Real reforms for financial institutions left out of budget
MADISON, WI (February 4, 2015) — Governor Scott Walker’s Budget Bill seeks to improve the function and organization of state government by combining the regulation and examination of approximately 350 state financial institutions, which serve millions and millions of Wisconsin consumers and hold tens of billions of dollars in assets, with oversight of body piercing, family therapy, home inspection, mixed martial arts and cosmetology. Unfortunately, the bill is silent in areas where simple and important changes to benefit financial institutions could have been made.
“While we appreciate and applaud the Governor’s efforts to reform and improve state government operations, we hoped to see our simple recommendations for concrete improvements included in his massive proposal,” said The Wisconsin Credit Union League’s Senior Vice President of Advocacy, Tom Liebe. Liebe continued, “If his expansive bureaucratic merger is ultimately approved by the Legislature, we hope that, at a minimum, the bill will be amended to allow all the fees collected from financial institutions to be used exclusively for the benefit of those institutions.”
The top issue for many financial institutions is ensuring the fees they pay to the State be leveraged to improve their industry, instead of shifted to unrelated purposes. Ending the yearly fee transfers would put the State in a better position when it comes to recruiting and retaining quality examiners, who help ensure state financial institutions continue to operate safely while providing essential financial services to millions of consumers.
“A concern with this bill is that adding non-financial institution related functions to a much larger agency may jeopardize credit union and bank regulators’ appropriately narrow focus on ensuring today’s complex financial institutions are safe, sound and successfully serving consumers,” said The League’s Liebe. “This appears to mirror how the State of Illinois bureaucracy is arranged and operates, so I imagine some folks will need convincing that this is best model for Wisconsin,” Liebe continued.
In addition to resolving the fees issue, The League recommended the Governor use his Budget Bill to eliminate the redundant and burdensome ‘Financial Institutions Data Matching’ programs scattered across at least four different state agencies. Merging four agencies’ programs, which do exactly the same thing, is consistent with the principles of creating a more efficient government and reducing burdens on the business sector. The bill is silent in this area.
Finally, the League and a number of other stakeholders also requested the Governor include authorization for the Department of Financial Institutions to create a Centralized Agricultural Lien Filing System. While adjacent states have had these important, effective and simple systems in place for decades, Wisconsin is still operating with an antiquated, awkward and inefficient system. The Governor’s proposal does not appear to have addressed this important issue for state financial institutions either.
Credit unions are cooperative financial institutions that are owned by their members and do not have stockholders. Because they are not-for-profit, they return earnings to members via more competitive rates of return on accounts, lower interest on loans, lower fees and improved services. The REAL Solutions Scorecard, at www.theleague.coop/scorecard, explains how Wisconsin credit unions serve their communities and how they’ve saved their members more than $1 billion since 2007. Around 2.5 million Wisconsin residents belong to credit unions. Find a credit union to join by visiting www.asmarterchoice.org.