Archive for month: October, 2022

,

Executive Letter: Regulatory Advocacy in Action!

Rose Oswald PoelsBy Rose Oswald Poels

Last week, bankers from Wisconsin and Illinois traveled to Washington D.C. together for in-person meetings with banking regulators. This trip, organized for the last 11 years by WBA, has for the last two years also welcomed bankers from Illinois.

I have always found this trip to be productive given the intentionally smaller group of bankers who attend and the senior level officials who meet with us. This year was no exception!

Like visits to Washington D.C. to meet with our elected officials, meetings with regulators do not result in meaningful, visible change overnight. However, if we don’t share the stories demonstrating the impact that regulations have on banking operations and consumers in the Midwest, their perspective is only what they know and see in Washington D.C. As the burden of federal regulations remains substantial on banks, it is critical that we continually advocate so to lessen the impact.

This year, our primary list of issues included small business data collection (1071 Rule), NSF/representment of checks and UDAAP (Unfair, deceptive, or abusive acts and practices), overdraft programs, deposit insurance assessment rates, CRA, and the definition of tangible equity capital in Federal Housing Finance Agency (FHFA) rules.

Our group had several meaningful conversations over the short two-day trip with senior officials from the Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and FHFA, as well as with Director Chopra from the Consumer Financial Protection Bureau (CFPB). During these conversations we learned it is likely that both the final CRA modernization rule and the 1071 rule would be issued at around the same time; however, there could be a phased-in implementation period for 1071.

The general counsel for FHFA heard from several of us in attendance regarding the very real and negative impact the current definition of tangible equity capital could have on community banks’ ability to borrow from the Federal Home Loan Banks and promised to share this impact with decisionmakers starting that afternoon. Overall, I was very pleased with the active involvement of the bankers during the meetings and the level of engagement we had with the various regulators.

I would like to thank the following Wisconsin bankers for joining me and WBA’s Vice President – Legal Heather MacKinnon on this trip:

  • WBA Chair Dan Peterson, Stephenson National Bank and Trust in Marinette
  • Al Araque, Johnson Financial Group in Racine
  • PJ Childers, Crossbridge Community Bank in Tomahawk
  • Kristen Gagliano, North Shore Bank in Brookfield
  • Corey Hoze, Associated Bank in Milwaukee
  • Mark Oldenberg, Security Financial Bank in Eau Claire
  • Terry Rosengarten, Unity Bank in Augusta
  • Theresa Wiese, First Business Bank in Madison

I would also like to thank Dave Feldhaus from the FHLBank of Chicago for joining us on this trip and the FHLBank of Chicago for sponsoring our dinner.

If you are interested in joining WBA on its annual regulatory advocacy trip in October of 2023, please let me know. As you can tell, we accomplish a lot in a short period of time and your continued advocacy for our industry makes the greatest impact in ushering the movements most important to our communities.

/by
,

October 2022 Compliance Journal

The October 2022 WBA Compliance Journal is now available. In this edition, WBA Legal covers Part 2 of a two-part series regarding contracting with minors. In this second part, readers will find guidance on what banks should consider when banking minors, including the doctrine of incapacity. The publication also includes an article about a recent court action that overturned closed-end loan HMDA reporting thresholds for exempt institutions, a summary of recently published agency rules and notices and other important compliance-related updates for bankers.

/by
Business people meeting to discuss the situation on the market

The Importance of Communication: How to Assist the Non-Technical in Understanding Technology

By Rob Foxx, CCBTO

As an information technology or information security professional, have you ever had a conversation with a member of your team and watched their eyes glaze over and think to yourself, ‘did they just understand a word I said?’ Welcome to the industry — this is part two in my series assisting technical and non-technical staff to better communicate on the subject of technology. Before breaking down a few simple ideas tech professionals can keep in mind when communicating with non-technical peers — we should first discuss where (and why) we as technology professionals falter in our communication.

Gaps in Experience

Like many of my peers, I spent my younger years studying both in college and independently to absorb as much information as I could in preparation for my career. In many ways, college helped me build my baseline for what I would need to learn both on my own as well as on the job. In addition to the standard classes within my major, I was also required to take speech classes like many college students. I did very well in speaking classes, however, my speeches were often on topics far more engaging to the audience than disaster recovery, firewalls, or server specifications.

Since then, I’ve spent much of my career working in teams with non-technical co-workers and, considering my target audience is usually within the banking industry, more than likely you too are a single individual or part of a very small team supporting your enterprise with minimal contact with those sharing your understanding of technology.

If you are of my generation or older, you were likely told somewhere along the way that you were very gifted or had aptitudes that leaned towards the up-and-coming field of information technology. Unfortunately, if you had any degree of awkwardness, it may have also been sold to you as something that would not require you to regularly communicate with people — a detail probably very few people have found to be true.

Having technical skills, aside from communication, is one of the most important skills one can have. On the upside, many of us have found being an effective communicator does not mean being a master orator or an excellent writer. As proof to that, I will tell you in all honesty that I am neither. I stumble over my words, and I need someone to proofread anything holding more content than a short email or technical report.

Four Things to Keep in Mind

As I continue through my career and often work closely with non-technical individuals, I have found that there are a few ways our profession can not only communicate better, but also build relationships for better future communications.

  • Do not get frustrated with your audience.

None of us learned our profession overnight, so do not set the expectation that your non-technical team members will learn yours after one chat. By getting frustrated, you do a great disservice to the effort of everyone who was patient enough to make sure you understood your profession well enough that you could work successfully and independently.

In further developing good communication skills, technical people will realize the importance of asking co-workers to be specific in their requests. You may frequently get calls from peers saying, “my computer does not work.” By asking follow up questions such as “what are you trying to do,” “what does the computer do when you do that,” or “walk me through the problem,” tech professionals will generally get a better overall response and diagnosis of the issue at hand.

  • Know your audience.

Knowing who you’re talking to and their level of understanding in the subject you are talking about is the major difference between public speaking and speaking with business leaders. Never make assumptions about their level of understanding or be afraid to ask how familiar they are with virtual environments. The least technical executive at your bank most likely still receives business articles that could offer a baseline understanding of the subject matter at hand. Either assuming too much or too little could lead to your target getting frustrated with you expending their limited time.

  • Find a beta user.

My original career goal was to become a software developer. I said from day one that I would want to hire someone who is older and less tech savvy to work with my team and test my product. If my non-technical mother could operate it without significant guidance, then I would have succeeded in developing a product that offers an intuitive and user-friendly design and would be well accepted for its ease of use.

To apply this idea in dealing with business leaders, remember that if you can explain it to someone non-technical — be it a spouse, parent, or even a helpful co-worker — business leaders should have a better chance of understanding what thoughts you are trying to convey.

  • Don’t be judgmental.

Make sure to have a non-judgmental way of communicating if a decision that is being made or considered is problematic. In technology, it may be stating that “this is a band aid to the problem,” or “we will need to readdress this problem sometime in the near future.” In information security, the cue is often “we can do that if you are willing to accept the risk and sign a risk acceptance form.”

Now that we have looked at the issues and a few things to help keep in mind, I encourage you to keep in mind that learning complex concepts and making decisions is a process. Talking over the heads of your coworkers and business leaders may only make this process more difficult. Remember, technology is your profession — not theirs.

Foxx is director – infosec and IT audit services for FIPCO, a WBA Gold Associate Member.

/by
,

Executive Letter: Recognizing the 2022 Banker of the Year

Rose Oswald PoelsBy Rose Oswald Poels

Since 1986, bankers across the state of Wisconsin have been recognized for their outstanding efforts as leaders in our communities. This tradition, now celebrated annually at the WBA Bank Executives Conference in February, is equally as exciting as it is inspiring and encouraging to each of us in the room and throughout the industry.

Last year’s Banker of the Year, Steve Burgess of National Bank of Commerce in Superior, exemplifies not only the commitment bankers demonstrate to the community, but an incredible dedication to the industry as a whole. His career, spanning nearly 40 years, has accounted for remarkable growth throughout Wisconsin’s banking industry and in every community he has served.

Steve, and all previous Bankers of the Year recipients, are just a few of the many devoted individuals throughout Wisconsin demonstrating an outstanding commitment to their banks, communities, and the profession. It is humbling to recognize these exceptional leaders each year.

As such, the Wisconsin Bankers Association (WBA) will now be accepting nominations for the 2022 Banker of the Year through Friday, December 9, 2022. In addition to demonstrating remarkable service efforts over their career to both their bank and community, qualifying individuals must be an employee of a Wisconsin bank and WBA member as well as a current (or recent past) president/CEO.

Those nominating themselves or another qualified banker for the prestigious Banker of the Year recognition may submit the nomination form at any time before December 9, 2022. As our Association receives many qualified applications each year, those who have previously nominated a banker who was not selected are also encouraged to do so again this year.

Thank you for the continued work each of you do for Wisconsinites each and every day. I can say without a doubt that the devotion Wisconsin bankers show to our industry has left a lasting impression on many communities and fellow bankers. I look forward to hearing new stories about the outstanding service Wisconsin bankers do each day as well as celebrating these achievements in the new year.

Make a Nomination
/by

Insuring Safely and Locally

MBIS provides insurance for banks by people who know banks

By Daryll J. Lund

For over 10 years, Midwest Bankers Insurance Services (MBIS) has saved bankers throughout the Midwest time, money, and the headache that comes with disasters of all kinds.

MBIS is co-owned by the Wisconsin Bankers Association (WBA) and the Minnesota Bankers Association and is endorsed by the North Dakota Bankers Association. As our independent insurance agency focused exclusively on serving and educating community banks in the Midwest, our team of dedicated individuals is equipped with three distinct lines of coverage that will help prepare your bank for the unexpected.

Professional Lines

MBIS offers banks three professional lines of coverage including financial institution bond, directors and officers liability (D&O), and cyber/privacy liability. Whether your bank is seeking policies that will protect the bank from losses arising out of electronic theft of customer information; protection against dishonest fraudulent acts committed by employees, customers, or third parties; or a combination of all of these — MBIS has your best interest in mind.

Property and Casualty Lines

It is important to ensure the safety of what makes up your bank. MBIS’ five lines of coverage including property coverage, general liability, business auto, umbrella liability, and workers’ compensation offer flexibility and peace of mind for every aspect of your bank.

Property coverage protects bank buildings and business personal property from physical damage; general liability protects the bank from customer or third-party personal injury claims on premise; business auto coverage, includes physical damage and liability of owned autos, repo autos, non-owned autos, and hired autos; umbrella liability, provides excess liability over general liability and business auto liability limits; and workers’ compensation is for employment-related injury or illness and covers lost wages and medical expenses.

Lending-Related Lines

Finally, MBIS understands that every bank approaches lending from a unique perspective. With that, our team will tailor your plan to the specific needs of your bank. To protect your loan assets, MBIS has four types of policies for banks to consider. Mortgage protection/errors and omissions (E&O), which covers physical damage losses to the bank’s real estate portfolio if the borrower doesn’t have insurance and property goes into foreclosure. Lenders Single Interest covers the bank’s auto, truck, boat, snowmobile, ATV, etc. for losses if the borrower doesn’t have insurance and chattel is repossessed with physical damage. Force placed hazard and flood provides coverage to borrower, and MBIS’ Flood Compliance Solutions program incorporates flood certifications, borrower purchased flood insurance, lender force place flood insurance, and notification to all real estate borrowers that flood insurance is available.

Rest assured that your bank will be covered no matter what life throws at you, and save yourself the headache later by investing now in competitively priced, top-of-the-line policies offered by MBIS.

Contact Jeff Otteson at 608-217-5219 or jeffo@mbisllc.com to learn more about what MBIS has to offer for your bank.

/by
, ,

Community Advocate of the Month: Ted Gerber, Community Bank, Grantsburg

Ted Gerber

The following is a brief interview between WBA President and CEO Rose Oswald Poels and Community Bank, Grantsburg President Ted Gerber.

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

Ted: My family was involved in many businesses, including banks, in northwestern Wisconsin when I was growing up. Banking seemed the most interesting to me, so I pursued a degree in finance and started working for Norwest Bank in St. Paul, Minn. as a credit analyst. After a few years, my grandfather Franz and father Terry were interested in opening a branch in Grantsburg, Wis. and asked me to be the branch manager.

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

I love working with small business customers — they are the heart and soul of our economy, especially in rural areas. Helping them succeed is good for business, but it is also great for our communities. Beyond that, I respect and admire the dedication it takes to run your own business and really enjoy lending a helping hand.

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

Not all banks are the same. While many times the products we provide are very similar, how we deliver those products can be vastly different. Two banks across the street from each other might have vastly different philosophies on technology, underwriting, service, etc. I think the general public assumes we are all the same on everything, and that couldn’t be further from the truth.

Where do you believe the industry’s greatest challenges are in the next three to five years?

Like all bankers, I worry about credit union expansion, data breaches, and non-bank competition, but perhaps my biggest fear is regulatory overreach. I believe there is a segment of the government bureaucracy that thinks charging for financial services is inherently wrong. It seems as though banks are an easy target as the regulatory framework is already in place to enforce whatever perceived “wrong” they want us to correct. Holding the line on regulation will be key to our industry going forward.

Every day, bankers serve their local communities by helping their customers achieve their financial dreams. Please describe your current role at your bank and share with us one of your more rewarding experiences.

I believe that all of us have talents, and the best way to serve our community is to share those talents with others. As president of the bank, it is my responsibility to set a good example.

My passions are business and baseball. Not surprisingly — like almost every other small-town banker — I’ve served as treasurer for many organizations over the years, from the local chamber of commerce to our town’s industrial development company. I have also coached baseball at the youth and high school levels in Grantsburg for over 20 years.

Watching the boys I coached grow into men has been incredibly rewarding. Recently, I was helping with a youth practice and told a youngster that his swing looked like a guy I used to coach. He smiled and said, “That’s my dad, he told me you were going to say that.” That smile and comment (and the slap on the back I got from his dad after practice) are one of the many memories that show you get back much more than you give when you share your talents.

/by
, ,

Executive Letter: FHLBank Regulation Can Impact a Member Bank’s New Advance Option

Rose Oswald PoelsBy Rose Oswald Poels

Given recent rate increases by the Federal Reserve and the overall market impact of the current economy, banks that have lines with a Federal Home Loan Bank (FHLBank) need to be mindful of how FHLBank regulation can impact a member bank’s ability to obtain new FHLBank advances or letters of credit. With this Executive Letter, I wanted to be certain FHLB member banks are aware of the possibility.

Under FHLBank Regulation 12 CFR 1266.4(b), a FHLBank cannot make a new advance to a member bank whose tangible capital is not positive. To make a determination of whether a member bank has negative tangible capital, the FHLBank will use the member bank’s most recently available Call Report data. A member bank would not be considered to have negative tangible capital until its quarterly report is filed.

As an exception, a new advance may be made if the member bank’s prudential federal regulator (the Federal Reserve or OCC) or federal insurer (FDIC) requests, in writing, the FHLBank lend to the member bank. It is my understanding that the federal regulators are currently not willing to issue such instruction unless a particular member bank has a dire liquidity need for the advance.

Historically, bank capital calculations of the prudential federal banking regulators and the Federal Housing Finance Agency (FHFA) were similar. However, recent changes made to capital calculations by the banking regulators have not been adopted by FHFA. In particular, under FHLBank regulations the definition of tangible capital is inclusive of Accumulated Other Comprehensive Income (AOCI). Therefore, this difference will impact those member banks that made the election to opt-out of the requirement to include components of AOCI when calculating common equity tier 1 capital under Basel III rules.

It is important to note that the FHLBank regulation does allow member banks with negative tangible capital to renew outstanding advances, for successive terms of up to 30 days each. There is no limit to the number of times a member bank may roll over an existing advance. Such member banks may also renew outstanding advances for a term greater than 30 days at the written request of the appropriate federal banking regulator or FDIC as federal insurer.

It is also important to note that the limitation for a new advance does not impact a member bank’s use of Community Investment Products or for a member bank’s ability to sell loans into FHLBank’s Mortgage Partnership Finance (MPF) Program.

FHLBank member bankers who may be impacted by this limitation should work closely with their FHLBank Sales Director for more information specific to the member. Affected member banks should also work closely with your accounting and investment resources as there may be options to consider as a means to avoid reaching a negative tangible capital position. Accounting and investment resources will also be able to explain the impact of such options to the member bank in areas other than under FHLBank regulation.

WBA is monitoring the impact of this FHLBank regulation component and is working for a resolution whereby banks whose tangible capital is negative due to a difference in tangible capital calculations are not negatively impacted by an inability to obtain new FHLBank advances. WBA plans to advocate for a change in the rule starting with addressing the issue directly with FHFA later this month during our D.C. Regulatory Trip. In addition, WBA is also working to organize an all-member call on this issue — please watch our publications for an announcement of a complimentary webinar in the near future.

/by
Asian businesswoman mentor teaching African American intern, using laptop
,

Partnering with Wisconsin’s Diverse Small Businesses

Empowering underrepresented communities, expanding our economy

By Hannah Flanders

Bankers are always focused on their mission of serving their communities, and lending to local businesses is at the heart of that mission. As more small businesses are looking to start or expand, access to capital remains a challenge, and disproportionately so for firms owned by people of color, according to the Small Business Credit Survey conducted by all 12 Federal Reserve Banks. Partnering with community-based organizations such as chambers of commerce allows both banks and the organization to assist historically underrepresented individuals to gain access to the credit they need.

Diverse Chambers and Community-based Organizations in Wisconsin

In Wisconsin, there are 20 chambers of commerce and community-based organizations with a specific mission of supporting underrepresented individuals that WBA is familiar with. While our state boasts many other chamber models representing specific cities and regions, demographically focused chambers are established with the purpose of representing a specific group of business owners.

Of these chambers, many underrepresented groups — including veterans, people of color, and women — have the ability to access local networks of fellow underrepresented business owners, and can acquire resources and opportunities to gain knowledge from other professionals.

Ruben Hopkins, chairman and CEO of the Wisconsin Black Chamber of Commerce, works to help prepare Black business owners in Milwaukee to take out small business loans. “Money’s in the paperwork,” Hopkins states. “Our organization works to establish a more aware business owner and save bankers time. When my business owners walk into the bank, you know they’re prepared with whatever is necessary [to complete the application].”

How Your Bank Can Get Involved

Over the last several years, Wisconsin bankers have become even more intentional in hiring employees who represent their local communities so customers “seem themselves” when they enter the bank. This certainly helps foster connections with the bank from these represented groups.

Another way banks are developing relationships with historically underrepresented businesses is by becoming involved with specific ethnic or community-based chambers and organizations.

As bankers already know, one of the easiest ways to become involved is to become a member or sponsor a chamber event. This effort alone highlights to community members the care and support bankers have for local businesses. According to a study conducted by The Schapiro Group, consumers are 19% more likely to think favorably of a company that is involved with its local chamber.

From galas to art fairs, summits, and workshops — the are many opportunities for banks to assist and support ethnic chambers and other community-based organizations in their mission to help marginalized small business owners reach new heights.

For the Wisconsin Black Chamber of Commerce, the 3,000 Black Business Challenge is a boot-camp program that sets Black business owners up for success. The program features education on a wide range of topics including financial literacy, business accounting, and funding.

Not only does the 3,000 Black Business Challenge boot-camp offer a great opportunity for Black business owners to hone a diverse range of financial skills, but bankers who volunteer as partners will also play a significant and memorable role in the growth of these businesses.

Additional ways of getting involved include serving on an organization’s Board, contributing to loan funds, or making an increased effort to work with business owners who are members of the partner organization.

Benefits for Banks and Communities Alike

For banks looking to increase their Community Reinvestment Act (CRA) performance or become involved in new ways within their community, partnering with community-based organizations offers various opportunities to achieve those goals while assisting underrepresented small business owners.

According to the Association of Chamber of Commerce Executives (ACCE), historical circumstances, population fluctuations, differing ambitions, and the needs of employers have all played a role in the formation of different chambers. Chambers today remain effective for representing business in a certain location or those focused on a certain demographic.

Partnering with a local chamber of commerce that serves underrepresented business owners is an excellent opportunity for bankers to assist entrepreneurs in the expansion of their businesses and support the growth of the local economy, all the while establishing the bank as a trusted partner for diverse members of the community.

In addition, banks may find that working with local chambers will offer them opportunities to reach new talent. Many local chambers offer members the opportunity to post recruitment ads on
their websites, offering an additional avenue for talent recruitment that may reach a new population of individuals.

In developing a connection with an ethnic chamber or other community-based organization, banks are able to widely support the growth of marginalized small businesses in the communities in which they serve. This commitment to Wisconsin’s underrepresented entrepreneurs will provide not only an opportunity for banks to reach into historically underserved communities but offer creative ways in which to support diverse local businesses and the growth local economies.

Ethnic Chambers and Other Organizations in Wisconsin

* Indicates WBA Associate Membership.

/by
Women in Banking
,

Paving the Way for Women in Banking

Read more
/by
, ,

Executive Letter: Ensuring Financial Success for Wisconsinites

Rose Oswald PoelsBy Rose Oswald Poels

Ensuring the financial success and prosperity of our community members is at the heart of the banking industry. Recently, the FINRA Investor Education Foundation released its National Financial Capability Study results, providing insights into the financial capability of U.S. adults. The findings are a helpful resource in understanding the financial circumstances of households in Wisconsin compared to the region and nation.

The summary of FINRA’s findings — split into specific sections such as making ends meet, planning ahead, managing financial products, and financial knowledge — underscore a few of the most important areas relating to financial literacy. Conducted June through October 2021, the results show that Wisconsinites stand ahead of the rest of the U.S. in many critical areas such as having emergency funds, a savings account, and a plan for their future.

  • 52% of Wisconsin residents spend equal to or more than their income (compared to 53% in USA)

    Living Paycheck to Paycheck (WI) graph

  • 37% of Wisconsin residents do not have emergency money of three months of income (compared to 43% in USA)

    No Rainy Day Fund (WI) graph

  • 27% of state residents have engaged in some form of high-cost, non-bank borrowing during the last five years (compared to 32% in USA)

    Borrowing (WI) graph
PreviousNext
123

Bankers play an important role in outreach efforts in your communities to equip consumers young and old with the knowledge and resources needed to achieve financial stability and prosperity.

In countless ways, Wisconsin bankers do so much to promote financially healthy communities. To support you in this work, the Wisconsin Bankers Foundation (WBF) serves as the hub for all things financial literacy. Annually, Wisconsin bankers venture into schools as part of Teach Children to Save Day in April using WBF’s Reading Raises Interest Kits. In addition, the Foundation is actively working to curate relevant resources bankers can use with people of all ages and levels of financial experience — please wisbankfoundation.org/resources to view what we have available now.

As a reminder, the 2022–2023 Financial Education Summary Forms are now open. Not only does the Foundation assist Wisconsin bankers in providing resources for all consumers, but we also celebrate these important contributions you make each day to our state. If your bank employees participate in any financial education-related event from June 1, 2022 through May 31, 2023, please submit a form as you go to record your activity. Questions related to WBF and resources available for your bank can be directed to Hannah Flanders, WBF coordinator.

Bankers should also be aware of programs such as America Saves, Wisconsin Saves, and ELEVATE Wisconsin that can be implemented in the office, shared with business customers, and members of the community.

  • America Saves: Accessible online guidance, best practices, and goals consumers can pledge themselves to.
  • ELEVATE Wisconsin: An online wellness program providing interactive, effective, and unbiased instruction in personal finance and investing fundamentals to Wisconsin employees.
  • Wisconsin Saves: Small- and medium-sized employers can promote to their employees the ease and benefits of saving automatically for emergencies through split deposit.

Thank you to every bank that assists our industry in continuing its commitment to serving and educating members our communities. Time and time again, data such as FINRA’s National Financial Capability Study reminds us of the strength in our industry — where we’ve come from and where we have yet to go.

*Graphs provided by the Wisconsin Department of Financial Institutions (DFI) based on information provided by the FINRA Investor Education Foundation National Financial Capability Survey.

/by
Wisconsin Bankers Association logo

questions@wisbank.com

608-441-1200

4721 S Biltmore Ln.
Madison, WI 53718

Get our Newsletter!
Subscribe