Entrepreneurs create banking niche

Will 2022 be the year of the entrepreneur? The Wall Street Journal recently noted that the number of self-employed workers has risen by 500,000 since spring 2020, to about 9.44 million, a 6 percent increase, and 4.54 million new businesses received federal tax ID numbers in the first 10 months of 2021, up 56 percent from the previous year. Some banks will be able to affirm the rise of entrepreneurship by delivering products and services specifically tailored to this unique customer group. [Continue]

Climate change beckons bankers

May 1, 2008, was the first time I ever heard a speech on climate change in the context of a banking meeting. The annual “Day with the Superintendent” was taking place in West Des Moines, and former Iowa Governor Tom Vilsack opened a 45-minute speech by declaring “climate change is real.” I think the speech caught a lot of people off guard, as evidenced by the tepid audience applause at the conclusion of his remarks. In 13 years, the climate change discussion has moved to the center of the policymaking agenda. [Continue]

Protecting against elder financial abuse response

A year ago in this space, I wrote about an elderly woman who was scammed out of thousands of dollars when a phony lawyer talked her into withdrawing money from her bank account and sending it to him. Financial scams aimed at older Americans are a serious problem. The good news is many banks are training their people to watch for elder abuse and take steps to prevent it. [Continue]

EWA is a fintech opportunity

Earned wage access is the future of payroll, and community banks should be the ones making it available to companies and their employees. EWA is a service employers offer with their financial institution and payroll processor that makes it possible for employees to collect their pay whenever they want. Forget about the monthly, biweekly or weekly paycheck. With EWA, an employee can receive by direct deposit the money they have earned up to that moment. [Continue]

Building a strategic roadmap

A lot of banks take time during October for strategic planning. If I were a banker, these are some of the things I would put on my strategic planning meeting agenda. Should we start a virtual bank? A long-established bank might not have much opportunity to grow its business footprint, so rather than defining the market by geography, maybe we define it by affinity and reach out to new customers digitally. [Continue]

A hat tip to the family-owned bank

While it is difficult to nail down exact numbers, it is safe to say that the number of banks owned by one or two families is declining. The family-owned bank is a venerable niche of the community bank arena. Family-owned institutions experience pressures other banks avoid. As the family group grows with generations, fewer of the shareholders retain direct bank involvement. More of the shareholders in these families see their shares as solely an investment. As they weigh the value of their shares against other investment options, they may press the other members of the family to sell.  [Continue]

Bankers may find project to identify racist deeds intriguing

U.S. Sen. Tina Smith (D-Minn.) is seeking support for a bill she wrote which would provide grant money to organizations that help identify property deeds containing racist covenants. Some deeds written in the early 20th century contained provisions prohibiting the sale of land to Black people and other minorities. More research needs to be done to determine the impact of decades-old racist covenants on today’s patterns of homeownership. Perhaps Sen. Smith’s legislation could result in additional understanding. [Continue]

Three things lawmakers should consider for tax laws

When a new party comes into the White House, with control of Congress, it raises or lowers federal taxes according to its priorities. President Biden has laid out ambitious spending plans and expects to pay for a portion of it with increased tax revenues. Income taxes and capital gains taxes are obvious targets, although the President has pledged not to raise income taxes for people earning less than $400,000 per year.  [Continue]

Change is real

Fourteen months after the coronavirus paralyzed the country, it seems we are returning to pre-pandemic normalcy. Most of the people I talk to are looking forward to a summer when we can meet in person again, attend live events, and socialize without fear. But what is “normal” and will we ever be able to get back to the way things were? Some of the changes of the last year do not seem to be retractable. Consider: Customers, employees and cash. [Continue]