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Connect with peers, expand your compliance knowledge
As the Wisconsin Bankers Association (WBA) enters the 2023–2024 fiscal year, do not forget to renew or join the membership of the WBA Compliance Forum. Whether you are looking for more opportunities to connect with your compliance peers or would like to gain CLE and other compliance certifications*, WBA’s annual Compliance Forum membership provides various opportunities to expand your network and further develop your understanding of state-specific and national compliance matters.
The registration fee includes attendance of all three forums for two individuals from each bank. Additionally, these two primary members will also gain access to the highly active WBA Compliance Forum Google group. All Wisconsin bank compliance professionals and bank legal counsel are encouraged to attend each of the sessions to gain in-depth information on key compliance issues. Any additional bank staff can be registered by the bank’s primary contacts for an additional fee.
“WBA’s Compliance Forum is the place to get updates on recent trends, hear from experts on emerging topics, and connect with other compliance professionals,” says Scott Birrenkott, WBA director – legal and session speaker. “Each session provides great networking opportunities and the ability to share experiences.”
WBA’s Compliance Forum is WBA’s premier Wisconsin-specific program focused on presenting updates and addressing the latest hot topics in compliance. The first session, to be held on June 20 at the Holiday Inn and Convention Center in Stevens Point, will include discussions on areas such as the Section 1071 final rule and related implementation action plans, as well as how to respond when a vendor gets hacked.
“As a subject matter, banking compliance is unique in that it manages to be simultaneously vast, yet also nuanced. It can be tough to sift through, which is why opportunities to meet, stay abreast of trends, and discuss with peers are so valuable,” adds Birrenkott.
Those interested in joining a passionate group of compliance bankers or renewing their membership for WBA’s 2023–2024 Compliance Forum should visit wisbank.com/2023forum. Questions regarding membership opportunities or upcoming Compliance Forum sessions can be directed to Anna Lorang, WBA education and event coordinator.
*Submission of education program material to the Board of Bar Examiners does not guarantee CLE credit will be granted. Bankers with the CCBCO designation can self-submit this program for credit using the agenda provided at the forum.
By Rose Oswald Poels
In the last year, bankers from around the state have made an incredible effort to make the most of their membership with the Wisconsin Bankers Association (WBA). When 2022–2023 Chair Dan Peterson began his term last June and spearheaded the member-wide initiative to increase engagement, it was impressive to see the multitude of ways in which bankers chose to connect with both their peers and the Association as a whole.
June, the beginning of WBA’s fiscal year, is the perfect time to reassess your involvement in the Association and uncover the programs, groups, and opportunities available for all. I encourage bank leaders to continue to emphasize the employee benefits brought forth by WBA and support all members of the bank in finding the engagement opportunities that are the most meaningful for their professional growth.
The WBA Advocacy Officer program connects individuals with an interest in public policy to opportunities to act and provide input on legislative and regulatory policy items. Working alongside members of the WBA Government Relations team and other Advocacy Officers from throughout Wisconsin, these banker volunteers regularly communicate with bank officers and directors, coordinate advocacy programs such as “Take Your Legislator to Work” days and fundraising initiatives, as well as stay abreast of the latest legislative and governmental issues.
BOLT, or Building Our Leaders of Tomorrow, members represent Wisconsin’s current and emerging bank leaders. The free program is focused on providing bankers with the opportunity to learn, network, and expand their leadership in the banking industry. In addition, bankers are encouraged to attend the leadership summits — held twice per year — to make connections, discuss challenges, and explore new opportunities for personal and professional development.
The CEOnly and CFOnly Network is open to all CEOs and CFOs currently employed at a Wisconsin-chartered bank. The group, which focuses on networking and idea sharing related to Wisconsin’s banking industry, provides bankers with the platform to anonymously ask questions and receive advice as well as connect with peers at up to three in-person networking events.
The newest benefit — WBA’s Diversity, Equity, & Inclusion (DEI) Employee Resource Group (ERG) — was formed in 2022 as a safe space for bankers of historically underrepresented backgrounds to meet and hold open-forum discussions. The ERG, led by a popular speaker at WBA events, Dr. Alonzo Kelly, provides a virtual space to share ideas and experiences, ask questions, and learn from others.
WBA’s Compliance Forum is the Association’s premier Wisconsin-specific program focused on presenting updates and addressing the latest hot topics in compliance. In addition to gaining in-depth information on key issues, members have the opportunity to attend several Compliance Forum events throughout the year to connect with peers, gain CLE and other compliance certifications (subject to approval), and gain access to the Forum’s Google Group.
WBA Connect is a collection of banker-only peer groups designed to keep bankers connected and help one another grow. The free benefit — currently representing bankers with interests in DEI, enterprise risk management, human resources and organizational development, marketing, retail banking, and technology and operations — provides excluive access to the related Google Group as well as the possibility to coordinate in-person networking meetings.
Not to mention the various digital resources — including, but not limited to, the Best Practices Library, Legal Call Program, and Banconomics.com — our Association works to ensure that you and your staff have the resources relevant with the work you do each day and the opportunities to get involved, stay informed, and make an impact both in your community and throughout the banking industry.
The May 2023 WBA Compliance Journal is now available. In this edition, readers will find an article covering recently issued guidance by FDIC, CFPB, and OCC, each of which identify activities expected to be a focus of upcoming compliance examinations. Readers will also find an article highlighting an interagency statement and an interim final rule regarding the transition from US LIBOR. The publication also includes a summary of recently published agency rules and notices, other important compliance-related updates, and a WBA Education Calendar which lists upcoming training events.
By Rose Oswald Poels
Last Thursday, the Bureau of Consumer Financial Protection (CFPB) issued its long-awaited final Section 1071 business data collection rule. The Wisconsin Bankers Association (WBA) has been engaged in the rulemaking process since the proposal’s inception. While I know the general requirements for this rule came directly from the Dodd-Frank Act, CFPB chose to add in many more data points than what the law required which have made this rule very burdensome for the banking industry and intrusive for banks’ small business customers.
Just this past fall, I, along with several Wisconsin bankers, shared specific concerns of the proposal directly with CFPB Director Rohit Chopra. I am disappointed our concerns were largely disregarded given the requirements within the final rule. Our concerns of data privacy for small business customers remain.
Given the low threshold for rule applicability, the amount of data to be collected and reported, and the changes in process that will need be implemented, the rule will be burdensome to implement. While I and the WBA Legal team are currently working through the final rule and accompanying resources, below are highlights of the final Section 1071 rule. WBA will certainly be hosting educational events and will be creating resources around the final rule in the forthcoming months.
Highlights
- The final rule applies to banks that originated at least 100 covered originations in both of the two previous years.
- “Small business” means one with gross revenue of $5 million or less in the preceding fiscal year.
- Small businesses will be able to self-identify as women-, minority-, or LGBTQI+ owned.
- Lenders will be able to rely on financial and other information provided by the small business applicant.
- Mandatory compliance dates are staggered based upon the number of covered originations made by each bank, in particular:
- A bank must begin collecting data and otherwise complying with the final rule on October 1, 2024, if it originated at least 2,500 covered originations in both 2022 and 2023.
- A bank must begin collecting data and otherwise complying with the final rule on April 1, 2025, if it:
- Originated at least 500 covered originations in both 2022 and 2023;
- Did not originate 2,500 or more covered originations in both 2022 and 2023; and
- Originated at least 100 covered originations in 2024.
- A bank must begin collecting data and otherwise complying with the final rule on January 1, 2026, if it originated at least 100 covered originations in both 2024 and 2025.
As mentioned above, the CFPB has created resources which accompany the final rule. The resources include an executive summary, quick reference guides, and a data point chart.
WBA Creates Transfer by Affidavit Guide
By Scott Birrenkott
When an individual dies and leaves property subject to administration in Wisconsin, there are several types of estate procedures which can be followed. One such method involves the use of a form known as a Transfer by Affidavit (sometimes referred to as a Small Estate Affidavit). The Transfer by Affidavit is often a popular option due to its simplicity and ease of use. Because of this, Wisconsin banks are likely to encounter individuals seeking to use this form to close out accounts.
It is important to remember that a bank should not be advising or recommending anyone use a Transfer by Affidavit Form — or any other particular method to wrap up an estate. When a customer dies, the decedent’s family, attorney, or other party acting as the executor must determine the appropriate method. Estate matters can be quite complex, and the Transfer by Affidavit is not the only method available. Oftentimes, a relative of the decedent may come to the bank asking for advice on how to administer an estate. However, it is important that bankers know to refer these individuals to an attorney.
A Transfer by Affidavit may only be used for estates having a value of $50,000 or less (but again, note that it is not the only option available for small estates).
The individual who presents a Transfer by Affidavit is known as an “affiant.” There are four categories of affiants who may use a Transfer by Affidavit, that being an heir, trustee, person who was guardian at the time of the decedent’s death, and a person named in the will to act as a personal representative. As with all aspects of the Transfer by Affidavit, the affiant must determine their capacity and represent it on the form — not a banker. By completing the Transfer by Affidavit, the affiant makes various statements — under oath — regarding the property, and by accepting the decedent’s property, the affiant assumes certain duties. Most of these duties do not concern the bank, but there are a couple matters which do.
First, if the affiant is a person named in the decedent’s will to act as personal representative, banks must wait 30 days before releasing the property. The reason for this waiting period is that if, within the 30-day period, the bank is presented with an affidavit for the same decedent from another person, then the bank is prohibited from releasing the property. Essentially, it is a waiting period in which other parties might express an interest in the property. If this happens, then the bank should not release the property until instructed to do so by court order.
Another responsibility the affiant has is to notify the state of Wisconsin if the decedent (and/or the decedent’s spouse) ever received the benefit of certain medical services. The Transfer by Affidavit Form includes a section related to these services and, if the decedent (or spouse) received such benefits, or the affiant does not know, then the affiant must send notice to the state and provide receipt of that notice to the bank before receiving property. If the affiant does not provide this receipt, the bank cannot release the property.
Oftentimes, the Wisconsin Bankers Association (WBA) is asked certain questions such as: must a bank verify the affiant’s status (e.g., as an heir)? Or, what if the affiant lies or is mistaken regarding the property or other duties? These questions, and others, can be answered by considering the statutory protections received by banks releasing property to the affiant. That is, Wisconsin law provides for release of liability of the transferor of the property. Meaning, liability protections for the bank. This protection is contingent on the above conditions, but in general, banks should consider that by signing the Affidavit Form, the affiant certifies that the contents of the Affidavit are true and correct. Unless the bank, for some reason, had actual knowledge that an affiant was lying or otherwise misrepresenting information (e.g., the affiant describes property as being under $50,000 but bank knows for a fact that the estate holds property over $50,000), then the bank is not required to verify the information beyond what the statute otherwise requires.
While the above serves as a brief overview of Wisconsin’s Transfer by Affidavit Form, there are some additional nuances worth considering which are beyond the scope and format of this article. However, WBA recently created a Transfer by Affidavit Guide which goes into greater detail regarding the form, who may use it, how it may be used, along with a discussion of the law, step-by-step instruction for reviewing the form, and a question-and-answer section. This guide may be found on WBA’s website within the compliance resources section at wisbank.com/resources/compliance.
For any questions regarding the Transfer by Affidavit Form, or other topics, contact WBA legal at wbalegal@wisbank.com or 608-441-1200. Additional compliance resources, including Q&A’s, can be found by visiting wisbank.com/resources/compliance.
As spring arrives, so does the March 2023 WBA Compliance Journal. In this edition, WBA Legal covers upcoming changes to FDIC’s deposit insurance rules, FinCEN’s alert on the nationwide surge in mail theft-related check fraud schemes, and a Wisconsin Supreme Court decision which upheld Wisconsin’s long-established rules for priority under receivership rules. The publication also includes a summary of recently published agency rules and notices and other important compliance-related updates for bankers, including links to FRB’s Bank Term Funding Program resources and changes made to FDIC’s Section 19 rules as a result of the Fair Hiring in Banking Act.
Banks should consider document type, purpose, relevant issues
By Scott Birrenkott
Q: What name should banks use for customers when completing documents?
A: The name that should appear, and be signed, on documents depends on a few things. Primarily, the type of documents being signed, the purpose for which the customer’s name is appearing, and any relevant rules.
Typically, a customer has a single, consistent name which will appear on documents, disclosures, and other communications and match their signature. However, there are situations where this is not the case. A customer might use inconsistent capitalization, or go by different names, such as a “nickname,” or perhaps use their middle initial in some situations, or a “Jr.” or “Sr.” designation. There may also be situations where a customer changes their name, either because of a marriage, or other situation — such as a change in identity or gender transition — and a change from an individual’s “deadname.”
Banks should consider how various types of documentation can be affected. For example, if opening a checking account, the specimen signature is important to verifying transactions on the account. If a customer provides a specimen signature which does not match the signature they intend to use on checks, that can result in a question as to whether certain items are authorized. For this reason, the signature card should match the name the customer intends to use when authorizing transactions and should be updated if a change occurs.
When entering into a contract, best practice would be using the customer’s legal name, as provided by customer. The customer should sign in a manner by which they intend to be bound. There are no specific standards for a signature, other than that it reflects the party’s intent to be bound. For example, a customer might sign in a manner different from the way their name otherwise appears on documentation, such as whether they use a middle initial in their signature or not. Or how they capitalize their signature, or whether they are able to sign their name at all and perhaps can only make a mark or symbol such as a checkmark or “X.”
Banks must consider whether the documents properly identify its customer, and whether the signature affixed to the document reflects a valid contract. In this regard, it is ultimately a matter of policy and preference, but a best practice recommendation would be for the bank to be consistent in how the name appears throughout all the documentation, and the signature itself.
However, when it comes to Uniform Commercial Code (UCC) financing statements, there are specific rules which must be followed. This article does not delve into the specifics, but banks should consider that for filing UCC financing statements, the filing should reflect the debtor’s exact name as required by Wis. Stat. section 409.503.
For any questions regarding customer names, accuracy of UCC financing statements, or other topics, contact WBA legal. Additional compliance resources can be found at wisbank.com/resources/compliance.