special functions and unique purpose of the FHLBs must be recognized and maintained by the Federal Housing Finance Agency (FHFA). As the Administration and Congress consider reforming the housing finance system, care must be taken not to harm the FHLBs. They must remain healthy, stable and reliable sources of funding for their members . However, given their unique relationship with thousands of community lenders, it may be appropriate for the FHLBs to support their members secondary market activities as aggregators or guarantors for residential mortgage loans, provided their current ability to serve their members is not impeded or threatened. Additionally, the FHFA should not impose an ongoing housing mission asset test on FHLB membership, which would undermine the reliability of FHLB funding. A vibrant agricultural and rural economy is vital to Americas prosperity. The multi-year Farm Bill provided a strong safety net for farmers and ranchers including adequate price-protection programs and enhanced USDA-guaranteed farm and business loan programs. These programs must be protected from further cuts or adverse changes that would discourage farmer and rancher participation or undermine private-sector delivery. Community banks are strong guardians of the security and confidentiality of their customers information and are on the frontline of defending against cyber security threats. Core data security principals in legislation and regulations must include the complete cost of data breaches being borne by that party that caused the breach; all participants in the payment system should be subject to verifiable Gramm-Leach-Bliley Act-like data security standards; a national data security breach and notification standard should replace the current patchwork of state laws; and any new data security standard proposals should ensure that community banks are not burdened with having to reassess existing critical systems, and implement and comply with new regulations, only to achieve the same superior results they currently attain. While community banks represent less than 20% of banking industry assets, they make 60% of the small business loans and 80% of agricultural loans. The requirement for reporting small business data collection stems from Section 1071 of the Dodd-Frank Act and is meant to facilitate the enforcement of fair lending laws in small business lending. The data, however, clearly suggests fair lending is not a problem at community banks as they treat their customers honestly and fairly. The regulatory burden of the collection and reporting requirements fall disproportionately hard on community banks that lack scale and compliance resources, and Section 1071 should either be repealed or community banks should be provided with a meaningful exception. The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC) Legislation - SAFE Banking Act (H.R. 1595 and S. 1200) (All Sections), cannabis banking safe harbor (House, Senate, OCC) Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House, Senate, OCC) Corporate Transparency Act of 2019 and Coordinating Oversight/Illicit Cash Act (H.R. 2513&14 and S. 2563) (All Sections), which amends the Bank Secrecy Act (BSA) to require beneficial ownership information to be collected by the Financial Crimes Enforcement Network (FinCEN) (House, Senate, OCC) Preserving Small Business Lending Act of 2020 (H.R. 5574) (All Sections), regarding Section 1071 of the Dodd-Frank Act about small business data collection (House, Senate, OCC) Letters - Letter to The Honorable Senator Mike D. Crapo regarding request for information about Concerns with Cannabis Banking Legislation (Senate) Comment Letter to the Office of the Comptroller of the Currency (OCC) regarding Permissible Interest on Loans that are Sold, Assigned, or Otherwise Transferred; Docket ID OCC-2019-0027 and RIN 1557-AE73 (OCC) Action Alerts - Action Alert regarding tax-exempt credit unions purchasing taxpaying community banks and Congressional oversight of credit unions (House, Senate) Miscellaneous - Modernization of the CRA, OCC Comment Letter - Reforming the CRA Regulatory Framework, Docket ID OCC-2018-0008 and RIN 1557-AE34 (House) Modernization of the CRA (OCC) Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC) Rural America and Farm Credit System lenders (House, Senate, OCC) Community bank response to Coronavirus (House, Senate)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The Federal Deposit Insurance Corporation (FDIC) Deposit Rate Caps (Rate Caps) impact community banks ability to grow and thrive. The flaws in how the Rate Caps are calculated include: not reflecting competitive funding or investment opportunities; the largest banks extensive branch networks and their too-big-to-fail subsidies have an outsized influence on the Rate Caps; promotional and negotiated rates are excluded which present an incomplete picture of the deposit-rate landscape; and credit unions are omitted which wrongly ignores thousands of financial institutions that are similar to community banks. Also, during safety and soundness examinations for well capitalized banks, FDIC examiners are using the flawed Rate Caps as a benchmark in the analysis of bank liquidity, which inevitably results in faulty conclusions that can impact liquidity in a banks CAMELS rating. Without taking a position on the legalization of cannabis, it is a matter of public safety to have a safe harbor from federal sanctions for financial institutions that choose to serve legally-compliant cannabis-related business in states where cannabis is legal. Newly chartered (de novo) community banks are vitally important to maintaining a strong, growing, evolving and vibrant banking profession in the face of industry consolidation. The Federal Deposit Insurance Corporation (FDIC) has indicated a change in direction to finally get back on the right course. These encouraging signs must be closely monitored to assure that many new banks are chartered each year to help maintain the vitality of the community banking profession. Hand in hand with renewed de novo bank formation is the importance of maintaining the dual banking system, which has served our nation well for over 150 years, where chartering and supervision is divided between the federal government and the states. Community banks should be able to choose the banking charter that best fits their unique business model. A banking system with multi-agency (state and federal) regulators and charter choice provides the necessary checks and balances on the immense power of the regulators, as well as improved rulemaking - as the benefit of each agencies expertise and experience is brought to bear on complex and controversial issues. The reform of the housing GSEs remains critically important to the future of the housing market and the U.S. economy. American homeowners have benefited from the critical role Fannie Mae and Freddie Mac have played in helping finance homeownership for many decades. The GSEs have provided a steady, reliable source of funding for home mortgage lending through all economic cycles and in all markets. Community banks depend on the GSEs for direct access to the secondary market without having to sell their loans through larger financial institutions that compete with them. The GSEs allow community banks to retain the servicing of the loans they sell, which helps to keep delinquencies and foreclosures low. And, unlike other private investors or aggregators, the GSEs have a mandate to serve all markets at all times which is critical to maintaining liquidity when the markets are experiencing financial stress. Most community banks are members and shareholders of their regional Federal Home Loan Bank (FHLB). The FHLBs provide short-term liquidity, long-term funding, mortgage-related products, and other financial services in order to help their members provide affordable credit to the local communities they serve. The regional structure, special functions and unique purpose of the FHLBs must be recognized and maintained by the Federal Housing Finance Agency (FHFA). As the Administration and Congress consider reforming the housing finance system, care must be taken not to harm the FHLBs. They must remain healthy, stable and reliable sources of funding for their members . However, given their unique relationship with thousands of community lenders, it may be appropriate for the FHLBs to support their members secondary market activities as aggregators or guarantors for residential mortgage loans, provided their current ability to serve their members is not impeded or threatened. Additionally, the FHFA should not impose an ongoing housing mission asset test on FHLB membership, which would undermine the reliability of FHLB funding. A vibrant agricultural and rural economy is vital to Americas prosperity. The multi-year Farm Bill provided a strong safety net for farmers and ranchers including adequate price-protection programs and enhanced USDA-guaranteed farm and business loan programs. These programs must be protected from further cuts or adverse changes that would discourage farmer and rancher participation or undermine private-sector delivery. Community banks are strong guardians of the security and confidentiality of their customers information and are on the frontline of defending against cyber security threats. Core data security principals in legislation and regulations must include the complete cost of data breaches being borne by that party that caused the breach; all participants in the payment system should be subject to verifiable Gramm-Leach-Bliley Act-like data security standards; a national data security breach and notification standard should replace the current patchwork of state laws; and any new data security standard proposals should ensure that community banks are not burdened with having to reassess existing critical systems, and implement and comply with new regulations, only to achieve the same superior results they currently attain. Regulations promulgated by the Consumer Financial Protection Bureau CFPB must provide community banks with the flexibility to meet the needs of its customers and they must not be burdened with additional and unnecessary regulatory requirements that would prevent them from serving their customers and communities. A one-size-fits-all approach to CFPB regulations harms the successful community bank business model. The CFPB should not be unduly influencing marketplace behavior by targeting financial institutions, products, services, and practices which it deems to be undesirable or inappropriate regardless of what consumers want. In reforming the CFPB, the single Director governance should be replaced by a five-member board or commission; a broader definition of firms that grant credit should be subject to the CFPB rules, they should be robustly supervised and examined; and the focus of any enhanced regulation of financial products should be on the mega banks and financial firms, the unregulated shadow financial industry and emerging Fintech companies. The CFPB, in the Dodd-Frank Act (Section 1022(b)(3)(A), has the statutory authority to exempt any class of providers [community banks] or any products or services from the rules it writes, but to-date the Bureau has been far too reticent to do so. The effective use of this authority will ensure community banks continue to be a healthy alternative to large banks and non-banks for consumers seeking to use responsible financial service providers. The Office of Comptroller of the Currency (OCC) intends to issue special purpose national banking charters to Fintech companies. The OCCs intentions, however, raise many concerns. The very legal authority permitting the OCC to charter Fintechs has been challenged by the Conference of State Bank Supervisors (CSBS) as being fatally flawed. A single regulator acting unilaterally in the chartering, examining, supervising and regulating Fintechs is not in the best interests of the profession, consumers and the economy. Congress must provide the explicit statutory authority to charter Fintechs. If the OCC moves forward, it must guarantee that Fintechs will comply with all banking laws, rules and regulations, and that they be held to the same rigorous safety and soundness standards (e.g., supervision and regulation) that are currently being required of community banks and bank holding companies. Fintechs cannot have the advantages of a national bank charter with limited requirements, regulations and liability. The Financial Accounting Standards Board (FASB) has approved significant revisions to the way community banks reserve for their loan losses (i.e., the Current Expected Credit Loss (CECL) Model). After significant community banker input, FASB agreed to address community banker concerns and revised their Model proposal. The revised CECL is more flexible and scalable for community banks by allowing them to evaluate and adjust loan loss amounts using qualitative factors, historic losses, and their current operating systems such as spreadsheets, narratives and other noncomplex estimation methods. Community bankers and Congress must continue to be vigilant to assure the Model implementation provides a clear, practical and easy-to-use methodologies for calculating expected losses which can be seamlessly incorporated into existing processes for community banks. There is an emerging threat to the security of consumer data from the proliferation of companies seeking to access bank customer account information (i.e., customer data sharing). The Consumer Financial Protection Bureau (CFPB) is responsible under the Dodd-Frank Act to promulgate this rule. While community banks support responsible innovation in financial products and services, the integrity of consumer data and privacy is only as strong as the weakest link. Community banks are financially sound and take great care in protecting consumer privacy, but non-bank entities are typically not well capitalized, have no significant assets and are financially unable to make restitution in the event of a loss. They must none-the-less be held responsible for ensuring the safety of the customer information they are accessing and be able to satisfy the liability for any financial harm which they cause community banks and their consumers. The Consumer Financial Protection Bureaus (CFPB) small-dollar lending rule was intended to address its concerns about consumer abuse caused by payday and vehicle title lenders. The proposed rule was too broadly drafted and would have ensnared sensible community bank small-dollar consumer lending. Some exemptions were granted for community banks after a burdensome rulemaking process. Subsequently, the new CFPB Director proposed eliminating the underwriting provision, and the delay in the payment provision was continued by a U.S. District Judge. A carefully monitoring and appropriate action will be required, as the implementation of the rule unfolds, to minimize any negative impact on community banks small-dollar consumer lending. While community banks represent less than 20% of banking industry assets, they make 60% of the small business loans and 80% of agricultural loans. The requirement for reporting small business data collection stems from Section 1071 of the Dodd-Frank Act and is meant to facilitate the enforcement of fair lending laws in small business lending. The data, however, clearly suggests fair lending is not a problem at community banks as they treat their customers honestly and fairly. The regulatory burden of the collection and reporting requirements fall disproportionately hard on community banks that lack scale and compliance resources, and Section 1071 should either be repealed or community banks should be provided with a meaningful exception. Fraud losses are increasing at community banks and Reg CC needs to keep pace with the technology that banks and their customers are using, both now and particularly as the payments system transitions to real-time. All banks, credit unions, and others who utilize the payments system should be operating on the same level playing field when it comes to return reasons for fraud and acknowledging and communicating about fraud. The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC) Legislation - Proposed legislation to amend the Bank Holding Company Act to regulate industrial bank holding companies (House, Senate, OCC) SAFE Banking Act (H.R. 1595 and S. 1200) (All Sections), cannabis banking safe harbor (House, Senate, OCC) Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House, Senate, OCC) Community Bank Access to Capital (S.1233) (All Sections), exempting banks under certain thresholds from Sarbanes-Oxley internal control attestations and FDIC annual reports, and revises the SECs definition of investor categories (House, Senate, OCC) Corporate Transparency Act of 2019 and Coordinating Oversight/Illicit Cash Act (H.R. 2513&14 and S. 2563) (All Sections), which amends the Bank Secrecy Act (BSA) to require beneficial ownership information to be collected by the Financial Crimes Enforcement Network (FinCEN) (House, Senate, OCC) Preserving Small Business Lending Act of 2020 (H.R. 5574) (All Sections), regarding Section 1071 of the Dodd-Frank Act about small business data collection (House, Senate, OCC) Letters - Letter to The Honorable Senator Mike D. Crapo regarding request for information about Concerns with Cannabis Banking Legislation (Senate) Comment Letter to the Office of the Comptroller of the Currency (OCC) regarding Permissible Interest on Loans that are Sold, Assigned, or Otherwise Transferred; Docket ID OCC-2019-0027 and RIN 1557-AE73 (OCC) Comment Letter to the Consumer Financial Protection Bureau (CFPB) regarding Request for Information Regarding the Integrated Mortgage Disclosure Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation (Z) Rule Assessment; Docket No. CFPB-2019-0055 (CFPB) Letter to the Federal Deposit Insurance Corporation (FDIC) regarding Deposit Insurance Applications for Industrial Loan Companies (FDIC, House) Action Alerts - Action Alert regarding tax-exempt credit unions purchasing taxpaying community banks and Congressional oversight of credit unions (House, Senate) Miscellaneous - Modernization of the CRA, OCC Comment Letter - Reforming the CRA Regulatory Framework, Docket ID OCC-2018-0008 and RIN 1557-AE34 (House) Modernization of the CRA (OCC) Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC) Rural America and Farm Credit System lenders (House, Senate, OCC) Community bank response to Coronavirus (House, Senate) Federal Reserves potential removal of Wells Fargo Asset Cap. (House) Current Expected Credit Loss (CECL) model (OCC)

Farm Credit System H.R. 1872, the Enhancing Credit Opportunities for Rural America Act S. 1641, ECORA Act of 2019

Client expense: $2,435,000 · Firm income: Not reported

H.R. 216 Main Street Tax Certainty Act H.R. 1872 Enhancing Credit Opportunities in Rural America Act S. 1641 Enhancing Credit Opportunities in Rural America Act Credit Union Tax Exemption Farm Credit System Taxation S. Corp Reforms

Client expense: $1,170,000 · Firm income: Not reported

Government targets: Agriculture, Dept of (USDA), Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Federal Emergency Management Agency (FEMA), Federal Housing Finance Agency (FHFA), Federal Reserve System, HOUSE OF REPRESENTATIVES, Internal Revenue Service (IRS), Natl Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), SENATE, Small Business Administration (SBA), Treasury, Dept of, White House Office

HR 1872 The Enhancing Credit Opportunities for Rural America (ECORA) Act S. 1641 ECORA Enhancing Credit Opportunities in Rural America Act Crop Insurance Farm Credit System Investment Authorities Funding for USDA Guaranteed Loans Hemp Opposition to the Farm Credit System Buying USDA Loan Guarantees Poultry Loans Guaranteed by Small Business Administration Regulatory Oversight of Farm Loans - Support forbearance Support for Maintaining Crop Insurance Funding Support for funding adequate staff levels for USDA program areas

Client expense: $1,170,000 · Firm income: Not reported

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC, CFPB) Legislation - Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House and Senate, OCC, CFPB) Letters - Comment Letter to the National Credit Union Administration (NCUA) regarding proposed rule about serving core-based/urban statistical areas (NCUA) Action Alerts - Action Alert regarding the National Credit Union Administration (NCUA) proposed rule about serving core-based/urban statistical areas (NCUA) Miscellaneous - Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC, CFPB)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The reform of the housing GSEs remains critically important to the future of the housing market and the U.S. economy. American homeowners have benefited from the critical role Fannie Mae and Freddie Mac have played in helping finance homeownership for many decades. The GSEs have provided a steady, reliable source of funding for home mortgage lending through all economic cycles and in all markets. Community banks depend on the GSEs for direct access to the secondary market without having to sell their loans through larger financial institutions that compete with them. The GSEs allow community banks to retain the servicing of the loans they sell, which helps to keep delinquencies and foreclosures low. And, unlike other private investors or aggregators, the GSEs have a mandate to serve all markets at all times which is critical to maintaining liquidity when the markets are experiencing financial stress. Most community banks are members and shareholders of their regional Federal Home Loan Bank (FHLB). The FHLBs provide short-term liquidity, long-term funding, mortgage-related products, and other financial services in order to help their members provide affordable credit to the local communities they serve. The regional structure, special functions and unique purpose of the FHLBs must be recognized and maintained by the Federal Housing Finance Agency (FHFA). As the Administration and Congress consider reforming the housing finance system, care must be taken not to harm the FHLBs. They must remain healthy, stable and reliable sources of funding for their members . However, given their unique relationship with thousands of community lenders, it may be appropriate for the FHLBs to support their members secondary market activities as aggregators or guarantors for residential mortgage loans, provided their current ability to serve their members is not impeded or threatened. Additionally, the FHFA should not impose an ongoing housing mission asset test on FHLB membership, which would undermine the reliability of FHLB funding. Community banks are strong guardians of the security and confidentiality of their customers information and are on the frontline of defending against cyber security threats. Core data security principals in legislation and regulations must include the complete cost of data breaches being borne by that party that caused the breach; all participants in the payment system should be subject to verifiable Gramm-Leach-Bliley Act-like data security standards; a national data security breach and notification standard should replace the current patchwork of state laws; and any new data security standard proposals should ensure that community banks are not burdened with having to reassess existing critical systems, and implement and comply with new regulations, only to achieve the same superior results they currently attain. Regulations promulgated by the Consumer Financial Protection Bureau CFPB must provide community banks with the flexibility to meet the needs of its customers and they must not be burdened with additional and unnecessary regulatory requirements that would prevent them from serving their customers and communities. A one-size-fits-all approach to CFPB regulations harms the successful community bank business model. The CFPB should not be unduly influencing marketplace behavior by targeting financial institutions, products, services, and practices which it deems to be undesirable or inappropriate regardless of what consumers want. In reforming the CFPB, the single Director governance should be replaced by a five-member board or commission; a broader definition of firms that grant credit should be subject to the CFPB rules, they should be robustly supervised and examined; and the focus of any enhanced regulation of financial products should be on the mega banks and financial firms, the unregulated shadow financial industry and emerging Fintech companies. The CFPB, in the Dodd-Frank Act (Section 1022(b)(3)(A), has the statutory authority to exempt any class of providers [community banks] or any products or services from the rules it writes, but to-date the Bureau has been far too reticent to do so. The effective use of this authority will ensure community banks continue to be a healthy alternative to large banks and non-banks for consumers seeking to use responsible financial service providers. There is an emerging threat to the security of consumer data from the proliferation of companies seeking to access bank customer account information (i.e., customer data sharing). The Consumer Financial Protection Bureau (CFPB) is responsible under the Dodd-Frank Act to promulgate this rule. While community banks support responsible innovation in financial products and services, the integrity of consumer data and privacy is only as strong as the weakest link. Community banks are financially sound and take great care in protecting consumer privacy, but non-bank entities are typically not well capitalized, have no significant assets and are financially unable to make restitution in the event of a loss. They must none-the-less be held responsible for ensuring the safety of the customer information they are accessing and be able to satisfy the liability for any financial harm which they cause community banks and their consumers. The Consumer Financial Protection Bureaus (CFPB) small-dollar lending rule was intended to address its concerns about consumer abuse caused by payday and vehicle title lenders. The proposed rule was too broadly drafted and would have ensnared sensible community bank small-dollar consumer lending. Some exemptions were granted for community banks after a burdensome rulemaking process. Subsequently, the new CFPB Director proposed eliminating the underwriting provision, and the delay in the payment provision was continued by a U.S. District Judge. A carefully monitoring and appropriate action will be required, as the implementation of the rule unfolds, to minimize any negative impact on community banks small-dollar consumer lending. The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC, CFPB) Legislation - Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House and Senate, OCC, CFPB) Letters - Comment Letter to the Department of Housing and Urban Development (HUD) regarding HUDs implementation of the Fair Housing Acts Disparate Impact standard; Docket No FR-6111-P-02 and RIN 2529-AA98 (HUD) Comment Letter to the National Credit Union Administration (NCUA) regarding proposed rule about serving core-based/urban statistical areas (NCUA) Action Alerts - Action Alert regarding proposal to increase the Home Mortgage Disclosure Act (HMDA) thresholds for collecting and reporting data (CFPB) Action Alert regarding the National Credit Union Administration (NCUA) proposed rule about serving core-based/urban statistical areas (NCUA) Miscellaneous - Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC, CFPB)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The Federal Deposit Insurance Corporation (FDIC) Deposit Rate Caps (Rate Caps) impact community banks ability to grow and thrive. The flaws in how the Rate Caps are calculated include: not reflecting competitive funding or investment opportunities; the largest banks extensive branch networks and their too-big-to-fail subsidies have an outsized influence on the Rate Caps; promotional and negotiated rates are excluded which present an incomplete picture of the deposit-rate landscape; and credit unions are omitted which wrongly ignores thousands of financial institutions that are similar to community banks. Also, during safety and soundness examinations for well capitalized banks, FDIC examiners are using the flawed Rate Caps as a benchmark in the analysis of bank liquidity, which inevitably results in faulty conclusions that can impact liquidity in a banks CAMELS rating. Without taking a position on the legalization of cannabis, it is a matter of public safety to have a safe harbor from federal sanctions for financial institutions that choose to serve legally-compliant cannabis-related business in states where cannabis is legal. Newly chartered (de novo) community banks are vitally important to maintaining a strong, growing, evolving and vibrant banking profession in the face of industry consolidation. The Federal Deposit Insurance Corporation (FDIC) has indicated a change in direction to finally get back on the right course. These encouraging signs must be closely monitored to assure that many new banks are chartered each year to help maintain the vitality of the community banking profession. Hand in hand with renewed de novo bank formation is the importance of maintaining the dual banking system, which has served our nation well for over 150 years, where chartering and supervision is divided between the federal government and the states. Community banks should be able to choose the banking charter that best fits their unique business model. A banking system with multi-agency (state and federal) regulators and charter choice provides the necessary checks and balances on the immense power of the regulators, as well as improved rulemaking - as the benefit of each agencies expertise and experience is brought to bear on complex and controversial issues. The reform of the housing GSEs remains critically important to the future of the housing market and the U.S. economy. American homeowners have benefited from the critical role Fannie Mae and Freddie Mac have played in helping finance homeownership for many decades. The GSEs have provided a steady, reliable source of funding for home mortgage lending through all economic cycles and in all markets. Community banks depend on the GSEs for direct access to the secondary market without having to sell their loans through larger financial institutions that compete with them. The GSEs allow community banks to retain the servicing of the loans they sell, which helps to keep delinquencies and foreclosures low. And, unlike other private investors or aggregators, the GSEs have a mandate to serve all markets at all times which is critical to maintaining liquidity when the markets are experiencing financial stress. Most community banks are members and shareholders of their regional Federal Home Loan Bank (FHLB). The FHLBs provide short-term liquidity, long-term funding, mortgage-related products, and other financial services in order to help their members provide affordable credit to the local communities they serve. The regional structure, special functions and unique purpose of the FHLBs must be recognized and maintained by the Federal Housing Finance Agency (FHFA). As the Administration and Congress consider reforming the housing finance system, care must be taken not to harm the FHLBs. They must remain healthy, stable and reliable sources of funding for their members . However, given their unique relationship with thousands of community lenders, it may be appropriate for the FHLBs to support their members secondary market activities as aggregators or guarantors for residential mortgage loans, provided their current ability to serve their members is not impeded or threatened. Additionally, the FHFA should not impose an ongoing housing mission asset test on FHLB membership, which would undermine the reliability of FHLB funding. A vibrant agricultural and rural economy is vital to Americas prosperity. The multi-year Farm Bill provided a strong safety net for farmers and ranchers including adequate price-protection programs and enhanced USDA-guaranteed farm and business loan programs. These programs must be protected from further cuts or adverse changes that would discourage farmer and rancher participation or undermine private-sector delivery. Community banks are strong guardians of the security and confidentiality of their customers information and are on the frontline of defending against cyber security threats. Core data security principals in legislation and regulations must include the complete cost of data breaches being borne by that party that caused the breach; all participants in the payment system should be subject to verifiable Gramm-Leach-Bliley Act-like data security standards; a national data security breach and notification standard should replace the current patchwork of state laws; and any new data security standard proposals should ensure that community banks are not burdened with having to reassess existing critical systems, and implement and comply with new regulations, only to achieve the same superior results they currently attain. Regulations promulgated by the Consumer Financial Protection Bureau CFPB must provide community banks with the flexibility to meet the needs of its customers and they must not be burdened with additional and unnecessary regulatory requirements that would prevent them from serving their customers and communities. A one-size-fits-all approach to CFPB regulations harms the successful community bank business model. The CFPB should not be unduly influencing marketplace behavior by targeting financial institutions, products, services, and practices which it deems to be undesirable or inappropriate regardless of what consumers want. In reforming the CFPB, the single Director governance should be replaced by a five-member board or commission; a broader definition of firms that grant credit should be subject to the CFPB rules, they should be robustly supervised and examined; and the focus of any enhanced regulation of financial products should be on the mega banks and financial firms, the unregulated shadow financial industry and emerging Fintech companies. The CFPB, in the Dodd-Frank Act (Section 1022(b)(3)(A), has the statutory authority to exempt any class of providers [community banks] or any products or services from the rules it writes, but to-date the Bureau has been far too reticent to do so. The effective use of this authority will ensure community banks continue to be a healthy alternative to large banks and non-banks for consumers seeking to use responsible financial service providers. The Office of Comptroller of the Currency (OCC) intends to issue special purpose national banking charters to Fintech companies. The OCCs intentions, however, raise many concerns. The very legal authority permitting the OCC to charter Fintechs has been challenged by the Conference of State Bank Supervisors (CSBS) as being fatally flawed. A single regulator acting unilaterally in the chartering, examining, supervising and regulating Fintechs is not in the best interests of the profession, consumers and the economy. Congress must provide the explicit statutory authority to charter Fintechs. If the OCC moves forward, it must guarantee that Fintechs will comply with all banking laws, rules and regulations, and that they be held to the same rigorous safety and soundness standards (e.g., supervision and regulation) that are currently being required of community banks and bank holding companies. Fintechs cannot have the advantages of a national bank charter with limited requirements, regulations and liability. The Financial Accounting Standards Board (FASB) has approved significant revisions to the way community banks reserve for their loan losses (i.e., the Current Expected Credit Loss (CECL) Model). After significant community banker input, FASB agreed to address community banker concerns and revised their Model proposal. The revised CECL is more flexible and scalable for community banks by allowing them to evaluate and adjust loan loss amounts using qualitative factors, historic losses, and their current operating systems such as spreadsheets, narratives and other noncomplex estimation methods. Community bankers and Congress must continue to be vigilant to assure the Model implementation provides a clear, practical and easy-to-use methodologies for calculating expected losses which can be seamlessly incorporated into existing processes for community banks. There is an emerging threat to the security of consumer data from the proliferation of companies seeking to access bank customer account information (i.e., customer data sharing). The Consumer Financial Protection Bureau (CFPB) is responsible under the Dodd-Frank Act to promulgate this rule. While community banks support responsible innovation in financial products and services, the integrity of consumer data and privacy is only as strong as the weakest link. Community banks are financially sound and take great care in protecting consumer privacy, but non-bank entities are typically not well capitalized, have no significant assets and are financially unable to make restitution in the event of a loss. They must none-the-less be held responsible for ensuring the safety of the customer information they are accessing and be able to satisfy the liability for any financial harm which they cause community banks and their consumers. The Consumer Financial Protection Bureaus (CFPB) small-dollar lending rule was intended to address its concerns about consumer abuse caused by payday and vehicle title lenders. The proposed rule was too broadly drafted and would have ensnared sensible community bank small-dollar consumer lending. Some exemptions were granted for community banks after a burdensome rulemaking process. Subsequently, the new CFPB Director proposed eliminating the underwriting provision, and the delay in the payment provision was continued by a U.S. District Judge. A carefully monitoring and appropriate action will be required, as the implementation of the rule unfolds, to minimize any negative impact on community banks small-dollar consumer lending. While community banks represent less than 20% of banking industry assets, they make 60% of the small business loans and 80% of agricultural loans. The requirement for reporting small business data collection stems from Section 1071 of the Dodd-Frank Act and is meant to facilitate the enforcement of fair lending laws in small business lending. The data, however, clearly suggests fair lending is not a problem at community banks as they treat their customers honestly and fairly. The regulatory burden of the collection and reporting requirements fall disproportionately hard on community banks that lack scale and compliance resources, and Section 1071 should either be repealed or community banks should be provided with a meaningful exception. Fraud losses are increasing at community banks and Reg CC needs to keep pace with the technology that banks and their customers are using, both now and particularly as the payments system transitions to real-time. All banks, credit unions, and others who utilize the payments system should be operating on the same level playing field when it comes to return reasons for fraud and acknowledging and communicating about fraud. The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC, Federal Reserve, CFPB) Legislation - Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House and Senate, OCC, CFPB) Community Bank Access to Capital (S.1233) (All Sections), exempting banks under certain thresholds from Sarbanes-Oxley internal control attestations and FDIC annual reports, and revises the SECs definition of investor categories (House and Senate, OCC, CFPB) Corporate Transparency Act of 2019 (H.R. 2513) (All Sections), which amends the Bank Secrecy Act (BSA) to require beneficial ownership information to be collected by the Financial Crimes Enforcement Network (FinCEN) (House) Letters - Comment Letter to the Department of Housing and Urban Development (HUD) regarding HUDs implementation of the Fair Housing Acts Disparate Impact standard; Docket No FR-6111-P-02 and RIN 2529-AA98 (HUD) Comment Letter to the Federal Deposit Insurance Corporation (FDIC) regarding interest rate restrictions on institutions that are less than well capitalized (Deposit Rate Caps); RIN 3064-AF02 (FDIC) Comment Letter to the Federal Reserve regarding Notice and Request for Comments - Federal Reserve actions to support interbank settlement of faster payments [FedNow Service] (Federal Reserve) Comment Letter to the National Credit Union Administration (NCUA) regarding proposed rule about serving core-based/urban statistical areas (NCUA) Action Alerts - Action Alert regarding proposal to increase the Home Mortgage Disclosure Act (HMDA) thresholds for collecting and reporting data (CFPB) Action Alert regarding the Corporate Transparency Act of 2019 (H.R. 2513) (all Sections), which amends the Bank Secrecy Act (BSA) to require beneficial ownership information to be collected by the Financial Crimes Enforcement Network (FinCEN) (House) Action Alert regarding the Federal Reserves implementation of its FedNow (faster payments) Service (Federal Reserve) Action Alert regarding the National Credit Union Administration (NCUA) proposed rule about serving core-based/urban statistical areas (NCUA) Miscellaneous - Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC, CFPB) FDIC Listening Session on Supervisory Appeals and Dispute Resolution Process (FDIC) Closing the supervisory loophole for Industrial Loan Corporations (ILCs) (House)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). Community banks are strong guardians of the security and confidentiality of their customers information and are on the frontline of defending against cyber security threats. Core data security principals in legislation and regulations must include the complete cost of data breaches being borne by that party that caused the breach; all participants in the payment system should be subject to verifiable Gramm-Leach-Bliley Act-like data security standards; a national data security breach and notification standard should replace the current patchwork of state laws; and any new data security standard proposals should ensure that community banks are not burdened with having to reassess existing critical systems, and implement and comply with new regulations, only to achieve the same superior results they currently attain. There is an emerging threat to the security of consumer data from the proliferation of companies seeking to access bank customer account information (i.e., customer data sharing). The Consumer Financial Protection Bureau (CFPB) is responsible under the Dodd-Frank Act to promulgate this rule. While community banks support responsible innovation in financial products and services, the integrity of consumer data and privacy is only as strong as the weakest link. Community banks are financially sound and take great care in protecting consumer privacy, but non-bank entities are typically not well capitalized, have no significant assets and are financially unable to make restitution in the event of a loss. They must none-the-less be held responsible for ensuring the safety of the customer information they are accessing and be able to satisfy the liability for any financial harm which they cause community banks and their consumers. While community banks represent less than 20% of banking industry assets, they make 60% of the small business loans and 80% of agricultural loans. The requirement for reporting small business data collection stems from Section 1071 of the Dodd-Frank Act and is meant to facilitate the enforcement of fair lending laws in small business lending. The data, however, clearly suggests fair lending is not a problem at community banks as they treat their customers honestly and fairly. The regulatory burden of the collection and reporting requirements fall disproportionately hard on community banks that lack scale and compliance resources, and Section 1071 should either be repealed or community banks should be provided with a meaningful exception. The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC, CFPB) Legislation - Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House and Senate, OCC, CFPB) Corporate Transparency Act of 2019 (H.R. 2513) (all Sections), which amends the Bank Secrecy Act (BSA) to require beneficial ownership information to be collected by the Financial Crimes Enforcement Network (FinCEN) (House) Letters - Comment Letter to the National Credit Union Administration (NCUA) regarding proposed rule about serving core-based/urban statistical areas (NCUA) Action Alerts - Action Alert regarding the Corporate Transparency Act of 2019 (H.R. 2513) (all Sections), which amends the Bank Secrecy Act (BSA) to require beneficial ownership information to be collected by the Financial Crimes Enforcement Network (FinCEN) (House) Action Alert regarding the National Credit Union Administration (NCUA) proposed rule about serving core-based/urban statistical areas (NCUA) Miscellaneous - Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC, CFPB)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The Federal Deposit Insurance Corporation (FDIC) Deposit Rate Caps (Rate Caps) impact community banks ability to grow and thrive. The flaws in how the Rate Caps are calculated include: not reflecting competitive funding or investment opportunities; the largest banks extensive branch networks and their too-big-to-fail subsidies have an outsized influence on the Rate Caps; promotional and negotiated rates are excluded which present an incomplete picture of the deposit-rate landscape; and credit unions are omitted which wrongly ignores thousands of financial institutions that are similar to community banks. Also, during safety and soundness examinations for well capitalized banks, FDIC examiners are using the flawed Rate Caps as a benchmark in the analysis of bank liquidity, which inevitably results in faulty conclusions that can impact liquidity in a banks CAMELS rating. Without taking a position on the legalization of cannabis, it is a matter of public safety to have a safe harbor from federal sanctions for financial institutions that choose to serve legally-compliant cannabis-related business in states where cannabis is legal. Newly chartered (de novo) community banks are vitally important to maintaining a strong, growing, evolving and vibrant banking profession in the face of industry consolidation. The Federal Deposit Insurance Corporation (FDIC) has indicated a change in direction to finally get back on the right course. These encouraging signs must be closely monitored to assure that many new banks are chartered each year to help maintain the vitality of the community banking profession. Hand in hand with renewed de novo bank formation is the importance of maintaining the dual banking system, which has served our nation well for over 150 years, where chartering and supervision is divided between the federal government and the states. Community banks should be able to choose the banking charter that best fits their unique business model. A banking system with multi-agency (state and federal) regulators and charter choice provides the necessary checks and balances on the immense power of the regulators, as well as improved rulemaking - as the benefit of each agencies expertise and experience is brought to bear on complex and controversial issues. The reform of the housing GSEs remains critically important to the future of the housing market and the U.S. economy. American homeowners have benefited from the critical role Fannie Mae and Freddie Mac have played in helping finance homeownership for many decades. The GSEs have provided a steady, reliable source of funding for home mortgage lending through all economic cycles and in all markets. Community banks depend on the GSEs for direct access to the secondary market without having to sell their loans through larger financial institutions that compete with them. The GSEs allow community banks to retain the servicing of the loans they sell, which helps to keep delinquencies and foreclosures low. And, unlike other private investors or aggregators, the GSEs have a mandate to serve all markets at all times which is critical to maintaining liquidity when the markets are experiencing financial stress. Most community banks are members and shareholders of their regional Federal Home Loan Bank (FHLB). The FHLBs provide short-term liquidity, long-term funding, mortgage-related products, and other financial services in order to help their members provide affordable credit to the local communities they serve. The regional structure, special functions and unique purpose of the FHLBs must be recognized and maintained by the Federal Housing Finance Agency (FHFA). As the Administration and Congress consider reforming the housing finance system, care must be taken not to harm the FHLBs. They must remain healthy, stable and reliable sources of funding for their members . However, given their unique relationship with thousands of community lenders, it may be appropriate for the FHLBs to support their members secondary market activities as aggregators or guarantors for residential mortgage loans, provided their current ability to serve their members is not impeded or threatened. Additionally, the FHFA should not impose an ongoing housing mission asset test on FHLB membership, which would undermine the reliability of FHLB funding. A vibrant agricultural and rural economy is vital to Americas prosperity. The multi-year Farm Bill provided a strong safety net for farmers and ranchers including adequate price-protection programs and enhanced USDA-guaranteed farm and business loan programs. These programs must be protected from further cuts or adverse changes that would discourage farmer and rancher participation or undermine private-sector delivery. Community banks are strong guardians of the security and confidentiality of their customers information and are on the frontline of defending against cyber security threats. Core data security principals in legislation and regulations must include the complete cost of data breaches being borne by that party that caused the breach; all participants in the payment system should be subject to verifiable Gramm-Leach-Bliley Act-like data security standards; a national data security breach and notification standard should replace the current patchwork of state laws; and any new data security standard proposals should ensure that community banks are not burdened with having to reassess existing critical systems, and implement and comply with new regulations, only to achieve the same superior results they currently attain. Regulations promulgated by the Consumer Financial Protection Bureau CFPB must provide community banks with the flexibility to meet the needs of its customers and they must not be burdened with additional and unnecessary regulatory requirements that would prevent them from serving their customers and communities. A one-size-fits-all approach to CFPB regulations harms the successful community bank business model. The CFPB should not be unduly influencing marketplace behavior by targeting financial institutions, products, services, and practices which it deems to be undesirable or inappropriate regardless of what consumers want. In reforming the CFPB, the single Director governance should be replaced by a five-member board or commission; a broader definition of firms that grant credit should be subject to the CFPB rules, they should be robustly supervised and examined; and the focus of any enhanced regulation of financial products should be on the mega banks and financial firms, the unregulated shadow financial industry and emerging Fintech companies. The CFPB, in the Dodd-Frank Act (Section 1022(b)(3)(A), has the statutory authority to exempt any class of providers [community banks] or any products or services from the rules it writes, but to-date the Bureau has been far too reticent to do so. The effective use of this authority will ensure community banks continue to be a healthy alternative to large banks and non-banks for consumers seeking to use responsible financial service providers. The Office of Comptroller of the Currency (OCC) intends to issue special purpose national banking charters to Fintech companies. The OCCs intentions, however, raise many concerns. The very legal authority permitting the OCC to charter Fintechs has been challenged by the Conference of State Bank Supervisors (CSBS) as being fatally flawed. A single regulator acting unilaterally in the chartering, examining, supervising and regulating Fintechs is not in the best interests of the profession, consumers and the economy. Congress must provide the explicit statutory authority to charter Fintechs. If the OCC moves forward, it must guarantee that Fintechs will comply with all banking laws, rules and regulations, and that they be held to the same rigorous safety and soundness standards (e.g., supervision and regulation) that are currently being required of community banks and bank holding companies. Fintechs cannot have the advantages of a national bank charter with limited requirements, regulations and liability. The Financial Accounting Standards Board (FASB) has approved significant revisions to the way community banks reserve for their loan losses (i.e., the Current Expected Credit Loss (CECL) Model). After significant community banker input, FASB agreed to address community banker concerns and revised their Model proposal. The revised CECL is more flexible and scalable for community banks by allowing them to evaluate and adjust loan loss amounts using qualitative factors, historic losses, and their current operating systems such as spreadsheets, narratives and other noncomplex estimation methods. Community bankers and Congress must continue to be vigilant to assure the Model implementation provides a clear, practical and easy-to-use methodologies for calculating expected losses which can be seamlessly incorporated into existing processes for community banks. There is an emerging threat to the security of consumer data from the proliferation of companies seeking to access bank customer account information (i.e., customer data sharing). The Consumer Financial Protection Bureau (CFPB) is responsible under the Dodd-Frank Act to promulgate this rule. While community banks support responsible innovation in financial products and services, the integrity of consumer data and privacy is only as strong as the weakest link. Community banks are financially sound and take great care in protecting consumer privacy, but non-bank entities are typically not well capitalized, have no significant assets and are financially unable to make restitution in the event of a loss. They must none-the-less be held responsible for ensuring the safety of the customer information they are accessing and be able to satisfy the liability for any financial harm which they cause community banks and their consumers. The Consumer Financial Protection Bureaus (CFPB) small-dollar lending rule was intended to address its concerns about consumer abuse caused by payday and vehicle title lenders. The proposed rule was too broadly drafted and would have ensnared sensible community bank small-dollar consumer lending. Some exemptions were granted for community banks after a burdensome rulemaking process. Subsequently, the new CFPB Director proposed eliminating the underwriting provision, and the delay in the payment provision was continued by a U.S. District Judge. A carefully monitoring and appropriate action will be required, as the implementation of the rule unfolds, to minimize any negative impact on community banks small-dollar consumer lending. While community banks represent less than 20% of banking industry assets, they make 60% of the small business loans and 80% of agricultural loans. The requirement for reporting small business data collection stems from Section 1071 of the Dodd-Frank Act and is meant to facilitate the enforcement of fair lending laws in small business lending. The data, however, clearly suggests fair lending is not a problem at community banks as they treat their customers honestly and fairly. The regulatory burden of the collection and reporting requirements fall disproportionately hard on community banks that lack scale and compliance resources, and Section 1071 should either be repealed or community banks should be provided with a meaningful exception. Fraud losses are increasing at community banks and Reg CC needs to keep pace with the technology that banks and their customers are using, both now and particularly as the payments system transitions to real-time. All banks, credit unions, and others who utilize the payments system should be operating on the same level playing field when it comes to return reasons for fraud and acknowledging and communicating about fraud. The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC, Federal Reserve, CFPB) Legislation - Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House and Senate, OCC, CFPB) Community Bank Access to Capital (S.1233) (All Sections), exempting banks under certain thresholds from Sarbanes-Oxley internal control attestations and FDIC annual reports, and revises the SECs definition of investor categories (House and Senate, OCC, CFPB) Corporate Transparency Act of 2019 (H.R. 2513) (All Sections), which amends the Bank Secrecy Act (BSA) to require beneficial ownership information to be collected by the Financial Crimes Enforcement Network (FinCEN) (House) Letters - Comment Letter to the Department of Housing and Urban Development (HUD) regarding HUDs implementation of the Fair Housing Acts Disparate Impact standard; Docket No FR-6111-P-02 and RIN 2529-AA98 (HUD) Comment Letter to the Federal Deposit Insurance Corporation (FDIC) regarding interest rate restrictions on institutions that are less than well capitalized (Deposit Rate Caps); RIN 3064-AF02 (FDIC) Comment Letter to the Federal Reserve regarding Notice and Request for Comments - Federal Reserve actions to support interbank settlement of faster payments [FedNow Service] (Federal Reserve) Comment Letter to the National Credit Union Administration (NCUA) regarding proposed rule about serving core-based/urban statistical areas (NCUA) Action Alerts - Action Alert regarding proposal to increase the Home Mortgage Disclosure Act (HMDA) thresholds for collecting and reporting data (CFPB) Action Alert regarding the Corporate Transparency Act of 2019 (H.R. 2513) (all Sections), which amends the Bank Secrecy Act (BSA) to require beneficial ownership information to be collected by the Financial Crimes Enforcement Network (FinCEN) (House) Action Alert regarding the Federal Reserves implementation of its FedNow (faster payments) Service (Federal Reserve) Action Alert regarding the National Credit Union Administration (NCUA) proposed rule about serving core-based/urban statistical areas (NCUA) Miscellaneous - Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC, CFPB) FDIC Listening Session on Supervisory Appeals and Dispute Resolution Process (FDIC) Closing the supervisory loophole for Industrial Loan Corporations (ILCs) (House)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The reform of the housing GSEs remains critically important to the future of the housing market and the U.S. economy. American homeowners have benefited from the critical role Fannie Mae and Freddie Mac have played in helping finance homeownership for many decades. The GSEs have provided a steady, reliable source of funding for home mortgage lending through all economic cycles and in all markets. Community banks depend on the GSEs for direct access to the secondary market without having to sell their loans through larger financial institutions that compete with them. The GSEs allow community banks to retain the servicing of the loans they sell, which helps to keep delinquencies and foreclosures low. And, unlike other private investors or aggregators, the GSEs have a mandate to serve all markets at all times which is critical to maintaining liquidity when the markets are experiencing financial stress. Most community banks are members and shareholders of their regional Federal Home Loan Bank (FHLB). The FHLBs provide short-term liquidity, long-term funding, mortgage-related products, and other financial services in order to help their members provide affordable credit to the local communities they serve. The regional structure, special functions and unique purpose of the FHLBs must be recognized and maintained by the Federal Housing Finance Agency (FHFA). As the Administration and Congress consider reforming the housing finance system, care must be taken not to harm the FHLBs. They must remain healthy, stable and reliable sources of funding for their members . However, given their unique relationship with thousands of community lenders, it may be appropriate for the FHLBs to support their members secondary market activities as aggregators or guarantors for residential mortgage loans, provided their current ability to serve their members is not impeded or threatened. Additionally, the FHFA should not impose an ongoing housing mission asset test on FHLB membership, which would undermine the reliability of FHLB funding. A vibrant agricultural and rural economy is vital to Americas prosperity. The multi-year Farm Bill provided a strong safety net for farmers and ranchers including adequate price-protection programs and enhanced USDA-guaranteed farm and business loan programs. These programs must be protected from further cuts or adverse changes that would discourage farmer and rancher participation or undermine private-sector delivery. Community banks are strong guardians of the security and confidentiality of their customers information and are on the frontline of defending against cyber security threats. Core data security principals in legislation and regulations must include the complete cost of data breaches being borne by that party that caused the breach; all participants in the payment system should be subject to verifiable Gramm-Leach-Bliley Act-like data security standards; a national data security breach and notification standard should replace the current patchwork of state laws; and any new data security standard proposals should ensure that community banks are not burdened with having to reassess existing critical systems, and implement and comply with new regulations, only to achieve the same superior results they currently attain. While community banks represent less than 20% of banking industry assets, they make 60% of the small business loans and 80% of agricultural loans. The requirement for reporting small business data collection stems from Section 1071 of the Dodd-Frank Act and is meant to facilitate the enforcement of fair lending laws in small business lending. The data, however, clearly suggests fair lending is not a problem at community banks as they treat their customers honestly and fairly. The regulatory burden of the collection and reporting requirements fall disproportionately hard on community banks that lack scale and compliance resources, and Section 1071 should either be repealed or community banks should be provided with a meaningful exception. The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC, CFPB) Legislation - Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House and Senate, OCC, CFPB) Letters - Comment Letter to the National Credit Union Administration (NCUA) regarding proposed rule about serving core-based/urban statistical areas (NCUA) Action Alerts - Action Alert regarding the National Credit Union Administration (NCUA) proposed rule about serving core-based/urban statistical areas (NCUA) Miscellaneous - Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC, CFPB)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, OCC, CFPB) Legislation - Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House and Senate, OCC, CFPB) Letters - Comment Letter to the National Credit Union Administration (NCUA) regarding proposed rule about serving core-based/urban statistical areas (NCUA) Action Alerts - Action Alert regarding the National Credit Union Administration (NCUA) proposed rule about serving core-based/urban statistical areas (NCUA) Miscellaneous - Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, OCC, CFPB)

HR 1872 The Enhancing Credit Opportunities for Rural America (ECORA) Act S. 1641 ECORA Enhancing Credit Opportunities in Rural America Act Crop Insurance Hemp Livestock Dealer Trust Poultry Loans Guaranteed by Small Business Administration

Client expense: $1,060,000 · Firm income: Not reported

Government targets: Agriculture, Dept of (USDA), Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Federal Emergency Management Agency (FEMA), Federal Housing Finance Agency (FHFA), Federal Reserve System, HOUSE OF REPRESENTATIVES, Internal Revenue Service (IRS), Natl Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), SENATE, Small Business Administration (SBA), Treasury, Dept of, White House Office

H.R. 216 Main Street Tax Certainty Act H.R. 1872 Enhancing Credit Opportunities in Rural America Act S. 1149 Main Street Tax Certainty Act S. 1641 Enhancing Credit Opportunities in Rural America Act Community Bank Exclusion from IRC Section 481(d) Credit Union Tax Exemption Farm Credit System Taxation Main Street Tax Certainty Act S. Corp Reforms

Client expense: $1,060,000 · Firm income: Not reported

Farm Credit System H.R. 1872, the Enhancing Credit Opportunities for Rural America Act S. 1641, ECORA Act of 2019

Client expense: $2,161,000 · Firm income: Not reported

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The reform of the housing GSEs remains critically important to the future of the housing market and the U.S. economy. American homeowners have benefited from the critical role Fannie Mae and Freddie Mac have played in helping finance homeownership for many decades. The GSEs have provided a steady, reliable source of funding for home mortgage lending through all economic cycles and in all markets. Community banks depend on the GSEs for direct access to the secondary market without having to sell their loans through larger financial institutions that compete with them. The GSEs allow community banks to retain the servicing of the loans they sell, which helps to keep delinquencies and foreclosures low. And, unlike other private investors or aggregators, the GSEs have a mandate to serve all markets at all times which is critical to maintaining liquidity when the markets are experiencing financial stress. Most community banks are members and shareholders of their regional Federal Home Loan Bank (FHLB). The FHLBs provide short-term liquidity, long-term funding, mortgage-related products, and other financial services in order to help their members provide affordable credit to the local communities they serve. The regional structure, special functions and unique purpose of the FHLBs must be recognized and maintained by the Federal Housing Finance Agency (FHFA). As the Administration and Congress consider reforming the housing finance system, care must be taken not to harm the FHLBs. They must remain healthy, stable and reliable sources of funding for their members . However, given their unique relationship with thousands of community lenders, it may be appropriate for the FHLBs to support their members secondary market activities as aggregators or guarantors for residential mortgage loans, provided their current ability to serve their members is not impeded or threatened. Additionally, the FHFA should not impose an ongoing housing mission asset test on FHLB membership, which would undermine the reliability of FHLB funding. A vibrant agricultural and rural economy is vital to Americas prosperity. The multi-year Farm Bill provided a strong safety net for farmers and ranchers including adequate price-protection programs and enhanced USDA-guaranteed farm and business loan programs. These programs must be protected from further cuts or adverse changes that would discourage farmer and rancher participation or undermine private-sector delivery. Community banks are strong guardians of the security and confidentiality of their customers information and are on the frontline of defending against cyber security threats. Core data security principals in legislation and regulations must include the complete cost of data breaches being borne by that party that caused the breach; all participants in the payment system should be subject to verifiable Gramm-Leach-Bliley Act-like data security standards; a national data security breach and notification standard should replace the current patchwork of state laws; and any new data security standard proposals should ensure that community banks are not burdened with having to reassess existing critical systems, and implement and comply with new regulations, only to achieve the same superior results they currently attain. While community banks represent less than 20% of banking industry assets, they make 60% of the small business loans and 80% of agricultural loans. The requirement for reporting small business data collection stems from Section 1071 of the Dodd-Frank Act and is meant to facilitate the enforcement of fair lending laws in small business lending. The data, however, clearly suggests fair lending is not a problem at community banks as they treat their customers honestly and fairly. The regulatory burden of the collection and reporting requirements fall disproportionately hard on community banks that lack scale and compliance resources, and Section 1071 should either be repealed or community banks should be provided with a meaningful exception. The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, FDIC, CFPB, Federal Reserve) Legislation - Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House and Senate) Safe and Fair Enforcement Banking Act of 2019 (SAFE Act) (H.R. 1595) (All Sections), safe harbor for banking cannabis related businesses (House) Action Alerts - Action Alerts (two) regarding tax-exempt credit unions purchasing taxpaying community banks (House and Senate) Miscellaneous - Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, Federal Reserve, CFPB, FDIC)

CBAI Federal Policy Priorities - 2019 The Community Bankers Association of Illinois (CBAI) supports fair competition for financial services, tiered regulation, the separation of banking and commerce, the dual banking system/charter choice, and financial innovation; and opposes discrimination favoring certain financial service providers, banking industry consolidation and systemic risk. The Independent Community Bankers of Americas legislative and regulatory agenda contained in their Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity proposes a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more efficient agricultural policies to extend the nations economic growth to every corner of the country. The swift implementation of the remaining regulatory relief provisions for community banks - consistent with Congressional intent - contained the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which became law in May of 2018. The passage of additional meaningful regulatory relief for community banks including modernizing the Bank Secrecy Act (BSA)/Currency Transaction Report (CTR) threshold/Suspicious Activity Report (SAR) threshold. Also, data for the new beneficial ownership reporting requirements should be collected and verified by the appropriate federal/state government agencies when a legal entity is formed or when subsequent changes occur. Credit unions and Farm Credit System (FCS) lenders have long-since strayed from their founding purposes, blatantly abusing their competitive advantages. This blatant and continuing discrimination against community banks must end. Either the credit union and FCS competitive advantages must be reined-in or there must be tax credits or deductions for community banks lending to small businesses, farmers and ranchers, homebuyers, and low- and middle-income individuals. These changes in the tax code would help sustain and strengthen community bank lending and would begin to offset the competitive advantage enjoyed by tax-exempt credit unions and FCS lenders. The United States payments system (System), which is the very foundation of our financial services and economy, must be modernized to meet the demands of consumers and to keep pace with the rest of the world. System improvements must not be dominated by the largest banks and financial firms or private-sector non-banks. Community banks, small businesses and consumers must rely on the Federal Reserve to provide access to a safe and secure payments system which requires the Federal Reserve to continue to play a preeminent role in the Systems improvement. The Community Reinvestment Act (CRA) needs to be updated to incorporate new financial products and services delivered in modern ways. Community banks have traditionally excelled in the performance of their CRA compliance and examinations. The modernization of the CRA must enhance the ability of community banks to serve their communities and must not impose any additional regulatory burden. All financial service providers must be subject to the CRA to provide a complete picture of financial institutions performance in serving their communities - including credit unions, Farm Credit System lenders and Fintechs (including the OCCs Special Purpose National Banks). The Federal Deposit Insurance Corporation (FDIC) Deposit Rate Caps (Rate Caps) impact community banks ability to grow and thrive. The flaws in how the Rate Caps are calculated include: not reflecting competitive funding or investment opportunities; the largest banks extensive branch networks and their too-big-to-fail subsidies have an outsized influence on the Rate Caps; promotional and negotiated rates are excluded which present an incomplete picture of the deposit-rate landscape; and credit unions are omitted which wrongly ignores thousands of financial institutions that are similar to community banks. Also, during safety and soundness examinations for well capitalized banks, FDIC examiners are using the flawed Rate Caps as a benchmark in the analysis of bank liquidity, which inevitably results in faulty conclusions that can impact liquidity in a banks CAMELS rating. Without taking a position on the legalization of cannabis, it is a matter of public safety to have a safe harbor from federal sanctions for financial institutions that choose to serve legally-compliant cannabis-related business in states where cannabis is legal. Newly chartered (de novo) community banks are vitally important to maintaining a strong, growing, evolving and vibrant banking profession in the face of industry consolidation. The Federal Deposit Insurance Corporation (FDIC) has indicated a change in direction to finally get back on the right course. These encouraging signs must be closely monitored to assure that many new banks are chartered each year to help maintain the vitality of the community banking profession. Hand in hand with renewed de novo bank formation is the importance of maintaining the dual banking system, which has served our nation well for over 150 years, where chartering and supervision is divided between the federal government and the states. Community banks should be able to choose the banking charter that best fits their unique business model. A banking system with multi-agency (state and federal) regulators and charter choice provides the necessary checks and balances on the immense power of the regulators, as well as improved rulemaking - as the benefit of each agencies expertise and experience is brought to bear on complex and controversial issues. The reform of the housing GSEs remains critically important to the future of the housing market and the U.S. economy. American homeowners have benefited from the critical role Fannie Mae and Freddie Mac have played in helping finance homeownership for many decades. The GSEs have provided a steady, reliable source of funding for home mortgage lending through all economic cycles and in all markets. Community banks depend on the GSEs for direct access to the secondary market without having to sell their loans through larger financial institutions that compete with them. The GSEs allow community banks to retain the servicing of the loans they sell, which helps to keep delinquencies and foreclosures low. And, unlike other private investors or aggregators, the GSEs have a mandate to serve all markets at all times which is critical to maintaining liquidity when the markets are experiencing financial stress. Most community banks are members and shareholders of their regional Federal Home Loan Bank (FHLB). The FHLBs provide short-term liquidity, long-term funding, mortgage-related products, and other financial services in order to help their members provide affordable credit to the local communities they serve. The regional structure, special functions and unique purpose of the FHLBs must be recognized and maintained by the Federal Housing Finance Agency (FHFA). As the Administration and Congress consider reforming the housing finance system, care must be taken not to harm the FHLBs. They must remain healthy, stable and reliable sources of funding for their members . However, given their unique relationship with thousands of community lenders, it may be appropriate for the FHLBs to support their members secondary market activities as aggregators or guarantors for residential mortgage loans, provided their current ability to serve their members is not impeded or threatened. Additionally, the FHFA should not impose an ongoing housing mission asset test on FHLB membership, which would undermine the reliability of FHLB funding. A vibrant agricultural and rural economy is vital to Americas prosperity. The multi-year Farm Bill provided a strong safety net for farmers and ranchers including adequate price-protection programs and enhanced USDA-guaranteed farm and business loan programs. These programs must be protected from further cuts or adverse changes that would discourage farmer and rancher participation or undermine private-sector delivery. Community banks are strong guardians of the security and confidentiality of their customers information and are on the frontline of defending against cyber security threats. Core data security principals in legislation and regulations must include the complete cost of data breaches being borne by that party that caused the breach; all participants in the payment system should be subject to verifiable Gramm-Leach-Bliley Act-like data security standards; a national data security breach and notification standard should replace the current patchwork of state laws; and any new data security standard proposals should ensure that community banks are not burdened with having to reassess existing critical systems, and implement and comply with new regulations, only to achieve the same superior results they currently attain. Regulations promulgated by the Consumer Financial Protection Bureau CFPB must provide community banks with the flexibility to meet the needs of its customers and they must not be burdened with additional and unnecessary regulatory requirements that would prevent them from serving their customers and communities. A one-size-fits-all approach to CFPB regulations harms the successful community bank business model. The CFPB should not be unduly influencing marketplace behavior by targeting financial institutions, products, services, and practices which it deems to be undesirable or inappropriate regardless of what consumers want. In reforming the CFPB, the single Director governance should be replaced by a five-member board or commission; a broader definition of firms that grant credit should be subject to the CFPB rules, they should be robustly supervised and examined; and the focus of any enhanced regulation of financial products should be on the mega banks and financial firms, the unregulated shadow financial industry and emerging Fintech companies. The CFPB, in the Dodd-Frank Act (Section 1022(b)(3)(A), has the statutory authority to exempt any class of providers [community banks] or any products or services from the rules it writes, but to-date the Bureau has been far too reticent to do so. The effective use of this authority will ensure community banks continue to be a healthy alternative to large banks and non-banks for consumers seeking to use responsible financial service providers. The Office of Comptroller of the Currency (OCC) intends to issue special purpose national banking charters to Fintech companies. The OCCs intentions, however, raise many concerns. The very legal authority permitting the OCC to charter Fintechs has been challenged by the Conference of State Bank Supervisors (CSBS) as being fatally flawed. A single regulator acting unilaterally in the chartering, examining, supervising and regulating Fintechs is not in the best interests of the profession, consumers and the economy. Congress must provide the explicit statutory authority to charter Fintechs. If the OCC moves forward, it must guarantee that Fintechs will comply with all banking laws, rules and regulations, and that they be held to the same rigorous safety and soundness standards (e.g., supervision and regulation) that are currently being required of community banks and bank holding companies. Fintechs cannot have the advantages of a national bank charter with limited requirements, regulations and liability. The Financial Accounting Standards Board (FASB) has approved significant revisions to the way community banks reserve for their loan losses (i.e., the Current Expected Credit Loss (CECL) Model). After significant community banker input, FASB agreed to address community banker concerns and revised their Model proposal. The revised CECL is more flexible and scalable for community banks by allowing them to evaluate and adjust loan loss amounts using qualitative factors, historic losses, and their current operating systems such as spreadsheets, narratives and other noncomplex estimation methods. Community bankers and Congress must continue to be vigilant to assure the Model implementation provides a clear, practical and easy-to-use methodologies for calculating expected losses which can be seamlessly incorporated into existing processes for community banks. There is an emerging threat to the security of consumer data from the proliferation of companies seeking to access bank customer account information (i.e., customer data sharing). The Consumer Financial Protection Bureau (CFPB) is responsible under the Dodd-Frank Act to promulgate this rule. While community banks support responsible innovation in financial products and services, the integrity of consumer data and privacy is only as strong as the weakest link. Community banks are financially sound and take great care in protecting consumer privacy, but non-bank entities are typically not well capitalized, have no significant assets and are financially unable to make restitution in the event of a loss. They must none-the-less be held responsible for ensuring the safety of the customer information they are accessing and be able to satisfy the liability for any financial harm which they cause community banks and their consumers. The Consumer Financial Protection Bureaus (CFPB) small-dollar lending rule was intended to address its concerns about consumer abuse caused by payday and vehicle title lenders. The proposed rule was too broadly drafted and would have ensnared sensible community bank small-dollar consumer lending. Some exemptions were granted for community banks after a burdensome rulemaking process. Subsequently, the new CFPB Director proposed eliminating the underwriting provision, and the delay in the payment provision was continued by a U.S. District Judge. A carefully monitoring and appropriate action will be required, as the implementation of the rule unfolds, to minimize any negative impact on community banks small-dollar consumer lending. While community banks represent less than 20% of banking industry assets, they make 60% of the small business loans and 80% of agricultural loans. The requirement for reporting small business data collection stems from Section 1071 of the Dodd-Frank Act and is meant to facilitate the enforcement of fair lending laws in small business lending. The data, however, clearly suggests fair lending is not a problem at community banks as they treat their customers honestly and fairly. The regulatory burden of the collection and reporting requirements fall disproportionately hard on community banks that lack scale and compliance resources, and Section 1071 should either be repealed or community banks should be provided with a meaningful exception. Fraud losses are increasing at community banks and Reg CC needs to keep pace with the technology that banks and their customers are using, both now and particularly as the payments system transitions to real-time. All banks, credit unions, and others who utilize the payments system should be operating on the same level playing field when it comes to return reasons for fraud and acknowledging and communicating about fraud. The recent financial crisis, taxpayer bail-outs and subsequent recession was caused by the misconduct of the nations largest banks and financial firms (Too-Big-To-Fail Banks and Financial Firms). The Dodd-Frank Act was intended to reign-in their destructive behavior. Unfortunately, this was an inadequate legislative and regulatory response which has allowed these financial behemoths to grow in size, complexity and influence; they will continue to abuse their consumers; and they remain a significant threat to our financial system and economy. These megabanks have proven, at great cost to American taxpayers, that they cannot be effectively managed, supervised or disciplined. They are clearly too-big-to-change, too-big-to-fail and must be downsized. (House, Senate, FDIC, CFPB, Federal Reserve) Legislation - Enhances Credit Opportunities in Rural America (ECORA) (H.R. 1872 and S.1641) (All Sections), interest earned on agricultural real estate and rural single family home loans would not be taxable (House and Senate) Payments Modernization Act of 2019 (S.2243) (All Sections), regarding the Federal Reserve Systems role in faster (real-time) payments (Senate) Safe and Fair Enforcement Banking Act of 2019 (SAFE Act) (H.R. 1595) (All Sections), safe harbor for banking cannabis related businesses (House) Letters - Comment Letter to the IRS regarding Internal Revenue Code section 481(d), added to section 13543 of the Tax Cuts and Jobs Act (TCJA), Pub. L. No. 115-97 dealing with the treatment of section 481(a) adjustments that result when an S corporation terminates its S election and converts to a C corporation during the two year period beginning on the date of enactment of the TCJA, and where the change in status requires the taxpayer to change from the cash method of accounting to the accrual method. (IRS) Action Alerts - Action Alerts (two) regarding tax-exempt credit unions purchasing taxpaying community banks (House and Senate) Miscellaneous - Tax-exempt credit unions purchasing taxpaying community banks (House and Senate, Federal Reserve, CFPB, FDIC,) The Federal Reserve Systems role in faster payments (real-time payments). (House and Senate, FDIC, CFPB, Federal Reserve) Michelle Bowmans nomination to the Federal Reserve Board (Senate)