BankWise January 10, 2019

“Old ways of doing things must be updated. New solutions must be found for new problems. We must continue to aim higher, reach further, and build brighter futures for the people of our state.”
Timothy Walz upon his inauguration as Minnesota’s 41st Governor on Jan. 7.
 
Look for Capitol Comments, ICBM’s weekly legislative update, on Jan. 15.
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Gov. Walz and Minnesota legislature kickoff 2019 session

Yesterday was the first full day of the 91st legislative session. Minnesota is the only state with a split legislature – Democrats control the House and Republicans control the Senate. The house also has 39 new or freshman members (two have served before).

House DFL leaders  laid out the first 10 bills they intend to pursue in a news conference yesterday . DFL leaders propose measures meant to improve early childhood education, provide more affordable health care and curb gun violence. 
 
Senate republican leaders will focus on tax reform, growing the economy, healthcare investment, childcare accessibility, and investing in infrastructure.
 
At ICBM, we’re gearing up for a session full of education and engagement with our lawmakers on issues important to our members. “Advocacy is at the core of our mission,” said ICBM President/CEO Jim Amundson. “ICBM has already begun engaging the new Department of Commerce commissioner, and legislative chairs. We are their resource on issues affecting community banks in the state, and we’re making sure that ICBM is top of mind.”
190050 ICBM Day at the Capitol 2
Lawmakers want to meet you!
ICBM’s Day at the Capitol makes it easy for you to meet them.
We’ll set up the transportation and get you up to speed on key issues.

Former state senator named commerce commissioner

Steve Kelley, a former DFL state senator, was named to lead the Commerce Department by Gov. Walz. Kelley served in the Minnesota Senate from 1997 to 2006 and in the Minnesota House of Representatives from 1993 to 1996, serving on committees dealing with energy and telecommunications in both chambers.
 
What is Kelley’s background? What issues does he want to focus on? Find out. 
 

National News:

  • Wells Fargo, the San Francisco banking giant, will pay $575 million to settle claims made by all 50 states and the District of Columbia related to its fake-account scandal, as well as claims it improperly referred and charged customers for a number of financial products. It has racked up more than $2 billion in penalties over issues discovered across most of its business lines in the past two years.
 
  • Most banks with less than $3 billion in assets will get a break from seeing their examiners. Federal banking agencies finalized a rule that extends the exam cycle to 18 months from 12 for onsite exams.
 
  • Massachusetts Sen. Elizabeth Warren is firming up her 2020 presidential candidacy. A Democratic driving force behind creation of the CFPB, she announced last week she was forming an exploratory committee for a potential campaign. Highly influential on financial services issues, Warren was a key player in the addition of two planks to the Democratic party platform which some in the banking industry might find distasteful: postal banking and “an updated and modernized version of Glass-Steagall.”
 

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February 21, 2019

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Agriculture: The art of pricing custom farm work

While we’re still more than a month away from the release of the Iowa Farm Custom Rate Survey, the widely-accepted source farmers use to set their custom rates, the time for figuring rates for work done in 2018 is upon us. Looking at past rates for custom farming practices, the trend shows rates have held steady or declined only slightly, even though fuel costs have ticked higher.

 Refer to the 2018 Custom Rate Survey for a refresher on suggested fees for specific services. The University of Minnesota, meanwhile, offers good resources on the cost of operating farm machinery for those in need of figuring the hard costs that factor into setting custom rates.

Also, due to low commodity prices this year, a good deal of grain is being stored on the farm. A friendly reminder to farmers about the importance of checking on-farm storage to ensure bin temperatures remain stable might be well-advised. Grain spoilage is no way to end (or start) the year. 

Agriculture: Expansion of Farm Credit System not needed in Minnesota

The American Banker shared an opinion that diminished access to capital in rural areas could be rectified by something called “FCS banking.” The idea is for the federal government to broaden existing farm credit infrastructure to provide checking and savings accounts, and loans, to individuals and businesses who live in rural areas but who are not necessarily engaged in agricultural endeavors. The argument is predicated on the decrease in the number of rural bank offices nationally. We couldn’t disagree more
 
Minnesota’s 87 counties are well-served by more than 290 community banks, which operate 1,010 bank offices. Furthermore, our banks need a level playing field in order to better serve customers. That means less competition from the GSEs and other tax-advantaged entities. The infrastructure to serve rural communities is already in place: independent community bankers are available throughout Minnesota ready and willing to serve their communities.

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