Rose Oswald PoelsBy Rose Oswald Poels

Grassroots advocacy is at the foundation of WBA’s advocacy efforts to ensure that elected officials in Wisconsin and Washington D.C. understand the impact of their initiatives on the banking industry. The relationships that many of you develop with your representatives play a critical role in the success of WBA’s advocacy priorities. As part of our grassroots advocacy, WBA’s hosts an annual Capitol Day in Madison to help bankers around the state connect with their legislators on issues important to the industry and on actions our government can take to aid in the economic growth and strength of our communities.

As our 2022 Capitol Day quickly approaches, I invite you to join your fellow bankers in meeting face-to-face at the State Capitol to advocate on several key issues affecting the banking industry this session. Few Wisconsin legislators have experience in banking and your grassroot involvement is essential in reinforcing the impact legislative proposals will have on your bank, the industry, and your communities.

As we have mentioned in other publications, there will a public hearing on the credit union powers’ bill — SB 451 — on January 11, just one week before WBA’s Capitol Day. The timing of your attendance and conversations with legislators and their staff will be critical in helping us either defeat any further progress made or amend the bill. Moreover, the credit union industry is hosting their annual Capitol Day a week after ours, so it is imperative that we have a strong showing of bankers on January 18 to offset the large numbers we expect the credit union industry to have present at their event.

The event includes hearing from several State Assembly and Senate leaders, moderated discussions with political insiders Scott Jensen and Chuck Chvala, and WBA’s Government Relations update on the legislative session thus far. This information will provide every attendee the knowledge needed to be prepared for the afternoon of meeting face-to-face with your elected legislators in meetings WBA will schedule.

Again, the relationships bankers build at Capitol Day assist us in advocating successfully for the banking industry throughout the year. I hope you and/or others from your team will join me and your fellow bankers at the State Capitol in Madison on January 18 for WBA’s annual Capitol Day.

By Jeff Wilke, Denmark State Bank

As the calendar turns to 2022, there is no shortage of old and new challenges facing the ag customers we work with — continued high feed prices, escalating crop input costs, supply chain delays, labor shortages, etc. In order to weather the storm of this next round of challenges and future storms, it has never been more important for farmers to be good business managers.

That being said, the question I pose is — How would you rate the farmers you work with as business managers? This may be a subjective process in many ways. However, there are objective standards to consider when rating a farmer’s management skills or Business IQ, as Dr. David M. Kohl, Professor Emeritus, Ag & Applied Economics at Virginia Tech, calls it.

Per Dr. Kohl, Business IQ contains for cornerstones — Planning, Strategizing, Executing & Monitoring. From Dr. Kohl’s findings, ag producers with high management skills have plans for all areas of their farm operation, using those plans to prioritize their strategies; then executing those strategies using sound data, objectivity and intuition; and finally, and just as importantly, periodically monitoring the results.

From these cornerstones, Dr. Kohl has developed a Score Card that analyzes 15 management factors specific to ag producers. The Score Card can be found by doing a search for “Dr. David Kohl Business IQ”.

The factor getting the most attention is “Knows Cost of Production”. Other factors include creating goals, keeping a solid internal record keeping system, maintaining a modest lifestyle, continuously attending agricultural seminars/courses, and maintaining certain attitudes. Farmers who have many of the factors addressed in writing score much higher than those who have nothing documented.

In order to continue to build on their management skills, Dr. Kohl recommends that a farmer reexamine/re-score their Business IQ annually to see where progress has been made and where progress still needs to be made.

The bottom line is that a farmer that has strong management skills/Business IQ can navigate through challenging times (“weather the storms”) by keeping a close watch on their ability to plan, strategize, execute, and monitor the various aspects of their farm business.

Coming up on January 4, 2022, ag bankers have the opportunity to hear directly from Dr. Kohl as he shares his outlook for 2022 and beyond. Be sure to check out the Midwest Economic Forecast Forum, and you can even invite your ag customers to join your group to hear directly from Dr. Kohl as well. The session will be recorded and available for two weeks, so even in January 4 doesn’t work for you or your clients, check it out online.

Happy Holidays.

Wilke is Vice President, Agribusiness Lender at Denmark State Bank and serves on the WBA Agricultural Bankers Section Board.

By John Cronin

Legislative and Congressional redistricting is one of the most significant things the state Legislature undertakes every ten years in order adjust each Assembly, Senate, and Congressional district after the census. The Legislature is responsible for redrawing lines, subject to the Governor’s veto. This saga has been playing out for several months now in all three branches of government.  

Over the summer, before census data was even available to draw new district boundaries, right- and left-leaning interest groups were filing lawsuits attempting to steer inevitable litigation to either the State Supreme Court or federal court. This was done because everyone knew the GOP-controlled state Legislature and Democratic Gov. Tony Evers would never agree on a redistricting plan. Both the Wisconsin Supreme Court (SCOWIS) and the 7th Circuit Court of Appeals accepted separate cases on the matter earlier in the fall. 

What many predicted would inevitably be a perfunctory legislative process did indeed take place in October and November. Republican leaders in the Assembly and Senate introduced new maps in late October. Those maps were approved in each house on party-line votes in mid-November. True to his word, Gov. Evers vetoed those maps a week later.  

Upon the Governor’s veto, the redistricting process ended up in its expected destination — the courts. This will be litigated over the next month in the Wisconsin Supreme Court; the federal panel paused their action, stating they were going to observe SCOWIS’s action before deciding whether to act. 

The most recent development in the case at the state level took place on November 30, when SCOWIS stated they would make the “minimum changes necessary” to the current legislative and congressional maps when it determines new boundaries. This was viewed as a big win for Republicans, who already hold significant majorities in both chambers of the State House. 

Oral arguments are expected in January before the Wisconsin Supreme Court. A decision on district boundaries must be made in advance of April 15, the first day candidates may circulate nomination papers for the November 2022 general election.

WBA Releases Results of Bank CEO Economic Conditions Survey

In the Wisconsin Bankers Association’s biannual Economic Conditions Survey of Wisconsin bank CEOs, 79% of respondents rated Wisconsin’s current economic health as “excellent” or “good.” This marks a significant increase since December 2020, when only 42% of survey respondents gave “excellent” or “good” ratings. Sixty-four percent of Wisconsin bank CEOs who completed the most recent survey predict that the economy will stay the same in the next six months, while 21% predict it will grow and 15% predict it will weaken. 

“Wisconsin bank CEOs are in a unique position to gain insights into the microeconomic activities in their markets given the critical roles they play as lenders, advisors, and community leaders. As such, they often see developments occurring before economic trends are widely identified,” said WBA President and CEO Rose Oswald Poels. “As industries rebound — including tourism, manufacturing, construction, and agriculture  economic stability is taking hold. 
Many bank CEOs highlighted bright spots in their local economies such as low unemployment rates, strong consumer demand, a strong housing market, high commodity prices, growth in health care technology, and increased manufacturing and constructionAmong the sources of economic concern for bank CEOs were inflation, new variants and waves of COVID-19, and workforce shortages and supply chain issues preventing businesses from realizing growth. 
The end-of-year 2021 survey was conducted December 14–24 with 80 respondents. Sums may not equal 100 percent due to rounding. Below is a breakdown of the survey questions and responses. 

Wisconsin Bank CEO Economic Conditions Survey Results 

How would you rate the current health of the Wisconsin economy. . .  End-of-Year 2021  Mid-Year 2021  End-of-Year 2020 
Excellent  6%  15%  4% 
Good  73%  76%  38% 
Fair  20%  10%  58% 
Poor  1%  0%  1% 
In the next six months, do you expect the Wisconsin economy to. . .        
Grow  21%  48%  45% 
Weaken  15%  39%  14% 
Stay the same  64%  13%  41% 
Rate the current demand in the following loan categories:        
Excellent  9%  10%  4% 
Good  48%  30%  29% 
Fair  39%  52%  56% 
Poor  5%  8%  12% 
Commercial Real Estate        
Excellent  11%  13%  4% 
Good  44%  44%  30% 
Fair  41%  33%  52% 
Poor  4%  10%  14% 
Residential Real Estate        
Excellent  25%  40%  63% 
Good  48%  48%  29% 
Fair  24%  12%  8% 
Poor  3%  0%  0% 
Excellent  1%  2%  0% 
Good  22%  34%  19% 
Fair  58%  56%  59% 
Poor  18%  8%  22% 
In the next six months, do you anticipate the demand for the following loan categories will. . .        
Grow  28%  43%  39% 
Weaken  14%  7%  13% 
Stay the same  59%  51%  48% 
Commercial Real Estate        
Grow  24%  31%  32% 
Weaken  21%  8%  25% 
Stay the same  55%  31%  43% 
Residential Real Estate        
Grow  11%  14%  20% 
Weaken  56%  41%  40% 
Stay the same  33%  46%  39% 
Grow  15%  18%  20% 
Weaken  14%  6%  15% 
Stay the same  71%  76%  65% 
In the next six months, are the businesses in your bank’s market area likely to. . .        
Hire employees  68%  82%  30% 
Maintain current staffing levels  33%  15%  62% 
Lay off employees  0%  3%  8% 
In the next six months, is your bank likely to. . .        
Hire employees  55%  48%  34% 
Maintain current staffing levels  43%  45%  65% 
Lay off employees  3%  6%  1% 


By Jodie Norquist, CIP, CHSP; Ascensus, a WBA Associate Member 

If your financial organization administers IRAs, health savings accounts (HSAs), and Coverdell education savings accounts (ESAs), you are likely aware of the many reporting deadlines looming in the first quarter of the coming year. Performing these annual administrative tasks can be stressful. After all, compliance errors or missed deadlines can lead to costly financial penalties.

Here’s a rundown of the impending due dates, along with a brief description of the financial organization’s requirements. Please note that if any of these deadlines fall on a Saturday, Sunday, or legal holiday, the deadline is extended to the following business day.

January 31

Fair Market Value Statement

Financial organizations must provide an annual fair market value (FMV) statement to IRA owners and beneficiaries by January 31. These statements must be provided to Traditional, Roth, and SIMPLE IRA owners. They must also be provided to Traditional IRA owners that have received simplified employee pension (SEP) plan contributions. FMV statements are required for both IR accounts and IR annuities, including those that have been annuitized.

NOTE: FMV statements are not required but are recommended for HSAs.

The FMV statement must

  • show the IRA’s FMV as of December 31 of the previous year;

  • be presented in any type of written format;

  • be provided to IRA owners even if no contributions were made to the IRA for that year; and

  • contain a legend designating which information is being furnished to the IRS on Form 5498, IRA Contribution Information.

Required Minimum Distribution (RMD) Statement

If an IRA owner is age 72 or older and is required to take a distribution from an IRA for the year, the financial organization holding the IRA on December 31 of the prior year must provide an RMD statement to the IRA owner by January 31. RMD statements are not required for beneficiaries or for Roth IRA owners. This statement may be combined with the FMV statement.

The RMD statement must

  • inform the IRA owner that an RMD is due for the calendar year,

  • notify the IRA owner of the date by which the RMD must be taken,

  • include an offer to provide a calculation of the RMD amount, upon request, and

  • communicate what information is being reported to the IRS for the year.

This requirement may also be satisfied if a Form 5498 is sent to the IRA owner by January 31. If a financial organization opts to use Form 5498 to satisfy the RMD statement, then the date by which the RMD must be distributed should be entered in Box 12a, RMD date, and the RMD amount in Box 12b, RMD amount. However, keep in mind that if an IRA owner must take an RMD for the year, the financial organization is not required to report any RMD information to the IRS on Form 5498, other than the fact that an RMD is due.

SIMPLE IRA Account Statement

Financial organizations must provide SIMPLE IRA owners with an account statement by January 31. Although the IRS hasn’t provided any specific guidance on the form that the account statement must take, the SIMPLE IRA account statement must include

  • the SIMPLE IRA’s account balance as of the end of the previous calendar year;

  • a summary of the account activity throughout the previous calendar year; along with

  • any distributions taken or fees charged against the account, as well as all contributions.

Coverdell ESA Year-End Statement

While year-end statements for Coverdell ESAs are not required, they are recommended. Before 2003, the FMV of an ESA—originally known as an Education IRA—was reported on Form 5498, IRA Contribution Information, which suggests reporting ESA FMVs as a “best practice.” The recommended deadline for providing a year-end statement to the designated beneficiary is January 31. This statement should show

  • the ESA’s FMV as of December 31 of the previous year, and

  • contribution activity for the calendar year.

IRS Form 1099-R

Financial organizations must report Traditional, Roth, and SIMPLE IRA distributions made during the calendar year on Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to IRA owners and beneficiaries by January 31.

Distributions reported on Form 1099-R include

  • rollovers,

  • recharacterizations, and

  • conversions.

IRS Form 1099-SA

HSA and medical savings account (MSA) owners must be sent a Form 1099-SA, Distributions from HSA, Archer MSA, or Medicare Advantage MSA, by January 31, which reports their distributions for the previous year.

IRS Form 1099-Q

ESA distributions that were taken during the previous calendar year are reported on IRS Form 1099-Q, Payments From Qualified Education Programs, which is due to recipients by January 31.

IRS Form 945 and 945-A

Financial organizations must report amounts withheld by payers to the IRS on Form 945, Annual Return of Withheld Federal Income Tax. Form 945 is due to the IRS by January 31 of the year following the year the taxes are withheld.

NOTE: If withholding deposits are made on time and in full, the due date for filing Forms 945 and 945-A is February 10, rather than January 31. 

Some payers are required to file Form 945-A, Annual Record of Federal Tax Liability, in addition to Form 945, depending upon the payer’s withholding depositor status. Monthly depositors file only Form 945, which lists the amount of nonpayroll withholding collected for each month. Semiweekly depositors, however, file Form 945-A with Form 945 to report nonpayroll withholding. Form 945-A reports the amount of nonpayroll withholding collected each day. The IRS uses Form 945-A to match the tax liability to deposits to determine whether the withholding tax liabilities have been timely deposited.

Employer SEP Contribution Notice

Employers that make SEP plan contributions for employees must notify employees of all discretionary contributions by the later of

  • January 31 of the year following the year for which the contribution is made, or

  • 30 days after the contribution is made (potentially as late as the SEP plan sponsor’s tax return due date, including extensions).

February 28

IRS Forms 1099-R, 1099-Q, and 1099-SA

Forms to report distributions are due to the IRS by February 28 if filing on paper. The paper form must be filed with a Form 1096, Annual Summary and Transmittal of U.S. Information Returns.

March 15

IRS Forms 1099-R, 1099-Q, and 1099-SA

Forms 1042 and 1042-Srm 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, is filed to report tax withheld by the payor on certain payments (including IRA distributions) to foreign persons, including nonresident aliens. Form 1042 must be filed with recipients’ Forms 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, by March 15 of the year following the year of distribution.

March 31

IRS Forms 1099-R, 1099-Q, and 1099-SA

These forms used to report distributions from IRAs, Coverdell ESAs, HSAs, and MSAs are due to the IRS by March 31 if filing electronically. Financial organizations must file electronically if there are 250 or more returns of any one type.

Community First®

 Federal Home Loan Bank of Chicago (FHLBank Chicago) members may submit nominations for the 2022 Community First Awards. These awards recognize members and their local partners for their work in building and strengthening communities. The deadline for nominations from members for the 2022 Community First® Award program is January 14, 2022, and the categories are: 

Affordable Housing
Recognizes an exceptional effort to increase or strengthen affordable housing opportunities in Illinois and/or Wisconsin communities.

Economic Development
Recognizes an extraordinary effort to foster economic growth or community revitalization in Illinois and/or Wisconsin communities.

Diversity, Equity, and Inclusion
Recognizes an organization or coalition dedicated to advancing the principles of diversity, equity, and inclusion in the affordable housing and/or economic development space in Illinois and/or Wisconsin.

Emerging Leader
Recognizes an outstanding emerging leader relatively new to the affordable housing and/or economic development field (defined as fifteen or fewer years).

Examples of award recipients from last year are available here.

Affordable Housing Program

Details on both the AHP project grant program and the Downpayment Plus program for qualified home purchasers are available here.

An educational webinar on the DPP program for FHLBank Chicago members will be held on January 10, 2022.  Registration details are available here.


Executive network provides unique benefits for Wisconsin banking leaders

By Daryll Lund

Now is the time to renew or begin your membership in the CEOnly and CFOnly Networks so you can enjoy the services provided. As we continue to feel the impacts of COVID-19, economic, and regulatory strain, the CEOnly/CFOnly Networks are an important resource for you to connect with over 100 Wisconsin bank CEOs and CFOs.

These membership benefits allow peers to share information at in-person meetings and through a Q&A service, which provides a confidential forum for asking questions. In the past year, 100+ questions and answers have been shared amongst CEOnly/CFOnly members. We believe that the networking and information-sharing that is foundational to the CEOnly and CFOnly Networks will become even more valuable to you as the banking industry continues to experience unprecedented changes.

You can expect the same excellent value from your membership in 2022! This year, network members are invited to three complimentary networking events:

  • March 11 | Stevens Point
  • June 10 | Wisconsin Dells
  • September 23 | Madison

The annual membership fee is $300 for CEOs or CFOs. If both the CEO and CFO join from the same bank, the cost is $500. Membership is open to CEOs and CFOs of Wisconsin-chartered banks and runs on a calendar year basis, starting January 1, 2022, so now is the time to join!

This year’s event centers around the theme “Rise”

The Wisconsin Banker’s Association is thrilled to announce that the annual Bank Executives Conference will be back in person February 9–11, 2022 at the Kalahari Convention Center in Wisconsin Dells. This is the premiere event for bank leaders in the state. The theme of this year’s event will be “Rise.” Wisconsin bankers have risen to the occasion over the course of the pandemic, and this conference will address what it will take to be resilient and relevant in 2022.


Being back in person opens the door for the kind of networking opportunities that bank leaders have been craving for nearly two years. The conference will kick off with a networking reception on Wednesday evening, but bankers are invited and encouraged to arrive earlier for optional afternoon “banker-only” peer group discussions starting at 2:30 p.m. Peer group discussions are geared toward the roles of CEOs, CFOs, credit and lending, operations, and organizational development. Opportunities to connect with fellow bankers, WBA Associate Members, and WBA staff will be plentiful throughout the conference, with an exhibitor Marketplace providing a dedicated space for making connections.

Executive-Level Education

The WBA Bank Executives Conference brings national experts to Wisconsin, while providing tailored programming specific to the needs of banking leaders in our state. Among the trending topics that will be covered at the conference are:

  • Changes that emerged during the pandemic that are now here to stay
  • Talent recruitment and retention
  • Technology, fintech, and digital transformation
  • Cryptocurrency
  • And more!

New Hybrid Option for 2022 A livestream will allow attendees at the bank to view the keynote sessions on February 10 and 11.

The opening keynote session is titled, “Business as Unusual: How to Future-Proof Your Business in Transformational Times.” In this engaging, provocative, and insightful keynote session, acclaimed global futurist and best-selling author Jack Uldrich will not only discuss how the Coronavirus is transforming the world of tomorrow, he will explain why it is accelerating many of the trends that were already at work prior to the epidemic. History reminds us that great crises produce great change — as well as great opportunities. To take advantage of these extraordinary opportunities, businesses must position themselves now to operate in a world where “business as unusual” is the new “usual.” This session will help leaders at every level of an organization leverage ten “unconventional” techniques to succeed in today’s — and tomorrow’s — transformational times.

Dr. Chris Kuehl, managing director of Armada Corporate Intelligence, will present a keynote session, “2022 – The Real Recovery Year?” That honor was supposed to go to 2021, but we all know what happened over the last several months — inflation, labor shortage, supply chain breakdowns, and the repeated resurgence of the virus. Now we have these lingering issues along with the reactions — higher interest rates, efforts to restore, continued engagement by the government. The bankers have been placed squarely in the middle of all this and expected to do most of the heavy lifting. Does that continue and what can we really expect as far as growth and recovery?

For more details on programming and to view the full agenda, please visit

Banking leaders are eager to rise to the challenges ahead of them, and the conference will provide actionable tools and knowledge attendees can bring back to their banks and communities.


The 2021 Banker of the Year will be announced at the conference, recognizing a bank CEO or president (or an individual who has recently retired from these positions) who has made an outstanding effort throughout their career in service to their bank, to their community, and to the banking profession.

The Wisconsin Bankers Foundation Financial Education Innovation Award will be presented at a special luncheon on February 10. This prestigious award recognizes a bank’s unique efforts to enhance the financial capability of consumers in their community, whether it’s a new kind of educational game for students, curriculum developed for adult seminars, or some other new or innovative approach to financial education.

The 50- and 60-Year Clubs recognize bankers who have served in the banking industry for 50 and 60 years, respectively. These awards will be presented during the special luncheon at the conference to honor professionals who have dedicated their careers to the banking industry.


Ope! Charlie Berens, best known to Wisconsinites for his viral video series, “The Manitowoc Minute,” will perform at the Chairman’s Dinner Program on Thursday, February 10.

Comedian, Emmy award-winning journalist, and Wisconsin native Charlie Berens — who rose to fame from his video series, “The Manitowoc Minute” — will provide the entertainment for the Chairman’s Dinner Program on February 10. Attendees can expect lots of laughs from the author of the recently released book, “The Midwest Survival Guide: How We Talk, Love, Work, Drink, and Eat. . . Everything With Ranch.” Berens has been featured on Fox, CBS, Funny or Die, TBS Digital, Variety, MTV News, and more. In 2013, he won an Emmy for “The Cost of Water” while reporting for Texas news station KDAF. “The Manitowoc Minute” series has garnered millions of views and paved the way for a sold-out standup comedy tour. Geez, Louise, this is sure to be a hilarious show you won’t want to miss!


To register for the conference, please visit We look forward to seeing you Wednesday, February 9–Friday, February 11 at the Kalahari Convention Center in Wisconsin Dells!

By Paul Gores

In a prominent spot near the center of Brookfield Square mall, an automated kiosk quietly invites shoppers to insert cash and buy Bitcoin, Litecoin, or Ethereum cryptocurrencies.

Similar cryptocurrency kiosks — commonly called crypto ATMs or Bitcoin ATMs — can be found in other major Wisconsin malls, as well as in hundreds of convenience stores, gas stations, and retail shops around the state.

At the same time, a cryptocurrency-buying option now is available throughout Wisconsin at many kiosks operated by the self-service coin-cashing company Coinstar — 146 of them in all in the Badger State.

As cryptocurrencies and their enabling technology — blockchain — grow in acceptance and popularity, more and more kiosks that make Bitcoin, Litecoin, and other currencies available to the masses are popping up around the state and nation. There are now more than 35,000 crypto kiosks or ATMs in the U.S. offering people interested in owning the digital currency an easy way to acquire it. In Wisconsin, there are believed to be more than 500 such machines.

The buildup of crypto ATMs — and decentralized currencies operating on blockchain in general — raises questions for American financial institutions whose business traditionally has revolved around a currency with a central authority.

In the short term, bankers shouldn’t worry that cryptocurrencies are about to overtake the dollar to the point where trips to the grocery store routinely will be paid with Bitcoin, one expert said.

“We’re nowhere close to grandpa buying milk with a tiny, tiny, tiny fraction of a Bitcoin,” said computer science professor, Michael Litman, of Concordia University Wisconsin in Mequon.

Still, more companies are accepting payment in cryptocurrency, and nowadays even a wealthy donor might ask whether his or her favored charity will accept a contribution in Bitcoin. Given crypto’s momentum, bankers would be wise to learn as much as they can about cryptocurrency and consider how it could be useful to their customers, experts say.

Cryptocurrencies are here to stay, with a total market value in excess of $2 trillion and more than 200 million users across the globe, said David Krause, director of applied investment management and associate professor of finance at Marquette University in Milwaukee.

Krause said when it comes to cryptocurrency, banks should think of themselves like taxi companies before Uber, or bookstores before Amazon.

“They need to innovate and adopt digital currencies to avoid being run over,” Krause said.

The rise in crypto ATMs coincides with the interest in cryptocurrencies, particularly Bitcoin, which, while volatile, has seen its market price skyrocket over the past few years. Kiosks or ATMs offer average people access to owning Bitcoin or other digital currencies as an investment, or, if they use a vendor that accepts Bitcoin, to easily acquire Bitcoin to make a purchase.

“Coinstar and the Bitcoin kiosk industry generally serve consumers who prefer to budget or manage their funds in cash yet still need access to digital financial products like cryptocurrency,” said Michael Jack, head of product for Coinstar. “There are a variety of use cases. Consumers use cryptocurrencies to invest or save and buy and hold them in a wallet. Others use it as a form of person-to-person or person-to-business transfers. In many cases, cryptocurrency can be an easier and/or more cost-effective way to do those transactions.”

Last fall, Walmart said it had started a pilot program with Coinstar to put crypto-enabled Coinstar kiosks in 200 stores of the nation’s largest retailer. If the pilot is successful and expands to other Walmart stores, the ability to buy cryptocurrency in so many locations could go a long way toward mainstreaming the digital currency.

While some crypto ATMs allow a currency such as Bitcoin to be sold and converted to cash, most transactions at the ATMs involve a customer inserting cash and having an equal amount of Bitcoin at that day’s market price — minus fees — deposited in the buyer’s digital wallet. In the case of Bitcoin, which at the time of writing this was valued at about $48,000, even $1,000 inserted into the ATM would buy only a small fraction.

“There is growing adoption of cryptocurrency, primarily as a speculative investment,” said Scott Green, of Shazam Network-ITS Inc. “While Bitcoin can be used for person-to-person transfers or purchases from retailers that support it, the most prevalent use case is investment.”

However, even though cryptocurrency might not be well-suited for smaller financial transactions yet, it can make sense for larger deals, said Concordia’s Litman. Litman, who has owned and sold Bitcoin, is a fan of some NFTs, or non-fungible tokens, which also are powered by the blockchain.

NFTs are used as a way to validate ownership of something unique, the way, say, a title registered with the Department of Motor Vehicles shows who bought a car. An NFT can do the same thing, except it’s verified by the blockchain for proof of ownership.

“I would actually make the argument that in some ways banks should be embracing this,” Litman said.

Litman also said using NFTs can cut the red tape and expense of international transactions. For instance, $100,000 in U.S. dollars could be converted to an NFT such as Ripple, sent via blockchain to a Ripple digital wallet in China, and then converted into the yuan.

Using a crypto ATM comes at a cost to the user. A commission typically is charged, along with a flat fee. Fees range widely depending on which company operates the ATM.

For example, each cryptocurrency purchase at a Coinstar kiosk carries a transaction fee of 4% and a cash exchange fee of 7%.

Bitcoin Depot, which runs the crypto ATMs at Brookfield Square and other Wisconsin malls, allows for daily purchases of from $20 to $15,000 of cryptocurrency.

Retailers who provide space for cryptocurrency ATMs do so for the reason they host other types of automated kiosks or services — mostly for the rent.

“Adding this service provides an additional revenue stream to the retailer,” said Coinstar’s Jack. “It also brings more consumers into their establishment who are then more likely to spend money in the store.”

Jack said rents vary between providers and retailers, and can encompass either a flat rent and/or a revenue share.

“For Coinstar retailers, it is a service offered on an existing kiosk with no additional space or labor required by the retailer,” he noted.

On its website, Coin ATM Radar puts the number of cryptocurrency kiosks in Wisconsin at 416, although that appears not to include the nearly 150 Coinstar kiosks offering a crypto function.

Among other crypto ATM operators in Wisconsin are Digitalmint, Athena, and CoinFlip.

As of now, crypto ATMs are not regulated by the Wisconsin Department of Financial Institutions. But as locations and usage grows, they could face increasing scrutiny by state and federal regulators.

CNBC reported in November that as the number of crypto ATMs in the U.S. has grown, criminals increasingly have used the machines in schemes including money laundering and drug trafficking.

The CNC report said the ease of transactions and relative anonymity allowed when using them has contributed to abuses of the ATMs, and that some in the industry are pushing for uniform standards to prevent crime amid a patchwork of rules and state laws.

Experts generally believe some kind of regulation is coming for cryptocurrencies.

“I do expect more regulation over time. But regulation focused on cutting off fraud should and hopefully will be first and foremost,” said Joseph Wall, associate professor of accounting at Marquette University.

Litman said some attempt to regulate cryptocurrency is likely, but it might not be easy.

“Yes, the government is going to want to step in and do it. With blockchain, because of the nature of it, it’s going to be very difficult. Who are they going to hold accountable?” he said.

Shazam’s Green said that to some extent, there are regulations and statutes that apply to cryptocurrency, but the enforcement is difficult due to the nature of decentralized finance.

“For example, Bitcoin as a crypto should roughly follow commodities laws, and tokens that look like securities should fall under securities laws,” Green said. “The regulatory environment around the entire crypto, DeFi (decentralized finance), and stable coin industry is in flux, but we are starting to get more clarity by the day. Also, as banks start delving into it more, they will be seeking guidance and approval of regulators for their projects, and that will help clarify ambiguities.”

Should banks become involved in offering customers crypto options or even crypto ATMs?

“It would make a lot of sense to offer a platform like an ATM, but one that can do more,” said Marquette’s Wall, an expert in blockchain and related technologies. “A bank that wants to increase its customer base and service its customers based on their needs should consider multiple ways that their customers may want to store their wealth, conduct transactions, and interact with their mediums of exchange. ATMs are one way to do this. Increasing the ability of a customer to transact, transfer, and use their chosen medium of exchange is the very basis of banking, starting with the barter system. I cannot imagine a bank believing that U.S. dollars only is a permanently sustainable business model.”

Green said there’s not a need for banks to rush into crypto ATMs.

“Banks don’t need to do anything to allow customers to purchase and use cryptocurrency. The debit cards, ACH, and new faster payment gateways will all help facilitate fiat-to-crypto conversions for customers when they’re using any third-party service such as an exchange,” Green said. “A question banks may start asking is what else can we do directly ourselves that provides value and earns revenue? For example, rather than ATMs, the digital banking platforms that banks have provide a much more flexible, efficient, and convenient interface to buy and sell crypto.”
Marquette’s Krause doesn’t particularly like the idea of banks adding crypto ATMs.

“Bitcoin and crypto ATMs can be convenient for investors and consumers, but I am not a fan,” Krause said. “They tend to have high transaction fees, they are not widely available, and like most ATMs, they often have technical problems. I think bankers have a lot more to worry about than crypto ATMs!”

Regardless of how much crypto ATMs proliferate, banks should be paying attention to cryptocurrencies, experts said.

Wall said decentralized financial models are one of the greatest threats to traditional banking in a long time.

“I have seen studies that suggest it can cost more for a poor person to send money to and from other relatives in other economically impoverished areas than it did 30 years ago,” Wall said. “This should not be. Cryptocurrencies can be an equalizer by slashing rates and making costs proportional for all. The speed, execution, immutability, and cost structure are such that it is understandable why the market capitalization of DeFi companies is already rivaling that of traditional banks.”

There are ways for banks to work with cryptocurrencies, and they need to look into them, Wall said.

“Some banks will likely create their own cryptocurrencies, embrace the use of a Fedcoin should one be created, or partner with traditional cryptocurrencies to hedge their risks in the space,” Wall said. “Those banks which do so will likely experience a reduction of profitability in percentage terms, but an increase in the number of transactions such that overall profitability may increase, depending on their creativity.”

Wall said banks that ignore the sector are likely establishing a profitability maximum this year.

“They will likely still be able to grow for a while, but the gap between their rate of growth and the potential growth they could have — by embracing cryptocurrencies — will begin to widen at an increasing rate,” Wall said. “It is not that banks are going away. The business models they employ are rapidly changing. Those that adapt can still do well. Those that do not will struggle.”

Gores is a journalist who covered business news for the Milwaukee Journal Sentinel for 20 years.

SHAZAM® is a WBA Gold Associate Member.

DFI Deputy Secretary Cheryll Olson-Collins Appointed Top Post

Today, Governor Tony Evers announced Wisconsin Department of Financial Institutions (DFI) Secretary Kathy Blumenfeld will be leaving the agency to lead the Department of Administration (DOA) effective January 17, 2022. Gov. Evers also announced the appointment of current DFI Deputy Secretary Cheryll Olson-Collins to the agency’s top post upon Blumenfeld’s departure.

“The Wisconsin Bankers Association extends our appreciation to Sec. Blumenfeld for her public service and management of DFI and congratulates her on her appointment to lead the Department of Administration,” said Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association. “Our association and members are grateful to Kathy for her collaboration and engagement with the banking industry, and for her steady leadership during the economic uncertainty created by the COVID-19 pandemic. We wish her the best in her new role.”

“WBA also congratulates Deputy Secretary Olson-Collins on her appointment to serve as DFI Secretary,” said Oswald Poels. “Cheryll has a breadth of experience and has served Wisconsin’s financial institutions well throughout her time at DFI. We look forward to working with Cheryll in this new, and well-deserved, leadership role.”