Society for Savings Is Setting Trend For Nonbank Activities in Connecticut
Thrift Has Signed Leases with an Insurance Agency and with H&R Block
By early next year, customers at the Society for Savings, a thrift based in Hartford, Conn., will be able to buy insurance, have their income tax returns prepared, book a trip to Hawaii, and purchase stocks and bonds--all without leaving the lobby.
It's part of a new program called the "Xchange at Society,' which offers nonbank services in a walled-off section of Society's busiest branches, in Hartford and Avon. These services will soon be offered in Wethersfield, Greenwich, anc West Hartford.
Before long, Society hopes to have other services available at the Xchange, including a full-scale investment counseling operation.
"As the markets dictate the need for other service in the Xchange, we will be happy to provide space for them,' said Peter Mulligna, senior vice president for marketing at Society.
"I feel very posivively about what Society is doing,' said Robert Eden, director of the Savings Bank Association of Connecticut. He said that he has learned of no other depository institutions in the state that are attempting to provide the same sort of one-stop financial nancial services center that Society has established through the Xchange. "I don't know whether any others will be doing anything similar,' he said.
Connecticut Banking Commissioner Brian J. Woolf, however, said he believes that now that Society is setting the example, other bnaks in the country will follow suit.
"I think it's just the next basic step for banks to take to increase their fee income and broaden the services they offer to the general public,' Mr. Woolf said. "It's in the embryonic stages right now, but in time you're going to see more and more banks getting involved with this thpe of activity.'
Mr. Woolf has for some time been a strong backer of banks moving into nonbank areas, providing they comply with state and federal regulations.
"I am a firm believer that banks should be involved in this type of activity,' he said. "This is the kind of one-stop financial services center that banks are going to have to become if they are going to survive.'
Society is one of an increasing number of banks and thrifts that offer a discount brokerage service through Fidelity Discount Brokerage Inc. of Boston.
But in september, Society took the first step toward expanding its nonbank offerings, by setting up the Xchange and signing a lease with Secured Bankers Insurance Agency Inc., a newly established, autonous insurance agency. Society thus became the first depository institution in Connecticut to lease space to a full-service insurance agency.
Society asked for a banking department ruling on the legality of leasing space to an insurance agency. Mr. Woolf's response was that as long as Society and Secured Banker remained separate businesses, there would be no problem.
"I don's have any problem with that. Insurance is just another financial product,' Mr. Woolf said. "But it's got to be an arm's length realtionship-- no interlocking directorships--and the bank cannot own the agency.'
Mr. Woolf said he heard "not a murmur' from the insurance industry over the arrangement. "I didn't expect that we would,' he said, "because no one was giving the banks the right to mvoe into the insurance industry. …