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Rose Oswald PoelsBy Rose Oswald Poels

The Society of Bank Executives, a nationwide organization for building new connections and accessing accelerated programing related to leadership, is looking ahead to the official launch in January 2023. Currently, the Society is comprised of over 120 executives from 15 states, including several from Wisconsin, and these bankers are participating in the pre-launch cohort this fall.

As I have announced in previous publications, the Society was established by several banking trade groups across the country — including WBA — to promote individual professional development. The initiative focuses specifically on granting C-suite bankers the opportunity to network among peers, attend relevant and flexible education seminars by experts, and enhance critical leadership competencies and skills.

As we all work to navigate within our ever-evolving industry, I encourage you to consider the importance of taking part in opportunities such as the Society of Bank Executives. Unlike other leadership seminars, the program offers bankers not just the education, but the relationships and soft skills necessary to masterfully lead our banks. In addition to studying, analyzing, and applying knowledge learned during the four-month program, bank executives will form invaluable networks among peers outside of our markets.

Although the pre-launch session is in full swing, Wisconsin bankers are invited to join the Society during its third meeting in Sun Valley, Idaho. The three-day event focuses specifically on the power of peer groups, and will kick off on October 19. I encourage bank executives who have not already registered for Society membership to consider utilizing this opportunity to garner a sneak peek of what’s in store for programing as the initiative formally launches in January.

Thank you to those Wisconsin bankers who have already registered as a member the Society. If you would like to learn more about the Society and how its program could impact your bank, please visit executives.bank/home. Additionally, if you are interested in taking part in the Society’s upcoming in-person educational event in Sun Valley, please click here for details on how to register.

Rose Oswald PoelsBy Rose Oswald Poels

When WBA’s charitable arm, the Wisconsin Bankers Foundation (WBF), was founded in 2015, education remained a top priority to aid the public in increasing their financial literacy and responsibility.

As part of this, the Foundation is proud to offer well-known programs such as Reading Raises Interest Kits that assist bankers in coordinating curriculum used during Teach Children to Save Day in April and scholarships awarded to students throughout the state for their demonstration of excellent financial capabilities. Involvement in these programs brings the Foundation one step closer to ensuring the financial knowledge and responsibility of every youth in our state.

Now through November 15, the Foundation will be accepting applications for the third annual Agricultural Banking Scholarship!

Students who will be enrolled in an accredited Wisconsin college, university, or technical college during the Spring of 2023 and are pursuing a career related to agricultural banking are encouraged to apply.

With agriculture serving as one of Wisconsin’s largest economic drivers, it is critical that we invest now in the students that are interested in driving this critical sector of our state.

The Foundation is also excited to announce this year’s Agricultural Banking Scholarship award has been increased to $1,500 each for the two qualified winners in order to help combat rising tuition costs, assist individuals in reaching their goals, and promote financial literacy in every consumer.

I encourage you to share this exciting opportunity widely within your networks — current and past ag interns, parents of college-aged children, and educators at the many ag programs throughout the state. By aiding us in spreading the word to qualified students, you play a significant part in assisting the Foundation to serve its mission as well as provide new opportunities for your community!

Please visit wisbankfoundation.org/scholarships to learn more or contact WBF’s Foundation Coordinator Hannah Flanders with any questions.

Rose Oswald PoelsBy Rose Oswald Poels

As our Association continues its efforts to support bankers of historically underrepresented backgrounds, finding new ways to invest in the personal and professional development of every one of our employees is top of mind.

WBA’s employee resource group (ERG), which launched in June, continues to provide a safe space for our colleagues of color and individuals of underrepresented backgrounds to engage in employee-led conversations once a month related to their identity or feelings, ideas, and developments in the diversity, equity, and inclusion (DEI) space.

The next meeting will be held Thursday, September 22 at 10:00 a.m. The conversation will include the topic of professionalism and an open discussion with staff from Peoples State Bank, Wausau regarding their involvement with the local Hmong community. Bank leaders, managers, and HR professionals are encouraged to forward this opportunity on to bankers who may benefit from this inclusive forum.

Additionally, in conjunction with WBA’s DEI Plan to provide professional development opportunities and foster a welcoming, inclusive culture, I am excited to announce that WBA will be offering three educational scholarships to select WBA events this fall.

These scholarships, offered in partnership with the Federal Home Loan Bank of Chicago, will be presented to bankers of historically underrepresented backgrounds — including, but not limited to, individuals of African American/Black, Asian/Asian American/Desi, Indigenous, Hispanic/Latinx/Spanish origin; members of the LGBTQ+ community, people with disabilities, and those part of a religious minority. Please share this scholarship opportunity with members of your staff as they look to expand their career within the banking industry.

WBA’s three educational scholarships will cover the registration fee of the selected program along with any overnight accommodation, as needed.

Scholarships are available for:

I encourage bankers to take this chance to invest in their professional development and share these various opportunities with members of their staff. It is ever so important for the prosperity of our banks and the communities in which they serve that individuals of all backgrounds and experience levels are supported in their pursuit of new degrees of leadership and opportunities to expand their career and network.

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Rose Oswald PoelsBy Rose Oswald Poels

As students around the state head back to school, the importance of ensuring every individual has access to high quality financial education and resources to improve their financial literacy continues to ring true. The Wisconsin Bankers Foundation (WBF) has served since 2015 as the hub for Wisconsin bankers when looking to provide resources, including Reading Raises Interest Kits each spring, to communities across Wisconsin.

As the Foundation continues to grow, we are happy to provide small grants to Wisconsin nonprofit organizations that align with our mission of improving the financial capability of our communities.

WBF recently awarded a second $5,000 grant to Asset Builders, a Wisconsin nonprofit organization, in support of its Finance and Investment Challenge Bowl, a quiz bowl competition geared towards high school students on subjects such as personal finance, economics, business, and marketing. The program aligns with Wisconsin’s statewide learning standards and is an effective strategy to complement what students are learning in the classroom.

The Challenge Bowl serves as an exciting and interactive supplement that educators across the state year after year sign up and accompany students to participate in. As students work in small groups to prove their mastery of finance-related knowledge against their peers, they also have a unique opportunity to interact with local banking and financial services professionals, who serve as quizmasters and competition judges.

For the 2022–2023 school year, the Finance and Investment Challenge Bowl tournament now has 12 regional competitions — reaching students in every corner of the state — and concludes with the state championship in Madison in May. These in-person tournaments are lively and immersive for students and volunteers alike. As the Challenge Bowl continues to expand to reach more students, I highly encourage bankers to volunteer not only to keep this value-adding program as high quality as possible, but as an opportunity to connect the banking industry with hundreds of passionate students. This type of engagement demonstrates our industry’s involvement in these critical efforts to keep our community members financially savvy. If you or any member of your staff is interested in a fun and rewarding service experience, please contact Cassie Krause, WBF’s executive director, or me.

In addition to volunteering for one of the many Finance and Investment Challenge Bowl tournaments across Wisconsin, please also consider making a tax-deductible donation to the Wisconsin Bankers Foundation. Contributions made to the 501(c)3 nonprofit organization support financial education in communities across our state. Thank you for your continued support of not only the Foundation, but of programs such as the Finance and Investment Challenge Bowl that offer engaging educational opportunities to Wisconsinites.

Rose Oswald PoelsBy Rose Oswald Poels

Every fall, I travel to Washington D.C. with a small group of bankers to visit regulators. During this trip, we nearly always meet with staff from Consumer Financial Protection Bureau (CFPB).

Since CFPB’s inception, we inevitably encourage the CFPB staff during each of these annual visits to focus more on the non-bank financial organizations that operate in the traditional “banking” space. Nearly every time we have this conversation, they nod and share that they provide this type of supervision typically through a complaint-based system. This means that if enough consumers complain about a particular financial organization (not a regulated bank), they will investigate and take whatever action they deem appropriate. Certainly, this has been incredibly frustrating for bankers to hear over the years given that many non-bank actors contributed to the causes of the Great Recession back in 2008 and 2009 and CFPB’s mission is that of protecting consumers. It has been too easy for CFPB to focus on the banking industry through their rulemaking and enforcement authorities since banks are easier to find with traditional brick-and-mortar offices.

I was pleasantly surprised to learn recently, however, that the CFPB has focused some of its attention on the non-bank financial industry by assessing fines to fintech companies for actions that have ultimately harmed consumers. Specifically, CFPB recently levied a $2.7 million fine against lender Hello Digit for a range of issues including misleading marketing claims such as “no overdraft fees.” This claim of no overdraft fees was one of several promises made to consumers by Hello Digit that were, in fact, not always true. Other fintechs have made similar claims regarding no overdraft fees as well, including digital lender Chime, that have turned out to be misleading or only true in a limited set of circumstances.

At the same time, the FDIC recently issued cease and desist orders against five crypto firms for making false or misleading statements suggesting that their digital assets were FDIC-insured. According to the FDIC, each of these companies made false representations on their website and social media accounts stating or suggesting that certain crypto-related products are FDIC-insured or that stocks held in brokerage accounts are FDIC-insured. As we all know, these representations are false and misleading.

There are many fintechs that are working to do the right thing and help improve the financial industry through technological efficiencies, but some reasonable level of regulation and oversight is important for these institutions just like banks. These recent regulatory actions against non-bank financial organizations are good reminders that it is important to continue sharing our concerns with regulatory agencies related to non-bank actors and to continue to stress to our clients and the public how trustworthy banks are.

If you are interested in accompanying me on a future fall regulatory agency trip to D.C., please let me know and I will add you to the list. I try to keep the group small, limited to 12 bankers, to ensure meaningful dialogue with the regulatory agencies. Bankers who have joined me in the past have found this trip to be worthwhile given much of our frustration and burden comes from regulation. In the meantime, WBA will continue to advocate for the members on these and other issues affecting the industry.

Rose Oswald PoelsBy Rose Oswald Poels

At the heart of the Wisconsin Bankers Association’s (WBA) mission is advocating on behalf of the Wisconsin’s banking industry. In the last year alone, WBA has taken action in combating credit card fees, increasing instances of elder fraud in our communities, legislation that would expand credit union powers, a looming recession, and so much more.

It’s no secret that WBA-member banks play a significant role in the support of our Association. Between political contributions that help further engage our legislators or by participating in Capitol Day, organizing a “Take Your Legislator to Work Day”, or testifying on a bill — the engagement shown by our membership has been paramount in advancing WBA’s efforts over the last 130 years.

I am also lucky to say that, in addition to the thousands of bankers throughout the state who engage with WBA, our Association is also made up of nearly 50 individuals who, like you, are sincerely dedicated to our state’s banking industry.

Earlier this month, WBA hosted its annual staff fundraiser in support of Wisbankpac and Alliance of Bankers for Wisconsin (ABW) — two critical methods of promoting advocacy for the Wisconsin banking industry. This timely event, in which the funds raised are used to help support pro-banking political candidates, welcomed staff donations (though participation was not required) by way of a specified contribution from payroll, a check made out to one of the funds, or the purchase of one or more Jeans Day stickers for a casual dress day at the office. All money raised directly aids in WBA’s advocacy efforts.

For their generosity, and to celebrate Wisconsin’s beloved county fair season, WBA hosted a fair-themed week of events. Ranging from a blue ribbon bake off to games and a cornhole competition, every staff person was able to participate in activities and win prizes.

I am proud to announce that our small but mighty staff was collectively able to crush our goal of $7,000 and raise over $12,350 this year. This amazing feat by our team highlights the commitment each WBA staff member has to the industry and our membership.

As we look ahead to the remainder of this calendar year, it is critical that all WBA-member banks continue to engage with our Government Relations team and take part in supporting our industry. In addition to making political contributions, banks should take a moment to ensure they remain on track to receive WBA’s Gold Triangle or Bankers Involved in Grassroots and Government (BIGG) Award.

The Gold Triangle Club, the highest level of fundraising recognition for banks, is awarded annually through contributions to ABW political conduit, Wisbankpac, or WBA’s issue advocacy fund. Corporate contributions as well as contributions from bank employees and directors count toward Gold Triangle status, and the amount to qualify ranges from $500 to $4,500 based on the size of the bank.

WBA’s BIGG Award expands beyond Gold Triangle fundraising to encompass grassroots advocacy engagement and serves as the Association’s highest level of recognition for overall advocacy. To learn more about how your bank can earn these prestigious awards, please contact Lorenzo Cruz, vice president – government relations, or me.

As I’ve stated in previous publications, the support and involvement of every member bank is critical to the continued success of our advocacy efforts. With the goal of raising $300,000 by the end of this year, it truly requires a team effort to keep our Association on target to continue surpassing our goals for the industry!

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Rose Oswald PoelsBy Rose Oswald Poels

As we emerge from the pandemic and face historic levels of inflation, people across Wisconsin are experiencing high levels of financial stress and burnout, which is impacting various aspects of their lives and our economy in general. The Wisconsin Department of Financial Institutions (DFI) and the Governor’s Council on Financial Literacy and Capability, on which I serve as a member, have partnered with the Financial Fitness Group to help improve the financial well-being of people who live and work in our state. The program is an expansion of a prior collaboration between DFI and the Wisconsin Department of Employee Trust Funds, which helped educate over 12,000 state employees over the last year.

ELEVATE Wisconsin is an effective and unbiased financial wellness program designed to enhance the lives of Wisconsin employees and their families while generating positive exposure for businesses.

The cost of financial stress impacts more than an individual’s bank account. Economic challenges affect employees’ health, workplace effectiveness and productivity, long-term financial stability, and ultimately an employer’s bottom line. A few key facts:

  • 68% of the retiring workforce worry about having enough money to retire.
  • 67% of Americans lack the knowledge to make sound financial decisions.
  • 64% of the American workforce is living paycheck-to-paycheck. When economic downturns happen, it causes even more stress on them.
  • 33% of Americans have minimal to no retirement savings.

Why is ELEVATE Wisconsin Important?
Financial education can positively enhance the lives of Wisconsin employees through financial wellness and improve their financial security while fostering financial confidence.

ELEVATE Wisconsin represents truly unbiased, FINRA-compliant financial education that has been proven to be effective and measurable. ELEVATE Wisconsin focuses on improving the financial aptitude, behaviors, and confidence of Wisconsinites and their families.

What is ELEVATE Wisconsin?
ELEVATE Wisconsin is an online wellness program providing interactive, effective, and unbiased instruction in personal finance and investing fundamentals to Wisconsin employees.

DFI is a key sponsor of the program and has worked with the Financial Fitness Group to help develop the program. The Financial Fitness group is an industry leader, having already provided financial education to over 2 million users at more than 1,000 major U.S. organizations. Financial Fitness Group’s financial fitness solutions can assess, score, and educate consumers at a quarter of the cost of conventional methods.

ELEVATE Wisconsin Financial Education Includes:

  • A personalized financial wellness platform where participants can access tutorials, interactive calculators, videos, and more!
  • Pre- and post-lesson quizzes to determine knowledge change and measure program effectiveness.
  • Certificates, points, and badges to motivate users to keep on learning.
  • Access to the Financial Fitness SCORE™, a Financial Fitness Checkup that allows users to benchmark their overall financial health — aptitude, behavior, and confidence.
  • 24/7 online access from any device — smartphone, tablet, or computer.
  • A reporting dashboard where administrators can access real-time data on overall organizational metrics, user progress, financial assessments, learning data, and most popular courses.

What Role Can Banks Play?
As employers are trusted partners in financial education, this program is designed to be delivered through the workplace. Banks can join as program sponsors, offering the program to their business customers (for example, small businesses or nonprofit organizations that would like to make the program available to their employees) as well as to the bank’s own employees. The online platform will be co-branded for the sponsor and the business, so users (employees) see the bank’s logo as well as their employer’s.

We look forward to getting the word out on this important financial wellness program that aims to empower more than 100,000 employees and engage over 500 employers throughout Wisconsin by 2025.

Rose Oswald PoelsBy Rose Oswald Poels

Since the Wisconsin Bankers Association’s (WBA) inception 130 years ago, advocating on behalf of Wisconsin bankers has been one of our top priorities. WBA reaches across aisles, supporting pro-banking legislators and candidates, with the goal of advocating for and supporting the banking industry.

With Wisconsin’s general election quickly approaching in November and the primary just next week on August 9, I wish to remind all Wisconsin bankers of the importance of not only participating in these two elections, but ultimately making your voice heard on behalf of our industry.

This year, the American Bankers Association (ABA) is once again promoting their “Get Out the Vote” initiative which assists in educating voters on banking issues. I encourage you to visit the ABA’s site to make sure you are registered to vote, know the candidates on your ballot, and where your polling locations are. ABA has also created a toolkit for banks to share with employees to promote voter participation.

As we know, Wisconsin’s election battleground regularly takes the national spotlight and with candidates looking to flip the ballot for several major state offices — Governor, U.S. Senate, and some state Assembly seats, to name a few — little is expected to change this year. In addition to making your voice heard through casting your vote next week (and in November), I encourage bankers to actively participate in our advocacy initiatives in two additional ways.

Take Your Legislator to Work

As WBA’s over 100 Advocacy Officers can attest, the most effective way of advocating for our industry is to meet with legislators in person. Taking this one step further, “Take Your Legislator to Work Day” visits not only allow decision makers to hear about the great work bankers do each day in their communities but see it for themselves.

Your direct involvement in hosting legislators not only assists our elected government officials in further understanding the community banking industry and the impact legislation has on our operations, but also offers an in-depth perspective into Wisconsin’s economy as well as the successes and challenges many of our communities face.

The WBA Government Relations team stands ready to assist your bank in engaging in advocacy-related events, including working with you to schedule a “Take Your Legislator to Work Day” at your bank. If you would like to host, or learn more about hosting a visit, please contact Lorenzo Cruz, vice president – government relations, or me.

Political Contributions

WBA is not concerned with “D” or “R”, but rather “B” as in the “Banking” party. Donating to WBA’s political action funds in support of pro-banking candidates is an easy and significant way to further promote WBA’s legislative agenda and bankers throughout the state.

Wisbankpac is WBA’s registered political action committee. Wisbankpac supports pro-banking candidates throughout Wisconsin by pooling individual banker contributions in order to maximize the overall impact. The Alliance of Bankers for Wisconsin (ABW) — WBA’s state conduit — allows individuals to direct contributions to the candidate(s) of their choosing.

I greatly appreciate your past support and active involvement in WBA’s various advocacy initiatives; however, as with everything else, we need your engagement to continue at an even higher level. It would be ideal if an additional six to eight “Take Your Legislator to Work Day” visits were scheduled between now and December. Furthermore, WBA has a goal of raising $300,000 in our political accounts this calendar year, which will require greater participation than what has occurred in the past. If you are interested in contributing to WBA’s political action funds — be it Wisbankpac or ABW — or learning more about how to contribute, please visit wisbank.com/Give or contact me. Together we will continue to achieve successes for our industry!

Rose Oswald PoelsBy Rose Oswald Poels

Since the enactment of the Dodd-Frank Act in 2010, WBA has assisted members in understanding and implementing countless layers of new federal regulations — some as straight forward as creating and delivering a new one-page notice, others much more complex, including TRID, mortgage servicing rules, and QM/ATR underwriting standards (and those are only the most recent of new laws).

An area of the Dodd-Frank Act that much of the industry has been anxiously awaiting is that of Section 1071. As a reminder, Section 1071 of the Dodd Frank Act amended the Equal Credit Opportunity Act (ECOA) to require that financial institutions collect and report to the Consumer Financial Protection Bureau (CFPB) certain data regarding applications for credit for women-owned businesses, minority-owned businesses, and small businesses.

Having been in this industry for over thirty years, I will say that the forthcoming business data collection and reporting regulation is of the magnitude — both in cost and in operational impact — of what bankers experienced with the implementation of other industry-changing regulations such as the Bank Secrecy Act, Reg CC, or the SAFE Act. I can recall pre-BSA procedures, and now we operate in an implemented BSA world; a time of in-branch check encoding and processing to today’s electronic presentment, centralized clearing, and near live-time processing; and of course, a time when TILA and RESPA were separate disclosures versus today’s mortgage loan application and closing procedures due to TRID rules.

The same will be true after full implementation of a final Section 1071 rule. This law, once finalized, will change how business credit applications are processed. Data will need to be collected and reported as never before. Some members experience similar types of data collection and reporting under the Home Mortgage Disclosure Act (HMDA), but even non-HMDA reporting banks may be required to comply with Section 1071 data collection and reporting.

Based upon recent agency regulatory agenda filings and court filings earlier this month, it is expected that CFPB will finalize its Section 1071 Small Business Lending Data Collection and Reporting Rule by March 2023. Rest assured, I understand the impact this rule will have on the membership. In my comment letter to CFPB regarding its Section 1071 proposal, I advocated for the collection of only those data points required under the Dodd-Frank Act, a higher exemption threshold, and for a longer implementation period to help lessen the impact of the new regulation.

Late last year, WBA prepared a toolkit to help senior management, commercial lenders, loan processors, compliance officers, and others involved with small business lending to better understand the impact of CFPB’s proposal on the bank. Those resources are still available, and I would recommend those in the areas mentioned become familiar with the general concepts of the proposal, understand what could become law, and begin considering the impact on the bank. Planning will be crucial with a regulation as impactful as what Section 1071 will be.

In addition to being vocal during the regulatory process on Section 1071, WBA has advocated for repeal of Section 1071 with our congressional delegation for the last 10 years. Although it is late in the session, I am pleased to share that Rep. Scott Fitzgerald (WI-05) introduced on July 20 the Making the CFPB Accountable to Small Business Act which would repeal Section 1071 of the Dodd-Frank Act. Rest assured, WBA will continue its strong advocacy at all levels to try and reduce this regulatory burden. In the meantime, WBA plans to create further resources once the final rule is released and will help answer questions related to the new regulation.

Current WBA Section 1071 resources may be found on the WBA Compliance Resources webpage.

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Rose Oswald PoelsBy Rose Oswald Poels

As many would know, I started my career at WBA answering compliance questions for members through WBA’s Legal Call Program and a frequently asked question has long been, “May a bank pull a credit report on a non-applicant spouse when a married Wisconsin resident applies for credit individually?” WBA’s longstanding answer has been yes. Banks have a permissible purpose under the Fair Credit Reporting Act (FCRA) to pull credit on the non-applicant spouse when an applicant is a married Wisconsin resident. Under Wisconsin’s Marital Property Act (MPA), the creditor should consider the couple a unit, taking into consideration all income and all debt of both spouses.

The Bureau of Consumer Financial Protection (CFPB) recently issued an advisory opinion regarding permissible uses of credit reports. The opinion appears to be primarily directed at consumer reporting agencies who furnish credit reports. However, given statements within the opinion regarding use of credit reports, I believe it worth a reminder about how the MPA plays a role in there being a legitimate business need for a bank to pull a credit report on a non-applicant spouse when a married Wisconsin resident applies for credit individually, as CFPB failed to take into considerations a state’s property laws when it analyzed permissible purposes under FCRA Section 604.

Under the MPA, when credit will result in an obligation that is “in the interest of marriage or the family” pursuant to sec. 766.56(1), Stats., creditors need to consider both the assets and liabilities of each spouse when evaluating an applicant spouse’s creditworthiness. By reviewing both the assets and liabilities of each spouse, the creditor can meet its obligations under s. 766.56(1) to consider “all marital property available to satisfy the obligation in the same manner that the creditor, in evaluating the creditworthiness of an unmarried credit applicant, considers the property of an unmarried credit applicant…” Credit reports are the tools most often used to determine liabilities of both spouses.

The Federal Trade Commission (FTC), the agency with authority for banks regarding FCRA prior to the Dodd-Frank Act, recognized states’ property laws under its interpretation of FCRA permissible purposes. To use a credit report, the FCRA provides that one must have a permissible purpose for the report. FCRA Section 604 sets forth the permissible purposes of credit reports. Section 604(a)(3)(A) allows a consumer reporting agency to furnish consumer reports to a person which it has a reason to believe “intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer.” Past FTC interpretation of this section has confirmed that creditors may pull a credit report on a non-applicant spouse.

In particular, FTC interpretation of FCRA Section 604(a)(3)(A) has been,

“A creditor has a permissible purpose to obtain a consumer report on an applicant’s spouse if that spouse will be permitted to use the account or will be contractually liable upon the account, or if the applicant is relying on the spouse’s income as a basis for repayment of the credit requested. In addition, a creditor may obtain a consumer report on an applicant’s spouse if (i) the state law doctrine of necessaires (which may make a consumer liable for certain debts of a spouse) applies to the transaction, (ii) the applicant resides in a community property state, (iii) the property upon which the applicant is relying as a basis for repayment of the credit requested is located in such a state, or (iv) the applicant is acting as the agent of the nonapplicant spouse.”

The requirements under the MPA and FTC’s interpretation of a permissible purpose under the FCRA were the areas of law WBA has cited as rationale why banks may use the consumer reports of both the married Wisconsin resident applicant and his/her non-applicant spouse when determined debt in connection with new credit or review of an account.

However, with CFPB having issued an advisory opinion regarding the furnishing and use of credit reports under the FCRA, members need be aware of the opinion.

In its opinion, CFPB stated that the permissible purposes listed in FCRA section 604(a)(3) are consumer specific and that a consumer reporting agency may not provide a consumer report to a user under FCRA section 604(a)(3) unless it has reason to believe that all of the consumer report information included pertains to the consumer who is the subject of the user’s request. CFPB believes section 604 analysis need be on a consumer-by-consumer basis, intending the use of information in connection with a credit transaction to be one involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer.

CFPB’s new advisory opinion could be read to not allow a credit report to be pulled on a non-applicant spouse as the non-applicant spouse is not party to the application. In writing this opinion, CFPB has failed to consider a state’s property law — such as the Wisconsin MPA — and of the legitimate business need for debt information. Separately, a creditor cannot require spouses to apply together to then obtain a credit report on both spouse as that would be a violation of Regulation B. CFPB’s focus only on federal law when writing this advisory opinion without considering state marital property laws raises a question for banks in marital/community property states, including Wisconsin banks when trying to comply with s. 766.56(1) Stats.

WBA believes banks do have a permissible purpose under state law, and therefore under FCRA section 604, to obtain a credit report of a non-applicant spouse in connection with an application involving a married Wisconsin resident, since CFPB’s advisory opinion focuses solely on the fact that FCRA permissible purposes are consumer-specific and is silent on any relevant state law.

It is clear under s. 766.56(1), Stats. that when credit will result in an obligation, that is “in the interest of marriage or the family,” creditors need to consider both the assets and liabilities of each spouse when evaluating an applicant spouse’s creditworthiness. This requirement results in a legitimate business need to identify debts of both the applicant spouse and non-applicant spouse. Furthermore, pursuant to s. 766.55(1), Stats., an obligation incurred while married is presumed to be incurred in the interest of the marriage or family, and under para. (2) the obligation is to be satisfied from all marital property and all other property of the married Wisconsin resident applicant. These MPA provisions make the non-applicant spouse part of the credit transaction and resulting obligation for which a credit report is being used thereby meeting the conditions under CFPB’s advisory opinion despite CFPB not specifically addressing marital property interests.

Due to the requirements of ss. 766.55 and 766.56, Stats., banks have a permissible purpose under FCRA section 604(a)(3) to use a consumer report of a non-applicant spouse when an applicant is a married Wisconsin resident. A bank’s current practice to pull a credit report on both spouses need not change as a result of CFPB’s advisory opinion.

While CFPB’s release is only that of an advisory opinion, and is not regulation, I want to make sure that members are aware of the opinion and its narrowness, along with WBA’s thoughts on it.