Every year, people around the world make financial New Year's resolutions in January and give up on them by Valentine's Day. According to a recent survey by GoBankingRates, the top three financial resolutions are: 1) save more, spend less; 2) pay down debt; and 3) increase my income. Below are tips to help you actually accomplish those resolutions this year.  

Save More, Spend Less
The most critical step to achieving the balance you want between saving and spending is to develop a sustainable budget. That budget is your step-by-step plan for sticking to this resolution. There are two essential pieces of a successful budget: the money you make and the money you spend. Break down all income and all expenses on a monthly basis to get a clear picture of what your personal budget should look like. This will help you optimize your spending and cut back on unnecessary expenses. 

A second tool that will help is to use automation for saving. Set up an automatic transfer through your bank that will take a cut of each paycheck and put it into your savings account. It's less likely you'll be tempted to spend what you planned to save if you never see the money in your checking account. 

Pay Down Debt
If your resolution is to pay down your debt, tackling all of it at once may seem like an insurmountable task. Break it down into smaller goals, such as monthly or bi-monthly dollar amount targets, in order to make it more manageable. For example, if you have $1,200 in credit card debt you want to pay off, commit to paying off the full balance of the card each month plus $100. At the end of the year, you'll be debt-free. Achieving the smaller goals can also motivate you to reach the big one.

If you have a lot of debt you're trying to pay off, another tool that may help is consolidation. Certain types of debts can be lumped together into a single account so that you can easily see how much you have left to pay off. Sometimes, you can even improve the interest rate you're paying on the loan. Talk to your banker to find out if consolidation is a good option for your situation. 

Increase My Income
Resolving to make more money than last year is a popular goal, and more achievable than some people think. In addition to sitting down and asking your boss for a raise, it's important to consider additional sources of income that you may not be using. Do you have a hobby you could monetize? Painting, writing and even helping people fix their computers are all valuable skills in the freelance market. If not, consider taking on a part-time position on the weekends to bring in additional cash.

No matter what your financial goals for 2017 are, you can rely on your local banker to help you create a plan and find the tools to achieve them.

By, Amber Seitz

The December 2016 edition of the WBA Compliance Journal has been published.

Read Special Focus for an article on CFPB's prepaid rule. Next, turn to Regulatory Spotlight for and update on the injunction against the DOL overtime rule. Finally, turn to Compliance Notes for the federal regulators' CECL FAQs and other timely information.

Click here to download the full issue.

By, Amber Seitz

The history of the Wisconsin Bankers Association goes back to March 24, 1892. That's when Milwaukee banker James K. Ilsley recorded in his ledger the names of a handful of banks that paid $5 each to join the new organization. Over the next 125 years, the association and the banking industry would grow and evolve together, overcoming obstacles and meeting new challenges, all with the goal of serving the consumers of this state. 

Humble Beginnings

The WBA has been working hard on behalf of Wisconsin banks almost as along as Wisconsin banks have been around serving their customers. Banking was legalized in the state in 1853, and it took Wisconsin bankers less than 40 years to realize the need for uniformity across the state and formed an official state-wide association to benefit the entire industry. In March of 1892, bankers from all over Wisconsin travelled to Milwaukee for a convention… Some without even knowing what was to be discussed. Meeting leaders informed the 150 gathered bankers that they proposed an organized group: the Wisconsin Bankers Association. Guidelines and goals, a formal Constitution and bylaws were created and ratified, and the WBA was born. 

The association's membership seesawed during its early years, zigzagging from 173 banks in 1892 to 148 in 1895, then back to 178 in 1896. Still, that only represented half of the 329 banks operating at the time. Early leadership urged the association to gain members by becoming more visible, specifically by lobbying government and providing services to members. Today, over 98 percent of Wisconsin banks are WBA members. 

Partnership through Tumultuous Times 

Over the 125 years of partnership between Wisconsin's banking industry and the WBA, the association and its member bankers have worked together to weather a variety of storms, from the very beginning. Just one year after the Association was formed, the Panic of 1893 swept Wisconsin, dragging the state's banking system to the brink of collapse. In the aftermath, bankers debated the need for more rigorous bank regulation and examinations at two successive WBA conventions. From the Great Depression to the more recent housing crisis and ensuing recession, the partnership between banks and the association was the key to bolstering the industry's economic health and its reputation with the public.

The partnership between the association and the industry was not only vital during periods of economic stress, however. In 1909, WBA developed an intelligence network to track and infiltrate the activities of often-dangerous outlaws and established a fund to help banks pay the costs of tracking down burglars and robbers. A decade later, the association established a fund to assist law enforcement and banks with the purchase of defensive weapons. The association even organized a subsidiary, the Bankers' Mutual Casualty Company, to provide burglary insurance to association members.

Serving You Today

Today, the association has several subsidiary companies, each with its own unique set of products and services to offer, ranging from insurance products and technology solutions to compliance assistance. The association's dedication to banker education has only grown since its role in establishing the University of Wisconsin School of Banking at the close of World War II. WBA now provides professional development year-round in a wide variety of formats on topics applicable to every role in the bank. 

One of the most significant ways the association has changed the way it serves Wisconsin's banking industry in recent years is by joining forces with the state's only other banking trade association. On Feb. 27, 2015, the Community Bankers of Wisconsin and the Wisconsin Bankers Association signed merger papers, finalizing the decision made in December 2014 with an overwhelming number of positive votes submitted by both association memberships. The merger signaled an historic and exciting time for Wisconsin's financial services industry, with one stage ending and another beginning. The new WBA continues its mission to serve Wisconsin's banking industry, now with the added power of speaking with a unified voice to address the common challenges of all Wisconsin banks, advocate for their interests, and provide educational services and products to support their continued success. 

Looking Toward the Future

The Wisconsin Bankers Association has served the state's banking industry for nearly 125 years, and while how the association promotes and advances banking has changed over the years, its commitment to the success of its members has not. From the farmer/banker meet-ups of the early 1900s, to distributing Tommy guns to prevent robberies in the '20s, to the professional development and advocacy efforts of today, the WBA has always worked on behalf of its members. 

Looking forward, the WBA's new technology tools (such as the recently launched website and the digital Wisconsin Lending Guide) and innovative services will continue to drive change and help Wisconsin's banks overcome challenges. As technological advances, escalating regulatory burden, higher consumer expectations, and inventive criminals all transform the banking industry, your association will adapt, too. The association and the industry will face a future full of uncertainty and opportunity as they always have, together.

By, Amber Seitz

The banking industry is undergoing a prolonged period of tremendous change. In fact, many experts say that constant change is the new normal. As the guiding hand and governing body, bank boards must also adapt and adjust their focus in order to lead their institutions to success in today's volatile environment, all without losing sight of their primary responsibilities. Read on for a look at how directors and boards have changed in recent years, and for perspective on what your bank's board may need to transform into in the near future. 

Who's Sitting Around the Table?

Twenty or 30 years ago, the banking industry was much more straightforward than it is today, and was reasonably stable as well. That placed fewer demands on directors, in general. "As long as the board members were representative of the bank's market and were helpful in generating new business and making lending decisions they contributed to the success of the bank," said Cass Bettinger, president, Cass Bettinger and Associates. Often chosen for their community status or ongoing business with the bank, directors on historical bank boards often mirrored the bank's product mix, which facilitated their role as brand ambassadors, according to Julia Johnson, senior manager, Wipfli LLP. "However, those historical boards may not have had a thorough understanding of banking, and how banks serve as an intermediary of cash," she explained. "They put a lot of faith, confidence and trust in senior management to prudently manage the bank and ensure regulatory compliance." 

Walk into a bank boardroom in 1985 and you'd find a collection of businessmen, lawyers, accountants and community leaders, individuals with backgrounds in either business or finance. New directors were often selected based on their commercial relationship with the bank, their connections to the local business community, or because they (or their family) owned a large share of the bank's stock. According to Philip K. Smith, president, Gerrish McCreary Smith Consultants and Attorneys, the director role used to be viewed as a passive one with little impact on the overall success of the institution. "Historically the makeup of the board of a successful bank was identical to the makeup of the boards of unsuccessful banks," he said. "The focus of those kinds of boards was loan approval, dividend payments and general oversight." 

Walk into that same boardroom today, and you'll still find a collection of businessmen, lawyers, accountants and community leaders, but they may look very different. As with historical boards, today's directors are individuals with business acumen, and may also be representatives of large shareholders. "A good business background is helpful, and those people often end up leading discussions and have significant input," said John Knight, partner, Boardman & Clark llp. However, today's economic and regulatory environment has forced a move toward selecting directors to fill in gaps in expertise on the board, rather than business community or shareholder representation. "That has promoted much more diversity in the board in terms of gender, race, age and ethnicity," explained Smith. "Those go out the window when the question is 'what does the bank need?' rather than 'who should sit on the board?'." According to Knight, the composition of bank boards is transitioning slowly, especially at community banks. "It's quite different between community banks and regional or national banks," he said. "If I see a change, it's modest and gradual. This is not abrupt." Still, Johnson says not only is increased diversity necessary to bring in expertise, but it will also have an overall positive impact on the institution. "When you look at what needs to shift in terms of the composition of the board, we need to have more diversity on the board," she said. "While backgrounds may remain consistent, the diversity of individual experiences and perspectives contribute to the strength of the board by creating a rich and robust platform for discussion. Specifically, there will be greater representation of women and individuals of different ages on the board." 

Same Board, Shifted Focus

While the individuals sitting around the table and their backgrounds are not much different, the expectations placed on them and their approach to their role has shifted dramatically. "Traditionally, the board has looked to the CEO to be the primary strategist for the organization and that their role was simply to look at the strategic plan and approve it," Bettinger explained. "The biggest single change in responsibilities for board directors is that they now must be responsible for being actively engaged in the strategic planning process and understanding what it means." According to Knight, the law regarding directors' responsibilities has not changed appreciably, but the application of it has broadened as expectations from regulators rise. "In general terms, their fiduciary duties haven't really changed," he said. "But the regulators in particular expect more of directors." Those expectations mean directors can no longer be passive sources of commercial loan contacts. "In the past, directors could serve in a more passive capacity," Johnson said. "Today, the regulatory environment doesn't allow for that." 

Just as regulatory expectations for bank directors have transformed their role, so have market and economic influences. "Banks now have to be constantly reassessing their business model and changing it," said Bettinger. "The bank needs directors who have certain skillsets that will help the bank succeed in a changing marketplace." The ideal combination of skillsets will vary by institution, depending on the bank's strategic goals. "The board needs to know who the bank is and who they want to be in the future," Smith explained. "You identify new members by understanding the kind of bank you're trying to become and then reaching out to those people." For example, if the strategic plan forecasts growth through M&A activity, the board should have at least a couple directors with experience in that arena. That's why Johnson advocates not filling the board to capacity at all times. "I like to see banks that don't keep their board at full capacity, but leave a couple seats vacant as permitted by the bank's bylaws," she said. "This gives the bank flexibility to bring in new board members who have a particular expertise and/or enables the bank to create an overlap between a new director and an experienced director who may be stepping off the board." That provides the board with crucial responsiveness if a critical unmet need is identified.

With this shift away from more ceremonial boards to knowledge-based, strategic, active boards, the recruitment and training of board members is transforming as well. "It's a requirement that the board not micromanage but be much more active than historical boards," said Smith. "That changes the dynamic, even as you're recruiting people." Smith says the board must also take an active role in its own succession planning. "Directors must help recruit new board members," he said. "The board should consider itself a body independent of management and therefore participate in recruitment." The process for identifying potential successors should be familiar to the board, because it's the same one they use within the bank. "Look at the strategic plan and then do a board composition analysis, on the basis of knowledge, skills and abilities, and identify where you have gaps," said Johnson. "It's the same thing you do at the bank level. The key is to be intentional and proactive." Active recruitment also requires directors to understand and articulate why serving on the board is valuable. "In today's world, if you want somebody who's really good to come on your board, you need to have a winning value proposition for them," Bettinger explained. "You want them to feel that going on your board will be a great thing for them to do for the community and their business." 

Training: Not Just for New Directors
Offering regular education and training opportunities is one of the best ways bank executives can equip their directors (and therefore their bank) for success. After all, most directors will not have built-in understanding of the banking industry, and that is an important component of their fiduciary duty. Board education and training is a highly diverse process that varies greatly from board to board. The key is that it should not be a one-and-done onboarding session. "All board members of all banks ought to have some type of minimum requirement for continuing education every year," Smith advised. Bettinger recommends specifying the education and development each individual director needs and incorporating it into a written plan. This not only provides specific training for each board member, it's more efficient, too. "You don't want to spend money to send your entire board off to training that only a quarter of them need," Bettinger explained. "It's much more cost-effective to be individualized in your director education by identifying what specific education that each director needs that's most important." Another approach, specific to the onboarding process, is to provide one-to-one guidance. "You might even assign a mentor for a period of time," Johnson suggested. "Partner a new director with a seasoned director who can respond to questions."

Looking Forward

So, what will you see walking into a bank boardroom in 2030? "I'm already seeing more independent directors with specific expertise and experience that are relevant to the development and execution of strategy," said Bettinger. "A prime example is the crucial role that digital technologies increasingly play in developing, promoting and reinforcing winning customer value propositions; measuring and managing relationship profitability and loyalty; efficiency enhancement; and more effectively managing all categories of risk." With signs indicating that mergers and acquisitions will continue to rise, Johnson predicts the resulting larger banks will have boards focused on those unique challenges. "On the one hand, I think bank boards will need to be more savvy and more skilled in merger and acquisition activity," she said. "On the other side, as the asset size of the banks grows and regulatory pressures increase, they'll need to be increasingly more sophisticated in terms of the banking industry and the applicability of those regulations to their financial institution in order to mitigate risk and liability, to ensure safety and soundness." Increased regulatory pressure will be met with increasing pressure from technological changes, as well. "It's my opinion that it will result in more board turnover because directors will need to constantly stay on top of new threats that didn't exist before," Smith said. "The industry is changing so rapidly it will require a more engaged, nimble board with a much younger average age that is able to monitor technology." Just as we've seen over the past two decades, as the industry becomes more complex, the board will shoulder more responsibility to be informed. "The complexity of banking is much greater now than it's ever been," said Knight. "That requires more well-informed, better educated directors, just to deal with the complexity of it.

By, Amber Seitz

The Wisconsin Bankers Association offers the following consumer education column for your use. Your bank is free to use this as a community column in your local newspaper, a letter to the editor, a press release or in any other way you see fit. The purpose is to give our members an easy-to-use tool for promoting the banking industry to Wisconsin's communities. An archive of Consumer Columns is available online at www.wisbank.com/ConsumerColumns.

The holiday shopping season is in full swing, which means the scammers are out in full force. Every year, as shoppers seek out the best holiday deals, thousands of consumers fall victim to the scams and bogus charity pleas that crop up around the holiday season. Consider the following tips to avoid falling victim to a scam.

When Buying Gift Cards: During the holiday season, when gift card purchases go up, thieves take advantage by swiping the information from gift cards on display in stores. They then periodically check online to see if the card has been activated. Once a consumer purchases the card and activates it, the scammer uses it to shop online. If you're buying gift cards not kept behind the counter at a store, carefully inspect the card for signs of tampering, including torn or bent packaging.

When Donating: The past few years have seen a rise in the number of fake charities, many of which claim to support popular issues of homelessness, child welfare or disaster relief. When giving back, work directly with an official website or representative, rather than someone setting up shop on a street corner or community center. You can also find up-to-date reports on local and national charities at www.give.org. 

When Bargain-Hunting: Remind yourself to stay grounded. No matter how many deals you see advertised during the holidays, keep your expectations grounded in reality. If the price seems too good to be true, then it probably is. If you're questioning whether the online deal you see is real, that's your first red flag that it probably isn't. To double-check, do a quick search for the same product on other shopping websites. If the "deal" you found is more than 50 percent lower than everything else you're seeing, it's probably a scam.

If you think you may be a victim, take action. Don't wait for the criminals to drain your accounts. At the first sign of suspicious activity, call your bank directly and have them freeze your accounts so the thieves cannot steal additional funds. Your bank will work with you on how to resolve the issue based on your unique circumstances.

By, Amber Seitz