THU AM News: Wisconsin banks going into 2025 with mix of hope and hesitation, report shows; Federal Reserve Bank of Chicago CEO offers insights during WBA event

— Wisconsin banks are going into 2025 with a “mixture of hope and hesitation,” as optimism about the policies of the incoming Trump administration meet uncertainty and economic headwinds. 

That’s according to Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association. The group yesterday released its annual Wisconsin Economic Report, which compiles a series of sector outlooks from leaders of key industries within the state. 

In her overview, Oswald Poels said bankers in Wisconsin will be “closely watching” how Donald Trump in his second term may bring “much-needed regulatory relief” to the financial sector. They’re looking for a pause on new federal regulations being introduced, she said, along with hoping that “overly burdensome” regulations will be pared back. 

As an example, she points to new Section 1071 requirements from the Consumer Financial Protection Bureau, which are meant to collect more data on small business loans. Oswald Poels says they’re being criticized by banks for creating an “excessive” administrative burden for them and their small business customers. 

“The requirements go far beyond the original intent of the DoddFrank Act and could negatively impact small businesses by making access to credit more complicated and costly,” she said in the report. 

At the same time, bankers are feeling cautious about the economic landscape writ large, Oswald Poels said. She wrote the “path to economic recovery is still uncertain and a significant rebound may take longer than expected.” 

The effects of inflation were a central topic in several of the sector overviews in the report.

Bradley Uken, the Wisconsin Farm Bureau’s chief administrative officer, notes the ag industry has been operating under an extension of the “outdated” 2018 Farm Bill. 

“While provisions in the bill have allowed some modest adjustments to account for market changes, bill authors at the time had no way to anticipate the impacts of a global pandemic, the highest inflation in forty years, or major geopolitical developments hitting prices for the products farmers buy and sell,” he wrote. 

He calls for a new Farm Bill to be signed into law, noting farm safety net programs and other standards “must be updated” to work as intended. 

Meanwhile, Wisconsin Grocers Association President and CEO Mike Semmann says the state’s grocery industry will continue to face “razor-thin margins” and stiff competition this year as inflation remains top-of-mind for consumers. 

“Since the inflationary peak, food price inflation remains on a solid path and prices on staple items this past holiday season experienced areas of disinflation,” he wrote. “Overall, inflationary pressures and the resulting increase in the cost of goods and services will likely persist, placing continued financial burdens on American households.” 

Another overview from Wisconsin Technology Council President Tom Still touts the resilience of Wisconsin’s economy, highlighting some high-profile projects and trends in venture capital investing. 

Eric Borgerding, outgoing president and CEO of the Wisconsin Hospital Association, addresses the “unprecedented financial pressure” facing health care providers as well as demographic trends driving higher demand for care. 

And Wisconsin Realtors Association President and CEO Tom Larson and Construction Business Group Executive Director Robb Kahl weigh in on their interconnected sectors. Topics explored in these overviews include an increase in home sales, unmet demand for housing, opportunities presented by infrastructure projects, workforce challenges and much more. 

Plus, Wisconsin Manufacturers & Commerce President and CEO Kurt Bauer explores the potential impacts of the next Trump term on a variety of topics, ranging from taxes, tariffs and energy to border security, mining and the regulatory environment. 

See the full report here

— The head of the Federal Reserve Bank of Chicago says he’s worried about higher levels of loan delinquency as efforts to reach 2% inflation continue. 

Austan Goolsbee, the bank’s president and CEO, spoke yesterday during the Wisconsin Bankers Association’s online 2025 Midwest Economic Forecast Forum. He said delinquencies on auto loans, credit cards and more have been on the rise, noting such a pattern “has historically been a bad sign” for the economy’s trajectory. 

“This business cycle that we just went through looks nothing like previous business cycles,” Goolsbee said. “So we have been trying to figure out what to make of it. That said, now with the delinquencies … the level is pretty high. That is, in the full portfolio of data, that area of the house is of some concern to me.” 

The WBA’s latest release covering federal banking figures from the third quarter of 2024 found past-due loans had increased 19.3% year-over-year and 6.55% over the quarter. The group says inflation and the high cost of living is impacting borrowers, and the level of past due loans was above recessionary levels. 

Goolsbee discussed the Fed’s efforts to bring down inflation, noting it fell “dramatically” over the last year and a half “in an almost unprecedented way” without triggering a recession. The latest Consumer Price Index report shows inflation was 2.9% in December. 

He explained that cutting the inflation rate typically requires a large decrease in unemployment, but that didn’t occur in this case. 

“I still see continued progress,” he said. “It’s important to take the long view on inflation … so any one month, take with a grain of salt. Multiple months, take as being a trend. And the trend continues to be improvement in inflation.” 

He added: “I’m still optimistic for 2025 that we can continue growing and have a soft landing.” 

Goolsbee also noted an uptick in business confidence since the presidential election coupled with greater uncertainty around geopolitics, fiscal policy and overall economic conditions. But he cautioned against trying to assess the impact of individual policies in a vacuum. 

“What will matter is the impact of policies taken as a whole … you can’t really answer the question of what would be the impact of a tax cut, unless you are also asking what’s going to happen on the spending side,” he said. 

— State officials have announced $10 million in grants for five harbor projects, aimed at fortifying supply chains while driving coastal economic development. 

The funding from the Harbor Assistance Program is going toward harbor maintenance and construction projects in La Crosse, La Pointe, Marinette, Green Bay and Manitowoc, according to yesterday’s release from Gov. Tony Evers and the state Department of Transportation. 

“As billions of dollars of cargo move through our ports each year, maintaining and improving these critical parts of our state’s infrastructure is exceedingly important,” Evers said in a statement. 

See project details in the release

— As Wisconsin youth face mental health challenges linked to drug and alcohol abuse, economic stressors, social media and more, experts say more efforts are needed to address these factors. 

Panelists weighed in on these challenges yesterday during a WisPolitics + WisBusiness Health Care Report virtual luncheon, which follows the recent release of the latest annual report from the state Office of Children’s Mental Health. The office highlights concerns around anxiety, depression, self-harm and suicidal thoughts among kids in Wisconsin — all of which are on the rise. 

Several of the speakers underlined the role of near-constant technology use, highlighting social media in particular, as it enables cyberbullying as well as exposure to lifestyles that aren’t healthy or attainable. Debbie Patz, vice president of Bellin Psychiatric Center at Emplify Health, says adolescents are now “expected to grow up sooner,” noting the increased emphasis on career readiness at an earlier age. 

Maureen Busalacchi, director of the Division of Alcohol Policy Prevention and Research at the Medical College of Wisconsin, argued “there’s a lot more that we need to do” to create a better environment for kids. She also runs the Wisconsin Alcohol Policy Project. 

“I know there’s challenges in terms of the amount of advertising that kids are seeing, and sort of the lifestyle that is kind of put out there a lot of times on social media … you know, glorifying alcohol and drug use and those kinds of things are not helpful for our kids,” she said. 

But Erich Pfeifer, president and CEO of Marine Travelift in Sturgeon Bay, noted “it’s not all digital and social media,” emphasizing the importance of kids’ basic needs being met. Pfeifer is on the corporate board for the Boys & Girls Club of the Bay & Lakes Region. 

“That’s also a really critical piece, you know, with making sure youth have good meals, a positive environment,” he said. “And with inflation and everything getting more expensive, parents having to work harder, more hours, multiple jobs, that’s all part of it.” 

The discussion touched on the impacts of the COVID-19 pandemic, which has been linked to higher rates of anxiety and depression among U.S. youth. Mary Pfeiffer, the former Neenah Joint School District superintendent and a supporter of efforts by Bridge & Build Wisconsin, said many kids actually “thrived” during this period as they spent time with structured, caring families. Bridge & Build is staging a March 17 youth summit at Lambeau Field to tackle the issue.

“But there are also … young children and people in general affected by spending time alone, or in a chaotic and sometimes abusive and [neglectful] family,” she said. Pfeiffer added “if basic needs are met, people can get through a lot of things. And if they’re not met, the most vulnerable are really going to be struggling.” 

In Wisconsin, all of these trends are playing out within a culture of widespread alcohol consumption. Busalacchi said youth in the state are more comfortable with binge drinking than those living elsewhere. While overall rates of underage drinking have dropped, she said kids’ perceptions about alcohol and drug use can be a major driver for related mental health challenges. 

She noted studies have found if kids try alcohol for the first time before age 12, their lifetime alcohol dependence rate is 41%. When that rises to age 18, that percentage drops to 17%. To reduce the rates of alcohol, tobacco and drug addiction, “we really have to pay attention” to how often kids are using these substances, she said. 

She also raised the issue of retailers selling alcohol to underage customers, advocating for more alcohol age compliance checks and noting the importance of how communities deal with underage drinking. 

“Between 9-10% of our sales are to youth in our state and across the country, so we do have an issue with retailers selling to kids, and that sends a message,” she said, adding “it’s really important that we really think about that locally as well as the state.” 

Meanwhile, Patz said a recent legislative change is already making a difference in how care providers can help young people facing a mental health crisis. She noted a Wisconsin law signed in April allows children covered by Medicaid to be hospitalized in freestanding psychiatric hospitals when needed. 

“Prior to that, that was not a reimbursable service, so that is a huge change,” she said. “And we need to continue to look at where there are limitations for our children, for our youth to receive mental health services, and we need to make sure they are reimbursable.” 

Watch the video

— State health officials have launched an online campaign to educate Wisconsinites about the health dangers of tobacco products that contain menthol. 

The state Department of Health Services yesterday announced the campaign, highlighting how targeted marketing impacts Black communities. The agency notes menthol tobacco advertising has been “disproportionately promoted” to communities of color, as menthol is now used by 90% of African Americans in Wisconsin who smoke. 

The top three causes of death for Black Wisconsinites — heart disease, cancer and stroke — are all exacerbated by smoking, the DHS release shows. 

Meanwhile, the tobacco industry is using similar marketing tactics to target others such as young adults, youth and the LGBT community, raising concerns about higher rates of smoking-related disease and addiction among these groups. DHS says 9,300 people under age 18 try cigarettes for the first time every year, with half starting with menthol products. 

“Through this awareness campaign, we want to inform people about the harm that comes from menthol tobacco use and call attention to the tactics that the industry is using to get people addicted,” said Vicki Huntington, section manager with the agency’s Commercial Tobacco Prevention and Treatment Program. 

See the release

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PRESS RELEASES

See these and other press releases 

Kenosha Area Business Alliance: KABA and its partners celebrate the grand opening of the new LakeView Technology Academy at the Kenosha Innovation Neighborhood

Dept. of Agriculture, Trad​e and Consumer Protection: Meat Processor Infrastructure Grant application period open through February 24