LSB's Day on the Hill
On Wednesday, February 26, 2020, twenty-two Lincoln Savings Bank employees descended upon the Iowa State Capitol, determined to move the needle on key issues today’s community banks face. Starting the day in the House chamber, the Lincoln Savings Bank team got to see where all the action takes place, while capturing a photo of the group alongside Grinnell Representative David Maxwell. Enraptured by the ornate building, and intricate details, LSB employees took in their appreciation for such a beautiful space, holding so much potential for change.
After climbing the steep ornamental stairs to the third floor, the group from the Cedar Valley was able to meet with Speaker of the House Pat Grassley and discuss the frontline issues that are hindering bank activities here in Iowa.
- ISSUE #1: Create an equitable tax system that is fair for all financial institutions.
- ISSUE #2: Update to electronic filing system for buyers of ag products.
Erik Skovgard, Lincoln Savings Bank President & CEO, shared how credit unions are monopolizing small towns and taking deposits from rural communities to reinvest and grow larger metro areas. In contrast, community banks, like Lincoln Savings Bank, curate deposits, and keep those funds local, reinvesting back into the community they serve. With the local and state taxes the bank pays, area municipalities have additional tax revenue to repair roads, fund schools, and facilitate a variety of other necessary projects. However, some of the largest credit unions in the state generate a net income of more than $50 million each, income tax free.
Additionally, Dana Uhlenhopp, Lincoln Savings Bank’s Chief Banking Officer, shared how the current ag filing system is an outdated paper centric communication method, that isn’t holding up to today’s digital standards. The bank is unable to get confirmation of receipt from these paper mailings, and often has to repeat steps, and re-confirm updates since there is no digital database present. In a world of drone technology and innovative agricultural science, Iowa needs to continue to develop with the needs of its people and upgrade this 1985 filing system.
Speaker Grassley listened to the group’s feedback and shared some initiatives he’s currently working toward in our rural communities. While Iowa’s metro areas continue to grow and expand, there is a governmental push to support Iowa’s smaller communities and facilitate their needs to grow and prosper.
A second group from the Des Moines area met with Senate President Charles Schneider, covering the same topics around credit unions and the regulations which surround them. Mike Olson, Lincoln Savings Bank Commercial Lender, expressed concern about a recent large credit union’s attempt to purchase tax-paying banks in Iowa. This transaction represents an unfunded and potentially unlimited liability to the State of Iowa as a whole. Allowing such a change would effectively eliminate a substantial tax base paid by the bank and replace it with a tax subsidy to the credit union in question, which is not required to pay income tax.
Following a brief lunch, the Lincoln Savings Bank team gathered in the Governor Kim Reynold’s conference room to share input and insights around our two key issues in addition to the work we’re currently doing with our various government lending programs. The Governor conversed and listened to our concerns while sharing some of the initiatives her administration is currently working on.
Ryan Collins, Lincoln Savings Bank Commercial Lender in Waterloo, showcased the bank’s initiatives in government lending for our rural areas. Lincoln Savings Bank offers USDA and SBA lending specifically tailored to the needs of municipalities and growing town governments. These unique loan programs enable towns and communities to grow, creating new public works systems, town infrastructure, and more.
Mike Olson shared a credit union flier soliciting deposits from rural areas to the Des Moines community. He highlighted his viewpoint that credit unions continue to lure in rural deposits through high interest accounts. Then, using their tax-exempt advantage, effectively decrease the tax revenue of the towns which they are targeting. It is actions such as these that illustrate just how far credit unions have stepped outside of their intended lines and are causing detrimental harm to the communities they are attempting to engage.
As our team gathered toward the end of the day, filled with inspiration and hope for the future, we all expressed our sincere gratitude for the day. Together we shared thanks for representatives who are willing to listen, thanks for a system where issues can be addressed, and thanks for a company and management team that encourage us to make our voices heard.
Our day on the Hill was filled with history lessons, architectural amazement, gripping conversations, and a sense of comradery that united us all together. If you’re looking to make a change, or help your state grow for the better, reach out to your representatives, we assure you, it’s worth the effort.
Lincoln Savings Bank. Member FDIC.
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