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A Guide to Joining a Community Bank’s Board

Responsibilities, benefits new board members can expect

By Hannah Flanders

Community banks serve a unique and important purpose in every Wisconsin community by directly supporting the growth and stability of small businesses and families. With a mission of reinvestment, it is critical that Wisconsin’s community banks are led by individuals who share similar values to the institution, are knowledgeable of the community, and have experience in banking or local business.

As community banks across the state look to recruit new board members and enhance their strategic planning for the coming year, an increasing number of community leaders who are recruited for their knowledge and skills are curious — and rightfully so — of what responsibilities they will take on as a member of the board.

Key Responsibilities

Like any commitment, joining a bank board leaves individuals to consider many aspects of their willingness to engage with the organization, its shareholders, and bank employees; their understanding of (or desire to learn about) bank policy and regulation as well as the national and local economy; and what skills or experiences make them a qualified leader.

A strong board member adds diversity to the table — be it through their experience or their perspective — and ultimately aids in the growth of the bank.

According to the Federal Deposit Insurance Corporation (FDIC), a bank’s board of directors is responsible for overseeing the institution’s business performance, selecting and retaining competent management, establishing the institution’s long- and short-term business objectives, adopting operating policies to achieve objectives in a legal and sound manner, monitoring operations to ensure that they are controlled adequately and are in compliance with laws and policies, and ensuring the institution helps to meet its community’s credit needs.

Joining a community bank’s board is a substantial commitment to not only the bank, but the community as well. It is essential that responsibilities, such as regularly attending board and board committee meetings, are a top priority of every member of the board.

Benefits for Community Leaders

The benefits new members experience upon joining the board of directors for a community bank range from building connections within the banking industry and expanding skills and knowledge to staying updated on local and national issues. In addition, this unique opportunity allows leaders to give back to their communities and promote economic growth and prosperity.

To many, being elected as a community bank’s board member highlights those who have proven themselves as trustworthy, knowledgeable, and active leaders both in their business and throughout the community. By joining as a board member, community leaders contribute significantly to shaping the local economy and expanding the legacy of Wisconsin’s community banks.

 

What to Consider Before Joining a Bank’s Board of Directors

  • Commitment to:
    • Professional development
    • Community growth
  • Engagement with:
    • The bank (shareholders, other directors, committee members, staff)
    • The community
  • Experience in:
    • Business, banking,
      or leadership
    • Also includes education or financial/business connections
  • Desire to learn about:
    • Bank regulations
    • National and local economy
  • Fiduciary responsibility:
    • Trustworthy, objective, responsible, and efficient

Bank Director Resources:

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Introducing New WBA Chair Dan Peterson

By Hannah Flanders

This June, Dan Peterson, a native of DePere, Wis., began his year-long term as chair of the Wisconsin Bankers Association (WBA). The banking veteran, nearing 35 years in the industry, inspires bankers around the state with his strong work ethic and overall dedication to local communities and the banking industry.

After graduating from St. Norbert College with a bachelor’s degree in business administration, Peterson began his career as a lending officer with a finance company, first located in Milwaukee, transferring to Marinette after nine months. In 1988, after two years with the finance company, Peterson began his banking career with The Stephenson National Bank & Trust (SNBT) in Marinette as assistant loan officer.

Peterson gained experience in all lending areas of the bank and served as head of the commercial loan department in 2003 before advancing to his current role of president and CEO in 2013.

As WBA chair, Peterson hopes to continue deepening member engagement with the Association. Between education opportunities, advocacy related events, and efforts put forth by the Wisconsin Bankers Foundation (WBF) — the nonprofit arm of WBA — Peterson encourages bankers to not only foster growth in their own banks and communities by engaging with the Association, but also help WBA continue to advocate and support members as it has done for the last 130 years.

“I think as members of WBA, we owe it to the organization because they provide so many benefits to us as bankers,” says Peterson. “I would really like to see member engagement continue to increase over the next year.”

Peterson highlights the newly remodeled WBA office in Madison, including the state-of-the-art Engagement Center as being one of the many opportunities banks can utilize to further engage with WBA. The Engagement Center, open to all WBA member bankers, regularly hosts education events and training sessions. It also serves as an additional resource for bankers to reserve for meetings or strategic planning sessions.

“I think it is important for us as bankers to really support the WBA,” Peterson adds. “Your involvement will help us to remain a highly relevant and impactful organization for the membership.”

In his tenure at SNBT, Peterson has also contributed greatly to the efforts of WBA, the banking industry, and his local community. Peterson has previously served on the WBA Bank Executives Conference Advisory Board, the FIPCO (Financial Institution Products Corporation) Board, and the American Bankers Association (ABA) Community Bankers Council. Additionally, Peterson is currently the president of the Peshtigo Lion’s Club.

Peterson and his wife of 36 years, Barbara, currently reside in their little “slice of heaven” in Marinette. The couple, both St. Norbert alumni, raised two sons who also went on to attend St. Norbert College. Peterson enjoys spending his time away from the bank outside; be it hunting, fishing, or maintaining his property and spending time with his six — soon to be seven — grandchildren. Despite his banking background, Peterson jokingly states that members should not expect to find him on the golf course anytime soon, that is unless he is driving the beverage cart!

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Board Reporting Best Practices, Requirements, Delivery, Risk, & More

This invaluable session will explain the types of reports to include in board packages and how to recognize “red flags” in board reports. It will address how the reports should be used to ensure directors are receiving the necessary details to stay informed of issues impacting your institution and make effective, risk-based decisions.

After This Webinar You’ll Be Able To:

  • Understand directors’ responsibilities and examiners’ expectations of them
  • Track that corporate documents, policies, and reports are appropriately reviewed by the board
  • Review compliance exception reports
  • Define BSA responsibilities for the board, including policy and risk assessment approval, training requirements, and review of audit/exam findings
  • Explain key information from lending reports, including tracking concentrations, stress testing, and LTV standards

Webinar Details
Ultimate responsibility for your institution’s risk-management program lies with your board of directors. Examiners will evaluate the overall effectiveness of management and the board by analyzing:

  • Board and senior management oversight
  • Policies, procedures, and limits
  • Risk monitoring and management information systems
  • Internal controls

To facilitate this review, examiners will look at reports and minutes from board and subcommittee meetings to confirm whether management is effectively communicating with the board and that the board has appropriate oversight over risk management, compliance, operations, and financials. Therefore, receiving clear, concise, complete information is critical to a board’s decision-making.

Who Should Attend?
This informative session is designed for directors, compliance officers, risk managers, senior management, board secretaries, and auditors.

Take-Away Toolkit

  • Sample risk assessments
  • Sample policy review schedule
  • Sample board reports
  • Employee training log
  • Interactive quiz
  • PDF of slides and speaker’s contact info for follow-up questions
  • Attendance certificate provided to self-report CE credits

NOTE: All materials are subject to copyright. Transmission, retransmission, or republishing of any webinar to other institutions or those not employed by your agency is prohibited. Print materials may be copied for eligible participants only.

Presenter

Dawn Kincaid, Brode Consulting Services Inc
Dawn Kincaid began her banking career while attending The Ohio State University. She has over 20 years’ experience in client service, operations, information technology, administrative and board relations, marketing, and compliance.  Most recently Kincaid served as the Senior Vice President of Operations for a central-Ohio-based community bank, where she created and refined policies and procedures, conducted self-audits and risk assessments, and organized implementation of new products and services. Kincaid has served in the roles of Compliance, BSA/AML, CRA, Privacy, and Security Officer. She has led training initiatives, prepared due diligence information, completed a variety of regulatory applications, coordinated internal and external audits and exams, and presented for numerous state associations.

Registration Options

  • $245 – Live Webinar Access
  • $245 – OnDemand Access + Digital Download
  • $350 – Both Live & On-Demand Access + Digital Download
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Regulation B – Small Business Loan Data Collection and Reporting Rules (Section 1071)

On August 31, 2021, the Consumer Financial Protection Bureau (CFPB) published a 918-page notice of proposed rulemaking (NPRM) to implement Section 1071 of the Dodd-Frank Act. That section amends the Equal Credit Opportunity Act (ECOA) to require financial institutions to collect and report certain data in connection with credit applications made by women- or minority-owned businesses and small businesses.

Comments on the NPRM were due by January 6, 2022. Compliance with a final rule will be mandatory 18 months after publication, which is expected by March 2023.

Key aspects of the proposal include, but are not limited to:

  • Who is covered – The rule applies to financial institutions, however a proposed activity-based exemption would exempt financial institutions that originate less than 25 “covered credit transactions” to “small businesses” in each of the two preceding calendar years. It is estimated that the rule will apply to approximately 3,600 to 3,800 (70% to 73% of the total) banks and Savings Associations.
  • What is a “Small Business” – The CFPB is proposing to define a “small business” as one that had $5 million or less in gross annual revenue for its preceding fiscal year.
  • What is an “Application” – The NPRM proposes to adopt the Regulation B definition of an “application” but exclude:
    Reevaluation requests, extension requests, or renewal requests on an existing business account, unless the request seeks additional credit, and
    Inquiries and prequalification requests.
  • What is a “covered credit transaction” – The CFPB is proposing to define a “covered credit transaction” as one that meets the definition of business credit under Regulation B. The term:
    • Includes loans, lines of credit, credit cards, and merchant cash advances.
    • Does not include trade credit, public utilities credit, securities credit, and incidental credit as defined in Regulation B.
  • What information is collected and reported – Financial institutions must collect 21 fields of data including the race, sex, and ethnicity of the principal owners of the business, the credit type, the amount applied for, action taken, pricing, census tract, gross annual income, the NAICS code, and much more. The sex of the applicant includes, “male”, “female”, “I do not wish to provide this information”, and “I prefer to self-identify as_____”.

What You’ll Learn

  • Who is covered by the new regulation,
  • The definition of “small business,”
  • The definition of “application,”
  • Which transactions are reportable and which are exempt from reporting,
  • The 21 data fields to be collected,
  • The data collection form,
  • The tolerances applied to the collected data,
  • The “firewall” concept,
  • The rules for reporting data to the CFPB,
  • What data gets published, when it gets published, and how it gets published,
  • The recordkeeping requirements,
  • The enforcement provisions,
  • The likely effective date of the rule, and
  • The five steps that need to be addressed before the final rules are published.

Who Should Attend
The program is designed for the board of directors, senior management, loan officers, compliance officers, training staff, and auditors.

Instructor Bio
Jack Holzknecht is the CEO of Compliance Resource, LLC. He has been delivering the word on lending compliance for 44 years. In 39 years as a trainer over 147,000 bankers (and many examiners) have participated in Holzknecht’s live seminars and webinars. Holzknecht’s career began in 1976 as a federal bank examiner. He later headed the product and education divisions of a regional consulting company. There he developed loan and deposit form systems and software. He also developed and presented training programs to bankers in 43 states. Holzknecht has been an instructor at compliance schools presented by a number of state bankers associations. As a contractor, he developed and delivered compliance training for the FDIC for ten years. He is a Certified Regulatory Compliance Manager and a member of the National Speakers Association.

Registration Options

Live Access, 30 Days OnDemand Playback, Presenter Materials and Handouts $279

  • Available Upgrades:
    • 12 Months OnDemand Playback + $110
    • 12 Months OnDemand Playback + Digital Download + $140
    • 12 Months OnDemand Playback + CD + $140
    • Additional Live Access + $75 per person
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Strategies for Succession Planning and Talent Management

In this webinar you will learn strategies to avoid losing your top talent, and how to establish a simple, yet successful, Talent Management Program. This in turn integrates into your Strategic Plan. The presenter will cover nine competencies your successors must possess and you will walk away with strategies and tactics you can implement in your institution immediately.

What You’ll Learn

  • Learn about the key components of a strong Talent Management Program
  • How to conduct a talent assessment in your organization
  • A step-by-step process of how to integrate your Talent Management Program into your Strategic Plan
  • Strategies on how to retain your top talent and attract the right talent
  • The importance of succession planning and how to get started at all levels
  • The nine competencies your successors must possess
  • How to strategically outsource HR

Who Should Attend
Human Resources personnel including HR Director, managers, supervisors, senior leadership of any organization, Board of Directors, as well as ownership.

Instructor Bio
Marcia “Marci” Malzahn is the president and founder of Malzahn Strategic, a community financial institution management consultancy focused on strategic planning, enterprise risk management, treasury management, talent management, and EOS’ Implementation.

Malzahn has 30 years of banking experience, ten of those years as the EVP/CFO and COO of a community bank she co-founded where she oversaw all areas of operations. In her last year as EVP/COO/CRO, Malzahn created and focused on the bank’s enterprise risk management program.

Malzahn is the recipient of several professional awards, is a published author of four books, and an international bilingual keynote speaker, speaking frequently at banking and credit union conferences and associations as well as leadership and women’s conferences. As a Certified Virtual Presenter, Malzahn also provides online and onsite training for financial institutions.

Malzahn is a certified life coach, holds a B.A. in business management from Bethel University, and is a graduate of the Graduate School of Banking in Madison, Wisconsin.

Registration Options

Live Access, 30 Days OnDemand Playback, Presenter Materials and Handouts $279

  • Available Upgrades:
    • 12 Months OnDemand Playback + $110
    • 12 Months OnDemand Playback + CD + $140
    • Additional Live Access + $75 per person
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