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Creating a Welcoming Space for People With Underrepresented Identities in the Banking Industry

Rose Oswald PoelsBy Rose Oswald Poels

About two years ago, the Wisconsin Bankers Association board formalized a plan to build out the association’s diversity, equity, and inclusion (DEI) efforts. Since then, a DEI Advisory Group has been established and meeting regularly to help drive WBA’s initiatives, including the development of a sample DEI policy for banks, the production of the Diverse Voices in Banking video series, the publication of DEI-related articles and resources for bankers, various education sessions at conferences and stand-alone programs, and the formation of a WBA Connect DEI Peer Group. The horrific, racially motivated shooting this past weekend in Buffalo, New York underscores the need to double down on our efforts and do more for our colleagues of color and from other underrepresented backgrounds who are acutely experiencing the effects of yet another act of violence and hatred.

The next component of WBA’s DEI plan is the formation of an Employee Resource Group (ERG) for bankers from underrepresented backgrounds. The ERG is designed to be a safe space for bankers to meet virtually for one hour approximately once per month in an open-forum discussion to share feelings, concerns, and frustrations as well as positive developments related to DEI. A moderator will lead each session, and group members are encouraged to bring up topics that they would like to talk about with one another.

ERGs provide a space for groups of people who share a common identity to voluntarily network and engage in employee-led conversation. ERGs also attract new employees and retain existing employees. WBA members have expressed a desire for WBA to organize a group to serve bankers statewide, as many member banks do not have the resources to offer this type of group on their own. The ERG is open to employees of banks of all sizes. Employees of small banks can benefit from connecting with people from backgrounds that may not be widely represented at their own bank, while employees from large banks that may already have ERGs can benefit from perspectives outside their own organization. The ERG is a place to share experiences, ask questions, and find mentorship.

Through this ERG, WBA seeks to support inclusivity at a statewide level across the banking industry. The first meeting will be held virtually from 11:00 a.m.–12:00 p.m. on June 9, 2022. This meeting will aim to provide a discussion space and explore the ways the group can serve the members going forward. The first meeting will include people from a variety of underrepresented backgrounds and gauge interest in branching into more focused ERGs.

Our organizations benefit when we bring our authentic selves to the workplace, and I am excited about the ways this ERG will help bankers from underrepresented backgrounds build high-trust relationships and thrive in their careers. I encourage bank leaders to invite their staff to sign up to participate in this opportunity by filling out the form.

Rose Oswald Poels By Rose Oswald Poels

Last week, the Federal Reserve Board (FRB), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) released a joint statement proposing changes to the Community Reinvestment Act (CRA) regulations. The joint proposal would both strengthen and modernize the regulations by expanding access to credit, investment, and basic banking services; adapt to internet and mobile banking changes; provide greater clarity and consistency with both banks and their customers; and create unique CRA evaluations requirements.

The CRA, originally enacted in 1977, encourages banks and savings associations to help meet the need of all borrowers — including low- and moderate-income individuals. In recent years, the industry has seen the agencies attempt to modernize CRA to better address new technologies and community-investment opportunities. However, those efforts left much frustration for the industry when OCC implemented its own “updated” CRA regulation in June 2020, while FDIC and FRB retained existing standards, interpretations, and regulations.

WBA advocated heavily against separate CRA regulations in meetings with the agencies and in filed comment letters. Successfully, late last year, OCC repealed its independent CRA regulation and now the agencies are once again acting together in proposing a unified CRA regulation. I am pleased to see the expansion of transparency between agencies.

The new joint proposal has the following key elements:

  • Expand access to credit, investment, and basic banking services in low- and moderate-income communities. Under the proposal, the agencies would evaluate bank performance across the varied activities they conduct and communities in which they operate so that CRA is a strong and effective tool to address inequities in access to credit. The proposal would promote community engagement and financial inclusion. It would also emphasize smaller value loans and investments that can have high impact and be more responsive to the needs of LMI communities.
  • Adapt to changes in the banking industry, including internet and mobile banking. The proposal would update CRA assessment areas to include activities associated with online and mobile banking, branchless banking, and hybrid models.
  • Provide greater clarity, consistency, and transparency. The proposal would adopt a metrics-based approach to CRA evaluations of retail lending and community development financing, which includes public benchmarks, for greater clarity and consistency. It also would clarify eligible CRA activities, such as affordable housing, that are focused on LMI, undeserved, and rural communities.
  • Tailor CRA evaluations and data collection to bank size and type. The proposal recognizes differences in bank size and business models. It provides that smaller banks would continue to be evaluated under the existing CRA regulatory framework with the option to be evaluated under aspects of the new proposed framework.
  • Maintain a unified approach. The proposal reflects a unified approach from the bank regulatory agencies and incorporates extensive feedback from stakeholders.

I highly encourage you to join WBA in commenting on this joint proposal by August 5, 2022. Please contact WBA’s Heather Mackinnon, vice president – legal, at hmackinnon@wisbank.com and Scott Birrenkott, assistant director – legal, at sbirrenkott@wisbank.com if you have any questions regarding the proposed regulation updates.

Rose Oswald PoelsBy Rose Oswald Poels

As WBA’s fiscal year concludes at the end of May, I am continually impressed with how bankers and WBA staff members alike take each challenge in stride. While disruptions of the COVID-19 pandemic have yet to fully subside, our Association has continued its focus in promoting a healthy environment for banks in Wisconsin through actively advocating, educating, and supporting members.

In March, the Association celebrated 130 years of serving Wisconsin banks. Like it was in the first meetings of the WBA, advocacy continues to be a major focal point in our mission to support the banking industry. This year, 100 bankers from across the state attended WBA’s annual Capitol Day in Madison. Additionally, 112 banks designated Advocacy Officers to coordinate regulatory, legislative, and community advocacy efforts alongside the WBA.

With your help, 10 WBA legislative priorities or WBA-influenced bills were signed into law during the 2021–22 legislative session. WBA’s government relations team has also been busy this past fiscal year fundraising and looking ahead to the 2022 elections in Wisconsin. As of this writing, Wisconsin bankers have contributed a total of $192,193 to WBA’s political action and issue advocacy funds. Be it a donation or attendance at a public hearing, I deeply appreciate your efforts in ensuring the success of our industry!

In addition to advocating on behalf of the Wisconsin banking industry, our Association prides itself on providing bankers with in-depth and up-to-date educational opportunities. WBA offered 95 training programs and events tailored to every level of the bank this fiscal year. Of these events, 4,750 bankers were in attendance to expand their expertise and network with peers. As COVID restrictions continually loosen in the state, many WBA conferences and events have returned either in person or to a hybrid setting.

Above all, WBA’s top priority for the last 130 years has been supporting its members however possible. This year alone, nearly 1,600 bankers utilized WBA’s Legal Hotline and each day, over 2,600 bankers across the state receive the Wisconsin Banker Daily, featuring recent industry and compliance-related news, straight to their inbox.

Looking ahead to WBA’s next fiscal year, in addition to our efforts advocating and educating, WBA staff will continue to update resources and provide Wisconsin banks with the best tools for insurance, services, and products. For more information on WBA’s 2021–22 fiscal year, please look for a complete, in-depth Year in Review in the upcoming June Wisconsin Banker.

As always, I thank you for your support of WBA. Your membership continues to allow us to advocate for our industry both at the state level and in D.C., educate beginning and experienced bankers, and provide resources for all areas of the bank. Invoices for the new fiscal year dues will arrive in the mail by the beginning of June. If you have any questions or concerns about your membership, please do not hesitate to contact me.

Rose Oswald PoelsBy Rose Oswald Poels

For 130 years, advocacy has been at the core of WBA’s mission and a key focus of the banking industry. While advocacy is not directly in the job description of most banking positions, bankers have long recognized that being actively engaged in all aspects of advocacy helps preserve the franchise value of banks.

I’m incredibly proud of how many bankers took time out of their busy schedules to send letters, make calls, participate in hearings in Madison, travel to Washington, D.C., attend public meetings of elected officials, and personally contribute to the industry’s political action funds throughout this last year! All of these efforts were critically important to augment WBA’s own work in achieving policy success for our industry. Recently, we mailed each member the WBA Advocacy Report which highlights the industry’s advocacy accomplishments this biennium. It was a very active session with WBA working hard on both offense and defense!

In that same mailing, each member received a copy of our Advocacy Toolkit which contains our annual fundraising request for political funds from you, your team, and your bank. With the number of banks in the state shrinking, it is more important than ever for everyone to step up and contribute to this industry effort. I recognize that the money side of advocacy is not always the most appealing; however, it is critical to make sure those who support banking are elected to office in Madison and in Washington, D.C. Our goal for this calendar year is to raise $300,000 — a feat we have not accomplished in the last four years. Ideally, we would welcome every banker contributing as even small dollar contributions help make a big difference. I personally give at least $4,000 each year, and I encourage executive management to give generously this year as well since our livelihoods depend on the success of this great industry. In 2021, 152 bankers earned the Silver Triangle award by contributing at least $500 to our advocacy efforts. I encourage new members to consider joining at the Silver Triangle level and urge existing members to double, triple, or quadruple their donation amount. Your contribution to any combination of the Wisbankpac, ABW, or the issue advocacy fund would dramatically move WBA closer to achieving its calendar year fundraising goal.

In addition to personal contributions, I encourage each bank to consider making an issue advocacy contribution. This is a corporate contribution, payable to WBA, that we use to join with our business coalition partners to create pro-business public policy messages. These dollars are also extremely helpful to achieve our advocacy goals. I welcome and encourage corporate contributions of any amount; and for those whose bank give at least $5,000, we are hosting three special outings in Kohler, June 20–21, that two individuals may attend.

Finally, the WBA advocacy team is very willing to come and speak in person to your staff and/or board of directors on our current advocacy work. I promise this is not going to only be a sales pitch for money (although we will mention political giving at the end). Our team is able to structure the presentation in a manner to which you prefer and can include talking about policy issues affecting the banking industry here in Wisconsin and in DC, as well as redistricting, key legislative races, regulatory initiatives, and other similar topics. Contact me anytime to schedule this type of presentation.

If you did not receive the Advocacy Toolkit in the mail or would like additional fundraising templates/materials to share with your staff, please let me know. Thank you for all you do to advocate for the banking industry!

Rose Oswald PoelsBy Rose Oswald Poels

Each year, bankers throughout Wisconsin go above and beyond in their mission to provide for their communities. As we near the end of Wisconsin Bankers Association’s (WBA) fiscal year on May 31, we want to be sure to recognize the efforts our member banks accomplish in pursuit of bettering the financial education and responsibility of their communities.

Alongside the Wisconsin Bankers Foundation (WBF) in its mission to empower financial decisions through education and research, I highly encourage all WBA-member bankers to track and submit their data to help WBA and WBF better understand the financial education-related activities Wisconsin banks and their bankers are involved with each year.

New this year, bankers are able to submit their presentation summaries online at wisbankfoundation.org/education/.

The two summary forms aim at highlighting the achievements of both individuals as well as the bank for their financial education presentations and activities from June 1, 2021 through May 31, 2022. These activities often include volunteer hours with Junior Achievement, Teach Children to Save presentations, and bank tours — events that many bankers take part in during the month of April as part of Power of Community Week.

The individual summary is intended to capture one event or presentation. Therefore, bankers who have or expect to engage in multiple financial education-related activities from June 1, 2021 to May 31, 2022 should expect to also submit multiple summaries. Because each summary reflects a single event, all co-presenters should be listed on the same form.

Exceptional individual efforts are recognized by WBF with either a Certificate of Recognition or Certificate of Excellence based on the number of presentations given. These awards, along with the top two banker awards, are presented each year at WBA’s LEAD360 Conference in the fall.

The bank summary form is intended to capture information related to the bank’s entire financial education initiatives. Based on the level of a bank’s total activity, member banks may earn the Excellence in Financial Education Award. This award is also presented each year to the winning banks at WBA’s LEAD360 Conference.

In addition to the Excellence in Financial Education Award, banks are strongly encouraged to apply for the prestigious Financial Education Innovation Award. This award is given to one bank each year that has financial education initiatives or programs that are very creative, reaching a wide audience. The 2021 Financial Education Innovation Award was presented to Bank Five Nine at WBA’s Bank Executives Conference in February for their efforts in creating an innovative approach to financial education. Banks may apply for this award by completing the final portion of the bank-wide presentation summary form application online.

You all do great work in the financial education space in your communities so take the time to get recognized for your outstanding work! Completing the forms this year is even easier now that they are online. You may submit forms at any time but the final deadline is July 31, 2022. I look forward to learning more about your efforts this past year and recognizing the incredible work Wisconsin bankers do each day. Please reach out to Hannah Flanders at hflanders@wisbank.com or me if you have questions regarding the completion of the two summary forms.

Individual Financial Education Summary FY 21–22

Bank-wide Financial Education Summary FY 21–22

Rose Oswald PoelsBy Rose Oswald Poels

In two separate publications, FDIC has recently identified deposit-related activities which, depending upon how banks disclose charges for such activities, may result in a heightened risk of violations of Section 5 of the FTC Act — otherwise known as unfair, deceptive, or abusive acts or practices (UDAAP).

FDIC has identified the assessment of overdraft fees for “force pay” transactions and charging multiple NSF fees for same transactions presented multiple times against insufficient funds as the deposit-related activities of concern. I have outlined both scenarios below.

Potential Issues with Assessing Overdraft Fees for “Force Pay” Transactions  

In a quarterly newsletter issued by its Dallas Region, FDIC outlined potential issues with assessing overdraft fees for “force pay” transactions in certain situations. There may be times when a bank authorizes an ATM or one-time POS debit card transaction based on sufficient funds in a consumer’s account at the time of authorization; however, at settlement, the account has insufficient funds to cover the transaction. Due to a bank’s contract with its payment network providers, the bank is required to pay these transactions even though the customer does not have sufficient funds in their account at settlement. FDIC refers to this type of transaction as a “force pay” transaction.

As outlined by FDIC, some banks have a policy and practice of declining to authorize and pay any ATM or one-time POS debit card transactions when a customer has insufficient funds available in the account to cover the transaction. FDIC refers to these banks as “no pay” banks. Other banks may offer an overdraft program, but some consumers do not qualify, have not yet met all eligibility requirements, or do not opt-in to participate.

FDIC has identified that some “no pay” banks solicit a consumer’s authorization or opt-in, using an overdraft opt-in form similar to the Regulation E model form A-9, to assess overdraft fees for ATM and one-time POS debit card transactions in “force pay” transactions.

FDIC stated it believes the use of the A-9 model form for this purpose may be considered deceptive, as a reasonable consumer may be misled into believing that the bank would generally pay all overdrafts caused by ATM and one-time POS debit card transactions. Additionally, the A-9 model form does not disclose that force pay transactions would be paid regardless of whether the consumer opts in. FDIC also identified how force pay transactions could lead to concerns at banks that offer overdraft programs, although those are more nuanced transactions and are not discussed here.

FDIC offered the following suggestions to mitigate risks:

  • Maintain policies and procedures to ensure compliance with applicable regulatory requirements under Regulation E;

  • Ensure that disclosures provided to consumers are clear and conspicuous, accurately reflect bank practices, and do not suggest that the bank offers an overdraft program when it does not;

  • Confirm a customer’s opt-in is deactivated in the deposit processing platform when he/she does not have access to the overdraft program;

  • Verify a customer’s opt-in is deactivated in the deposit processing platform when he/she revokes his/her opt-in election or when the bank terminates the customer’s access to the overdraft program; and

  • Notify customers as soon as possible if the bank independently terminates their access to the overdraft program.

Potential Issues with Re-Presentment of Unpaid Transactions 

In a separate publication, Consumer Compliance Supervisory Highlights, FDIC outlined potential issues with charging multiple NSF fees for re-presentment of unpaid transactions. FDIC found disclosing that one NSF fee would be charged “per item” or “per transaction” is not clearly defined and did not explain that the same transaction might result in multiple NSF fees if re-presented. FDIC stated it believes there is risk of unfairness if multiple fees are assessed for the same transaction in a short period of time without sufficient notice or opportunity for consumers to bring their account to a positive balance.

FDIC also addressed that re-presented transactions have been the subject of recent class action lawsuits involving banks, including FDIC-supervised institutions. The lawsuits typically allege breach of contract due to the omission of important information about when the fee would be assessed.

FDIC again offered suggestions to mitigate risks, including:

  • Eliminating NSF fees

  • Declining to charge more than one NSF fee for the same transaction, regardless of whether the item is represented

  • Disclosing the amount of NSF fees and how such fees will be imposed, including:

  • Information on whether multiple fees may be assessed in connection with a single transaction;

  • The frequency with which such fees can be assessed; and

  • The maximum number of fees that can be assessed in connection with a single transaction.

  • Reviewing customer notification practices related to NSF transactions and the timing of fees to provide the customer with an ability to avoid multiple fees for re-presented items

  • Conducting a comprehensive review of policies, practices, and disclosures related to re-presentments to ensure the manner in which NSF fees are charged is communicated clearly and consistently

  • Working with service providers to retain comprehensive records so that re-presented items can be identified

Conclusion 

I would not recommend the use of Regulation E model form A-9 as a means to obtain a consumers’ authorization or opt-in for a force pay transaction. There is not a model form for such transactions and banks need to review how best to disclose their practice for force pay transactions with their counsel. For banks offering overdraft programs, banks need to be careful how it treats a consumer’s opt-in if the opt-in election was provided but access to the overdraft protection coverage has not yet begun and when the bank terminates access to the overdraft program.

I would also recommend banks review their deposit account disclosures, statement of fees, and account rules documents to further determine how to accurately disclose an NSF fee on a re-presented item, if applicable.

If using FIPCO forms, the WBA 384 Deposit Account Rules document was revised in March 2021 to further clarify that a financial institution may charge a fee each time the same check, transfer request, or withdrawal request is returned unpaid. Language was also added to state that the depositor should review the schedule of fees for a listing and amount of such fees. Additionally, the revised form instruction also set forth that if the user intends to charge a fee each time the same check, transfer request, or withdrawal request is returned unpaid, it is important that the schedule of fees explains the financial institution’s intent to charge a fee each time rather than one fee regardless of the number of times the check, transfer request, or withdrawal request is returned unpaid.

If scrutinized by a regulator for charging multiple NSF fees for a re-presented item, I recommend the bank explain to the regulator the actual presentment process and any inability to identify items resubmitted by a merchant for payment.

Rose Oswald PoelsBy Rose Oswald Poels

I have learned of recent activity by a California law firm contacting Wisconsin banks alleging the bank’s website is in violation of the California Unruh Act. The law firm, Pacific Trial Attorneys, engaged in similar activity in Wisconsin back in 2018.

The letter alleges the firm has been retained by a blind consumer to file suit against the bank, claiming the bank’s website is not fully accessible to blind users. The letter cites a California court case which held “disability access laws apply to commercial websites, including online-only businesses.”

If your bank receives such a letter, it is important to contact your legal counsel immediately. This law firm has a history of sending these letters to banks and other businesses and then promptly filing lawsuits against the bank/business, as is threatened in the letter. I suggest you not treat these letters as a “fishing expedition” but, rather, take them very seriously and work to respond with the advice of your counsel, promptly.

The letter references a violation of California law. Bank’s counsel need be in review of bank’s products and activities to identify whether the California law is applicable to the bank. While in review of bank’s website, I recommend you also consider whether bank’s website is in violation of the Web Content Accessibility Guidelines (Guidelines) as the California claim could potentially change from a violation of California law to a claim regarding violation of the Americans with Disabilities Act (ADA).

I also suggest you work with your website vendor to be sure your bank’s website complies with any relevant law, including the Guidelines and, if not, how quickly it can be changed to comply.

I further suggest that if it is not already in your legal contract with your website vendor, you should add provisions to your contract to put the burden of ensuring your bank’s compliance with the Guidelines on the vendor. And, if any legal demand or litigation is initiated against the bank claiming a violation of ADA or the Guidelines, that the vendor is wholly responsible.

I understand that receiving these kinds of letters from plaintiffs’ law firms is not only frustrating but can be a significant distraction from normal operations. However, as more commerce is done electronically including through bank websites, it is important to not lose sight of relevant law, including ADA-related guidelines, to the same degree you follow applicable requirements for physical access to your bank. There is not going to be any legislative change that would wholly exempt bank websites from any compliance with guidelines around providing access to the public including persons with disabilities. Consequently, it is very important for you to promptly respond to any such letter you receive.

Both the ICBA and ABA have materials on their respective websites available for members on the topic of ADA digital accessibility. WBA first wrote on the topic of ADA digital accessibility in the January 2017 issue of Wisconsin Banker.

Finally, WBA is collecting letters received by its member banks. If you have received a letter, we would appreciate your sending a copy to WBA’s Scott Birrenkott at sbirrenkott@wisbank.com. If you have any questions or would like to discuss this further, please contact Scott, Heather MacKinnon, or me.

Rose Oswald PoelsBy Rose Oswald Poels

The Wisconsin Bankers Association (WBA) offers many opportunities for bankers around the state to get involved and shape the future of their industry. From serving as advocacy officers and taking part in Power of Community Week service activities to joining one of twelve WBA committees or sections — there are options for every member of your team.

WBA will be accepting applications for the 2022–23 committees and sections for a few more days! Ranging from marketing, human resources, and mortgage lending to financial crimes and government relations, WBA offers committees that not only tie into your bankers’ specialties but offer the chance to explore their interests as well.

As members of WBA committees, bankers directly impact what legislation WBA staff lobby for and what educational programs, trainings, and conferences are offered to the membership. Your efforts in diversifying our knowledge and ideas not only help WBA staff better understand your needs but allow us to provide WBA members with information, resources, and events that are relevant to them.

Along with the benefit engaged bankers provide the banking industry, WBA committees offer growth and leadership opportunities, peer networking, and special discounts on select educational programs.

WBA is your association. Your expertise and ideas directly aid us in making the greatest impact on your association and industry. I encourage you to volunteer for a WBA committee by March 14 to get involved with WBA and your professional peers for the benefit of our entire industry!

Apply Today!

Rose Oswald PoelsBy Rose Oswald Poels

*March 7, 2022 update: Gov. Tony Evers has launched Wisconsin Help for Homeowners Program.

I wish to remind Wisconsin’s bankers of the availability of the Wisconsin Help for Homeowners (WHH) Homeowner Assistance Fund (HAF) Program as another tool to assist homeowners struggling with a financial hardship as of January 21, 2020, due to the coronavirus. Program funding is available from the Treasury through the Homeowners Assistance Fund established under the American Rescue Plan Act of 2021.

The State of Wisconsin, through its WHH partners, will accept and process applications from homeowners within the state of Wisconsin. Homeowner income eligibility requirements are limited to households whose incomes do not exceed 100% of the area median income or 150% of the area median income if the homeowner meets the definition of Socially Disadvantaged under 24 CFR 124.103. Eligible expenses are those that were due on or after January 21, 2020, as described in the Wisconsin Homeowner Assistance Fund and Need Assessment Plan. The plan has recently been approved by the Treasury. The state has implemented the WHH HAF, and applicants can now apply. Funds are limited to $40,000 per applicant.

The State of Wisconsin, through its WHH partners, will be using the Common Data file (CDF) to share borrower information with loan servicers. If unable to utilize the CDF another mutually agreeable format will be used. A borrower general release and information sharing agreement is also required to be executed. All payments to servicers on behalf of borrowers will be disbursed using ACH.

If a bank is its own servicer, the bank could execute a collaboration agreement, and other required documents under the WHH HAF program, and work directly with WHH partners to process WHH HAF program payments on behalf of their borrowers. If a third-party is the servicer, the bank should alert its third-party servicers of Wisconsin’s program so that the servicer can execute the required documents in preparation for assisting affected borrowers.

To participate, several documents need be executed by servicer or borrower, including: a Collaboration Agreement, WHH Contact Information Form, WHH Borrower Consent Form, DOA-6460 New Supplier Form, DOA-6456 Authorization for Electronic Deposit Form, and a W-9 Request for Taxpayer Identification Number (TIN) Certification.

Upon receipt of the above documents, the Collaboration Agreement will be signed electronically by the state’s identified contact and a fully executed copy of the agreement shall be sent to the servicer. Program documents, in addition to those linked above, need be obtained from Wisconsin Department of Administration’s Tamra Fabian at tamra.fabian@wisconsin.gov. Fabian is leading the intake of the Collaboration Agreements.

More details regarding Wisconsin’s Homeowner Assistance Fund Program, may be found at: homeownerhelp.wi.gov.