On February 28, the state Senate Committee on Financial Services, Constitution and Federalism held an informational public hearing and invited WBA to testify on behalf of the entire banking industry. The informational hearing focused on industry overview and the impact of federal policy from the invited speakers (no other testimony was permitted).
Jeff Schmid, SVP & COO of Fox River State Bank and the current Chair of the WBA Government Relations Committee fielded several questions from the committee about the impact of federal regulations on the industry, specifically the looming HMDA changes. Schmid (above, right) explained to the members of the committee that the increase in reporting requirements and other regulations is impacting his bank's ability to lend to credit-worthy individuals. "We're still lending, but think of how much more we could be doing with a little more flexibility," he said.
WBA Director - Government Relations Jon Turke (above, left) provided the committee with a brief overview of WBA and Wisconsin's banking industry, highlighting the industry's strength despite the challenging low interest rate environment and increased merger and acquisition activity. "There is every indication that the strong bank performance we saw last year will continue through 2017, and though I anticipate continued merger activity, it will be at at a slower pace than 2016," Turke explained in his written testimony. "The banking industry continues to face earnings pressure as the interest rate environment has remained low for a prolonged period of time, and technology and regulatory costs have burdened the expense side of all banks’ balance sheets. Achieving efficiencies is challenging for all banks in this environment; however, it is particularly difficult for smaller community banks."
Also testifying at the hearing, Wisconsin Mortgage Bankers Association President Michael Kellman, SVP of North Shore Bank (above), provided detailed information about the impact of the Ability to Repay Act. Kellman and Schmid both thanked the committee for not "piling on" with regulations and asked them to speak with the state's Congressional delegation about the impact of federal regulations on the front lines here in Wisconsin.
The informational portion of the hearing also featured remarks from current DFI Secretary Lon Roberts, who immediately congratulated Wisconsin's bankers on the strength of the industry as evidenced by the FDIC quarterly data released that morning. Deputy Secretary (and soon-to-be Secretary) Jay Risch provided the committee with an overview of what the Department does as well as the purpose of state charters and the value of the dual-charter system. DFI Chief Legal Counsel Heather MacKinnon provided a detailed overview of crowdfunding in Wisconsin, outlining the progress made since the 2013 JOBS Act to today.
John Manske of the Cooperative Network Association also testified during the hearing. The Wisconsin Credit Union League was invited to testify, but did not attend.