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Advocacy, Community, News

Executive Letter: Opportunities to Advocate This Spring

Rose Oswald PoelsBy Rose Oswald Poels

With the transition into the new year, so too begins the 2023–24 legislative session. As the Wisconsin Bankers Association (WBA) looks ahead to further engaging with our elected officials and acting on several key priorities including credit unions, regulatory modernization, and elder fraud in 2023, WBA members are also encouraged to make the most of the various opportunities offered by the Association to make their voices heard.

This spring, bankers from across the state are invited to join the WBA Government Relations team in Madison for the 2023 WBA Capitol Day as well as two WBA Washington Trips to meet with our congressional delegation — one in conjunction with the American Bankers Association (ABA) Washington Summit and the other in conjunction with the Independent Community Bankers of America (ICBA) Capital Summit.

Our 2023 Capitol Day, which will be held on Thursday, May 11, provides Wisconsin bankers with the invaluable opportunity to meet face-to-face with their representatives and demonstrate how public policy impacts a bank’s ability to aid in the economic growth and vitality of their community.

Annually, over 100 bankers and WBA Advocacy Officers are in attendance to receive updates from state Assembly and Senate leaders as well as assist the Association in conveying the role and value of our industry. Registration is open now, and more information will be provided for attendees as the event nears.

Additionally, the WBA will be in Washington, D.C. March 20–22 (bankers are encouraged to schedule late flights on the 22nd or stay until the 23rd given the House Republican schedule that week) for the WBA/ABA Washington Summit as well as May 14–17 for the WBA/ICBA Capital Summit. During these two trips, bankers can expect to hear from a variety of speakers as well as make trips to Capitol Hill to visit with those in our congressional delegation. Please note that during the WBA/ABA Washington Summit, Hill visits will likely occur both on March 21 and through mid-afternoon on Wednesday, March 22 given that the House Republicans will not be in office until Wednesday of that week.

All WBA members, regardless of their membership to either national trade group, are welcome and invited to join WBA’s Washington Trip on either date. Please let WBA know if you are interested in attending one of these two key summits at your earliest convenience. You may register now for the WBA/ABA Washington Summit.

Grassroots advocacy is a fundamental aspect of WBA’s efforts in supporting the industry, and your involvement is critical to the success of our advocacy priorities. Although very few legislators have experience in banking, bankers are looked upon as trusted members of the communities our elected officials represent and are essential in reinforcing the impact legislative proposals will have on your community, bank, and industry.

Thank you for your continued grassroots involvement for the betterment of the banking industry, and I hope to see you and/or other members of your team this spring either at the State Capitol in Madison or on the Hill in D.C.

2023 WBA Capitol Day WBA/ABA Washington Summit WBA/ICBA Capital Summit (Opening Soon!)
January 11, 2023/by Hannah Flanders
https://www.wisbank.com/wp-content/uploads/2021/09/Untitled-3_Yellow.jpg 972 1920 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2023-01-11 08:16:252023-01-11 08:16:25Executive Letter: Opportunities to Advocate This Spring
Advocacy, News

Spring 2023 Washington, D.C. Summits

Each spring, the Wisconsin Bankers Association (WBA) travels to Washington, D.C. alongside both the American Bankers Association (ABA) and Independent Community Bankers of America (ICBA) to visit with those in our congressional delegation.

WBA members, regardless if their bank is a member of one of the national trade groups, are encouraged to join us and make their voice heard on the Hill during one of these two advocacy trips!

The first trip, the WBA/ABA Washington Summit, is scheduled for March 20–22, 2023*. A virtual option is also available. For more information and to register, please visit aba.com/summit.

The second trip, the WBA/ICBA Capital Summit, will take place May 14–17, 2023. More information and registration for the event will become available in early 2023. Please visit icba.org/capitalsummit to learn more.

The WBA spring summits prove themselves vital each year in providing bankers throughout Wisconsin with insights into policymaking and allow bankers to advocate on behalf of their industry. If you have any questions, please contact WBA.

*Hill visits will likely occur both on March 21 and mid-afternoon on Wednesday, March 22 since the House Republicans will not be in office until Wednesday that week. Attendees should schedule flights to leave later on March 22 or stay until March 23.

December 29, 2022/by Hannah Flanders
https://www.wisbank.com/wp-content/uploads/2022/12/Washington-DC-scaled.jpeg 1704 2560 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2022-12-29 07:40:262023-01-10 11:36:27Spring 2023 Washington, D.C. Summits
Advocacy, Community

ABA Update: How Bankers United to Play Defense Against Durbin Expansion

By Rob Nichols

There’s a saying that “everything old is new again,” and that’s certainly an adage you can bank on in Washington, D.C. — especially when it comes to poor public policy proposals.

A textbook example of this unfolded during the 117th Congress, when our industry found itself once again facing a bad idea that we thought had been soundly defeated: placing restrictive routing mandates on credit cards, like those imposed on debit cards by the Durbin Amendment over a decade ago. The idea came in the form of a bipartisan bill — the so-called Credit Card Competition Act — introduced in the Senate by Sens. Dick Durbin (D-Ill) and Roger Marshall (R-Kan.) and in the House by Reps. Peter Welch (D-Vt.) and Lance Gooden (R-Texas).

Bankers know all too well that the 2010 Durbin Amendment had disastrous consequences for banks and their customers: it increased the costs of checking accounts and debit cards and ultimately led to the elimination of popular debit card rewards programs. The Durbin Amendment’s most damaging provisions apply to banks of all sizes, causing a nearly 25% cut in the per-transaction debit card revenue earned by banks with under $10 billion in assets. At the same time, it helped line the pockets of large retailers who talked a big game about passing savings on to consumers — but 10 years’ worth of data tells us that simply isn’t what happened. In fact, the Federal Reserve published a study finding that only 1% of merchants lowered prices for consumers since the Durbin price controls took effect.

What’s more, the Credit Card Competition Act also goes several steps further than the Durbin amendment — not only would it require banks to add a second network to their customers’ cards, but it would limit them to options set by the Fed, unlike the Durbin Amendment, which allowed banks to choose between any two unaffiliated networks. The Credit Card Competition Act also requires banks to accept virtually any kind of transaction — functionally requiring them to onboard potentially many more than two networks, even networks that don’t meet basic data security standards.

Given the potentially catastrophic effect the bill could have on community banks and bank customers — while providing no tangible cost savings or benefits for consumers — the industry sprang into action to set the record straight.

Immediately following the bill’s introduction, ABA led a coalition of eight national financial services trade groups in issuing a statement of strong opposition to the bill. We then followed this up with numerous letters, op-eds, grassroots calls to action, and co-branded ads with the Texas and Kansas Bankers Associations that ran in their respective districts. The efforts were amplified by an op-ed from the Florida Bankers Association and a creative “Don’t Let Congress Steal Your Credit Card Rewards!” social media campaign from the Missouri Bankers Association. In early December, we then expanded that effort into an all-out media blitz to stave off any last-minute efforts to attach the bill to a must-pass piece of yearend legislation.

Every step of the way, our efforts at the national level were complemented by robust advocacy efforts by our partners at the state bankers associations, who stepped up to make calls, attend Washington fly-ins, pen letters and columns, and even appear on national TV to address our concerns about the bill.

Together, we blanketed Capitol Hill with a succinct, united message: the Credit Card Competition Act is terrible public policy that should not be enacted.

Our combined efforts proved the hollowness of this bill — it failed to attract a single cosponsor beyond the initial two in both the House and Senate or gain enough support to advance as a standalone measure and was successfully blocked from any other bills moving through Congress as the lame-duck session came to a close.

This win underscores the tremendous value of our state association alliance and demonstrates the power that our industry can have when we unite behind one message. It’s also an important reminder about vigilance.

We can’t say for certain whether and how these bad ideas will rear their heads again in Congresses to come. But what we can say is that if they do, our industry will be ready to respond.

Nichols is president and CEO of the American Bankers Association.

December 28, 2022/by Hannah Flanders
https://www.wisbank.com/wp-content/uploads/2021/09/Untitled-3_Light-Blue.jpg 972 1920 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2022-12-28 07:36:442022-12-28 08:07:58ABA Update: How Bankers United to Play Defense Against Durbin Expansion
Triangle Background
Advocacy, Community, News

ABA Update: Reining in a Regulator Gone Rogue

By Rob Nichols

In an American Banker op-ed earlier this year, I called out the CFPB under the leadership of Rohit Chopra as a “regulator gone rogue.” I’m not alone in my criticism: in September, 12 Republican lawmakers took the bureau to task over what they called a “radical and highly-politicized agenda unbounded by statutory limits.”

Unfortunately, the bureau has continued to push legal boundaries on several different fronts in recent months.

First, the bureau has waged an aggressive PR campaign against so-called “junk fees” — using a term it coined to demonize the legitimate fees, including overdraft fees, that banks charge consumers for the products and services they offer. Throwing these fees in with things like concert ticket processing fees, resort fees and other surprise fees charged by retailers and hospitality businesses was a deliberate move to confuse the public about the well-disclosed fees they currently pay. (For the record, banks don’t charge resort or ticket fees, nor does the CFPB have authority to regulate those types of fees.)

Another alarming step by the Chopra bureau was its decision to update the UDAAP section of its exam manual in a way that fundamentally upends the regulatory approach to fair lending supervision and enforcement, without providing industry stakeholders or the public the opportunity to provide feedback through the notice and comment process under the Administrative Procedure Act. Instead, the CFPB chose to take a backdoor route to expand its authority — giving itself the ability to examine for alleged disparate treatment or impact across all areas of bank operations using the authorities granted by the Dodd-Frank Act under its authority to prevent “unfair, deceptive, or abusive acts or practices.”

In reality, the CFPB’s authority to enforce anti-discrimination laws is limited to credit products. It’s clear that this move is an attempt by the bureau to set itself up as a “super-regulator” of financial practices using authority Congress did not give it.

To be clear: ABA fully supports the fair enforcement of the nation’s anti-discrimination laws. We simply believe these laws should be enforced by regulators within the boundaries set by Congress. This updated manual does not qualify.

Given that the bureau has not seen fit to rescind the manual — despite previous calls from ABA and other trade groups — we were left with no choice but to pursue legal action. ABA’s lawsuit, which was filed in late September jointly with the U.S. Chamber of Commerce, the Longview Chamber of Commerce, the Texas Bankers Association, the Independent Bankers Association of Texas, the Texas Association of Business, and the Consumer Bankers Association, alleges violations of the APA in three ways.

First, the bureau is exceeding its statutory authority outlined in Dodd-Frank, which is clear that “unfairness” under UDAAP and discrimination are distinct concepts that should not be conflated. Second, the updated manual is “arbitrary and capricious,” in violation of the APA. Finally, it violates the APA’s procedural requirements because it constitutes a legislative rule that failed to go through notice and comment.

It’s never our preference to take legal action against a regulator. And this lawsuit doesn’t mean we’ve given up on finding common ground with the bureau. In fact, on issues like the need to protect consumer data, or the need to make sure nonbanks face the same regulatory requirements as banks for similar activities, or the importance of relationship banking, our goals are very much aligned.

But when a regulator — any regulator — takes a step like this to dramatically expand its regulatory reach without authorization from Congress or any opportunity for the public to weigh in, ABA will respond on behalf of our members and the industry we represent.

Nichols is president and CEO of the American Bankers Association

November 4, 2022/by Hannah Flanders
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Yellow-on-Light-Blue.jpg 972 1921 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2022-11-04 07:57:052022-11-04 07:57:30ABA Update: Reining in a Regulator Gone Rogue
Community, News

ABA Update: Breaking Down the Debate Over Digital Assets

By Rob Nichols

As I traveled the country this summer speaking at various state bankers association conventions, I’d always ask this question of my audience: How many of you have clients and customers that are asking you about cryptocurrencies and digital assets? And nearly everywhere I went, nearly every hand would go up.

The interest in cryptocurrencies and digital assets is undeniable — even in the face of recent volatility in digital asset markets. Americans want them: from the casual dabbler to the serious investor, from Gen Z’ers to boomers, everyone it seems wants a bite at the crypto apple. Many banks want to engage, too — as digital assets become more popular, and those banks are exploring ways to meet the needs of customers who want their bank to be the custodian of these assets.

I’ve written previously about the merits of banks being able to take on custodial roles for digital assets — there are many — and the need for a regulatory architecture that will support them taking on these roles if they choose. That’s an area where the American Bankers Association (ABA) continues advocate for banks’ ability to enter the digital asset space in a safe and sound manner. But it’s just one of the debates that are currently brewing over crypto. There are several others that bankers should be aware of:

Who should regulate? One key quandary facing policymakers right now is: what’s the right way to regulate crypto, and to which agency should that authority be delegated?

Currently, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are both vying for the role of crypto cop. Two separate bills have been introduced this summer — one by Sens. Cynthia Lummis (R-Wy.) and Kirsten Gillibrand (D-N.Y.) and another by Sens. Debbie Stabenow (D-Mich.) and John Boozman (R-Ark.) — that would delegate most of this authority to the CFTC.

Simultaneously, there are some in the crypto community who are calling for the creation of a whole new regulatory agency dedicated to digital asset supervision, though this seems far less likely. Regardless of which entity ultimately ends up with regulatory authority, it is imperative that it develops clear definitions of digital asset products that are based on the risk that each category of digital asset carries. Working with the banking agencies, any prospective crypto regulator must also ensure a level playing field between bank and non-bank entities in the digital asset markets and establish clear guidelines for risk management and consumer protection.

Payments system access? Another key question is the extent to which nonbank crypto firms should have access to the payment system. The Federal Reserve took a significant step toward answering this question in mid-August when it finalized a framework for assessing which entities may be granted payments system access. This framework creates a tiered system for evaluating incoming requests, and under it, institutions that engage in novel activities would undergo a more extensive review.

Access to the payments system is a significant privilege and comes with many responsibilities. As the Fed begins evaluating new requests for access, we’ll be watching carefully to ensure that these new guidelines are appropriately accounting for the inherent risks that come with some of these new financial players.

Is there a use case for a CBDC? Finally, there’s the question of a central bank digital currency and whether there’s a use case for it in the U.S. As ABA told policymakers in several comment letters and testimonies over the last year, our view is that no such case exists — for every problem that proponents say a CBDC could solve, the fact is that there are already solutions available that don’t involve a government-created currency. Financial inclusion is just one example: Banks are already making great strides to bring more unbanked households into the financial system by offering Bank On-certified accounts.

Not only would a CBDC be duplicative of private-sector solutions that already exist, but it also has the potential to have an incredibly damaging effect on bank balance sheets and the flow of credit to households and businesses if the Federal Reserve were to become a competitor for bank deposits. All of these ongoing debates underscore an urgent need for a fair, well-calibrated regulatory framework for digital assets — one that promotes responsible innovation while minimizing systemic risk and protecting consumers. And that’s a framework we’ll continue to fight for.

Nichols is president and CEO of the American Bankers Association

August 24, 2022/by Hannah Flanders
https://www.wisbank.com/wp-content/uploads/2021/09/Untitled-3_Lime-Green.jpg 972 1920 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2022-08-24 15:21:372022-11-04 07:53:08ABA Update: Breaking Down the Debate Over Digital Assets

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