On June 9, 2017, after over forty years of “banking” on a simple understanding of the fiduciary rule, the initial phase of the Department of Labor’s (the “DOL”) new and controversial fiduciary rule was implemented. The new rule, applicable to financial service firms that manage retirement assets, expands the scope of who is a fiduciary under the Employee Retirement Income Security Act (“ERISA”), which in turn triggers a number of fiduciary investment advice responsibilities for such individuals. Under the new fiduciary rule, a fiduciary is required to put the client’s best interest first, act in a prudent manner, avoid misleading clients, provide complete disclosures of all relevant information and avoid conflicts of interest. 

Although the new fiduciary rule has been in the works since 2010, many financial institutions have been caught off guard by the application of the new rule to their employees and banking operations. In particular, the rule expands the types of situations where communications with customers may be deemed investment advice subject to the rule. Banks must carefully consider how the new rule will impact their operations in order to ensure that communications with customers will not inadvertently trigger the application of the fiduciary rule. In the alternative, financial institutions with trust departments, investment advisory and broker-dealer operations, and other wealth management lines of business will need to develop and execute plans to bring their operations into compliance with the new fiduciary rule.

History

Adopted in 1975, the old fiduciary rule created a strict five-part test that determined whether an individual was a fiduciary. Under the old rule, an individual would be deemed a “fiduciary” if he or she rendered advice: (1) as to the value of securities or other property, or made recommendations as to the advisability of investing in, purchasing or selling securities or other property; (2) on a regular basis; (3) pursuant to a mutual agreement, arrangement or understanding with the plan or the plan fiduciary; (4) that served as a primary basis for investment decisions with respect to plan assets; and (5) that was individualized based on the particular needs of the plan or IRA. To avoid application of the old rule, a person needed only to eliminate one (or more) of the five aforementioned elements from the customer relationship. For example, so long as the customer only received investment advice periodically (i.e. not on a regular basis), the old fiduciary rule would not have been triggered. 

The 1975 regulation was adopted prior to the existence of wide-spread use of IRAs, participant-directed 401(k) plans, and the now commonplace rollover of plan assets from ERISA-protected plans to IRAs.  This prior regulation also allowed some advisors, brokers and consultants to play a central role in shaping employee benefit plan and IRA investments without being subject to fiduciary obligations under ERISA or the Internal Revenue Code. 

Fiduciary Rule

Effective June 9, 2017, the new fiduciary rule amends the regulatory definition of fiduciary investment advice to replace the limited five-part test with a new and much broader definition. The new rule treats persons who provide investment advice or recommendations for a fee or other compensation with respect to assets of a plan or IRA as fiduciaries in a wider array of advice relationships. The rule first describes the kinds of communications that constitute investment advice and then describes the types of relationships in which such communications give rise to fiduciary investment advice responsibilities. 

What is investment advice under the rule?

A person gives investment advice if he or she provides, for a fee or other compensation (direct or indirect), the following types of advice:

  • Recommendations regarding the advisability of buying, holding, selling, or exchanging securities or other investment property, including recommendations as to the investment of securities after the securities are rolled over or distributed from a plan or IRA;
  • Recommendations as to the management of securities or other investment property, including, among other things, recommendations on investment policies or strategies, portfolio composition, selection of other persons to provide other investment advice or investment management services, and selection of investment account arrangements; or
  • Recommendations with respect to rollovers, transfers, or distributions from a plan or IRA, including whether, in what amount, in what form, and to what destination such a rollover, transfer, or distribution should be made.

The fundamental threshold element in establishing the existence of fiduciary investment advice is whether a “recommendation” has occurred. A recommendation is a communication that, based on its content, context and presentation, would reasonably be viewed as a suggestion that the recipient engage in or refrain from taking a particular course of action. According to the DOL’s Frequently Asked Questions on the fiduciary rule, published in January 2017, the more selective and specifically tailored the advice, the more likely it is to be considered as a recommendation and, therefore, trigger the new fiduciary rule if it is coupled with a financial incentive. 

In addition to a recommendation, there must be a fee or other form of compensation associated with the investment advice. Fees can be (i) direct, meaning any compensation or fees received from the customer that is explicitly connected to the investment advice given, or (ii) indirect, meaning any compensation or fees received from any other source in connection with the recommended transaction or service. Examples of the types of fees that trigger the fiduciary rule are: commissions; loads; finder’s fees; revenue sharing payments; shareholder servicing fees; marketing or distribution fees; underwriting compensation; payments to firms in return for shelf space; recruitment compensation; gifts and gratuities; and expense requirements.

What is not covered under the rule?

Not all communications with financial advisors or employees will be covered by the new fiduciary rule. Specific examples of communications that would not rise to the level of a recommendation and therefore would not constitute fiduciary investment advice include:

  • Investment Education: The DOL created exemptions from the definition of “recommendations” for certain educational information and materials. Delivery of such information or materials to a customer will not be considered “recommendations.” Examples of such educational information include:
    • Plan and investment information: information and materials that describe investment or plan alternatives without specifically recommending particular investments or strategies;
    • General financial, investment, and retirement information: any general financial, investment, or retirement information is non-fiduciary as long as it does not cross the line of recommending a specific investment or investment strategy;
    • Asset allocation models: financial institutions can provide materials on hypothetical allocations provided that they do not cross the line of making specific investment recommendations or referring specific products. These models must be based on generally accepted investment theories and explain the assumptions on which they are based; and
    • Interactive investment materials: financial institutions can provide questionnaires, worksheets, software and similar materials that enable retail investors to estimate future needs. As with the asset allocation models, the investment materials cannot cross the line of making specific fiduciary investment recommendations or referring to specific models.
  • General Communications: Examples of general communications that a reasonable person would not view as fiduciary investment advice include:
    • General circulation newsletters;
    • Commentary in publicly broadcasted talk shows;
    • Remarks and presentations in widely attended speeches and conferences;
    • Research or news reports prepared for general distribution;
    • General marketing materials; and
    • General market data, including data on market performance, market indices, or trading volumes, price quotes, performance reports, or prospectuses. 

The Best Interest Contract Exemption

ERISA and the Internal Revenue Code generally prohibit fiduciaries from receiving payments from third parties and from acting on conflicts of interest, including using their authority to affect or increase their own compensation, in connection with transactions involving an employee benefit plan or IRA. For example, an advisor has a conflict of interest when the advisor recommends that a participant roll money out of an employer plan, such as a 401(k) plan, into an IRA that will generate ongoing fees for the financial institution.

In addition to adopting an amended definition of fiduciary, the DOL also implemented a new exemption from prohibited transactions, which is referred to as the Best Interest Contract Exemption (“BIC exemption”). According to the DOL, the BIC exemption is designed to promote the provision of investment advice that is in the best interest of retail investors, such as plan participants and beneficiaries, IRA owners and small plans. To facilitate continued provision of advice to such retail investors, the exemption allows investment advice fiduciaries, including investment advisors and broker-dealers, and their agents and representatives, to receive fees and compensation that, in the absence of an exemption, would not be permitted under ERISA and the Internal Revenue Code.  

The BIC exemption permits financial advisors (i.e., individuals who are representatives of investment advisors, broker-dealers or banks or similar financial institutions) and the financial institutions that employ them to continue to rely on many current compensation and fee practices, as long as they meet specific conditions intended to ensure that financial institutions mitigate conflicts of interest, and they and their financial advisors, provide investment advice that is in the best interests of the customers. Specifically, in order to rely on the BIC exemption after December 31, 2017, a financial institution generally must:

  • Acknowledge fiduciary status for itself and its advisors;
  • Adhere to basic impartial conduct standards (described below);
  • Commit to such impartial conduct standards in an enforceable contract when providing advice to an IRA owner;
  • Implement policies and procedures reasonably and prudently designed to prevent violations of such impartial conduct standards;
  • Refrain from giving or using incentives for financial advisors to act contrary to the customer’s best interest; and
  • Fairly disclose the fees, compensation, and material conflicts of interest associated with their recommendations.

Under the BIC exemption, a financial institution which provides fiduciary advice must maintain and regularly update a website that includes information about the financial institution’s business model and associated material conflicts of interest; a schedule of a typical account fees; a model contract; a written description of the financial institution’s policies and procedures that mitigate conflicts of interest; a list of all product manufacturers and other parties that provide third party payments with respect to specific investment products or classes of investments; a description of the third party arrangements, including a statement on whether and how these arrangements impact financial advisor compensation, and a statement on any benefits the financial institution provides in exchange for the payments; and disclosure of compensation and incentive arrangements with financial advisors. Individualized information about a particular advisor’s compensation is not required to be on the website. All financial institutions relying on the BIC exemption also must notify the DOL in advance, and retain records that can be made available to the DOL and retirement investors for evaluating compliance with the exemption. 

Furthermore, the exemption provides for enforcement of the standards it establishes in the form of a contract. When providing advice to an IRA owner, the financial institution must commit to the impartial conduct standards in an enforceable contract. In the contract a financial institution must acknowledge its fiduciary status and that of its financial advisors. ERISA investors can directly assert their rights to proper fiduciary conduct under ERISA’s statutory protections within the contract. If financial advisors and financial institutions do not adhere to the standards established in the exemption, retirement investors will have a way to hold them accountable—either through a breach of contract claim or under the provisions of ERISA. 

Impartial Conduct Standards

Initially, the BIC exemption was supposed to be implemented in its entirety on June 9, 2017. However, during a transition period that will run until January 1, 2018, only the “Impartial Conduct Standards” provisions of the BIC exemption will be required of financial advisors and financial institutions that have fiduciary responsibilities. Specifically, during this transition period, in order to rely on the BIC exemption, financial advisors and financial institutions with fiduciary responsibilities must:

  • Give investment advice that is in the “best interest” of the retirement investor. The best interest standard has two main components: prudence and loyalty.
    • Prudence: Recommendations must reflect the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity familiar with such matters would use in the conduct of an enterprise of a like character with like aims.
    • Loyalty: Recommendations must be based on the investment objectives, risk tolerance, financial circumstances, and needs of the retirement investor, without regards to the financial or other interests of the investment advisor representative, employee, advisor, or any related entity or other party.
  • Charge no more than reasonable compensation. The obligation of service providers to charge no more than reasonable compensation has long applied to advisors. The reasonableness of the fees depends on the facts and circumstances.
  • Ensure that statements about services, recommended products and transactions, fees and compensation, material conflicts of interest and other relevant matters are not materially misleading at the time made.

Absent further action from the DOL, all other requirements of the BIC exemption will become effective on January 1, 2018. Although most aspects of the BIC exemption have not been implemented yet, financial institutions need to have policies in place to comply with the Impartial Conduct Standards and plan ahead for compliance with the rest of the rule at the beginning of next year.

Conclusion

As of June 9, 2017, financial institutions must fully understand (1) the new definition of a “fiduciary” and how to keep employees from inadvertently becoming a fiduciary, and (2) depending on what kind of services a financial institution offers, how to instruct their existing employees who do have a fiduciary duty to comply with the “Impartial Conduct Standards” of the BIC exemption. For most financial institutions, the goal will be to ensure that routine communications with the customers regarding retirement assets, such as advice regarding IRA accounts, do not trigger the fiduciary rule. For other financial institutions, the goal will be to implement an appropriate plan to ensure compliance with the fiduciary rule during the transition period and after the delayed effective date. Although this task may seem daunting at first, it is not impossible. Due to the fact that the majority of the BIC exemption has been delayed until January 1, 2018, now is the time for financial institutions to implement policies and procedures to meet the current requirements and plan ahead to ensure they are adequately prepared for the implementation of the remaining parts of the BIC exemption. A financial institution’s policies and procedures should be thoughtfully drafted and include specific guidelines for employee conduct. Additionally, financial institutions should review their investment advisory agreements, brochures and compensation structures to ensure they do not create a potential conflict of interest.

WBA wishes to thank Attys. Kathryn Allen and John Donahue of Godfrey and Kahn, SC for providing this article. Godfrey and Kahn is a WBA Bronze Associate Member.

By, Ally Bates

The Wisconsin Bankers Association offers for your use the following consumer education column. 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.

Savings at Home for Summer

Nearly half of the energy costs in a typical home come from heating and cooling, according to the U.S. Department of Energy, so when the temperature goes up, so do your cooling costs. Here are a few tips on how to stretch your household budget this summer and still keep your chill.

Consider upgrading your old air conditioner. If you have an old window unit air conditioners with an EER energy efficiency of 5, you can cut costs in half by replacing it with a new one with an EER of 10. So do a simple calculation: If your average annual bill is $260, your bill would become $130. Depending on the size of the unit and room (window units range from $100 to $500), your annual savings will pay for the unit in just a few years. Air conditioners also function more efficiently and cheaply (and last longer) when you replace or clean their filters on a regular basis. Read your owners' manual to find out how often you should replace or clean filters.

Use ceiling fans. Overhead fans get air circulating, which means you might be able to delay turning on the air conditioning-especially if you can also leave windows open on cool summer evenings. Make sure you have the blades spinning in the right direction, though! In the summer, the preferred direction for a ceiling fan to spin in is counterclockwise as you look up at the fan blades. You will feel a cool downward airflow as you stand directly under the fan. In the winter, the preferred direction for a ceiling fan to spin in is a clockwise direction. Check your owner's manual for how to switch the direction on your fans.

Take time to unplug. Even when they're not in use, electronics such as television sets, DVD players, computers and phone chargers can suck power out of outlets. Either unplug them when you're done using them or use a Smart Strip (which cuts power when it's not needed). One exception to this tip: overhead fans, especially at night, will cool air more cheaply than turning down the thermostat.

Invest in a programmable thermostat. Programming your thermostat is one of the easiest, most cost-effective ways you can cut your energy bills this summer. Installing a programmable thermostat prevents your home from going through large temperature swings and can save you up to 10 percent on your cooling bills. A homeowner can save as much as $150 on air conditioning bills by setting a thermostat.

An archive of Consumer Columns is available online at www.wisbank.com/ConsumerColumns.

By, Amber Seitz

Maximizing the Effectiveness of Your Risk Management Practices

With two recent raises from the Federal Reserve and an anticipated two or three more on the way this year, plus an increase in regulatory scrutiny, interest rate risk should be top-of-mind for every financial institution. However, not all interest rate risk methodologies are created equal. Bank management must review their practices to ensure they incorporate interest rate risk management with the bank's overall strategic plan, address the most likely risks, and utilize their risk management tools for more than just satisfying regulatory requirements. 

Interest Rate Risk and the Strategic Plan

The first step in aligning the bank's interest rate risk practices with the strategic plan is to define an acceptable level of risk, typically dictated by the board of directors. Too little risk can be just as harmful to the bank (via lost profits) as too much risk. "Risk management isn't risk avoidance," said Marc Gall, vice president at BOK Financial Institution Advisors. "The bank takes risks all the time, so you're not trying to avoid it. You're trying to manage it." Bank management must determine whether they believe the risk profile they use accurately represents the bank's risk. "Many of the tools and approaches we've used in the past have been driven by regulatory requirements, not the bank's needs," explained Dave Koch, president and CEO of FARIN & Associates. "Reconcile the reports with what everyone actually believes the bank's risk position actually is."

The exact strategy for managing that risk will be different at every institution. "It's always important for bank managers to recognize the unique characteristics of their institution, business model, customer base and local market area," said Jeff Caughron, president and CEO of The Baker Group. "There's no cookie-cutter approach to interest rate risk strategies because every single balance sheet has its own unique considerations." Those include the mix of assets and liabilities and their rate sensitivity as well as any unusual instruments or off-balance sheet derivatives. The bottom line is: what works for one bank may not work for another, even within the same market. "There are so many nuances," said Gary J. Young, president & CEO of Young & Associates, Inc. "For every rule of thumb, there are exceptions." For example, while most Wisconsin banks will benefit from keeping interest rates as low as possible on deposit accounts, a small branch in a large market with few deposits may benefit from being extremely aggressive in raising rates. 

The Usual Suspects: Common Risks

Despite each bank needing a unique interest rate risk management strategy, they share many of the same risks. After all, the entire industry is operating under the same prolonged low-rate environment. One common risk associated with that environment is the speed at which different banks will respond to rising rates. Many risk models show all loan rates going up by the same amount at the same time, when in reality the change is much more varied. "One vulnerability is the disconnect between the reality of how loan rates move versus how they're being modeled," said Koch. At the time of this writing, the Fed has increased its rate by 75 bps, yet there has been virtually no change in non-maturity account rates. "The bank needs to establish a strategy with respect to what they're going to do when other banks raise their interest rates, because it's going to happen," said Young. "It's best to think those things through before the event occurs." 

Another, more widespread concern is the question of how funds will move between non-maturity accounts and certificates as rates rise. The ratio of non-maturity accounts to CDs is very different today than it was prior to the Great Recession and subsequent rate collapse. According to Young, the average bank's pre-recession ratio of CDs to NMAs was 60%/40%. Today, a ratio of 30%/70% is not uncommon because of the prolonged low cost of funds. That dramatic swing has caught the attention of regulators because it has massive potential for interest rate risk as the spread widens between CD rates and NMA rates and depositors begin moving their money. "Trying to get a good understanding of how price-sensitive those [deposit] accounts are and how long those funds will stay there is one of the biggest challenges today," said Gall. Of course, the entire situation is uncharted territory, so there are no guarantees. "A core deposit study will absolutely help you manage that deposit relationship better and understand how to best control those costs while still meeting the customers' needs," Koch advised. 

Another common risk is overlooking dynamic liquidity risk analysis, according to Caughron. Because liquidity has been ample for so long, banks must ensure they have the tools at their disposal to prepare for different conditions. "For banks to survive and thrive, they need solid liquidity risk tools at their disposal," said Caughron. In general, lack of effective tools can be a risk for any bank. "Proper analysis of institution-specific data is critical to effectively manage interest rate risk," Caughron explained, adding that common "old tools" like rate-sensitive GAP analysis aren't enough anymore. "These days we know that GAP is a starting point and doesn't tell the whole story," he said. "We have to ensure that we're doing deeper dives into analysis of the data characteristics of our banks."

Invalid or untested assumptions in the bank's interest rate risk models are another common area of concern. "The key thing is understanding your report model and the assumptions that go into it," said Gall. "These reports are not as cut-and-dried as financial statements." It's also important for bank management to understand the severity of risk associated with each assumption. "Nobody is going to get all of the assumptions right," Koch explained. "You need to understand which assumptions could kill you quickly so you know what you have to keep a close eye on. Accurate sensitivity testing is essential." Gall recommends running an alternate assumption scenario annually. These "what if?" scenario models can help the bank build out strategies and tactics for unlikely but highly impactful possibilities. 

Finally, a risk that is common throughout the industry is the need to adapt to change. "Demographic changes are having an impact on the behavior of depositors and borrowers," Caughron said. "Those strategies that make sense going forward may be quite different from what made sense in the past."

More Than Just a Regulatory Requirement

Perhaps the most impactful change that can be made to a bank's interest rate risk practices is to use them not only to satisfy regulatory requirements, but also to manage the bank holistically. "The banks that really use interest rate risk well are the ones who take it one step further and ask what that means about how they can improve the quality of the bank," said Young. "If interest rate risk is only ever about measuring where you are, it's not doing you much good. You're just meeting the regulatory requirement." To realize the full potential of the information gleaned during the interest rate risk management process, bank management must use that data to inform small tactical shifts that will improve the bank's performance in the future.

Costs associated with purchasing or upgrading risk management tools should be viewed as investments due to their ability to improve the bank's overall performance. "If you invest in the risk management function wisely, it will make you money," Koch assured. He also recommends placing all of the bank's risk management tools into once overall forecast, because interest rate risk, liquidity risk and credit risk are all interdependent. "That's why modeling that tries to isolate one set of risks is problematic," he explained. 

Embracing interest rate risk and ALCO management also helps the bank improve profitability because the reports can give bank management a glimpse at where their current strategies will lead, according to Gall. "The interest rate risk report is a tool to determine where the bank is headed without additional action," he explained. "But the future is not set in stone. The report isn't a forecast. It's a guide." 

BOK Financial Institution Advisors is a WBA Gold Associate Member.
The Baker Group is a WBA Bronze Associate Member. 

By, Amber Seitz

Your employees are your most valuable asset, and their safety is your paramount concern. According to the US Department of Labor's most recent Census of Occupational Injuries, workplace homicides increased by 2 percent to 417 cases nationwide in 2015, with shootings increasing by 15 percent. Workplace violence is an unfortunate reality, but training and preparation can make all the difference if—and when—a situation arises. All businesses, but banks in particular, should regularly review their policies and training practices as well as work to develop a mindset of preparedness. "For the protection of your employees, customers and community, it is imperative that bank preparation and training, as well as policies and procedures, align with today's reality," said Rose Oswald Poels, WBA president and CEO. It can mean the difference between stopping an incident before it escalates to violence.

Effective Policies

Bank incident response policies can look good on paper, but if they don't take real human reactions into account they won't be effective, says Terry Choate, president & CEO of Blue-U Defense. Blue-U is a defense company that offers training and information to assist employees during incidents of workplace violence. "Incident response policies have to be practical and effective," Choate said. "They must take into account an understanding of what is going to happen to both the victim and the perpetrator. If they don't have those things, they're not going to work." For example, many bank lobbies now have free-standing teller pods or similar customer service stations. During a robbery, a typical policy will require the teller stationed at the pod to punch in a code on a keypad to retrieve any cash the robber demands. However, Choate points out that during a high-stress situation the heart rate spikes, inhibiting the fine motor control required for such a task, making it incredibly difficult. In fact, the bank employee may not even be able to recall the code under duress. "When the teller can't do what is expected of them, the situation escalates quickly," Choate explained. "The policy should not expect employees to do something they won't be able to do."

It is also common for banks' incident response policies to attempt to cover many different types of incidents under one large, complex policy. However, a good policy for responding to robberies or active shooter situations should be separate from the incident response policy addressing other types of scenarios. "The active-shooter policy should be stand alone," said Joe Hileman, executive vice president at Blue-U. "That situation and the responses it requires are different from any other situation at the bank." Due to regulatory requirements, often banks' incident response policies focus on computer-related incidents such as disaster recovery and data breaches, according to Debra Bartolerio, CAMS, AVP – compliance & security at Citizens Bank, Mukwonago. "You need to incorporate customer and employee safety in your incident response plan," she advised, also recommending that the policy include an annual requirement for training. 

Practical Training

Like a good policy, proper training also can have a tremendous positive impact on the outcome of an incident of workplace violence. Unfortunately, most bank employees only receive training focused solely on bank robberies, which doesn't meet today's needs, according to Hileman. "You also need to train for incidents that have nothing to do with a bank robbery," he advised. "We need to train people for today's needs and today's threats." Hileman explained that during an incident, people will always revert to their training, and the responses required for a bank robbery are very different from those required during an active shooter situation. "There is a fine line between a bank robbery and an active shooter," Choate said, explaining that not all bank robberies become active shooter situations, and not all active shooter situations are bank robberies. "The bottom line is, bank employees need training for both situations," he said. 

Helping bank staff distinguish between a robbery and a violent incident and respond accordingly is an essential, yet often overlooked, component of training. "Skills at recognizing signs of violence and de-escalation techniques are critical skills that bank employees need but very few of them get," said Choate. Those skills can event help prevent a situation from becoming violent. "Not every incident will turn into an active shooter situation," Hileman explained. "If you don't give your tellers those tools to de-escalate the situation, it may become a more violent encounter. So, training can actually prevent violent situations."

Bartolerio, Choate and Hileman all recommend bank staff receive workplace safety training at least annually, due to both turnover and the fact that the skills involved are perishable. Bartolerio recommends supplementing that training, as well. She explained that citing incidents of violence that bank employees hear about in the news (even if it didn't happen at a bank) helps drive home that "it can happen here." She uses a monthly article in the bank's internal newsletter for this purpose. "Whenever there's an incident, especially if it's local, send out a communication to staff about how they should react if something similar were to happen at your institution," she advised. 

Alert Mindset

Perhaps the most important and effective thing bank management can do to help keep their employees safe is to foster a culture of awareness. "The reason a lot of banks don't spend the proper time on policies and training is the same reasons why people don't prepare as individuals," said Choate. "They just don't think it's going to happen to them." Promoting a culture of awareness may involve updating policies or simply enforcing current ones. It's also important for bank staff to receive reminders when they're exposing the bank (or themselves) to the possibility of an incident. Bartolerio used the example of encouraging staff to leave lights on in unoccupied offices as a deterrent to criminals, and reminding tellers to be cautious with cash. "Tellers become immune to the value of money because they work with it every day," Bartolerio explained. "Make sure you call them out if you see them with a pile of money on their counter. That looks very inviting to potential criminals." 

Another effective deterrent is to take away potential criminals' ability to surveil the bank by having staff visibly check their surroundings periodically. "We tell our clients all the time, the absolute best way to prevent a bank robbery is to send someone out into the parking lot every so often and have them look around for possible threats or people surveying the bank," said Choate. Blue-U often provides similar low-cost, practical recommendations as a result of their physical site security assessment services, available to WBA members at a discounted rate. "The association is committed to offering tools our members can use to make their institutions safer for their employees and customers," said Oswald Poels.

A culture of awareness also encourages employees to internalize what they learn during their incident training. "A culture of safety is not something you can expect employees to turn on when they come to work," Choate explained. "It has to be a culture change in general that we all become more aware and more prepared. If you don't truly believe it could happen to you, any training is a waste of time." Ultimately, that's the key to bringing awareness and preparation to an incident workplace violence: believing that it can happen to you, no matter how unlikely it seems. "Especially at community banks, our staff tend to feel like 'that happens in downtown Chicago, not here,'" Bartolerio said. "But it can." 

WBA has partnered with Blue-U Defense to bring member banks free education offerings and steeply discounted services related to workplace safety. Three complimentary seminars are being held soon: 

June 6 | Pewaukee
June 7 | Wisconsin Dells
June 8 | Rice Lake

Sign up your bank's attendees today! 

Additionally, Blue-U Defense provides several services to financial institutions to help them protect their employees and customers, including in-bank training. Visit www.wisbank.com/WorkplaceSafety to learn more or to register for one of the free seminars.

By, Amber Seitz

“This is the first case of a bank closure in Wisconsin since 2013 and is a rare case where an institution was unable to recover as the rest of the industry has over the past few years. Recent numbers from the FDIC show Wisconsin banks continue to improve and grow in the role of helping businesses grow and families prosper. The industry as a whole is very strong and stable.

The most important thing for the public to remember is that insured deposits are safe through the Federal Deposit Insurance Corporation’s (FDIC) Deposit Insurance Fund which is 100 percent funded by the banking industry, not taxpayers.

Bank depositors are protected from losses up to $250,000, and in many instances in excess of that amount, by the Federal Deposit Insurance Corporation (FDIC). Underscoring this point is the fact that North Milwaukee State Bank customers will have uninterrupted access to their deposits via existing branch locations or by writing checks or using their ATM/debit cards.

No one has ever lost a penny of FDIC insured deposits in the 80-year history of the agency.

Wisconsin’s banking community expresses its support to the affected employees of the North Milwaukee State Bank.”

North Milwaukee State Bank is the sixteenth Wisconsin-based federally insured depository to be seized by regulators since the financial downturn began in 2008. The others are: Prime Financial Credit Union, Cudahy, March 2009; Bank of Elmwood, Racine, October 2009; First American Credit Union, Beloit, September 2010; Maritime Savings Bank, West Allis, September 2010; First Banking Center, Burlington, November 2010; Evergreen State Bank, Stoughton, January 2011; Badger State Bank, Cassville, February 2011;Wisconsin Heights Credit Union, Ogema, March 2011; Legacy Bank, Milwaukee, March 2011; Wausau Postal Employees CU, Wausau, May 2012; A M Community Credit Union, Kenosha, August 2012; and New Covenant Missionary Baptist Church Credit Union, Milwaukee, January 2013; Banks of Wisconsin, Kenosha, May 2013; Bank of Wausau, Wausau, August 2013; and CTK Credit Union, Milwaukee, February 2016.

By, Admin