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Minnesota Banks focus on credit union fight

Northwestern Financial Review, Oct 18, 1997

A proposed bank-funded credit union "war chest" was a much-discussed item last month as the Minnesota Bankers Association concluded district meetings in New Ulm, Granite Falls, Mahnomen and Rochester.

The proposed fund would be used to counter the credit union industry's initiatives and would be funded from the MBA, the Independent Community Bankers of Minnesota, and member banks. Under the member-participation portion of the plan, still under development by MBA President-Elect Bob Weiss of First State Bank of Excelsior, banks would pay a $1,000 assessment for every $50 million in assets.

Eric Gandrud, Eagle Bank of Glenwood, spoke in Granite Falls, and said the assessment was too low. Gandrud explained how easy it was for a credit union to come into his town with the common bond of residing in Glenwood and the mayor's complete support. "There was no notification process," Gandrud said. "One thousand dollars seems like a drop in the bucket when a non-taxpaying entity comes into town."

MBA President Dick Roesler, Peoples National Bank of Mora, added, "If you don't have a credit union in town, they're coming. They'd be fools not to." Roesler said banks can fight back by meeting rates on loans and deposits, but said it's difficult when credit unions don't pay taxes or do community reinvestment.

"We really can't get going on this fast enough," Roesler said. He thinks the same problems that the savings and loan industry experienced in the 1980s could happen to credit unions.

In the New Ulm and Granite Falls meeting, C. Thomas Wilson of Gislason, Dosland, Hunter & Malecki, PLLP, spoke on legal pitfalls in current lending.

Bankers also heard about the new CAMELS ratings from a host of Minnesota Commerce Department officials: Arnold Boland in Mahnomen, and Kevin Thovson and Jim Hill in Rochester.

Bankers also heard from Granite Falls state Rep. Gary Kuble who said lawmakers need to hear from bankers about the subchapter S issue.

Two districts elected new board members: Chuck Johnson Jr., Root River State Bank of Chatfield, for District 1; and Paul Pieschel, Farmers & Merchants State Bank of Springfield, for District 2.

Copyright NFR Communications Inc Oct 18, 1997
Provided by ProQuest Information and Learning Company. All rights Reserved
 

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