Archive for category: News

WBA Press Release: Can I Wear a Mask Into My Bank?

Bank branches reopening, may request customers lower masks briefly for identification

MADISON – The health and safety of customers and employees remains a top concern for Wisconsin banks as the state carefully begins reopening. As essential businesses, Wisconsin’s banks remained open throughout the Safer-At-Home order, serving their customers in the drive-through, over the phone, and via online and mobile banking.

In a recent Wisconsin Bankers Association member survey, the majority of respondents indicate they will either require or encourage employees to wear masks (59% total). Additionally, in order to help their customers feel safe and comply with CDC and State health recommendations, some banks may allow (or even require) branch visitors to wear masks.

However, safety and security collide when it comes to customers wearing masks, as banks are historically and understandably uncomfortable with people disguising their faces while in the bank. Out of an abundance of caution and to protect staff and customers, banks have historically prohibited masks and other face coverings. With many customers anxious about health concerns, many banks are shifting those rules to be more flexible.

“Banks’ highest priority is the health and safety of their customers and their staff,” said Rose Oswald Poels, president/CEO of the WBA. “Each bank will weigh its unique risks and determine their procedures for permitting customers to wear masks while in the branch. Customers should remember that banking services remain available online and through mobile applications as well as drive-throughs.”

Bank customers should consider what their bank’s guidelines may be related to masks. WBA’s member banks are employing a variety of strategies, so customers may be asked to:

  1. Lower their mask for a few seconds while facing a security camera
  2. Lower their mask for a few seconds to allow staff to identify them
  3. Answer security/identification verification questions (similar to using phone banking services)
  4. Use the drive-through if they are unwilling or unable to comply with the bank’s guidelines for masks

WBA encourages consumers to contact their bank directly with specific questions about wearing masks and/or other face coverings in the branch.

By, Amber Seitz

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IRS Issues Instructions on How to Handle Payments Made to Deceased Individuals

On May 6, 2020 the Internal Revenue Service (IRS) updated its Economic Impact Payment Information Center to include new questions and answers related to Economic Impact Payments (EIP) issued to deceased individuals. 

IRS Question 10 asks whether someone who has died qualifies for an EIP. The answer states the following: 

“No. A Payment made to someone who died before receipt of the Payment should be returned to the IRS by following the instructions in the Q&A about repayments. Return the entire Payment unless the Payment was made to joint filers and one spouse had not died before receipt of the Payment, in which case, you only need to return the portion of the Payment made on account of the decedent. This amount will be $1,200 unless adjusted gross income exceeded $150,000.” 

The instructions for returning an EIP provide the following: 

  • If the payment was a paper check: 
  1. Write "Void" in the endorsement section on the back of the check. 
  2. Mail the voided Treasury check immediately to the appropriate IRS location. 
  3. Don't staple, bend, or paper clip the check. 
  4. Include a note stating the reason for returning the check. 
  • If the payment was a paper check and you have cashed it, or if the payment was a direct deposit: 
  1. Submit a personal check, money order, etc., immediately to the appropriate IRS location. 
  2. Write on the check/money order made payable to “U.S. Treasury” and write 2020EIP, and the taxpayer identification number (social security number, or individual taxpayer identification number) of the recipient of the check. 
  3. Include a brief explanation of the reason for returning the EIP. 

The IRS has provided a list of appropriate addresses on its website which can be found in the link at the end of this article. 

Considerations for Banks 

The information provided by IRS answers the question as to how EIPs made to decedent should be handled, making it clear that they are to be returned. This is true for EIPs made both by check and direct deposit. An individual who receives an EIP payable to a decedent, or who is in possession of EIP funds paid to a decedent, must return those funds. 

Unfortunately, because this information was not issued until after many payments had already been made, it means that some banks have likely already accepted payments made to a decedent. While the information provided by the IRS instructs the recipient to return the EIP funds, banks should consider how they use this information. Certainly, if a customer receives a direct deposit on behalf of a decedent, or presents a check payable to a decedent, that customer should be directed to the instructions for returning the payment. For customers who have already received the funds, either by direct deposit or by depositing a check, those funds still need to be returned pursuant to the instructions. 

The IRS instructions also provide how the recipient is to determine the amount that must be returned. Banks are reminded that the appropriate amount that is to be returned is a consideration that should be made by the customer, not the bank. The instructions relate to the recipient and furthermore, banks are not in a position to know the customers adjusted gross income to make the determination on a customer’s behalf. 

Conclusion 

IRS has made it clear that decedents are not eligible for EIP funds, and individuals who have received payments made to decedents are to return those funds. At this time, IRS has not indicated any steps beyond the requirements above. For example, there is no current indication of a reclamation process beyond a requirement for recipients to return the payments themselves. 

Click here for the IRS FAQ.

By, Amber Seitz

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Tax Implications for PPP Borrowers

Late last week, the IRS issued Notice 2020-32 related to the deductibility for Federal income tax purposes of certain otherwise deductible expenses incurred in a taxpayer’s trade or business when the taxpayer receives a covered loan pursuant to the Paycheck Protection Program under section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)). This Notice can be found here.

Specifically, this Notice clarifies that no deduction is allowed under the Internal Revenue Code for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the CARES Act, and the income associated with the forgiveness is excluded from gross income for the purposes of the Code pursuant to section 1106(i) of the CARES Act. The IRS said that to the extent the income resulting from loan forgiveness under the PPP is excluded from income, it’s considered a “class of exempt income” under regulations promulgated under section 265. The IRS believes this treatment of not allowing the deduction of these covered expenses is appropriate because it prevents a double tax benefit.

It is possible this IRS guidance will be reversed by Congress as the heads of congressional tax committees want expenses funded with small business loans to be deductible. Given this evolving situation, bankers are reminded to be careful about providing tax information regarding any aspect of the PPP loans, and encourage borrowers to consult with their tax advisor regarding any tax implications of a PPP loan.

By, Ally Bates

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WBA PPP Loan Forgiveness Guide

Last updated on June 24, 2020

By, Eric Skrum

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Why Your Money is Safe in the Bank

By, Eric Skrum

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Differences Between PPP and EIDL

Last updated 04/02/2020 at 4:00 PM.

By, Eric Skrum

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Wisconsin SBA Lenders

Below is a list from the Small Business Administration of Wisconsin's financial institutions that offer SBA Loans, including contact information/website links. This list DOES NOT include any financial institutions that have applied to become an SBA Lender for the purpose of the Paycheck Protection Program (PPP). (For a full list of all lenders that are participating in PPP and are licensed to do business in the state of Wisconsin, please click here.)

WBA encourages businesses to contact their lender to determine participation in the Paycheck Protection Program (PPP). Please note that PPP is different than the PFP column in the list below (last updated on April 1, 2020 at 1:00 p.m.).

The PDF below, compiled by SBA, lists all lenders (alphabetically) that are participating in the Paycheck Protection Program (PPP) and are licensed to do business in Wisconsin. Therefore, this list includes non-depository institutions and out-of-state or online lenders. WBA strongly recommends businesses work with local institutions that have a physical branch presence in the state. 

In addition, SBA has built a search tool to help businesses find SBA lenders. Access this tool here

By, Eric Skrum

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SBA Wisconsin Contacts

This is a list of the current contacts for the Small Business Administration in Wisconsin.

By, Eric Skrum

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USDA’s New Hemp Program and What it Means for Wisconsin

The below article is the Special Focus section of the November 2019 Compliance Journal. The full issue may be viewed by clicking here.

The United States Department of Agriculture (USDA) published an interim final rule on October 31, 2019 specifying regulations to produce hemp. The rule is effective October 31, 2019 through November 1, 2021.

Introduction

The rule establishes a Federal program for producers in States that do not have their own USDA-approved plan. The program includes provisions for maintaining information on the land where hemp is produced, testing of THC levels, disposing of plants not meeting certain requirements, and licensing requirements. USDA has also outlined provisions under which States may submit their own plans for approval.

It is WBA’s understanding that the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) will submit a Hemp Program Plan to USDA. However, DATCP will continue under the 2014 Farm Bill provisions, and existing Wisconsin regulation at time of this article’s publication, in 2020. As of November 1, 2019, DATCP has begun its hemp licensing for the 2020 hemp season. At this time, DATCP is is preparing to write rules to align Wisconsin law with the 2018 Farm Bill, and expects to begin the new program under the 2018 Farm Bill, and USDA’s rule, in 2021. 

This article discusses the procedural aspects for submission of a State plan to USDA under its interim final rule. It also discusses the Federal program requirements placed upon hemp producers. While these procedures and the program requirements do not directly apply to banks, they will affect how hemp businesses operate in Wisconsin, and thus, bank customers seeking to engage in hemp-related activity. This article presents selected aspects of the interim final rule for banks to better understand what to expect in the coming years and the requirements that may apply to their customers.

Procedural Aspects

From a procedural standpoint, WBA reminds readers that as of publication of this article, much remains to be decided. November 26, 2019 Governor Tony Evers signed 2019 Senate Bill 188 establishing a new hemp program. It requires DATCP to write and submit a plan to USDA for approval. After USDA receives the plan, it will either approve or disapprove the plan no later than 60 calendar days after receipt.

If DATCP proposes a plan and it is rejected by USDA, the interim final rule provides for amended plan procedures. Under those procedures, hemp production continues under the existing plan. For example, production in Wisconsin would continue under current rules while DATCP and USDA work out amendments to the proposed plan. However, if an amended plan is not submitted within one year from the effective date of the rejected new law or regulation, the existing plan is revoked. 

Note that as of publication of this article, the current DATCP program under ATCP 22 and 2017 Wisconsin Act 100 is still in effect. As discussed above, DATCP is currently issuing licenses for the 2020 season. If DATCP writes new rules under the new law, WBA will report on what banks need to know about the process.

USDA Plan Requirements

Because hemp production at the time of this article’s publication continues under existing Wisconsin law, and the future rule governing production is unknown, a full discussion of USDA’s rule and the Wisconsin bill would be premature. As such, this article will not discuss the Wisconsin bill which has yet to be signed by the governor. It will discuss USDA’s rule below, but from a conceptual standpoint rather than a full discussion. Note that the requirements as presented below have been edited to help banks understand their broader implications. As such, most technical requirements have been removed. For a full reading of the rule, please refer to the link at the end of this article.

A State plan must meet information collection requirements, to be reported to The Secretary of Agriculture of the United States regarding:

  1. Contact information for licensed producers;
    • A legal description of the land on which the producer will produce hemp including its geospatial location; and 
    • The status and number of the producer’s license or authorization. 
       
  2. A State plan must include a procedure for accurate and effective sampling of all hemp produced, requiring the following: 
    • Samples must be collected within 15 days prior to the anticipated harvest.
    • The method used for sampling must be within a level of 95% accuracy, that no more than 1% of the plants in the lot would exceed the acceptable hemp THC level.
    • During a scheduled sample collection, the producer or an authorized representative of the producer shall be present at the growing site. 
    • Representatives of the sampling agency shall be provided with complete and unrestricted access during business hours to all hemp and other cannabis plants, whether growing or harvested, and all land, buildings, and other structures used for the cultivation, handling, and storage of all hemp and other cannabis plants, and all locations listed in the producer license.
    • A producer shall not harvest the cannabis crop prior to samples being taken.
       
  3. The State plan must include procedures for testing that can accurately identify delta-9 tetrahydrocannabinol content concentration levels to specified levels and meet a specific methodology.
    • Any test resulting in higher than acceptable THC levels is considered conclusive evidence that the lot represented by the sample is not in compliance. Lots tested and not certified may not be further handled, processed or enter the stream of commerce and the producer shall ensure the lot is disposed of.
    • Samples of hemp plant material from one lot shall not be commingled with hemp plant material from other lots. 
    • Analytical testing for purposes of detecting the concentration levels of THC shall meet standards that are not presented in this summary.
       
  4. The State shall promptly notify USDA by certified mail or electronically of any occurrence of cannabis plants or plant material that do not meet the definition of hemp in this part and attach the records demonstrating the appropriate disposal of all of those plants and materials in the lot from which the representative samples were taken. 
     
  5. A State plan must include a procedure to comply with certain enforcement procedures.
     
  6. A State plan must include a procedure for conducting annual inspections of, at a minimum, a random sample of producers to verify that hemp is not produced in violation of this part. 
     
  7. A State plan must include a procedure for submitting a monthly report to USDA. All such information must be submitted to the USDA in a format that is compatible with USDA’s information sharing system. 
     
  8. The State must certify that it has the resources and personnel to carry out the practices and procedures necessary to comply.
     
  9. The State plan must include a procedure to share information with USDA.
    • The State plan shall require producers to report their hemp crop acreage to the Farm Service Agency. 
    • The State government shall assign each producer with a license or authorization identifier in a format prescribed by USDA. 
    • The State government shall require producers to report the total acreage of hemp planted, harvested, and, if applicable, disposed. The State government shall collect this information and report it to USDA. 

Final Takeaways

As expected, the rule requires testing, reporting, and monitoring to accurately identify whether hemp samples contain a delta-9 tetrahydrocannabinol (THC) content concentration level that does not exceed the acceptable level. To that extent, hemp is defined as the plant species Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a THC concentration of not more than 0.3 percent on a dry weight basis.

Another aspect to note is the rule’s use of the word “producer.” A producer is someone who is licensed or authorized to produce hemp, meaning to grow hemp plants for market, or for cultivation for market, in the United States. The rule does not distinguish between grower, producer, retailer, or any other type of hemp-related business. As such, it will remain important to see what DATCP proposes for categories of regulation in its rule.

Conclusion

While hemp businesses in Wisconsin still operate under DATCP’s current rule at time of this article’s publication, it is important to understand the track Wisconsin is currently on, and what possibilities the future holds, in order to prepare accordingly. WBA will continue to monitor and report on future hemp regulation as it continues to develop.

Click here to view USDA’s interim final rule.

By, Ally Bates

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Legal Q&A: Revised Transfer by Affidavit Form Changed, But Not the Law

Q: Is There a Revised Transfer by Affidavit Form?

A: Yes. 

The transfer by affidavit form for estates of $50,000 or less is no longer maintained by the Wisconsin Court System’s Records Management Committee. The form is now maintained, for free, by the State Bar of Wisconsin Real Property, Probate, and Trust Law Section (Bar).

While the format of the form has changed, its purpose, function, and governing law under Wis. Stat. 867.03 has not changed. As such, financial institutions may want to review the new form to become familiar with it, but the law has not changed.

One format change that WBA was made aware of was how the affiant completes the Wisconsin Department of Health Services (DHS) section. On the prior form, the affiant indicated that if they “did not know” whether the decedent received aid, that they had submit notice to DHS. It is unclear on the new form whether such notice is required. However, WBA has heard from the Bar that it was not their intent to change the form in this way or any other.  

The new form and its instructions can be found through the links below. 

Form: https://www.wisbar.org/forPublic/INeedInformation/Documents/Transfer%20by%20Affidavit.PDF 

Instructions: https://www.wisbar.org/forPublic/INeedInformation/Documents/Transfer%20by%20Affidavit%20Instructions.pdf 

Birrenkott is WBA assistant director – legal. For legal questions, please email wbalegal@wisbank.com.

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution’s attorney for special legal advice or assistance.

By, Ally Bates

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questions@wisbank.com

608-441-1200

4721 S Biltmore Ln.
Madison, WI 53718

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