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Executive Letter: Joint Agency Proposal to Strengthen CRA Regulations

Rose Oswald Poels By Rose Oswald Poels

Last week, the Federal Reserve Board (FRB), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) released a joint statement proposing changes to the Community Reinvestment Act (CRA) regulations. The joint proposal would both strengthen and modernize the regulations by expanding access to credit, investment, and basic banking services; adapt to internet and mobile banking changes; provide greater clarity and consistency with both banks and their customers; and create unique CRA evaluations requirements.

The CRA, originally enacted in 1977, encourages banks and savings associations to help meet the need of all borrowers — including low- and moderate-income individuals. In recent years, the industry has seen the agencies attempt to modernize CRA to better address new technologies and community-investment opportunities. However, those efforts left much frustration for the industry when OCC implemented its own “updated” CRA regulation in June 2020, while FDIC and FRB retained existing standards, interpretations, and regulations.

WBA advocated heavily against separate CRA regulations in meetings with the agencies and in filed comment letters. Successfully, late last year, OCC repealed its independent CRA regulation and now the agencies are once again acting together in proposing a unified CRA regulation. I am pleased to see the expansion of transparency between agencies.

The new joint proposal has the following key elements:

  • Expand access to credit, investment, and basic banking services in low- and moderate-income communities. Under the proposal, the agencies would evaluate bank performance across the varied activities they conduct and communities in which they operate so that CRA is a strong and effective tool to address inequities in access to credit. The proposal would promote community engagement and financial inclusion. It would also emphasize smaller value loans and investments that can have high impact and be more responsive to the needs of LMI communities.
  • Adapt to changes in the banking industry, including internet and mobile banking. The proposal would update CRA assessment areas to include activities associated with online and mobile banking, branchless banking, and hybrid models.
  • Provide greater clarity, consistency, and transparency. The proposal would adopt a metrics-based approach to CRA evaluations of retail lending and community development financing, which includes public benchmarks, for greater clarity and consistency. It also would clarify eligible CRA activities, such as affordable housing, that are focused on LMI, undeserved, and rural communities.
  • Tailor CRA evaluations and data collection to bank size and type. The proposal recognizes differences in bank size and business models. It provides that smaller banks would continue to be evaluated under the existing CRA regulatory framework with the option to be evaluated under aspects of the new proposed framework.
  • Maintain a unified approach. The proposal reflects a unified approach from the bank regulatory agencies and incorporates extensive feedback from stakeholders.

I highly encourage you to join WBA in commenting on this joint proposal by August 5, 2022. Please contact WBA’s Heather Mackinnon, vice president – legal, at hmackinnon@wisbank.com and Scott Birrenkott, assistant director – legal, at sbirrenkott@wisbank.com if you have any questions regarding the proposed regulation updates.

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Lead Your Team By Example

WBA BOLT Summer Leadership Summit

The Building Our Leaders of Tomorrow (BOLT) Summer Leadership Summit will be held at Glacier Canyon in Wisconsin Dells next month! Join emerging leaders from across the state June 9–10 for the opportunity to develop leadership skills in addition to building and growing your career in banking.

The registration fee of $200/attendee includes several general session presentations, breakout sessions, as well as an interactive workshop facilitated by Laura Mael, director of talent and people development at Pareto’s Talent — a division of Lift Consulting, LLC — and Matthew Pletzer, president and CEO of Lift Consulting, LLC.

The interactive workshop titled “Leading Yourself to Lead Others” will help inform emerging leaders from every experience in the bank — from entry-level roles to c-level — on how they can effectively lead others. Mael and Pletzer will equip attendees with the tools and resources necessary to set personal and professional goals, reach these goals, and inspire others to do the same.

Every emerging leader attending the BOLT Summer Leadership Summit in June will enjoy hearing from nationally known speakers on leadership as well as specific banking topics, make connections, and learn to advocate for their industry in an energized environment.

In addition to breaks, meals, and a reception on Thursday evening, banking peers will have the opportunity to take part in sessions specifically designed for networking through peer group discussions over the course of the two-day Summit.

Attendees will also receive several updates regarding recent government activity related to banking, WBA’s Washington, D.C. visits, and a recap of WBA’s fifth annual Power of Community Week. This information will help advise WBA’s emerging leaders on the how and why of getting involved both in their local communities as well as state and federal government for the benefit of the banking industry.

To learn more or to register, visit wisbank.com/BOLT.

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Engage in Every Membership Opportunity

Reserve a space in WBA’s Engagement Center today!

The Enterprise Risk Management Peer Group met in person and virtually in the WBA Board Room. This room accommodates 12–20 people.

Since the completion of WBA’s remodel in 2020, hundreds of bankers from around Wisconsin have had the opportunity to experience the new Engagement Center. Featuring two dedicated training rooms, a board room with video conferencing capabilities, and a conference room with a touchscreen smartboard — the Engagement Center offers the space and capabilities for WBA-member bankers to learn and connect.

In addition to providing bankers a space to attend WBA educational courses and training events, these spaces are available for every WBA member bank to reserve.

WBA welcomes every member bank to take advantage of the Engagement Center for the benefit of their teams. From technology-enabled spaces to a beautifully redesigned café, WBA’s modern facility is a resource that banks can use to hold strategic meetings, training presentations, or remote conference calls. The Engagement Center also serves as a quiet spot in the Madison area for those bankers visiting the state’s capital and looking to get work done.

Any WBA-member bank looking for additional locations to hold meetings, meet between branches, or access technology-enabled spaces to train, present, or remotely connect is encouraged to take advantage of WBA’s Engagement Center.

Please contact WBA’s Association Meeting Planner/Engagement Center Manager Jody Roos at jroos@wisbank.com to learn more about what the Engagement Center offers or to reserve a space.

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Executive Letter: Advocating, Educating, and Supporting Wisconsin Bankers

Rose Oswald PoelsBy Rose Oswald Poels

As WBA’s fiscal year concludes at the end of May, I am continually impressed with how bankers and WBA staff members alike take each challenge in stride. While disruptions of the COVID-19 pandemic have yet to fully subside, our Association has continued its focus in promoting a healthy environment for banks in Wisconsin through actively advocating, educating, and supporting members.

In March, the Association celebrated 130 years of serving Wisconsin banks. Like it was in the first meetings of the WBA, advocacy continues to be a major focal point in our mission to support the banking industry. This year, 100 bankers from across the state attended WBA’s annual Capitol Day in Madison. Additionally, 112 banks designated Advocacy Officers to coordinate regulatory, legislative, and community advocacy efforts alongside the WBA.

With your help, 10 WBA legislative priorities or WBA-influenced bills were signed into law during the 2021–22 legislative session. WBA’s government relations team has also been busy this past fiscal year fundraising and looking ahead to the 2022 elections in Wisconsin. As of this writing, Wisconsin bankers have contributed a total of $192,193 to WBA’s political action and issue advocacy funds. Be it a donation or attendance at a public hearing, I deeply appreciate your efforts in ensuring the success of our industry!

In addition to advocating on behalf of the Wisconsin banking industry, our Association prides itself on providing bankers with in-depth and up-to-date educational opportunities. WBA offered 95 training programs and events tailored to every level of the bank this fiscal year. Of these events, 4,750 bankers were in attendance to expand their expertise and network with peers. As COVID restrictions continually loosen in the state, many WBA conferences and events have returned either in person or to a hybrid setting.

Above all, WBA’s top priority for the last 130 years has been supporting its members however possible. This year alone, nearly 1,600 bankers utilized WBA’s Legal Hotline and each day, over 2,600 bankers across the state receive the Wisconsin Banker Daily, featuring recent industry and compliance-related news, straight to their inbox.

Looking ahead to WBA’s next fiscal year, in addition to our efforts advocating and educating, WBA staff will continue to update resources and provide Wisconsin banks with the best tools for insurance, services, and products. For more information on WBA’s 2021–22 fiscal year, please look for a complete, in-depth Year in Review in the upcoming June Wisconsin Banker.

As always, I thank you for your support of WBA. Your membership continues to allow us to advocate for our industry both at the state level and in D.C., educate beginning and experienced bankers, and provide resources for all areas of the bank. Invoices for the new fiscal year dues will arrive in the mail by the beginning of June. If you have any questions or concerns about your membership, please do not hesitate to contact me.

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Bankers’ Roles in Recognizing Elder Financial Abuse

Join us in Madison for WBA’s annual Trust Conference

On May 25, 2022, WBA will be hosting its annual Trust Conference for the benefit of those involved with trust and estate planning. The one-day event held at the WBA office will assist trust professionals in staying up to date on upcoming changes in regulations, the economy, and overall trust department functions.

The conference will also feature a general session on elder abuse and undue influence by Jonathan Ingrisano and Nicholas Bezier of Godfrey & Kahn, S.C. Trust bankers and wealth managers of all levels will benefit from this session on spotting and responding to potential financial abuse of their elderly customers.

According to the World Health Organization, one in six individuals 60 years or older have experienced some form of abuse. Of this, less than 20% of financial abuse is reported by the individual or their proxies. “It is a growing problem that we can only expect to get worse as our population ages,” said Ingrisano.

This troubling trend is not only on the rise in Wisconsin, but throughout the country. As fraudsters become more sophisticated (even so that celebrities such as Stan Lee have endured financial abuse), it is important that bankers know the signs, understand their rights, and feel confident in approaching the situation.

As elder financial abuse cases rise, bankers have taken on the role of trusted advisors and observers. Trust bankers especially develop unique professional and personal relationships with their customers and have a greater ability to notice patterns, spot questionable distributions, and identify unexpected changes in their repeat customers patterns and behaviors.

“I want trust bankers to know they are empowered to do what they think is right, and their hands are not tied,” said Ingrisano. In this, the session will include advice from Godfrey & Kahn, S.C. representatives on reporting financial abuse or fraud, the tools and resources for trust bankers to consult as they work through cases, and important red flags to notice both in elderly customers and/or personal relatives experiencing such abuse.

In addition, trust bankers will also have the opportunity to learn more about how their paper trail observations on the front end can impact the actions taken by department heads or legal counsel on the back end. Through referrals or reports, bankers will learn of the avenues available to protect vulnerable members of their communities.

WBA’s Trust Conference is approved for 5.25 CTFA credit through the American Bankers Association (ABA). Register now to take advantage of this opportunity to stay ahead of upcoming regulatory changes, maintain your certification through ABA, as well as gain insight on how to better serve your community. Please contact Miranda Helt, WBA’s assistant director – education, at mhelt@wisbank.com with questions regarding the conference.

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From the Fields: Recapping Our Annual Ag Conference

By Chris Schneider, Nicolet National Bank

How nice it was to finally get together again as a group after two years of modified delivery of our annual WBA Agricultural Bankers Conference. The long-awaited return of the fully in-person conference was marked with great attendance, over 160 attendees including 130 bankers from across the state.

Always a highly-rated presenter, Eric Snodgrass, Science Fellow from Nutrien Ag Solutions, provided a detailed presentation on weather patterns and his prediction for this year’s weather forecast and the impact on crops in certain regions of the country. His long range predictions have been very accurate in past years. One of his topics that I found particularly of interest was the impact of Hurricane Ida on the supply chain.

Next up, Dr. Chad Hart, Iowa State University, took the stage and discussed marketing and risk management. He addressed many topics including the overall production of corn, beans, and wheat, and how the shifting of acres planted is impacted by certain factors; the Ukraine crisis and how that will affect global markets and shift exporting countries with commodities that come from them; and higher priced corn and the effects on exports. He also outlined how input cost and availability issues have increased cost dramatically and how that impacts if/when farmers can get products.

Wilson Law Group’s Daniel Purtell presented on estate planning brought out a lot of questions from conference attendees. Plan, Plan & Plan was the theme. We all know how most farmers like to plan, most are “reactive” folks. Don’t leave Ralph, the farmer’s son who was an underachiever his whole life, the farm because he will lose it. It’s never too early to plan for the next
generation.

Mike North from Ever.Ag was up next with marketing ideas for all commodities. He discussed marketing protection products and how they use these different types of items to protect milk, feed, and other items, sharing that less fluid milk and more cheese is what drives Wisconsin dairy plants. Cheese use increases on a yearly basis and is consumed in a variety of foods. The effects of European markets reducing production will help our country with driving more exports.

Ed Elfmann updated attendees on ABA’s priorities in Washington; from covering all the seats that are changing to policy updates. CFPB 1071 Rule, Farm debt declines at the end of 2020 somewhat due to additional government money, net farm income increasing, payments to farmers decline in 2021. The farm size has also changed; 9% of farms account for 33% of assets and 89% of farms are small but hold 60% of assets. Issues that should be top of mind for ag bankers include the Farm Bill hearings, as the current bill will expire in 2023; ECORA legislation; Farm Credit issues and the leveling of the playing field for banks vs Farm Credit; and RNG and Carbon credits and how this is getting driven into new income opportunities for farmers.

WBA’s John Cronin provided the Wisconsin update, covering the state budget and future policy discussions; shared what seats are up in the Wisconsin state assembly; and shared the budget and rule making process going forward.

AMPI was represented by their CEO and Co-President Sheryl Meshke. She talked about their markets and different facilities. AMPI is Co-op owned by farmers in multiple states and highlighted 50 plus years in business, producing award-winning products. Sheryl highlighted products including Dinner Bell Creamery, Co-op Crafted Promise, and Crystal Farm cheese. She expanded on how AMPI monitors the markets to stabilize and build business with their products.

Lastly Penn Vieau, a leadership expert, provided how to positively look at day to day activities. Have a positive mindset, positive thoughts, practice gratitude with purpose. Control, Influence, Accept. Attendees were encouraged to create goals that create new drive and energy, and importantly, goals that are achievable.

If you were unable to join us for this year’s annual conference, I hope that you will consider joining us in 2023. Watch for the 2023 conference dates to be announced soon to the Ag Section membership.

 

Chris Schneider is the current chair of the WBA Agricultural Bankers Section Board of Directors and is the vice president, agricultural banking with Nicolet National Bank in Appleton.

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From the Fields: Traditions and Transitions

By Amber Keller, Town Bank

I am looking forward to seeing many of you next week at the WBA Ag Bankers Conference. It will be great to reconnect, share stories and experiences, and learn about the latest trends and tips for navigating this agricultural super-cycle and these tenuous times in our world today. Whether you are new to farm lending or have been around the block a few times, there is still much to learn. Yet, some things do not change all that much- sound credit analysis and risk identification, assessment of farm management competencies, optimum use of technology and labor mix, as well as strategic planning for long-term success.

One of the strategic planning topics to be featured at our conference is farm succession and estate planning. Many of us are familiar with estate planning, as it relates to making plans for the business and assets when one passes on. However, farm succession planning also includes what happens to the business and our assets while one is still living. That’s just as important and even more so.

Think of farm succession planning as a way to build a road map for operations and enterprise growth, better defined job roles, knowledge and management transfer, and business decisions to be made by delegation, empowerment, or consensus as a team. Attorneys, accountants, lenders, and others can help farm families view their farms as dynamic businesses, respecting those long-standing traditions and embracing innovations with open minds. Indeed, that’s some powerful planning with purpose.

The legal professionals at Wilson Law Group will share with us some important concepts to consider when referring our clients for farm succession and estate planning services. They help farmers, business owners, and farm land owners plan and protect the assets and legacies they have built and transition them to the next generation and beyond. Hope you can join us next week! I’ll see you in the Dells!

Amber Keller is the current vice chair of the WBA Agricultural Bankers Section Board of Directors and is the senior vice president, director of ag banking with Town Bank in Clinton.

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Prepare to Navigate the Unknown in 2022

This year, the Wisconsin Bankers Association will offer the 2022 Bank Directors Summit in two locations: Stevens Point on May 18 and Madison on May 19. The event draws beginning and experienced inside and outside directors, bank CEOs, bank executive officers, and bank general counsel. This year’s Summit will take a look at the nuts and bolts that are essential to the role of bank directors, while preparing leaders for the kinds of unique opportunities and challenges that could potentially lie ahead of them in 2022.

One of the key topics addressed at the Summit will be directors’ responsibilities in the investment portfolio. Speaking on the topic will be Ricky Brillard, senior vice president in the Investment Strategies Group at Vining Sparks Associates. Brillard is a Certified Public Accountant who works with financial institutions on balance sheet strategies, the optimization of investment portfolio returns, and the evaluation of asset/liability exposure, while incorporating the entity’s liquidity needs, risk controls, and capital constraints.

A presentation titled ‘2022 — A Year of What Ifs’ will be given by Marc Gall, vice president and asset/liability strategist at BOK Financial. As bankers have come to expect uncertainty over the last two years, Gall will walk Summit attendees through various scenarios to help prepare for the coming months and into the future. Gall is a returning speaker to the WBA Directors Summit, and his areas of expertise include asset/liability modeling, interpreting output and communicating strategies to key management and boards of directors, understanding and complying with regulatory requirements, and fixed income portfolio management/trade execution.

Other sessions to look forward to include ‘Unlock and Inspire a Team That Spans Four Generations’ by Flynt Gallagher of Newcleus Compensation Advisors as well as ‘A Director’s Role in Today’s Changing Banking Environment.’ To learn more and to register for the Stevens Point or Madison event, please visit www.wisbank.com/directors.

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Wisconsin Program Prepares Future Commercial Bankers for Successful Careers

Marquette University Commercial Banking Program welcomes fifth cohort since inception

Dr. Kent Belasco

By Cassandra Krause

The Commercial Banking Program at Marquette University in Milwaukee is one of very few undergraduate commercial banking programs in the country and has graduated 56 students since the program’s inception in 2017, with an additional 16 planned in the next year, at a minimum. At the helm of the program is Dr. Kent Belasco, a 37-year banker who pivoted to a full-time career in higher education after having taught part-time as an adjunct professor of finance while he worked as an executive vice president and chief information and operations officer at a bank. Belasco said his two main goals for the program are (1) to provide students with great career opportunities and (2) to provide talent to the industry.

Students in the finance major at Marquette have the option to choose a concentration in the Applied Investment Management Program or the Commercial Banking Program. Belasco developed an advisory board, built the curriculum for
the Commercial Banking Program, and has published a Fundamentals of Commercial Banking textbook. The program is highly experiential, allowing students to analyze actual small businesses in the community and internationally. Students complete two internships with banks during the program and have opportunities to participate in competitions and field trips to places near and far, like Chicago and Zurich, Switzerland. Marquette is also co-branding research on bank performance with Crowe LLP (a Wisconsin Bankers Association Associate Member), with which students can get involved.

Students complete their introductory classes in finance and typically apply to the Commercial Banking Program as sophomores. A 3.0 GPA
is required for participation in the program, and students complete rigorous coursework that equips them with knowledge and skills Belasco says many bankers may not otherwise acquire until many years into their careers. Banking careers provide the opportunity to earn a good living in a rewarding industry. Belasco noted that today’s students are socially conscious, want to make a difference, and want to give back to the community. When he explains how those values align with the banking industry, he finds that it resonates well with students. He opens one of his introductory classes with a quote from Jason DeSena Trennert’s book, My Side of the Street:

Modern banking… has been the single greatest contributor to human progress… Academics have long noted the strong correlation between modern banking systems and national wealth, allowing businesses to take on more risks in their efforts to grow. Prudent risks can lead to faster economic growth, more jobs, and greater innovation in all fields of human endeavor.

Students who complete the program have a solid command of banking principles and terminology, have worked on projects with businesses and non-profit community organizations, and are eager to grow in meaningful careers. The program boasts a 100 percent job placement rate of its graduates in banks. For bank leaders who are looking to connect with the program and its students, there are a number of avenues:

  • Offer an internship (many can be done remotely during the academic year and/or in person over breaks);
  • Sponsor a scholarship;
  • Host a field trip;
  • Volunteer on a panel or at a career night; and/or
  • Attend the annual conference.

Last year’s virtual cybersecurity conference had around 200 attendees, and the focus of this year’s conference will be climate/sustainability.

An ideal partnership, says Belasco, could look like the following: the bank identifies a student in their local community with an aptitude for banking, sponsors a scholarship for the student at Marquette, offers the student an internship, and then hires the student into a key position at the bank upon graduation. There is a lot of flexibility in how to get involved, and Belasco encourages bankers to reach out to him personally about their plans for succession and talent development.

Daryll Lund, WBA executive vice president and chief of staff, serves on the advisory board for Marquette’s Commercial Banking Program. “To have a specialized program of this quality right here in our state is a great asset for Wisconsin’s banking industry,” says Lund of the program. “I would encourage bankers to raise awareness of the program in their communities and to get involved as employer partners.”

The program is a “win-win-win” for students looking for rewarding careers, for banks seeking talented employees, and for the bank customers they serve.

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