WBA filed comments with FRB, FDIC, and OCC on Monday regarding a new process whereby financial institutions could apply for exemptions for filing SARs. Each agency proposed their own rule to amend applicable SAR regulations to allow each agency the ability to issue exemptions from the requirements of the SAR regulations. The proposed rules would allow each agency to grant relief to supervised institutions that develop innovative solutions intended to meet Bank Secrecy Act (BSA) requirements more efficiently and effective. WBA made a number of recommendations to each agency, including:   

  • The agencies, together with FinCEN, need to create one standard and one system for any institution to use when applying for an exemption;  
  • The agencies, together with FinCEN, need to create a single-filing process whereby an institution files solely with its prudential federal regulator and any need for FinCEN approval involving the same application be obtained by the regulator;   
  • The agencies need to provide more information about the application itself, including what questions need be answered when applying, what factors are to be considered in decisions, and what supplemental information need be provided with the application;   
  • The agencies need provide a clear timeline for response to an application filing;   
  • The agencies need create an appeal process so that an applicant may make changes and re-submit without having to completely re-apply for an exemption; and  
  • The agencies need publish exemption decisions, so the industry is aware of agency analysis and decision regarding a particular process or new technology.  

  WBA is hopeful the agencies will take the recommendations into consideration when finalizing the proposals.   

By, Alex Paniagua

By Rose Oswald Poels

Monday, Feb. 22 began this year’s America Saves Week. Since 2007, this national event has provided an opportunity for organizations to work with their communities to encourage financial responsibility, promote good saving habits, and develop a plan to achieve better financial stability.

Our industry knows well that America Saves is more than just a week out of the year. It is a pledge to save money, reduce debt, and build wealth over time. WBA is proud to promote this message through many of our organization’s efforts, namely our Wisconsin Bankers Foundation. The Foundation’s recent auction during the Bank Executives Conference raised nearly $13,000 to promote financial literacy in Wisconsin through education and research. Many of you were a major part of this success, whether by donating, volunteering, or bidding. The donations from this auction will help fund annual scholarships as well as the Reading Raises Interest Kits, a free resource to teach kids about the importance of financial responsibility in conjunction with Teach Children to Save Day. More information on these kits can be found here.

The awareness of this pledge is most notably made apparent through our bankers. It is inspirational that regardless of restrictions, the members of our industry continue to find a way to promote financial wellness. Over the last few months, I have had the pleasure of working with several Wisconsin bankers and other interested groups on a pilot program that will be launched soon only in Wisconsin to encourage small employers to work with their employees on establishing automatic savings through their payroll and participating bank. I will be sharing more news about this pilot once we are ready to launch it statewide.

In the meantime, I encourage all of you to take the America Saves pledge – though in countless ways, you already have through your normal daily activities with customers. Each day of America Saves Week focuses on a different theme, and Tuesday’s theme, Save for the Unexpected, especially speaks to the educational resources banks have provided for their communities. As the path of our economic recovery slowly moves forward, you are the ones that offer guidance on best practices, goals, and financial well-being to your customers. Not only do you promote this important part of a stable life, but you constantly play a primary role in its growth as well. During 2020, participating financial institutions reported that customers deposited over $363.8 Million as a direct result of their America Saves Week efforts. This year, sharing resources with your customers, families, and friends to create a better understanding of saving is once again critical. We cannot predict the unexpected, but we can, and we do, help others prepare for it. Please go to the America Saves website to sign the pledge to be a participating organization.

Travel plans didn’t just take a back seat during the chaotic ride of 2020 – for many, they were left on the side of the road.  

Restrictions and limitations remain in place, but PTO hasn’t disappeared in the same way travel capability has. As a result, using vacation time has taken on a new meaning without taking a trip abroad or getting the whole family together for the holidays. With people having worked their way through the pandemic, a new concern is whether 2021 will continue this trend of people abandoning their vacation time in favor of more hours spent at their desks and home offices.  

The Year Vacations Stopped 

Taking time off was never banned by any means. The initial global shutdown combined with the unprecedented amount of people working remotely in the spring simply had many asking a very rational question: ‘Why would I take time off from working at home just to spend more time at home?’ Gwen Schnitzler, assistant vice president, human resources director at Forward Bank, Marshfield, saw a fair amount of this throughout the year. 

“Last year we definitely saw a decrease in PTO usage,” she said. “Some people may have planned trips they had to cancel because they couldn’t travel or didn’t feel comfortable doing so. Some questioned why they would take time off if there’s nowhere to go. There were a lot of factors contributing to this decrease.”  

A lack of places to go was only the starting point for this trend. For other employees, uncertainty in the future and health concerns played a larger role in their willingness to take time off than anything else. 

“With so many unknown factors related to COVID, we had a lot of employees holding on to their PTO,” said Ann Knutson, senior vice president, human resources director of Bank Five Nine, Oconomowoc. “People weren’t sure how this was all going to unfold. Even with FFCRA, people were reluctant to use all of their paid time off.” 

With so much uncertainty and a hold put on travel, it made sense that banks began reconsidering how to accommodate for this evolving scenario. Molly Bauer, Bank of Wisconsin Dells vice president, human resources officer, noted that properly responding to this created necessary reassurance for the individuals preparing for any unpredictable occurrence. They ultimately decided to do what they noticed other banks were doing. 

“We increased our carryover amounts for 2021,” said Bauer. “Then, time not used by the end of June goes into our ‘extended leave bank’ which can be used for illness-related events.”  

Each bank took its own approach to the situation based off the needs of its employees. Forward Bank realized early on that even if 2021 did provide a glimpse of hope, many of their employees might very well continue viewing the situation with caution. The fear was that the additional time off would simply go unused.  

“Under normal circumstances, employees can already carry over a week,” said Schnitzler. “We thought about extending that, but then understood how in a way we were almost prolonging the problem.” 

Instead, Forward Bank offered employees the option to cash out up to two weeks of PTO. The option was announced in the summertime, which allowed everyone to fully think about what they wanted to do and plan for it. For those who opted to use this choice, the payment was made on the Friday after Thanksgiving.  

“It gave the people who didn’t think they’d use that PTO a way to cash out instead,” Schnitzler added. “We timed it around the holidays so if employees wanted to put that toward holiday-related expenses they could.” 

She noted that the idea was well-received, even by those who decided not to take advantage of it. People were just happy to have that element of choice during a year that vacations allowed for anything but.  

A Good Time to Take Time Off 

Although these changes helped to make life easier, there hasn’t been much of an argument to carry this concept over into the new fiscal year. For some, this is a matter of life finally beginning to return to normal. For others, there is a concern that employees are not taking the time off they deserve. Many employees point to the recent growth in work spurred by essential tasks such as PPP as reason for sticking around. 

“Things got really busy, really quick,” said Schnitzler. “Of course, we still accommodated for when people wanted to take time off. But with mortgages, PPP loans, and the knowledge that even if time was to be taken off there weren’t a lot of options for recreation, the majority of people decided they would just keep working.” 

This became especially difficult for employees still working remotely. Now that their home had doubled as their office, taking time off simply meant spending more time in the place that they work. Schnitzler added that especially now with workloads leveling out a bit, it’s good to view spending time not working as an important part of the work itself, regardless of where or how you end up using that PTO.  Whether you’re simply recharging or looking to spend more quality time with your family, taking that time away from work is crucial for your health and well-being.  

“If you’re at a point where you feel like you have so much going on and can’t possibly take time away, that is exactly the time to use some vacation,” said Knutson. “This prevents burnout and encourages creativity. When people are away from work, they’re able to think about how they might take a new approach to their work style. They can think about developing new workflows. And it helps you keep in mind that life isn’t just about work.” 

Encouraging employees to take time off comes with several benefits. It can help them gain perspective, recalibrate, and have a positive effect on mental and physical health.  

“The past year speaks a lot about our workforce and the fact that so many people are willing to keep powering through, especially last year when things were so crazy,” Schnitzler said. “Seeing that dedication in this industry is amazing.” 

But at the end of the day, she noted that dedication doesn’t mean giving up the PTO you’ve earned. Allowing yourself some extended time to relax is part of the reward for hard work, not the antithesis of it. 

“It’s really as simple as this,” she added. “We don’t give people vacation time with the expectation that they’re not going to use it.”  

Returning to the Office 

Taking the opportunity to clear the mind outside of the day-to-day responsibilities of work is a necessary part of self-care, but prioritizing this time off doesn’t change the fact that the spread of COVID is still an issue. Making sure guidelines are set in place upon return to the office gives workers the time off they deserve while preventing any further spread. This might look different at each bank, and it doesn’t have to require any extraordinary planning. 

“We’ve just been following CDC and local health department guidelines,” Knutson said. “We are not scientists, we are not doctors, we are not medical professionals, and we don’t want to pretend like we are. I think that’s important because we don’t want to step outside of our expertise. We have to be able to rely on the experts.” 

Knutson noted that when you follow the professional advice that’s out there, you have the experts to lean on. And though planning is crucial, it’s equally as important to not overreach when it comes to people’s lives. Managing risk does not mean asking workers to quarantine after returning from seeing their in-laws in Illinois, and having a plan can be as simple as asking employees to be honest with where they’ve been and if they believe they’ve been exposed to the virus. 

“The banking industry is one that likes to make quick decisions once we have as many facts as we possibly can,” she continued. “This way we can make a more accurate decision upfront and won’t have to change our position at a later date.”  

Another concern is whether employers might discourage people from enjoying themselves by placing harsh restrictions on their ability to work once they come back. If allowing a few days of remote work isn’t an option, setting allotted time aside for employees to quarantine if necessary when returning from a trip is one way to incentivize vacation and stay safe in the process.  

“[Bank of Wisconsin Dells] has set up a bank of the equivalent of 10 days of paid time for anything that we require you to be out for, such as travel quarantine or extra days for illness,” said Bauer. “This is in addition to our PTO plan and the FFCRA time.”  

With all these factors considered, it is still uncertain whether people will end last year’s trend of skipping out on vacation time. While there are still plenty of things to remain cautious of, there is also reason to be optimistic that bankers are re-evaluating the importance of their time off.  

“We don’t know what the future is going to look like,” admitted Schnitzler, “but we’ve seen employees begin to feel more comfortable with traveling again. The virus is still out there, but there are a lot more precautions in place and I think people are really becoming more comfortable.” 

As Knutson sees it, employees are preparing for some much-needed time out of the office, whether it be for travel plans or to simply unwind.   

“I’m finding and hearing that more people are planning on taking PTO for vacation purposes,” she said. “It seems that so many people are beginning to look past the current situation and realizing that they just need some time to relax after such a long, difficult, and unexpected year.” 

By, Alex Paniagua

Wisconsin's bankers are the definition of "community advocates" in all that you do every day to improve your local economy through your bank's products and services, as well as through your generous philanthropy of time and money. This column shares and celebrates the diverse backgrounds, experiences, perspectives, and innovation of some of the extraordinary bankers in this state.

The following is a brief interview between WBA President and CEO Rose Oswald Poels and Premier Community Bank President and CEO Tom Pamperin.

Rose: How did you first get into the banking industry?

Tom: I’m proud to say I’m an SOB – son of a banker, so I was born into banking. It’s funny though, I did try to avoid banking, thinking it had too much to do with people for my liking and ended up gravitating toward accounting. However, growing up with a high-character leader like my Dad made it worth reconsidering. As my career progressed and opportunities developed, I realized it was the perfect place to make a difference.

What is your favorite aspect of your role at your bank?

I love the community aspect of banking. Forget the bank size or the population sign. Banking is all about building up and strengthening the greater community, be it a neighborhood, town, city, state or country and all the people within it. Watching growth in others is incredibly satisfying and we are uniquely placed to help it happen. A lot of dreams come true through our efforts and a lot of stories get told of the impact our involvement can have. I love being part of that.

What do you wish the general public understood about the banking industry?

How about that they are called safe deposit boxes, not safety deposit box. That would get rid of a pet peeve. Seriously though, I hope for a greater understanding and appreciation of the benefits of relationship banking. If the past year showed anything, relationships matter. Communication is easier, considerations are easier and connections are easier when long-standing customer relationships exist.  They also show their strength during crises so maybe the challenges we are facing will teach us something too.

Where do you believe the industry’s greatest challenges are in the next 3-5 years?

Recruitment and succession will always be a challenge. For a while I believed our greatest challenge was in the recruitment of our next leaders. The Great Recession and subsequent demonizing of our industry chased good people away and made it unattractive for others to consider. I don’t believe that as much anymore, but it’s still a challenge. We are seeing great people join our industry that are ready to be 21st century bankers. They want career paths, growth opportunities and leadership roles, as well as a purpose. They are bringing motivation, tech skills and commitment to a purpose they believe in.  Matching those is our challenge and our opportunity.   

Every day, bankers serve their local communities by helping their customers achieve their financial dreams. In addition, bankers also provide significant charitable support both financially and through countless volunteer hours. Please describe your current role at your bank and share with us one of your more rewarding experiences.

Every year our entire staff devotes a day to helping in our communities. We call it our MAD or Make A Difference day. It started as a celebration of our Bank’s anniversary and has continued annually because we wouldn’t know how to stop if we wanted to.  It’s not unusual to have 20 – 25 different teams of employees out helping different groups. I try to visit as many as I can during that day, taking selfies with our employees, stocking a shelf, understanding life through the eyes of elementary students, pulling some weeds and hearing immense gratitude from those being helped.  It truly is one of the highpoints of the year for the Bank. One particular year I was hugged by a woman that could only get the words “Thank You” out of her mouth and nothing else because of how emotional she was feeling.  She couldn’t believe someone would do what we were doing and expect nothing in return.  I couldn’t believe I was getting this type of response. After getting my emotions under control and heading on to the next team, I knew we were doing the right thing. I knew what we were doing was making a difference.

By, Alex Paniagua

The Biden Administration announced changes to the PPP Monday morning with the goal of promoting equitable access to the program for small business relief. These changes were outlined in a White House Fact Sheet which can be found here. SBA held a 30-minute webinar yesterday afternoon to provide a little more clarity on the Administration’s announcement while also stating that more details will be released throughout the week. Below are the highlights of information shared by SBA during their webinar. 

  • Beginning Wednesday, Feb. 24 through March 9, SBA will only accept applications from borrowers with fewer than 20 employees. To determine whether you qualify, a borrower must count all employees regardless of whether they are full-time, part-time, or seasonal. Unlike other aspects of PPP, this threshold is a headcount threshold, not an FTE number. 
    • All applications pending beginning Wednesday due to hold codes or other reasons will continue to move through the resolution process during this 14-day window and may be approved during this time, assuming all criteria are met, despite the application coming from a business with 20 or more employees. 
    • If an application is submitted during this 14-day period for a borrower that has 20 or more employees, then SBA will reject the application rather than hold it in a queue. The application may be resubmitted beginning March 10. As a result, lenders are encouraged to take applications from such PPP borrowers during this 14-day period; however, they must hold them until March 10 at which time they may be submitted through SBA’s portal. 
  • SBA is working on a formula change for sole proprietors, independent contractors, and self-employed individuals; however, the new rules around this change will likely not be finalized until later this week and therefore not available until next week. It is uncertain at this time whether this change will be prospective only or retroactive. The change will allow a maximum loan amount to be determined from Line 7 of Schedule C rather than Line 31. SBA may also develop a special application form for such borrowers. 
  • SBA is clarifying that small business owners who are lawful U.S. residents and who use an ITIN to file taxes are eligible to apply for a PPP loan using their ITIN assuming all other criteria are met. 

WBA also continues to hear from other sources that it remains unlikely that the PPP will be extended beyond March 31. WBA is also expecting SBA to clarify the circumstances in which a borrower could obtain both a First Draw PPP loan in 2021 and a Second Draw PPP loan in 2021 without waiting for a full 8-week forgiveness covered period to expire. At this time, it is unknown how quickly this information will be released by SBA. WBA will continue to monitor all these developments and share updates with the membership promptly as they occur. 

By, Alex Paniagua

By Rose Oswald Poels

WBA Board Candidates Announced 

Donna Hoppenjan, president and CEO of Mound City Bank, Platteville, has been selected to become the 2021-22 WBA vice chair by the WBA Nominating Committee.

The nominating committee, which is comprised of the current WBA officers and recent past chairmen from WBA, also selected the following candidates to fill seats for three-year terms on the WBA Board of Directors: Greg Ogren, Security State Bank, Iron River (Group 1); Joe Peikert, Wolf River Community Bank, Hortonville (Group 2); Jay Mack, Town Bank, Hartland (Group 3); and Dan Ravenscroft, Royal Bank, Elroy (Group 4).

Pursuant to the WBA Bylaws, the above candidates shall be considered elected on April 2 unless other nominees are offered by petition submitted to the WBA office by April 1. The Nominating Committee received many nominations of excellent candidates making the selection process very difficult.

The Committee, led by WBA Past Chair Mark Meloy, wishes to thank everyone for their interest in serving on the WBA Board, along with your continued strong support of WBA.

Harnessing the Power of Community

Since 2018 WBA has been proud to organize our Power of Community Week and it’s time to once again sign up to participate this year. This campaign was developed to showcase to elected leaders and the public the power of bringing member banks together for the purpose of engaging, serving, and celebrating our communities through volunteer efforts conducted over a concentrated period. During the first quarter of 2020, the campaign was set to be yet another great opportunity for over 2,000 bankers to showcase the thousands of volunteer hours you give to local charitable groups and other organizations that many of you also help year-round. Then, as March settled in a way no one could have ever expected, the phrase “Power of Community” suddenly held a new sense of urgency – and bankers were quick to acknowledge this.

As a result of the pandemic, bankers found new ways to volunteer and help their communities. It was inspiring to witness that in these moments of chaos and uncertainty, you still found ways to offer assistance and lend a helping hand. Whether it was supporting local restaurants, donating to food pantries, or distributing hand-sewn masks, the obstacles and limitations set forth could not prevent you from making a difference.

As the pandemic approaches another year, we again reflect on what it means to show the power of community. During the week of April 19-24, the fourth Annual WBA Power of Community Week campaign will call on our members to engage in these efforts, serve these communities, and celebrate these accomplishments. We invite you to offer your time however possible to support those in need. From creating a lesson plan on financial education for local schools to finding inventive ways of expressing gratitude to frontline workers, there is no shortage of ways, and there is no wrong way, to participate during another year that highlights how every community in our state is positively impacted by our industry’s efforts.

For ideas on how to take part in this year’s Power of Community Week, WBA has documented a few of the creative ways that our industry adapted in response to the global shutdown. You can sign up for this year’s Power of Community campaign here. Thank you for all that you do to make Wisconsin a better place, both in your neighborhoods and statewide.

In a world of financial options for consumers and commercial business, the community bank has never had a more impactful opportunity. Making a profound difference in the towns that our community banks call home is “food for the soul” of the communities we represent. While rates will always be a factor in lending, it is the on-going spirit of the community bank that nurtures and establishes the relationships that lead to long-standing, repeat business. It’s about giving back to those around us as much as it is about operating the day-to-day business of banking. And, community banking is about doing what is right for the greater good not simply the almighty dollar. We’ve proved that time and time again during this last year of business.

While community banks may not be “hanging their flags” on billion-dollar stadiums and concert venues, we are making a difference where it is needed the most, at home. We’ve taken the time to help our friends and neighbors through, what for some, has been the worst of the worst. Once again, we’ve shown that the beauty of community banking is being able to do the “right thing,” at the right time.

We’ve taken the time to sit and to listen. To understand our customers and empathize with the struggles they have felt during the pandemic. We have done more than write loans and deposit stimulus checks. We’ve been there for our people, internally and externally, making tough, yet thoughtful decisions, every day. In business, this might cost us a little more in both time and dollars, but the extra effort pays dividends many times over as we positively impact our communities, customers and employees. Think about that…fundamentally most banks do the same thing. But it is the gift of being a community bank that sets us apart from everyone else. “We make a living by what we get, but we make a life by what we give,” Winston Churchill. How many times in our business lives have we really stopped to think about that? The work of the community bank has the ability to fuel the spark that moves mankind forward. Our words reveal our thoughts but it’s our actions that reflect our character.

Social media has offered us all a platform to share the good work of both the things that we do and who our people are. While many community banks jumped on the social media bandwagon years ago, those more resistant to this form of marketing are now experiencing its tremendous and instantaneous effects. Telling our stories and sharing the success of those around us is literally at our fingertips and has made sharing the good news of community banking more in the moment than ever before.

As we move forward into this next year, it will be the structure within our industry that will continue to set us apart. Recovery from the past year will not happen overnight but together, we’ll continue to shine brighter than ever before. #powerofcommunitybanking. 

 

By, Alex Paniagua

As banking operations have adapted to the demands of pandemic life (more remote work, broader digital interaction with third parties, etc.) institutions should reassess their defenses. Data breaches are on the rise despite the heavy security investments organizations make. If you are still relying on outdated antivirus protection solutions like signature-based architecture, your systems may be at risk.  

FIPCO offers a fully managed solution for Endpoint Detection and Response (EDR): Cynet 360.  

Cynet 360’s Sensor Fusion technology continuously ingests and analyzes endpoint, network, and user activity signals to deliver the world’s first autonomous breach protection platform, providing complete automation of monitoring and control, attack prevention and detection, and response orchestration.

Cynet’s autonomous breach protection solution defends your institution from complex, advanced attacks including malicious macros and exploits or redirection to malicious websites. This solution more accurately identifies suspicious and unauthorized activities than traditional antivirus solutions and enables a more proactive response and remediation of threats.  

Key benefits of Cynet 360 include:  

  • Speed: Fully operable within two clicks and auto-deploys on newly added machines with no human intervention  
  • Accuracy: Collects all core activity signals to gain clear insight into the unique context of each event, reducing false positives to a minimum  
  • Coverage: Airtight protection against all attack vectors that involve users, network files, and hosts  
  • Automation: The widest set of automated response workflows to any type of attack  
  • Backup: An elite time of 24/7 threat analysts and security researchers at Cynet’s Security Operations Center (SOC)

FIPCO and the Wisconsin Bankers Association are so confident in Cynet technology that it has been implemented at our offices, not simply to replace the traditional antivirus solution, but to enhance the overall security to better protect all endpoints. Cynet centralizes and automates breach protection across the entire environment.  

Is now a good time to replace your traditional antivirus solution? Call or email FIPCO Director – Information Security and Audit Ken Shaurette at 800-722-3498 ext. 251 or itservices@fipco.com today to take advantage of these services and ensure the safety and soundness of your business.  
 
Learn more at www.fipco.com/solutions/it-audit-security/autonomous-endpoint-protection.  

 

By, Alex Paniagua

Rural broadband expansion, prescription drug price reductions, ag investment, and now marijuana legalization and regulation. The Governor hasn't released his budget yet – so why are these topics making state budget headlines? What happens next? Will the budget be done on time this year? I'll answer these questions and provide you with everything you need to know in this 2021-23 budget primer.  

While Gov. Evers has yet to formally unveil his 2021-23 executive budget, the aforementioned items are some of major policy initiatives he has already begun previewing in advance of the state budget address taking place next Tuesday, February 16. Prior administrations also set the stage like this in years past to get as much play in the press before handing the most important bill of the two-year session to the Legislature for consideration and alteration. Question 1 was the timeliest and has now been answered, but let's go over Wisconsin budget basics and how we got here. 

Background 

The State of Wisconsin's fiscal year runs from July 1 to June 30 and we budget in two-year cycles. The budget is an appropriation schedule for all of the government agencies and quasi-government entities within the executive branch and their programs. Revenue sources for these expenditures include: 

  • State General Purpose Revenue (GPR), derived mostly from individual and corporate income tax, excise taxes, and sales tax.  
  • Program Revenue (PR), derived from user fees, receipts from product sales, reimbursements, and tuition. 
  • Segregated Revenue (SEG), which is a revenue source where dollars are put in a specific fund other than the general fund, i.e.: fuel tax placed in transportation fund. 
  • Federal Revenue (FED), which is exactly how it sounds – dollars received by a state agency from the federal government for a specific purpose.  

All told, including bond revenue for UW and state building projects, the most recent two-year budget was $83.5 billion all funds. 

We are currently operating in the waning months of 2019-21 budget. Therefore, a new budget will theoretically have to be passed and signed into law for the start of fiscal year 2022 on July 1. Theoretically? More on this later. 

From the Legislature's perspective, February 16 is the first big milestone in the 2021-23 budget process. But for the Governor, it is the culmination of months of planning and development. Back on June 5, 2020, the Governor gave his budget marching orders to state agency heads, who in turn came back with their agency budget requests last September. From there, the State Budget Office and the Governor's team have been crafting budgets and policy for each agency which will all be packaged into the executive budget we get to see for the first time next Tuesday night. The highest-profile bill each session, the executive budget is where the Governor gets to showcase and attempt to pass his top priorities. 

Hopefully a few of the questions have been answered and you have a sound grasp of where things currently stand. After the budget address and the administration's marketing of the proposal, the spotlight begins to shift to the Legislature, specifically the Joint Finance Committee (JFC). Eight members of each house – 6 majority party members and 2 minority party members – make up the 16-member panel. JFC is co-chaired by Rep. Mark Born (R-Beaver Dam) on the Assembly side and Sen. Howard Marklein (R-Spring Green) on the Senate side. JFC takes possession of the bill and introduces it right away – typically the committee's fastest meeting of the entire session. 

About one month after introduction, the Legislative Fiscal Bureau (LFB) – a nonpartisan legislative service agency and the gold standard for all things state budget – will release a plain language summary of everything in the budget bill. Around the time that document is released, JFC will hold their biennial "roadshow" – typically a set of five hearings – throughout the state to glean input from the public, stakeholder groups, trade association membership, and others. 

Once those steps are complete, the committee will begin tackling each subarea of the budget one by one in executive sessions. These voting sessions are where the Legislature's substitute amendment to the Governor's budget bill is compiled. The LFB prepares budget papers with alternatives for JFC to consider for each area, and members of the committee may bring forward specific motions within the day's subject area(s). Process-wise, JFC usually handles the numerous small, noncontroversial areas first before moving into the larger agencies. The big areas are usually chock full of policy changes, new initiatives, and large dollar amounts where the final decision points all need to be negotiated over several weeks. 

To put a finer point on budget subareas, these are typically state agency budgets. However, numerous agencies house large programs that are all taken up separately. The Department of Corrections is a good example with their large budget, large footprint, and large employee count. DOC gets split up into adult corrections, juvenile corrections, community corrections, and "departmentwide" sections. This is getting into the minutiae, but important to keep in mind when following the budget process closely. 

Timing 

In April, May, and June, JFC normally meets twice a week to approve or deny what ends up being hundreds of decision items. When things are staying on schedule, this process wraps up in early June and the budget bill, as amended by JFC, goes to both houses of the legislature for approval. The budget is enormous, but at the end of the day it is a bill that must go through the legislative process like any other one would.  

In a perfect world, the bill is approved in each house and sent along to the Governor by the end of June so it can be signed and go into effect for the new fiscal year on July 1. However, we do not live in a perfect world and sometimes the JFC process takes longer, or there are squabbles between the two houses that delay final passage of the bill. This scenario is often the one that plays out, even under single-party control of the executive and legislative branches. With power currently split among the branches we also have another situation that could cause a new budget not to be in place by July 1 – a full gubernatorial veto. Luckily, the state continues to operate at the previous budget levels until a new one is signed into law.  

This Year’s Big-Ticket Items and Agencies Impacting the Banking Industry 

In its analysis of the state budget, WBA focuses on agencies and items that have the greatest impact on you, your bank, and the state’s economy. In fact, WBA’s advocacy team reviews the budget line by line and works with legislative leadership and agency heads to educate, inform, and lobby for pro-banking policies. The list of agencies include: 

Department of Financial Institutions 

Office of Commissioner of Insurance 

Office of State Treasurer 

Department of Administration 

Department of Agriculture, Trade and Consumer Protection 

Department of Health Services 

Department of Justice 

Tax Appeals Commission (DOR)  

Wisconsin Economic Development Corporation 

Department of Workforce Development 

Wisconsin Housing and Economic Development Authority 

Department of Revenue 

Department of Safety and Professional Services 

Wisconsin Board of Commissioners of Public Lands 

Department of Transportation 

These are the nuts and bolts of the budget and the process it goes through. Let's briefly go over some of the primary policy proposals the Governor has previewed so far, and what some of the other big-ticket items will be this year.  

Gov. Evers proposing the legalization of recreational marijuana has made the biggest splash so far. While many legislators in the GOP-controlled legislature have slowly come around to the prospect of limited legalization for medical use, full recreational legalization will likely be a bridge too far and is unlikely to become law. 

In his State of the State address, the Governor called for $200 million in funding for broadband infrastructure expansion and consumer subsidies. This proposed amount far exceeds what has been approved in years past, but there is a bipartisan appetite for doing more on the broadband front. 

The Governor is also calling for an agriculture package totaling $43 million that invests in several existing programs and would grease the skids for producers and food bank collaboration to help the needy. This is large ask, but there is usually agreement on helping the ag sector. 

Additional investment in mental health services statewide and Medicaid expansion. There has been agreement on the need to do more in the mental health realm in recent years, but not a consensus on how to accomplish that. Medicaid expansion has been a top priority for Democrats for several sessions and Republicans always shoot it down due to existing options, its potential impact on the private insurance market, and ideological opposition to expanding welfare. The amount of federal funding that expansion would allow Wisconsin to capture is becoming increasingly difficult to ignore, though. 

New measures to drive down the cost of prescription drugs and increase transparency for consumers. There has been bipartisan agreement here, especially reforming the role of prescription benefit managers, but not much has been signed into law.  

With the budget dropping in just a few days, we will be entering the most hectic portion of the entire two-year legislative session. I hope this initial breakdown has been helpful.  

By, Alex Paniagua

Q: Has the Treasury Department issued a new round of Economic Impact Payments?

A: Yes. On December 29, 2020 the Internal Revenue Service (IRS) and the Treasury Department began delivering a second round of Economic Impact Payments (EIP2) as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021. This round of payments includes direct deposit payments as well as paper checks. Discussed below are some similarities, and differences, between this round of payments and the first round.

The EIP2 payments are not subject to garnishments. This exemption will be indicated by an “XX” in their ACH identifier (XXTAXEIP2) and the check symbol. Furthermore, if the bank receives an EIP2 via ACH for an account that is closed, Treasury and IRS have instructed that the bank is to return the ACH as “account closed.” This is standard procedure pursuant to Chapter 4 of Treasury’s Green Book regarding the processing of electronic payments. Banks should also note that exceptions and returns should generally be processed as bank would normally, similar to the first round of payments.

Individuals alive on January 1, 2020 are eligible for EIP2 payments. If bank receives an EIP2 check payable to a deceased person, it should consider its typical procedures regarding checks payable to deceased individuals, including considerations as to existence of a proper endorsement. IRS has noted that it is conducting eligibility screening and will provide instructions for posting. Generally, as was the case with the first payments, it is the responsibility of the taxpayer to follow instructions as to when a payment is to be returned to IRS.

Banks have also begun asking questions related to offset. For an analysis of offset, WBA recommends bank consider working with its legal counsel. 

By, Alex Paniagua