CBW, TYME form surcharge-free ATM network

Northwestern Financial Review, Oct 4, 1997 by van Dyck, Brenda

Community banks in Wisconsin are joining together to form a surcharge-free network. The formation of the ATM Access network was announced at the annual convention of the Community Bankers of Wisconsin, whose members can join the network and provide their customers a way to get cash without having to pay surcharges.

"We see this as a major opportunity for our consumers," said CBW President Charles Saeman, State Bank of Cross Plains.

CBW is working with Brown Deer-based TYME Corp., which operates about 2,500 ATMs in Wisconsin. According to TYME statistics, about 950 of its machines surcharge; of those surcharging, about 70 percent are owned by large holding companies. The amount of surcharges varies between 25 cents and $2.00.

"It's very important to note that the primary purpose of the program is to give customers a choice," said Thomas Sheehan, CBW presidentelect, and president and CEO of Grafton State Bank. He noted that bankers are concerned about the reduction in choices customers of community banks have when it comes to ATM surcharges. "No one community bank has enough ATMs to balance those of the largest bank holding companies," Sheehan said.

The network should be operational Nov. 1, and so far about 150 banks, representing between 250 and 300 ATMs, have expressed interest in it. Community banks have more than 600 ATMs in the state, and collectively have more TYME ATMs than any one financial institution in the state.

In addition to being notified by their banks, consumers will recognize which ATM machines won't surcharge by the ATM Access network logo. The network also is setting up a toll-free number and web site where people can find out where ATM Access machines are.

Noting that it's hard to measure how many customers move their accounts to a bank with a larger ATM network to avoid surcharges, Sheehan characterized the formation of the network as a proactive move.

Saeman said that if community banks don't take actions to make themselves more competitive, they will lose their customers' loyalty, and eventually their business. The network also will help bolster the image of community banks, he said. "It's going to be a tremendous opportunity for us to promote community banks."

Other CBW News

Addressing bankers at the Sept. 14-16 meeting at the Holday Inn Madison West in Middleton, outgoing president Paul Adamski, The Pineries Bank, Stevens Point, said there's a significant need for locally owned community banks. Reflecting on a speech he heard from the founder of the nonprofit environmental group Greenpeace, Adamski said, "We are somewhat like the ecoterrorists of the banking industry.

"I prefer to characterize us as socially responsible banks." Adamski noted that community banks don't charge the fees that most banks do, and play a unique role in the cxommunities they serve.

Adamski said the association will work on an image campaign in the next year. An ad hoc committee was formed and has met a few times already. Members will consider how CBW can partner with the image campaign already established by the Independant Bankers Association of the America. The committee hopes to have some proposals for the board to consider before the end of the year.

Incoming president Saeman also lauded the assets of community banks. "As community bankers, we do more. We do more for our customers and for our communities," he said.

He encouraged bankers to constantly build relationships with customers, and find new ways to do business. "If we don't change, community bankers, if we don't change, we will be left behind," he said.

Noting the banking industry's record profits of late, CBW Executive Vice President Daryll Lund said, "We must remember that success in the past guarantees nothing for the future."

Talking about CBW's success in 1997, Lund reported that there was a 97 percent renewal rate of member banks, and 17 new members joined, bringing CBW's membership to 225. Membership in CBW has increased 22 percent since 1994. Attendance at the group's education and training programs, increased 40 percent. This year's convention also boasted a record number of exhibitors, 74.

Lund gave an overview of CBW's new goals. One, as addressed with the image committee, is to increase CBW's public visibility and recognition. Other goals include: enhance legislative advocacy efforts; identify association niches for products and services; identify important subjects for CBW education programs; and develop the association as a primary source for information for community banks in the state.

Along with CBW, the state's banking industry is also doing well. Richard Dean, secretary of the Department of Financial Institutions, said more than 99 percent of state chartered banks have a CAMEL rating of 1 or 2. "I can't imagine this trend of excellence diminishing any time soon," Dean said.

The amount of assets controlled by state-chartered banks has increased to nearly 80 percent in 1997 from 65 percent in 1988.

Bank Modernization

From his vantage point as chief regulator for various financial services industries in Wisconsin, Dean said the lines are blurring between the industries. Dean noted new trends including charter switching and credit unions converting to savings banks. "It seems these days, nothing is out of the realm of possibility," he said. Dean predicted that more dramatic departures are around the corner, with unlikely partnerships. "There may be a time when this body of bankers forms alliances with old enemies to better combat the new opposition," he said.