First woman to head bankers association sees upward path for state banks
7/6/2011

Rose Oswald Poels, the new president and CEO of the Wisconsin Bankers Association, has an affinity for financial institutions dating back more than two decades.

During summer breaks while in college, Poels – the first woman to head the 119-year-old WBA – worked for a bank. For the year before Poels headed for law school at UW-Madison, she worked for another financial institution. And while in law school, she interned with the WBA.

Then, upon graduation, she became the association’s first full-time, in-house attorney.

“I guess I’ve always been interested in the business side of the (banking) industry,” said Poels, who succeeds Kurt Bauer, now head of Wisconsin Manufacturers & Commerce.

Poels said she plans no major changes at the WBA. “It’s a strong association,” she said. “I want to continue the strong tradition we’ve had of providing good quality products, service, education and information for our members.”

Poels said 98 percent of the state’s 272 banks belong to the WBA. “They don’t have to belong, so they choose to write a check to us every year,” she said. “We want to continue to provide strong value to them so they keep writing those checks out.”

Poels said she believes the state’s economy is slowly beginning to move in a positive direction. “I’m certainly not an economist, but our unemployment rate is slowly going down, which is a positive sign,” said Poels, who downplayed the chances of a double-dip recession. “Manufacturing also has seen some slight upticks, so I am optimistic about the future of the economy here.”

Likewise, she said Wisconsin’s banks are on an upward path. First quarter data that came out in May showed that seven out of eight Badger State banks are now profitable, she said. That’s up from the prior quarter when only four of five were profitable.

“We aren’t seeing huge strides in terms of recovery and strong profitability here, but obviously if seven out of eight banks are profitable, that’s a pretty good percentage of financial institutions,” she said. “I expect to see that trend to continue, meaning slow but steady progress toward a full recovery.”

Poels said she believes the state budget recently signed by Gov. Scott Walker will help the state’s economy. And she praised the creation of the new Wisconsin Economic Development Corp., which replaces the old Commerce Department.

Similarly, she lauded efforts by Walker to pare down the carryover deficit.

“We are certainly glad that’s being addressed and hope that it will have huge effects to improve the state’s economy,” she said.

Walker also left intact, despite calls for a veto, a Joint Finance Committee provision that permits direct conversion of a member-owned credit union into a stockholder-owned bank.

The Wisconsin Credit Union League says the provision makes it easier for Wisconsin’s 2.2 million credit union members to be stripped of their equity in the cooperative financial institutions they own.

“We sincerely hoped Governor Walker would have heeded the recommendation of nearly 1,000 credit union advocates, dozens of cooperative businesses and the credit unions’ trade association, all of whom requested a veto,” said League President and CEO Brett A. Thompson. “Controversial and complex financial institution chartering policy clearly does not belong in a bill related to the state’s finances.”

Without comment directly on that provision, Poels said the rivalry between banks and credits continues to generate heat.

“The banking industry is concerned that credit unions, certainly the larger institutions, offer services and types of products that are virtually no different than a financial institution, yet they pay no state or federal income taxes," she said.

And they don't have the same regulatory burdens that banks have, she argued.

“That dichotomy between the very large credit unions and financial institutions has always been a source of frustration and continues to exist today,” she said.

On another matter, Poels said she's pleased state legislation to raise $400 million in venture capital funds to help start-ups was being sent back to the drawing board. She said her association was concerned that one portion of the proposal gave insurance companies too many tax breaks.

“Venture capital is a really niche market… and can be very risky,” she said. “Certainly as whole, I believe venture capital is a component to the overall economic climate and complements the role that financial institutions play.”

On the federal level, Poels said her group is concerned that the Dodd-Frank Act, passed in the aftermath of the national credit meltdown, is an over-reaction to the crisis and will impose huge compliance burdens on small banks.

“The law itself was just under 2,400 pages and the amount of regulations when all is said and done will be over 5,000 pages,” she said. “For smaller institutions, the cost of compliance is nothing but an expense line in their budget and produces no revenue to offset that cost.

“They took a sledge hammer to get at a mosquito,” she said.

Listen to the interview here.

By Brian Clark
For WisBusiness.com



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