Leaders urge bankers to get involved at MBA convention

Northwestern Financial Review, Jul 15-Jul 31, 2002 by Bengtson, Tom

Industry leadership motivated about 150 bankers to "share the vision and shape their industry" at the 113th annual convention of the Minnesota Bankers Association, conducted June 23-26 at Cragun's Resort near Brainerd. Mary Ellen Domeier, Valley Bank & Trust of New Ulm, completed her year as the association's first female president and passed the gavel on to Pat Hart of Paragon Bank, Wells.

Jim Smith, president of the American Bankers Association, drew on his experience as a professional baseball player to encourage bankers to "take their game to the next level." The Missouri banker encouraged his colleagues to contact lawmakers on industry issues, to contribute to state and national-political action committees, and to encourage those around them to get involved in industry issues as well.

"If you want to take this industry to the next level, you need to be there," he said. "It is our responsibility to make it happen for ourselves."

He outlined some of the challenges, including efforts to keep bankers out of real estate, and efforts by credit unions to expand their ability to make business loans. He said real estate groups are flooding Washington, D.C., with people and messages encouraging lawmakers to ban bankers from the real estate business that was opened up to the industry by the Gramm-Leach-Bliley law. Smith said that even if a banker is in an institution that is not directly affected by the realtors' challenge, bankers should contact their elected officials to communicate the banking industry's side of the story.

"If we can't win the battle against real estate brokers, we will never win the battle against credit unions," he said.

Smith called credit union competition one of the most pervasive industry threats. He explained that credit unions can make commercial loans up to an amount equal to 12.25 percent of their capital. Community credit unions, he said, exceed that figure by making loans guaranteed by the Small Business Administration. He said it won't be long before all credit unions will be asking for the opportunity to make unlimited SBA loans.

"That should make every banker angry," Smith said."These tax-exempt entities want to use a government sponsored enterprise to take commercial loan customers away from us."

Smith said bankers must call on their directors, employees and shareholders to support them in lobbying efforts. With 8,500 bank presidents, 1.5 million bank employees, tens of thousands of directors and hundreds of thousands of shareholders, Smith said the banking industry has the potential to make a huge impact with lawmakers on industry issues. "If we had gotten these people involved four years ago, the credit union bill might have turned out differently," Smith said, referring to legislation that greatly expanded credit union industry powers.

Bob Weiss of Beacon Bank in Shorewood, followed Smith's presentation with a plea for bankers to support the MBA's political action committee. "Last year, we raised a record $50,000, and our goal for this year is $75,000."

He explained that if every bank in Minnesota gave $500, the PAC would raise $250,000. "We'd be a leader in the nation," he said. "Next year's goal is more than do-able. I think the industry can raise a quarter of a million dollars."

Domeier called the past year extremely successful, noting that her experience as MBA president "surpassed her expectations." She noted that the association is utilizing technology more effectively, that 5,300 bankers attended association-sponsored educational programs in the last year, and that MBA lobbyists had a successful year at the Capitol. She said she was pleased no adverse legislation involving predatory lending passed, and the credit union bill that passed was significantly watereddown from its original version.

As she moves into her role as MBA's immediate past president, Domeier said she will concentrate on an effort she initiated to diversify membership on association committees and the board. During her general session speech, she asked all the women bankers in the audience to stand up; the request revealed four female bankers in the group.

"The MBA is not a `good old boys network'," she said. Domeier said she is working to recruit female bankers for leadership spots within the association. The organization will host a diversity workshop in September that will feature presentations designed to empower women to excel in banking and at the MBA.

Domeier said the association overcame financial challenges in the past year caused by a reduction in the number of banks in the states, and the falling interest rate environment.

MBA Treasurer Paul Pieschel, Farmers & Merchants State Bank, Springfield, explained that mergers during the past year cost the association about $100,000 in dues. In addition, interest on reserves came in $62,000 lower than budget due to low rates. Pieschel said the association has responded with cost containment measures. One bright spot he noted was a demutualization effort by Prudential Insurance which resulted in an unexpected pay-out of $832,000 to the association, which was passed along to members in the form of a premium holiday.