The Tax Cut and Jobs Act of 2017 that was recently passed has generated lots of discussion. Rather than focus on the politics of the legislation I’d like to focus this month’s column on some of the positive impacts of the tax cuts on our customers and our bank. Yes, I said positive. I believe that overall, the tax act will have a positive impact on individuals, businesses and our communities as a whole. Let me explain…
Ninety percent of people who file taxes are going to take home more money as a result of this tax act. For some, the amount will be smaller, for some it will be larger. But the bottom line is that as a result of legislation, you – our customers – will result in more take home pay in your paycheck. As a banker I’d be remiss to let this opportunity to promote savings pass me by.
I read an article recently highlighting a survey that revealed 57 percent of Americans have less than $1,000 in savings. That same survey showed that 39 percent have nothing saved. These are alarming statistics.
Since the day I’ve entered the workforce I’ve always tried to allot a portion of my earnings to savings. Both my father and my first boss encouraged me to have at least three months’ worth of pay saved up for an emergency fund – you just never know when you’re going to need it. Saving takes discipline, and I encourage you to use your additional take home pay to bolster your savings. Whether it’s for paying off debt, saving for college or buying a car – it’s important to be prepared.
Our business customers are also benefitting from this tax cut. Prior to this legislation, the United States had some of the highest corporate tax rates in the world – now we’re closer to the middle. As a result, businesses are going to see their margins grow. That will make it easier to make a profit, and when companies make a profit most reinvest it back into their business and community. That’s a win-win!
Just like other businesses in the community, MidWestOne is also a beneficiary of the tax cut. Recognizing this we’ve made some very conscious choices about what to do with that additional money.
One thing we are doing is funneling some of that money into further developing our technology offerings. As our customer demographics are changing, and more and more people are using the Internet to conduct their banking, we are going to continue to focus on our technology solutions. Our mission at MidWestOne Bank is to take care of our customers and those who should be – that includes customers who are banking online. Building strong technology solutions takes time. However, over the course of the next two years, our customers will see the continued benefits of these efforts.
One example is our upcoming integration of Zelle, a person-to-person payments network that links directly to your bank account and makes online payments much safer than existing solutions that are on the market.
Another example is a pilot program for small business customers that enables them to apply for business loans online. Research has shown that many entrepreneurs are hesitant to visit a bank and ask for a loan. Making it possible to begin the loan application process online will appeal to this customer group.
We are also in the process of redesigning our website. Our customers are going to our website more than ever before – as a result we want to make sure the experience they are having on the site matches that highly personal touch they experience when they visit one of our locations.
In addition to technology investments we are also funneling additional money back into our communities through the MidWestOne Foundation. We’ve increased our contribution to the foundation by $200,000 per year, which will trickle down into all the communities where we have a location. Our foundation currently has assets of just under $3 million and every year we designate a percentage of that money to be given back to the communities in which we operate.
Whether you’re an advocate or an opponent of the tax cut, I hope you take the new realities this legislation brings for us and determine how you can make the best of it. You can count on the team at MidWestOne to help you along the way.