The February 2017 edition of the WBA Compliance Journal has been published.

Read Special Focus for an article about the FFIEC's revision of the Uniform Interagency Consumer Compliance Rating System. Next, turn to Regulatory Spotlight for information on newly finalized rules on CRA and Regulations A and D. Finally, turn to Compliance Notes for information about the DOL fiduciary duty rule.

Click here to download the full issue.

By, Amber Seitz

Spring is just around the corner! That means it's time to open up the windows, sweep out the garage, and do some spring cleaning. As you scrub and organize, don't leave out your money. Tidying up your finances can help reduce stress during tax season, too! Here are a few tips to keep in mind:

Dispose of old records 
Go through all of the paper files and receipts you've saved over the past year and place everything into either the "File/Save" or "Toss/Shred" pile. Items that should be shredded include ATM receipts, bank deposit receipts and credit card statements, once the accounts are current. Utility statements can also be discarded after they've been paid. This helps protect you against identity theft as well as clutter. If possible, switch to e-statements to reduce the amount of paper lying around. Save pdf files or copies of the e-statements until they have been paid, then archive or delete them. Note: Tax information should be kept for seven years, so be sure to put those in the "Save" pile.

Update your beneficiaries
Look back at insurance and retirement account policies to make sure the beneficiaries are current. If your marital status recently changed or you experienced the loss of a spouse or child it is especially important to update your beneficiary information. Make sure the money will go where you want it to go if it gets distributed today, not where you wanted it to go when you first signed the policy. This is also a good time to reassess your insurance coverage – is the amount you originally signed up for still enough to protect you and your family?

Cash in your rewards
Go through any credit card points, airline frequent flyer miles, store credits, loyalty club memberships, etc. Schedule when you'll need to use these benefits by before you lose them. If you're currently paying a fee to participate in these programs (such as an annual fee for a credit card) do the math to figure out if the reward outweighs the fee. If it doesn't, consider dropping the program.

Organize your credit cards
Cut up and cancel cards that you haven't used in six months or more, especially if they carry an annual fee or have a higher interest rate than your other cards. You'll have more space in your wallet and fewer bills to worry about. If you're trying to eliminate debt, try to stick with just one or two credit cards or a debit card. If you're carrying debt on multiple cards, talk to your local bank about the possibility of consolidating that debt into a single payment so you can close the extra card accounts. 

No matter what areas of your personal finances need a little dusting off, taking a little extra time this spring to work on your money issues will make budgeting throughout the rest of the year much easier. 

An archive of Consumer Columns is available online at

By, Amber Seitz

Bankers work to raise awareness, education about the industry

Emerging from an eight-year recession during which many bank training programs were discontinued, the industry is now experiencing a need to recruit and train new bankers – some of whom will be the banking's future leaders. These young individuals begin their journey toward a career in banking by first learning about the diversity of the industry. If they decide banking is a good fit for them, they must then prepare academically for their chosen career. Wisconsin's banking industry is working to pave that career path and, ideally, guide more young talent into the challenging, dynamic field of commercial banking.

Discovering Diversity 

One of the primary barriers preventing young professionals from selecting a career in banking is their lack of understanding of the industry. Many students simply aren't aware of the diversity available within a banking career. Agricultural lending, information technology, human resources, retail banking, and trust banking all require different skill sets and appeal to different individuals. Scott Kopp, president/CEO of the Bank of Galesville and a member of the WBA Board of Directors, told a story of a young man who interned at the bank recently. "He didn't realize all the different functions that go on inside the bank," Kopp said. "He didn't have any idea about banking as a career." Through his work and by sitting in on various meetings, including board meetings and ALCO committee, Kopp says the internship opened the student's eyes to the wide variety of possibilities within a banking career. While the Bank of Galesville doesn't have a formal internship program, fostering students who express interest is a priority. "Interning at the bank gives students the opportunity to decide if this is what they want to do," said Kopp, pointing out that banking isn't the right career for everyone. "I think they'll know if this is the type of atmosphere they're looking for," he said. 

Bank interns can learn about the many different aspects of banking both through their daily duties and through exposure to other areas of the bank. Great Midwest Bank, S.S.B., Brookfield, developed a formal internship program in the summer of 2015 to fill a need during the peak season in their mortgage business. "While performing their daily duties, our interns obtain knowledge about real estate financing from different perspectives," said President/CEO Dennis Doyle, a member of the WBA Board of Directors. The interns also meet with members of the senior management team to learn more about the larger issues impacting community banks. After this in-depth introduction to banking, the next task for aspiring bankers is to prepare academically for their career.

Career Preparation

For the past several decades, many individuals who become bankers obtained a degree in finance, were hired at a commercial institution, and then worked their way up through the ranks, learning about the industry and the inner mechanics of banks while doing so. Unfortunately, many of today's bank employees tend to be "accidental bankers," a term former banker Kent Belasco learned of and uses to describe the phenomenon that these bankers didn't start their careers with the goal of becoming a banker – they just ended up in banking. Belasco is assistant professor of finance and director of the new Commercial Banking Program at Marquette University's College of Business, and he hopes to professionalize the banking discipline through this program. "One of my primary goals with this program is to professionalize this field through academic training, similar to other disciplines such as accounting and law," he said. The program, housed under the broader, well-ranked Finance Department at Marquette, allows students to focus specifically on commercial banking as part of their education. Just as a student studies law to become a lawyer, or accounting to become an accountant, a student with a commercial banking concentration will become a banker.

Students in the program will take nine core courses: three focused specifically on commercial banking and the remainder in finance. The first is a broad overview of the structure and basics of commercial banking; the second outlines and explains the key functions that occur within the bank, including retail and commercial sales management, IT, wealth management, administration support functions and operations; the third covers all aspects of risk management. Additionally, each student will complete two summer internships and two related electives. "By the time they graduate, they'll be well-positioned to enter a bank in a full-time position," Belasco said. "There are a lot of ancillary goals, but at the end of the day this program is about giving these students great careers and filling a talent and succession gap in the banking industry." 


In addition to professionalizing banking and readying students for a career in banking, Belasco says another primary goal for the new program is influencing students' opinion of banks through education. "When you educate students more on the risks and regulation that occurs in the industry, you can hopefully create an opportunity to stimulate productive thought and facilitate the changes that are needed in the industry, in addition to changing the perception of bankers," he explained. That same benefit applies even for those students and/or interns who choose not to continue on in banking. "At the very least we're exposing tomorrow's leaders to the world of community banking, a vital part of our economy," Doyle said. "Hopefully, the internship program gives them more insight into the industry and aids them in making an informed career decision." 

In addition to the benefit to the industry as a whole, banks that participate in internship programs or who actively engage with interested students also benefit in tangible ways. "We look at it as a way to fill a need the bank has and also one the student has," said Kopp. "It's a two-way street." The student gets to experience the life of a banker first-hand and the bank has an opportunity to gauge the skill level of a potentially productive long-term employee. "The bank benefits by having a productive employee for three months who is eager to contribute during our peak business season," said Doyle. "The program also gives us a glimpse of potential candidates for full-time employment following graduation." What is clear is the talent waiting to come off the bench and into banking. "Our interns have been bright and industrious individuals that were capable of quality work despite a small window of time," Doyle continued. "That tells us talent is out there and it is up to us as community bankers to promote our rewarding profession to our future leaders." 

Ultimately, not every bank will be a good fit for interns, and not every intern will be a good fit for banking. However, no matter where that student's journey in banking ends, they will step off the path with a deeper understanding of the industry, whether they become a bank employee, business or community leader, or simply a more well-informed consumer.

By, Amber Seitz

Banker, customer communication a key element to success

For the past few years, farm and other ag enterprises have been dealt a tough hand. As the ag sector works through the worst part of the super-cycle, the relationship between ag bankers and their customers becomes critically important; it can even be a lifeline for some. There are several actions ag bankers can encourage their clients to consider using, and several ways the bank can have a direct impact, as well. Above all, the key to survival and a return to profitability is consistent, open communication between ag bankers and their customers. 

The Farmer's Toolbox

There are many strategies bankers can offer their clients as options to help with cash flow during tough times. According to Steve Apodaca, senior vice president of the American Bankers Association's Center for Agricultural and Rural Banking, many farmers can take self-help action by reviewing their marketing plan for commodities, considering hedging, looking for expenses to cut, and/or cycling in more profitable crops. "Be careful of lender liability, however," Apodaca cautioned. "Bankers shouldn't instruct their customers to do something, but instead make suggestions that will help with profitability." 

Michael Irgang, executive vice president at Global Risk Management Corporation, advises having a well-thought-out, disciplined, strategic approach to marketing commodities that utilizes the applicable tools – exchange-traded futures and options, for example, to protect against downward movement in grains. "The use of futures and options when used in a disciplined risk management program can significantly reduce a lot of the risk that the farmer would otherwise have to a collapse in grain prices," he pointed out. Commodity prices are often very volatile and unfavorable shifts in grain prices can significantly impact a farmer's cash flow.  "As business partners to the farmers, bankers can suggest that farmers create and follow a risk management program to protect their cash flow against adverse changes in grain prices," Irgang said. "This is a win-win for both the farmer and the banker."

Ag bankers can both help their customers and position themselves as experts by becoming a source of education about these varied strategies. In addition to industry best practices, bankers should also encourage their customers to be open about financial obstacles. "Communication is the biggest thing," said Mike Brueggen, loan officer at the Bank of Cashton and 2016-2017 WBA Agricultural Banking Committee Chair. "To avoid pitfalls have an open line of communication and have a plan in place. We've been through these tight times before, so it's a matter of planning for it." Open communication gives the bank more options to assist in certain situations, such as a farmer needing to switch from cash to charging for accounts payable. "One of the best things a farmer can do is see their banker early and disclose everything they're going through financially to see what the banker can do to help them out," said Apodaca. Brueggen recommends the same strategy: "With my farmers, I always say 'let's talk about it now, not when you're in a bind.'" 

The Banker's Options

While it's essential that farmers communicate with their ag bankers, it's just as important for the bankers to communicate with their clients, particularly when it comes to understanding their financial situation during tough years. "As part of their portfolio review process, the banker should be going out and visiting their customers and asking for financial information," Apodaca advised. "Call up the customer, visit the farm or ranch and sit down with their financials and go over everything that's going on. After reviewing the complete financial picture the banker can offer solutions, and then ask the farmer to put down a financial plan for the next year, on paper." 

Because most Wisconsin banks have the financial capacity and risk-bearing ability to work with borrowers during stressful times, ag bankers have several options available to them to help provide relief for their stressed customers. To do so, Apodaca says banks will need to "intensify loan servicing efforts as borrowers begin encountering increased stress." One common tool is to increase or open lines of credit, according to Brueggen. "As a last case we'll do interest-only loans for a period until prices resume or they get back on their feet," he added. "Those types of restructuring definitely take some planning and meeting time with the customer." Under certain conditions, the bank can offer additional aid through the Farm Service Agency. "If there have been two or three years of negative cash flow and a collateral deficiency, combined with expectations of future positive cash flow, the banker can try to get a guarantee from FSA, or a combination package of some kind," said Apodaca.

It's also important for ag bankers to lend their financial expertise to their customer's situation, particularly when it comes to bringing objectivity to their plan for marketing. "The banker has to partner with the farmer to determine what makes the most sense for them and provide a degree of objectivity," said Irgang, emphasizing that bankers can bring objectivity to conversations about managing commodity risk and ease their customers' fears of "missing out on the high." That partnership requires a thorough understanding of the customer's specific needs and business risks. "There isn't a one-size fits all risk management strategy for every agri-business," Irgang cautioned. "You have to understand your clients and have the discussions with them of what marketing program makes the most sense for them." As part of that planning process, bankers may also offer assistance with financial modeling as a tool for their customers. "We're able to offer some stress testing of their operation, whether it's dairy or crops," Brueggen explained. "We can help them find their break-even and identify the prices they need to hit in order to make ends meet." 

Ultimately, whatever ag bankers can do to help their customers improve will also benefit their institution. "What's good for the farmer is good for the bank," Irgang said. "Ag lenders can improve the credit quality of their loan portfolio by setting standards for marketing grains." Banks may even offer better pricing to customers who have a risk management plan in place. 

Need a refresher on some of the strategies mentioned in this article? 
A true sign of an exceptional agricultural banker and bank is their ability to work with customers through the cycle, in good times and bad. The 2017 Ag Problem Loans Workshop is designed to prepare agricultural bankers for the challenging conversations and servicing options that might be necessary during the tough times. Topics covered during the workshop will include action plan development, lender liability, protective and emergency advances, guarantee protection, servicing actions, and more! Join your fellow aggies on February 23 in Wisconsin Dells by registering at


WBA Ag Conference: April 5
Don't miss seeing each of the experts featured in this article at the Agricultural Bankers Conference in Wisconsin Dells! Read more about the conference on page 21 of this issue, or visit


By, Amber Seitz