By Lorenzo Cruz

March Madness marks the start of the NCAA basketball tournament and the conclusion to an active 2022 legislative session for the Wisconsin Bankers Association (WBA) government relations (GR) team.

A Successful Legislative Session in the Books

WBA successfully defeated two bills which would have negatively impacted the banking industry. AB 478/SB 451 would have broadened the powers of credit unions by allowing for: non-member participation in loans, the ability to issue and offer supplemental forms of capital for all credit unions, the automatic adoption of federally chartered credit union activities or powers for state-chartered credit unions, and the broadening of the authority of credit unions on holding property. During the negotiations, it became evident that the priority for the Wisconsin Credit Union League (WCUL) was their supplemental capital change which contributed to the demise of the bill. WBA effectively lobbied and defeated the bills in the Assembly and Senate.

Another piece of legislation that drew a great amount of WBA’s lobbying attention was a bill related to interchange fees. AB 587/SB 572 would have prohibited the application of the interchange fee to the tax portion of the credit card transaction and would have provided a penalty for a violation. A retailer coalition advocated aggressively for the legislative change and WBA, WCUL, and several credit card companies opposed the effort. If passed, the bill would have required credit card companies to implement a split tender transaction for purchasing products or services, which means customers would have to swipe their credit card for the retail sum purchase and then pay with either cash or check for the tax portion of the transaction. WBA warned legislators of the cost shift, customer confusion and frustration that could follow from the change. The bills died in the Senate and Assembly Financial Institutions Committees.

Other bills worth noting are AB 596/SB 596 related to banking modernization and AB 45/SB 19 and AB 46/ SB 20 related to elder fraud. The banking modernization bill would have removed outdated regulation and other impediments to banking and the elder fraud bill would have provided banks with more tools to help protect older customers from fraud and abuse. The legislative proposals passed overwhelmingly in one House but then failed to be acted upon in committee or placed on the calendar for a floor vote. In some ways, the bills became collateral damage from the credit union battle. WBA did make considerable progress on both issues and will collaborate with legislators to reintroduce similar bills in the next legislative session.

Looking Ahead to Next Year

With the end of the March session, WBA GR shifts the team’s focus to political fundraising, member outreach, and strategic planning for the 2023 session. Many of the legislative issues identified above will return and be debated in the next state budget or advanced as separate pieces of legislation. WBA needs to prepare and lay the groundwork for the fight ahead on these critical public policy initiatives.

All members — big, medium, and small — must be more engaged financially in the political process and committed to grassroots advocacy to advance the industry’s priorities. Political campaigns have continued to trend upwards in cost, and the 2022 fall elections should see more spending records broken for state and federal races. With control for the East Wing in play and majorities at stake in both State and Federal Houses, expect hundreds of millions of dollars to be spent in Wisconsin which has become a battleground state for the rest of the country. WBA can ill afford to be a spectator. Sitting on the sidelines runs the risk of electing anti-banking candidates which could have severe negative consequences for our industry. It is imperative to have the political funds in place for WBA to support pro-banking incumbent legislators and challengers. Individual members are strongly encouraged to give to the Wisbankpac or Alliance of Bankers for Wisconsin (ABW) Conduit and corporations are urged to contribute generously to WBA’s issue advocacy fund. For more information go to www.wisbank.com/give.

Photo courtesy of PNC Bank

By Paul Gores

The term “mobile banking” typically involves financial apps on smartphones. But for some banks and credit unions, mobile banking also comes on wheels.

More credit unions and banks around the U.S. have been adding mobile branches — trucks or RV-type vehicles outfitted with banking gear ranging from ATMs to teller windows to private loan offices — to reach out to their customers.

Large regional banks doing business in Wisconsin, such as PNC Bank and U.S. Bank, have had mobile branches for years, and PNC is building a bigger fleet. But the vast majority of the nation’s community banks don’t have mobile units, and credit unions tend to own them more often than banks.

In fact, in Wisconsin, a state-based credit union soon will be operating a full mobile branch — a 34-footlong vehicle that is expected to hit the road for Westby Co-op Credit Union this spring.

“We’ll go where our members need us,” said Art Shrader, chief business development officer for the $763 million-asset credit union, also called WCCU. Mobile Facilities LLC in Elkhart, Indiana, is putting the finishing touches on Westby Co-op’s mobile branch, one of up to six the company produces each year for financial institutions.

Matt Fuller, president of Mobile Facilities, said he’s seen more orders and interest in mobile branches in recent years as financial institutions have pared back on branch locations.

“There’s a lot of branches closing everywhere, so they’re looking for other ways to reach out to these smaller communities where it just doesn’t make sense to have a brick-and-mortar branch anymore,” Fuller said.

Fuller said the mobile branches his company makes range from a 23-foot vehicle that costs about $159,000 to a 40-foot financial center on wheels that sells for around $295,000. The key feature of the 23-footer is an ATM, while the 40-footer can include just about whatever the financial institution wants, he said. “Some of them want teller windows on the inside, some want them on the outside. Some want restrooms, some don’t. Some want a lobby area, some want an office area,” Fuller said.

Mobile Facilities offers multiple mobile branch floor plans.

“We install restrooms, all the furniture and fixtures, of course air conditioning, heating, generators, wheelchair lifts on some of the bigger units,” Fuller said.

Fuller said the most popular mobile bank vehicles his company produces are its 29-foot and 34-foot units.

Photo courtesy of PNC Bank

The smaller Mobile Facilities mobile banks are built on a Ford E-450 Super Duty chassis, while the largest are crafted on a Freightliner M2 chassis. The vehicles use only two axles and weigh less than 26,000 pounds, which means they don’t need a specially licensed driver.

Fuller said it typically takes his company eight to nine months to complete a mobile branch vehicle.

Florida-based MBF Industries, Inc. (mbfindustries.com) is another supplier of mobile bank branches, including some built for PNC Bank.

PNC Bank is a big believer in the usefulness of mobile branches. It has a fleet of 12 so far in several sizes and expects to have 20 in all by the end of next year.

While PNC will dispatch the mobile branches to provide banking services where there’s been a natural disaster, its branches-on-wheels are used regularly as community outreach tools, said Chris Hill, senior vice president and PNC mobile branch channel manager.

When PNC Financial Services Chief Executive Officer William Demchak went through a new unit in 2018, he suggested the company build a fleet that could serve low- and moderate-income neighborhoods, Hill said. Now, working with community partners, PNC’s mobile units make regular visits to areas of Baltimore, Chicago, and Detroit, offering not only account-opening services but often financial education to people who might otherwise be outside of mainstream banking. The bank plans to expand the program to more major metro areas in the U.S.

“We have a 30-foot truck that we use for a variety of things, but it’s really what we use in our community outreach,” Hill said. “The employees don’t handle cash. We call it a cashless branch. So we don’t do any tellering services, but we do everything else.”

The unit includes a deposit-taking ATM, so people can make an account-opening deposit at the mobile branch. The bankers — there are always at least two — can issue debit cards on the spot.

“That’s pretty powerful for the consumer — we’ve come to them,” Hill said. “We haven’t asked them to come to us. We’ve brought banking to them.”

U.S. Bank has used its two mobile units mostly at natural disaster scenes. For instance, one unit went to the Bowling Green area when a tornado devastated parts of western Kentucky in mid-December last year.

“After a disaster our customers have appreciated the opportunity to bank right in their own town, typically near where the branch was,” said Doug Reier, senior vice president of operations process and delivery for U.S. Bank. “And our employees are happy to have a place to call a temporary home to work.”

Westby Co-op Credit Union’s Shrader said the new mobile branch is a way for the financial institution to serve all parts of its area better.

“We serve a rural area, and we have populations of Amish throughout the areas as well as non-Amish, and we need to go where our members need us,” Shrader said. “There’s a huge amount of benefits from this, from marketing to PR, but it’s to serve the membership plain and simple.”

He said he also expects that the mobile branch will make visits to offer banking services and financial education to places like schools, nursing homes, county fairs, and other community events.

Shrader said the credit union’s mobile branch will be able to do what a permanent brick-and-mortar branch can do, including lending.

Shrader said the credit union had to get permission for the mobile branch from the Wisconsin Office of Credit Unions, and its operation at first will be “a learning experience.”

Heather A. MacKinnon, vice president – legal for the Wisconsin Bankers Association, said state banks considering a mobile branch should contact the Wisconsin Department of Financial Institutions (DFI).

“From a state banking perspective, Wisconsin Department of Financial Institutions Banking Administrative Code has language referring to a branch location being ‘permanent,’ which may be a consideration to overcome as a concept of permanence is certainly different than ‘mobile,’” she said. “However, after having had informal conversations with DFI, WBA would encourage any bank seeking to file a mobile facility to engage with DFI as there is a willingness for discussions.”

Nationally, the Office of the Comptroller of the Currency requires a branch license for each mobile unit. The regulator defines a mobile branch as a facility that does not have a single, permanent site and includes a vehicle that travels to public locations to conduct branch transactions. It requires a bank to file an application delineating the proposed or expanded geographic area to be served by the mobile branch.

From a safety standpoint, bankers with mobile units said they are loaded with security cameras and other measures to protect staff, the vehicle, and its contents. Local police typically are notified where and when mobile branches will be stationed.

In addition to the service a mobile branch can provide and the good will it generates among its customers, a branch on wheels also is a valuable marketing tool. Whether it shows up at a disaster site, a school, a community event, or a local parade, it presents the financial institution in a positive light as an involved corporate citizen.

PNC takes its mobile units to college campuses during move-in week, making it easier for new students to open accounts without having to find fixed branches.

The mobile branches get noticed.

“They’re billboards for us going down the road. We wrap them from head to toe,” said PNC’s Hill.

U.S. Bank’s Reier also said brand awareness is a side benefit of mobile branches.

“When it’s rolling down the road, of course, but more importantly when it arrives in town,” Reier said.

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

Triangle Background

Helping young adults establish credit

By Tammy Tongusi

Financial institutions tend to overlook teens becoming adults, especially when it comes to providing education. Young adults will need to become financially independent, notably to prepare for purchasing a car or buying their first home. In today’s world, young adults plan for their future very differently than thirty years ago. I do not recall hearing from my parents or educators, “You should start thinking about building your credit.” As bankers, we help to start that process by giving our customers the tools they need to reach their financial goals. We know the credit scoring system creditors use to help determine your credit score. This will have an impact on many transactions going forward from whether or not a loan will be approved to the interest rate that will be paid and even the cost of car insurance.

Forte Bank offers a Teens with Green Club account that is designed for 13–17 year olds, and most of them are eager to get a checking account with a debit card. The teenage years are a great time to start the conversation and get them thinking. Many people do not realize that students and other young adults can establish credit through their parents’ credit if their credit card allows authorized users to be added. These card companies report to all three credit bureaus, so credit scores can start to build.

Financial classes for students and young adults, held in schools or at the bank branch, give them the tools needed to establish credit for future purchases and how to budget money to make them financially responsible. By promoting financial awareness, they can start taking steps to be on the path to a brighter future.

A “secured” credit card is a great starting point for customers with no credit or very low credit scores and is an excellent way to start building a credit history. The Forte Bank program requires account holders to have a separate deposit account with the bank and a balance of funds to hold as collateral. This deposit, which must be placed for at least 12 months, will establish the credit limit as a minimum of $250.00 and with no maximum. This will allow them to start understanding how to properly use a credit card. Stressing how important it is to make monthly payments on time and not maxing out the credit card every month is crucial for a young adult building their credit score. We generally recommend using credit cards for minimal purchases two to three times a month.

After they have received their secured card, they should take some time before they start applying for other credit cards. Having a credit use history will help in both building a credit score and gaining access to other lines of credit.

Another way to consider establishing credit is to explore the options of having a joint credit with a co-signer. This can be especially useful with an automobile purchase. Many banks will offer a reduced rate if customers sign up for automatic payments. Additionally, it will ensure their payments will be on time.

Forte Bank is very active in finding ways to ensure that future generations are responsible users of credit. Taking an active role at the start of their credit journey is a great way to help teens and young adults establish a solid credit score and understand how these products can be used to help them on their financial journey throughout life.

Tongusi is assistant vice president – retail banker and consumer lender at Forte Bank, Hartford and a member of the 2021–2022 WBA Marketing Committee.

Ken Thompson HeadshotBy Kenneth D. Thompson

April is a busy month for community bankers in Wisconsin. Between Community Banking Month and Financial Literacy Month, the Wisconsin Bankers Association (WBA) and its non-profit arm, the Wisconsin Bankers Foundation (WBF), are looking forward to providing bankers throughout the state with opportunities to further strengthen our commitment to every member of our communities.

Teach Children to Save Day is approaching on Thursday, April 28. This campaign highlights the value of teaching kids the importance of financial literacy. To facilitate this campaign in Wisconsin, WBF is once again distributing over 2,500 free books and resources for WBA-member banks to use as they engage with the youngest members of their communities. You can help support this program — along with many other financial education projects — with a tax-deductible donation to WBF. To learn more, visit wisbankfoundation.org or contact Hannah Flanders.

I am excited to see how our bankers’ creativity and dedication to financial responsibility shines yet again this year. As always, you are encouraged to share your efforts in improving financial literacy with WBF as part of both Teach Children to Save Day and other educational events you take part in. Visit wisbankfoundation.org/education to submit a presentation form recording your efforts between June 1, 2021 and May 31, 2022.

This year also marks the fifth annual WBA Power of Community Week. Member banks are encouraged to participate, during the week of April 18–23, in one or more community service activities. This effort highlights the Wisconsin banking industry’s long-standing commitment to the communities in our state. If you are looking for ways to get involved this year, would like to share your plans to be included on the interactive map, or to learn more about WBA’s plans, please visit wisbank.com/BanksPowerWI.

Whether it be through promoting the importance of financial literacy or volunteering at shelters, food pantries, or non-profit organizations, the month of April presents the perfect opportunity to showcase your bank’s involvement in making Wisconsin the exceptional state that it is. Your efforts, especially in the last two years, have not gone unnoticed and are deeply appreciated by your community. We thank those bankers who have continually gone above and beyond to lend a helping hand to others.