Bankers remember 40 years of association history

Northwestern Financial Review, Sep 1-Sep 14, 2002

Past officers of the Independent Community Bankers of Minnesota kicked off the association's 40th anniversary convention by sharing memories during a July 31 dinner at Arrowwood Resort in Alexandria.

Although the association was formed in 1962, it has roots that extend to 1930 when the Independent Bankers Association was formed in Glenwood, Minn. It was formed as a state association to fight against the expansion of the Northwestern Bank Corporation and First Bank System, explained Pat DuBois, who addressed the bankers after dinner. DuBois is chairman of the First State Bank in Sauk Centre, Minn.

DuBois noted that the association's first secretary was Robert Berry of Long Prairie, who was paid $300 per month. "In 1933, Mr. Berry was offered a position with the Minnesota Department of Commerce. He couldn't afford to say no," DuBois explained. DuBois' father, Ben, was appointed "temporary" secretary of the association, earning $50 per month. "He retired 30 years later," Pat DuBois said.

"In those early years, Ben almost single handedly worked the Minnesota legislature against branching. The independent associations were and still are grass roots organizations."

From 1930 to 1962, the Independent Bankers Association represented banks at the state level, added national legislative work in 1934. In 1939 the organization conducted its first statewide convention, with more than 200 bankers attending.

In 1962, the Independent Bankers of Minnesota was formed. The Independent Bankers Association became the Independent Bankers Association of America, and a few years ago, changed its name to the Independent Community Bankers of America. The Minnesota group changed its name to the Independent Community Bankers of Minnesota in 1992.

"If there hadn't been this association, half of you might not be here," commented Al Olson, the association's president since 1988. Four executives led the association prior to Olson. "You had the wisdom to form a bankers' bank, the Bank Holding Company Association, the Minnesota Transfer System, FutureBank and you founded the Banker/Regulator Forum, which is a shared effort with the Minnesota Bankers Association." Olson said the association's resolution of problems related to its health care plan in 1998 was very important. "We put the health care trust to bed without destroying the association," he said. "It was a successful program, but we ran up against health care costs."

Bob Vogel of New Market Bank, who was chairman of the association in 1998-99, explained how the association handled the issue. "The staff and leadership for the trust and ICBM had to ask for both the moral and financial support of its members to save both organizations from possible insolvency," Vogel wrote in a commemorative booklet distributed at the dinner. "Although we were not able to continue offering health insurance through an association-run plan, we were able to avert financial disaster through the help and substantial financial commitment of nearly all of the banks involved."

"We lost four members out of more than 300 at the time," Olson said. "It was one of the most successful things the association has done."

Following are excerpts of memories shared by past officers in the commemorative booklet. Each banker's name and location is followed by the year he served as president or chairman of the association.

E. Milton Klohn, Lake Elmo Bank, Oakdale, 1975-76.

"I recall testifying repeatedly against branch banking. The usual procedure was to provide written testimony and answer any questions the committee might ask. One particular occasion stands out. I took notes on the false or exaggerated statements of the proponents. When my turn came, a friendly questioner gave me openings to refute virtually everything the proponent said. The sad part was that they refused to consider the facts after they'd made up their mind."

Peter Carlson, Argyle State Bank, 1981-82.

"My year was a continuation of the concentration issue in the state of Minnesota. I wish we had prevented and curtailed the growth of big banks. However, we did educate the legislature and the public about the financial dangers of high concentration of funds."

Lowell Wakefield, First Minnesota Bank, N.A., Shorewood, 1982-83.

"We came so close to having a concentration limit in Minnesota, and what a different environment there would be today if it had happened. Minnesota is still home to the largest number of independent banks in the nation. There's no doubt in my mind that the greatest influence was a very knowledgeable, always prepared, articulate, intense, and sometimes entertaining Norb McCrady. He said what needed to be said, when often we could not, during one of the most difficult times in banking history."

James Clark, Minnstar Bank, N.A., Lake Crystal, 1984-85.

"Change is sometimes difficult and challenging, but if we look at our bottom lines the past 20 years, we would also have to admit it has been financially rewarding-the best years in our industry. We have proven that independent community bankers know how to handle change and face the challenges."