Archive for category: Credit Unions

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Advocacy Update: New Year, New Opportunities to Advocate

By Lorenzo Cruz

With the start of the new year, many of us have taken time to reflect upon the accomplishments of the last year. For the Wisconsin Bankers Association (WBA) and our members, 2023 was full of success. Of note, our team of dedicated banking advocates helped to secure a historic victory in the state budget, which will save the industry tens of millions of dollars annually through a state tax exemption on certain commercial and ag purpose loans. Without the grassroots and financial advocacy support of the membership, this monumental achievement would not have been possible. So, as you begin to consider your resolutions for the year ahead, I hope that you consider actively engaging in WBA’s political advocacy efforts in 2024.

As always, there are a plethora of ways for bankers to be involved with WBA’s advocacy efforts to aid in shaping the future of our industry. Being an election year, it is ever so important that bankers are present to make their voices heard. Capitol Day, the Association’s most important and largest advocacy event of the year, will take place on February 22 in Madison at the Monona Terrace. The one-day event is a great opportunity for all bankers, regardless of advocacy experience, to gain insight on policy issues impacting the Wisconsin banking industry and make direct connections with their elected legislators. These meetings, which occur in small groups based on Assembly or Senate district, are an effective way for WBA and the membership to share our legislative priorities with policymakers.

On the financial front, it is no secret that election years bring with them political campaigns that are skyrocketing in cost. Being “B” for “Banker,” it is more important than ever that we are prepared to support pro-banking candidates on both sides of the aisle.

At the individual level, bankers should consider becoming a member of the Silver Triangle Club or Leadership Circle by making a personal contribution to Wisbankpac or the Alliance of Bankers Conduit (ABW). At the bank level, an organization can achieve Gold Triangle recognition by meeting certain aggregate contribution amounts to the PAC and ABW. These contribution levels are based on the asset size of the bank.

After the big win in the budget, the WBA government relations team continues to lobby at the State Capitol in support of our top three priorities: elder fraud, financial institution modernization, and trust code updates. Our team is also playing defense on issues regarding privacy, Merchant Category Codes (MCC), Environmental Social Governance (ESG), and credit card swipe fees.

As the Legislature turns its focus on passing legislation over the next three months, WBA calls upon our members to remain engaged in the process both financially and on a grassroots level. Political activism allows our collective voice to stand out and be heard.

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WBA Power of Community banner
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Executive Letter: Banks Power Wisconsin

Rose Oswald PoelsBy Rose Oswald Poels

Six years ago, the Wisconsin Bankers Association (WBA) brought forth the Power of Community Week campaign to encourage bankers to share their activities during April — which also aligns with Financial Literacy and Capability Month, Community Banking Month, and Volunteer Month. As participation in the campaign only continues to increase, I wish to remind all WBA members of the value in highlighting their community-focused efforts.

As we all are well aware, embracing a community-focused mindset is deeply ingrained into the day-to-day functions of a career in banking; community service is a foundational component to the work bankers do each day. While CRA requirements are an aspect bankers must consider, many go far beyond what is expected — both in and out of the office — simply because they are committed to fostering growth in the communities in which they live, work, and play.

As I have stated previously, the credit union industry continues to be extremely vocal regarding their community-focused activities and, unfortunately, many of these profit-driven organizations are under the guise of a mission-focused institution. It is critical, for the continued prosperity of our industry and of our communities, that bankers remain proactive in informing our elected officials and the public of the work our teams do to serve our neighbors.

In order for WBA to spotlight the activities bankers take part in to give back to their communities, underscore the value of community banking, and work through the legislative process this session, I ask that you please take the time this month to share with us how your bank is involved by completing the 2023 Power of Community Week participation form (if you haven’t already) and sharing your event photos with us by using the hashtag #BanksPowerWI on social media.

Of course, the efforts demonstrated in serving and supporting Wisconsin communities is not just an annual event for banks. Throughout the year, these bankers across the state take part in volunteer activities, make donations, and support the families, business owners, farmers, and non-profit organizations around them. Participating in WBA’s Power of Community campaign helps our Association amplify the message that banks are devoted to serving Wisconsin.

Additionally, if your team will be venturing into local schools for Teach Children to Save Day on or around April 27, or are planning to host any financial education-related presentations by May 31, 2023 (of which all “count” for Power of Community Week participation), I encourage you to share these details with the Wisconsin Bankers Foundation to be recognized with an Excellence in Financial Education Award at the WBA FLEX: Retail and Marketing Summit this fall for your outstanding efforts to improve the financial capability of all Wisconsinites.

On behalf of all of those who have been or will be impacted by the work you and your team do this April, thank you for going above and beyond to demonstrate your commitment to your communities and Wisconsin’s banking industry. Your extensive efforts have not gone unnoticed.

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Executive Letter: Highlighting Your Community-focused Efforts

Rose Oswald PoelsBy Rose Oswald Poels

At the heart of the banking industry is community. Now more than ever, it is imperative that members of the Wisconsin Bankers Association (WBA) shine a spotlight on the work they do to contribute to the wellbeing of their communities, both inside and outside the office.

Credit unions have long touted the ‘exemplary’ work they do to engage and support their communities. However, WBA and bankers from across the state know that banks, too, do important work to support their communities above and beyond what may be required under CRA. Between volunteering their time, donating supplies and money, and helping to educate community members young and old — among so many other things — bankers make a huge impact every day in their communities by reinvesting their time and money into the local economy and its people. However, many bankers are reluctant to take credit, highlight the work they do, or take time to share the information with WBA.

As the Association looks ahead to a busy 2023–2024 legislative session — including goals to pass legislation on several key issues and guard against harmful credit union expansion, credit card swipe fees (interchange), and privacy reform — we encourage bankers to share the work they do to better their communities. Keeping these examples top of mind for legislators helps to advance our advocacy efforts.

In demonstrating to our elected leaders the critical role banks play in supporting their neighbors, the Association has the ability to underscore how issues such as banking modernization and credit union expansion have much wider implications. The credit unions do a good job of convincing elected officials that they are mission focused, and community minded rather than solely profit driven. I would argue that Wisconsin banks are no different. WBA needs your help in sharing our industry’s strong message of community to counter the rhetoric and implications of the credit union industry’s message.

As you reflect upon all the ways in which your bank was involved in your communities in calendar year 2022, I ask that you please complete the WBA Community Involvement Survey to assist our team in accurately highlighting the unique ways WBA members partake in philanthropy and volunteer activities.

If you are looking for more ways to reach your community in 2023, I also encourage you to participate in WBA’s sixth annual Power of Community Week, April 17–22, 2023 — a campaign specifically focused on celebrating the commitment of bankers to their communities. This event also aligns with Community Banking Month and Financial Literacy Month and provides the perfect opportunity for all WBA members to make their community-focused efforts known!

Take the WBA Community Involvement Survey
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Credit Union building
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CUs Continue Expansion Into Wisconsin Markets

By Hannah Flanders

Earlier this year, one of the largest credit union acquisitions of a bank nationwide occurred in Wisconsin. As the deal between Commerce State Bank, West Bend and Summit Credit Union, Madison prepares to close in the third quarter of 2022, it is becoming increasingly important that WBA and its membership act in opposition of further credit union expansion and hold these institutions accountable for the implications to Wisconsin’s economy.

First established in the early 1900s, credit unions aimed at providing access to credit and financial services to those of low or modest means. However, since their inception in the U.S., credit unions have largely gone unrestrained and have expanded into entities nearly indistinguishable from banks. As of May 2022, six of the 10 largest financial institutions in the state of Wisconsin were credit unions. Of these credit unions, 14 have equal to or greater than one billion dollars in assets, operating essentially as large commercial banks — aside from their tax-paying status.

Due to their not-for- profit status, credit unions are exempt from federal and state income taxes. As these institutions remain widely unchallenged by regulators, credit unions take advantage of their tax-exempt status for their own asset growth and continue to expand far beyond their employer- or neighborhood-focused origins.

Why Community Banks?

Unfortunately, acquisitions of Wisconsin banks by large, growth-oriented credit unions — such as the case with Commerce State Bank and Summit Credit Union — have become increasingly common over the last several years. In total, six whole-bank acquisitions by credit unions have taken place in Wisconsin since 2014.

Throughout the country, 13 whole-bank acquisitions by credit unions took place in 2021 alone — an alarming trend that is expected to continue through 2022 and beyond.

As member-owned organizations, credit unions have a unique interest in community banks. Due to small banks having close ties to their communities and often offering specialized services — such as digital banking or business lending — credit unions have the ability to expand their portfolios and their assets through the acquisition of a bank all while gaining new members.

Increasing competition for both employees and customers has significant impacts on financial institutions across the country. Growth-oriented credit unions in Wisconsin are increasingly lenient in the addition of new members, often not verifying that these customers align with those they are intended to serve.

“These multi-billion-dollar credit unions around the state are able to gain momentum though tax-subsidized acquisitions,” states WBA Vice President — Government Relations Lorenzo Cruz. “Community banks are often unable to compete with rising investor interest in merger and acquisition activity and premium offers.”

 

In addition to their tax-exempt status, credit unions — despite having been founded to provide greater access to financial services — have no requirement to participate in providing Community Reinvestment Act (CRA) investments, or similar programs, to low- and moderate-income (LMI) neighborhoods. These excess funds that are not allotted into community efforts or back into their membership can be used as leverage for purchasing banks.

As many Midwestern banks continue to be the target of credit union expansion, it is likely — according to a report published by Wilary Winn LLC — that a buying credit union will bid entirely in cash. This type of offer, already difficult for shareholders to refuse, has reportedly been upwards of three times higher than other bids in some cases.

An Unfair Advantage

In statement released by WBA President and CEO Rose Oswald Poels shortly after the Commerce State Bank acquisition was announced in March, Oswald Poels highlighted the need for fair and healthy competition within the financial service industry. As credit unions continue to expand their geographic footprint and offerings to members, these institutions have quickly become increasingly indistinguishable from tax-paying banks.

Membership to a credit union often costs as little as $5 — but with thousands of members across the country and no requirement to pay income taxes in many states — these profits continue to rise. Credit unions are often able to offer extremely low rates on services. If credit unions abided by their intended mission to only serve specific communities, these low rates would only affect a small percentage of population — however — in 2021, the Credit Union National Association (CUNA) reported that membership had risen to above 130 million Americans.

Community banks do not have the same flexibility with their rates and therefore, are often unable to compete with the rates of credit unions. As highly regulated organizations, the cost of some banking services may be intentionally or unintentionally affected by agencies, including the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FRB), or the Federal Deposit Insurance Corporation (FDIC).

Of course, the greatest damage to Wisconsin’s economy comes from the loss of tax revenue each time a bank is acquired by a credit union. Annually, the U.S. Treasury loses $2.6 billion in income tax revenue across the country as many of the largest financial institutions remain tax exempt, according to information provided by the American Bankers Association (ABA). As more and more banks are acquired by tax-exempt credit unions, this number will continue rise — forcing the burden onto individuals and tax-paying businesses and ultimately limiting consumer choice.

Taking Action

With the number of banks headquartered in the state decreasing each year — and the number of credit unions throughout the country continuing to rise — WBA has placed even greater emphasis than ever on advocating in opposition of all credit union expansion.

Over the last 10 years, credit unions around the country have acquired $11 billion in bank assets, according to the ABA. While Wisconsin law continues to allow banks to sell all or a substantial portion of their assets to other companies, given that several criteria are met, many states have made considerable moves in legislation against whole-bank acquisitions in their state by credit unions. So far, Colorado and Iowa have barred state-chartered banks from selling to credit unions.

Last year, WBA advocated in opposition to AB 478/SB 451 which ultimately would have allowed credit unions even further opportunities to expand throughout the state.

In addition to this state legislative effort, WBA regularly joins other state banking associations at the federal level in efforts to keep credit unions in check. These combined efforts not only unite the banking industry throughout the country but also emphasize to legislators the important role bankers play in every community.

“Wisconsin is experiencing a disturbing trend of credit unions buying banks. These acquisitions result in a direct loss of tax revenue to the state and federal government which places more of the burden on individuals and taxpaying businesses to support meaningful government and social services such as law enforcement, health insurance for low-income families and their children, infrastructure, and education,” says Oswald Poels. “WBA repeatedly questions the public policy rationale for allowing these acquisitions to occur with state and federal lawmakers highlighting the detriment to our state every time one is announced.”

Though the future of credit union expansion — both in Wisconsin and around the country — is uncertain, it is clear that so long as they remain untaxed, unchecked, and underregulated, credit unions will continue to extend their reach far beyond their intended purpose. As growth-oriented credit unions continue to be a detriment to the overall health of the state’s economy, WBA encourages bankers to advocate on behalf of the industry. Whether it be volunteering as a WBA Advocacy Officer to speak with elected officials or in day-to-day conversations with community members — bankers play an important role in holding credit unions accountable.

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March Madness Begins, and Ends…

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.

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PNC mobile branch
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Branches on Wheels Offer Different Kind of Mobile Banking

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.

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Statement on the Recent Acquisition of a Taxpaying Wis. Bank by a Credit Union

By Wisconsin Bankers Association President and CEO Rose Oswald Poels 

In a deal announced yesterday, Summit Credit Union will acquire West Bend’s Commerce State Bank. This marks the sixth acquisition of a taxpaying Wisconsin bank by a tax-exempt credit union in a decade, continuing a concerning trend of taxpaying community banks being bought by large, growth-oriented credit unions. The acquisition will bring Summit Credit Union to nearly $6 billion in assets with 54 locations. With Commerce State Bank’s $837 million in assets, this is one of the largest credit union acquisitions of a bank nationwide to date.

Wisconsin taxpayers should be very concerned about this transaction as the state alone will lose over $1 million annually in future tax revenues with this sale because credit unions do not pay any state or federal income tax. With large credit unions becoming indistinguishable from tax-paying banks, it is time for the public and elected officials to question the public policy rationale for this significant tax benefit. Why should the 14 Wisconsin-based credit unions over $1 billion in asset size pay nothing in state income tax to support social services, law enforcement, schools, and other public services? Individuals, families, and tax-paying businesses are left to shoulder these growing expenses. Not only is tax revenue lost in these transactions, but jobs in the state are often lost when the acquirer is an out-of-state credit union and/or when certain functions are consolidated. This type of consolidation is not in the public’s interest.  

While Wisconsin now has two pending bank acquisition transactions by credit unions, credit unions are also actively seeking expansionist powers from the legislature and their regulator that, among other things, would permit credit unions to raise capital from private equity investors. The days of small, employer- or neighborhood-focused credit unions are long gone. Elected officials should carefully scrutinize this legislation and strongly oppose Wisconsin AB 478/SB451 as it is in direct conflict with the public policy intent behind the tax exemption granted by this same body decades ago.  

It is time for growth-oriented credit unions to be paying their fair share of taxes. Competition in any industry is fair and healthy, but only when the playing field is level. Taking a tax-paying business off the tax roll by a “not-for-profit,” tax-exempt entity directly harms the citizens of this state and threatens the vibrancy and diversity of our state’s financial system.

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Executive Letter: The Importance of Attending Capitol Day

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.

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Wisconsin state capital building view from above
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Advocacy Updates from WBA’s Government Relations Team

Rose Oswald PoelsBy Rose Oswald Poels

In all facets, 2021 has been a busy year for WBA. Between keeping up with COVID-19 regulations and providing up-to-date resources for our member banks, WBA staff have worked tirelessly to advocate for the banks which our association serves.

Our government relations team has had a particularly busy fall from a policy perspective and so we decided to create periodic videos to keep you, your staff, and your board of directors easily (and quickly) informed not only on what is occurring in the industry but also how these key issues impact Wisconsin banks.

On October 6, WBA and 87 member banks joined in opposition of the Credit Union Legislation (AB 478/SB 451) which would provide credit unions with even more tools to grow beyond the intention of their original chartered mission much to the detriment of Wisconsin’s taxpaying banks and citizens. The grassroots involvement by bankers from around the state that signed on to the letter as well as appeared in person at the hearing allowed us to stop the bill’s current progression, though the work is certainly not done yet. It is because of your engagement that WBA is able to effectively fight against threats to our industry. In taking time out of your day to meet with legislators, they become more informed about the issues that impact us the most.

Twice in the fall session, banks have faced threats related to interchange/credit card swipe fees which call for the prohibition of interchange fees on the tax portion of a transaction. WBA successfully opposed this from being included into the state budget but have and will continue to oppose it as a standalone bill (AB 587/SB 572) as brought forth by the retail coalition.

While both of these bills will remain on our radar as we look onward into 2022, through the efforts of WBA and its member banks, each bill has only been heard by the Assembly Committee of Financial Institutions. It remains important for us to maintain momentum with our legislators until the sessions on each of these bills expires early next year.

Please share this inaugural video with your staff and Board so that they are informed of the top state legislative issues affecting banks. We plan to continue to produce the advocacy-focused videos periodically throughout the year to share both policy and political updates. Thank you again for your active engagement on policy issues as we navigate the next several months of the legislative session. Your voice on behalf of the industry leaves lasting impacts on legislators and doesn’t go unnoticed.

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Woman speaking at hearing for Assembly Bill 478
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Eighty-seven Banks Sign on to Letter and Testify in Opposition to Credit Union Expansion

Wisconsin Bankers Association Opposes Assembly Bill 478, Which Would Expand Authorized Activities and Powers of Credit Unions

At today’s hearing of the Assembly Committee on Financial Institutions, the Wisconsin Bankers Association and member bankers from around the state expressed opposition to Assembly Bill 478, which would provide credit unions with even more tools to grow beyond the intention of their original chartered mission much to the detriment of Wisconsin’s taxpaying banks and citizens.

In the early history of the existence of credit unions, they were either employer-based or focused on serving well-defined neighborhoods to serve consumers of modest means, which is the rationale for their income tax-exempt status. It is not difficult today for almost anyone to become eligible for membership in one of Wisconsin’s growth-oriented $1 billion and larger credit unions. In the past eight years, Wisconsin has seen the acquisition of five tax-paying community banks to large credit unions, which translates to a direct loss of tax revenue for the State of Wisconsin.

“Continuing to require that credit unions only do business with members is inherent in the public policy rationale behind which the tax exemption is given,” testified WBA President and CEO Rose Oswald Poels. “Making a substantive change to this foundational public policy principle as proposed in AB 478 should then also call into question, as other states have, the state tax exemption.”

“In Wisconsin, there are 13 credit unions that are over $1 billion in asset size that compete daily with banks like mine across the state. The services offered are no different than those offered by banks, and yet the credit unions enjoy a significant advantage in their income tax-exempt status,” testified Capitol Bank President and CEO and WBA Board Chair Ken Thompson. “Capitol Bank regularly experiences competition from growth-oriented credit unions operating in our market. . . Competition is normally healthy and good for consumers when all parties involved operate on a level playing field. However, that is not the case with the credit union industry.”

Joining WBA on a letter respectfully opposing Assembly Bill 478 as drafted are 87 banks from around the state. The letter explains that taxpayers can no longer afford to continue subsidizing the credit union industry; the goal is to have these large, aggressive credit unions return to their original mission or become subject to the same regulatory, supervisory, and tax requirements as banks.

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