Advocacy Archives - Page 11 of 11 - Wisconsin Bankers Association

Advocacy on Regulatory Modernization

In addition to the Wisconsin Bankers Association’s advocacy in opposition to Assembly Bill 478, WBA Director – Government Relations John Cronin and Capitol Bank SVP/Retail Banking and Chief Compliance Officer Gary Kuter testified in favor of Assembly Bill 596 at Wednesday’s hearing held by the Assembly Committee on Financial Institutions. AB 596 is designed to update several statutes relating to banking practices. WBA is very appreciative of the efforts of Rep. Terry Katsma and Sen. Howard Marklein for bringing this legislation forward.

In many ways, banks are the cornerstones of Wisconsin’s communities, having long provided services to individuals and business customers. Bankers relish the opportunity to build and maintain relationships and offer products that help propel Wisconsin’s diverse and vibrant economy.

Banks are also subject to many rules and regulations and are regularly examined for safety and soundness. Therefore, regulatory compliance, operations, and security are key areas of emphasis for financial institutions both large and small.

AB 596 will help us realize efficiencies in all three of these areas without jeopardizing safety and soundness. The common-sense pieces of regulatory relief in this legislation will allow our members to spend more time focusing on what’s most important: serving their customers.

October 8, 2021/by Hannah Flanders

Woman speaking at hearing for Assembly Bill 478

Advocacy, Credit Unions

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.

October 6, 2021/by Hannah Flanders

Advocacy, Credit Unions

WBA’s Grassroots Advocacy on Credit Unions

Following the latest acquisition of a Wisconsin community bank by a credit union, WBA has written to Wisconsin’s Federal Congressional delegation and to members of the Wisconsin State Assembly Committee on Financial Institutions to further illustrate that it’s time for growth-oriented credit unions to be paying their fair share of taxes. Read the letter below:

Yesterday, Dupaco Community Credit Union, a $2.6 billion credit union headquartered in Iowa, announced their acquisition of Home Savings Bank in Madison. According to the joint release, the strategic acquisition will increase Dupaco’s total number of branches to 20 and total assets to approximately $2.8 billion based on 2021 financial data.

A bank’s decision to sell is completely up to bank ownership, directors, or shareholders. While we at WBA are disappointed to see this type of acquisition occurring, we do not question the Home Savings Bank’s motivations for doing so. However, we are hopeful this deal sparks conversation among all members of Congress as to why these deals are possible in the first place.

Growth-oriented credit unions have managed to become nearly indistinguishable from tax-paying banks. This is because they enjoy federal and state income tax exemptions, less stringent oversight, and do not need to adhere to community reinvestment obligations.

Wisconsin banks have opportunities to make acquisitions in these scenarios, and there were institutions that sought to purchase Home Savings Bank. But given the future tax savings credit unions can realize, they can offer purchase terms with which banks simply cannot compete. This is wrong!

This is the fifth credit union acquisition of an income tax-paying community bank in Wisconsin in the last eight years. There have also been numerous credit union purchases of bank branches and bank assets. Each one of these transactions has revenue implications for the State of Wisconsin and the country; bank assets accumulated by credit union acquisition cease to be taxed at the state and federal level. As of this year, credit union acquisitions of community banks nationwide have surpassed 100.

Dupaco’s deal here is another example of a troubling trend in the financial services industry. Rather than return more money or reduce prices and cost to members, credit unions continue to use their tax advantages to expand their footprints and operate outside the scope of their original mission. It is our hope this acquisition will raise a red flag with Rep. Steil whose constituents subsidize credit unions’ competitive advantage that will ultimately leave them with fewer choices for financial products and services. It is time for these growth-oriented credit unions to be paying their fair share of taxes!

October 5, 2021/by Hannah Flanders

Advocacy, News

Executive Letter: Advocate for Credit Union Fairness

By Rose Oswald Poels

Calling attention to the need to level the playing field for credit unions and banks has been a top advocacy priority for WBA, and we are joining with our national trade association partners in a renewed effort to shed light on this issue. As we continue to see credit unions acquiring community banks here in Wisconsin (four acquisitions in recent years) and as a national trend, we are concerned about the increased tax burden on remaining banks and all other taxpayers. In 2020, credit unions in Wisconsin used their tax exemption to avoid paying $46,503,865 in federal income taxes and held a grand total of $49,499,980,974 in tax-free assets. WBA is actively advocating for credit union fairness to state legislators in Madison and to our members of the U.S. Congress — currently, credit unions do not pay income taxes at the state or federal level.

As you know, WBA has launched a publicity campaign, which includes billboard displays promoting Wisconsin banks and their positive impact on our state’s economy and communities. We are also working closely with our national counterparts at the American Bankers Association (ABA) and the Independent Community Bankers of America (ICBA) on their awareness and advocacy initiatives.

ABA has updated the website for its Reform Credit Unions campaign, and ICBA has recently renewed its Wake Up and Take Action call for policymakers to examine the credit union tax exemption as the number of credit union-bank acquisitions passed 100. Both organizations’ sites include talking points, information about the impact by state, and a template to send a letter to your member(s) of Congress.

I encourage you to utilize the resources and tools linked above to reach out to your members of Congress and make your voice heard on credit union reform. Please don’t hesitate to reach out to me or our WBA Government Relations team (Lorenzo Cruz, VP – government relations and John Cronin, director – government relations) with any questions or if we can be of assistance.

September 9, 2021/by Cassandra Krause

Advocacy, Community, Member News, News

WBA Releases 2019-2020 Advocacy Report

Every two years, WBA is proud to document the advocacy efforts accomplished on behalf of its membership. WBA’s priority through advocacy is to ensure there are no legislative, regulatory, or judicial obstacles barring you from serving your customers to the best of your abilities. This year’s advocacy report is now available and features several victories for the Wisconsin banking community.

Capitol Days, an annual event that allows bankers to meet with state legislators or their staff, continued to develop a dialogue on the issues that are critical to bankers, their customers, and the economy. 2019 saw this event take place in the office of Wisconsin State Senate Majority Leader Scott Fitzgerald, while the 2020 edition took a virtual approach.

Other conversational efforts included Rose Oswald Poels as a speaker for the introduction of a bill to combat elder financial abuse, as well as a meeting between WBA’s Agricultural Bankers Section, FSA Farm Loan Chief Tom Brandt, and Administrator for DATCP’s Division of Agricultural Development Krista Knigge about the issues that Wisconsin’s ag bankers continue to face.

In addition, WBA files comment letters with government agencies soliciting input from the public on proposed regulatory updates and policy guidance. Recent letters have been submitted to the OCC, FDIC, Council on Environmental Equality, FRB, and HUD, to name a few.

Many opportunities allow WBA to be a third-party advocate in judicial hearings. In the past two years, the WBA-supported omnibus bill was passed, an amicus brief was filed for the Koss Corporation v. Park Bank case that resulted in Park Bank’s favor, and both the CARES Act and the SAFE Banking Act and Corporate Transparency Act were passed by the House.

WBA has also helped to raise funds and save money for banks and their customers. A total of $222,000 was raised for Wisbankpac and the Alliance of Bankers Conduit, and nearly $250 million in taxes were saved by small businesses that could have been applied to the forgivable portion of PPP loans through Wisconsin Act 185.

To read more on the 2019-2020 victories and the work that WBA does on behalf of its membership, download the advocacy report here. To find out how you can engage in advocacy efforts for your bank, contact msemmann@wisbank.com.

By, Alex Paniagua

December 3, 2020/by Jose De La Rosa

Advocacy, Member News, News

The Wall Street Journal Publishes WBA Letter Regarding Minority-Owned Banks

Rose Oswald Poels, President and CEO of the Wisconsin Bankers Association, recently wrote a letter to The Wall Street Journal which they published in an article on Friday, Nov. 13. Below is the original letter.

“The Battle to Keep America’s Black Banks Alive” was right when it said “In many ways, the struggles of "Black-owned banks and small, community lenders are one and the same.” The high cost of regulations as well as keeping up with the technology demands of a public that expects safe, secure, and instantaneous online banking at their fingertips are just a few of the factors driving these challenges. Like other minority-owned banks, Black-owned banks are very mission-driven and to help them succeed in their mission, they need the support of others willing to help champion this effort.

Real progress begins with Congress and state legislatures promoting policies that recognize and support all minority-owned banks. This could include policies that allow for greater regulatory flexibility given the type of lending that occurs, and tax credits to help offset necessary investments in technology to improve compliant internal operations as well as allow them to compete with highly valued customer-facing products.

A recent study done by the Wisconsin Bankers Foundation and Dr. Russell Kashian of UW-Whitewater's Fiscal & Economic Research Center, supports a point made in the article about competing with the global or larger banks. The study found overall that race is a factor in a consumers’ choice of type of institution. “Our results found, interestingly, that the white students were statistically more likely to use a community bank, and Black students were more likely to use national banks, and Latinx students were more likely to use regional banks,” Kashian said. A possible explanation, he said, is that national banks are more likely to be in urban areas, whereas community banks tend to focus on a smaller, usually more suburban or rural, geographic footprint.

State and national banking associations are also champions of minority-owned banks and leveraging their resources will also further the success of Black-owned banks. In addition to the good work done by focused associations like the National Bankers Association and Minbanc Foundation, other banking associations offer products and services that can help Black-owned banks succeed. In addition to the advocacy support banking associations provide, they also offer high-quality educational programs to improve the professional development of bank staff, and other products designed to improve the business operations of banks. Many times, these are offered for members at discounted prices without sacrificing value.

Finally, all of us in and around the banking industry can do more to economically empower disenfranchised citizens, which will ultimately improve the financial situation of customers of all banks, notably including Black-owned banks. Financial literacy is critical to provide individuals with the right knowledge and tools to develop and sustain a solid financial foundation. Elected officials along with the private sector can provide Black-owned banks with financial support and the tools necessary to allow them to provide meaningful financial education to their customers and local communities.

A diverse banking sector is critical to meet the unique needs of our diverse country. We should all continue to do our part to help Black-owned banks, and all banks succeed.

On a similar note, WBA is hosting “A Conversation on Racial Equity.” Sponsored by the Federal Home Loan Bank of Chicago, this Dec. 9 program is intended to provide bankers with unique perspectives on racial equity to help us all learn how we can all improve and move forward on a path toward positive change.

By, Alex Paniagua

November 16, 2020/by Jose De La Rosa

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