Bank on Wipfli - Blog and Podcast


Which season are we in?

Jan 06, 2016
Financial Institutions

Anyone who lives in the Midwest knows there really are only two seasons: winter and road construction season. What does that have to do with banking? In short, the banking industry now has been asked to help foot the new transportation bill.
The $305 billion transportation bill, which was recently signed into law, had a $70 billion shortfall, and to close that shortfall, Congress, in its infinite wisdom, decided it would move $53 billion from the Federal Reserve Bank’s capital account to the general treasury. This, believe it or not, is counted as new money on paper (if only we could all do accounting the way our federal government does). Things could be worse, though; banks over $10 billion in assets will also be receiving lower dividends from the Federal Reserve, with the savings used to fund transportation programs going forward. Thank goodness this did not impact community banks as was initially proposed.
I’m guessing in all the time that you have been in banking, you never realized how interrelated banking was with federal highway spending. So for bankers, it looks like we may be down to only one season, road construction season.

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