Independent Banking's Not Dead Yet; Just as the Gloomy Reports Are Belied by the Independents' ROA, So the Trade Group Has New Vigor to Defend Its Sponsor's Rights

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NEW ORLEANS -- For independent bankers, just as candidates in the ongoing presidential primaries have painfully learned, what may seem inevitable is not.

"For too many years now, we have heard the gloom and doom predictions that community banks are an endangered species," James D. Herrington told the Independent Bankers Association of America here this week as he concluded his one-year term as president of the group.

A common perception, Mr. Herrington said, has been that "it is only a matter of time until small independent banks are relegated to the history books, that nationwide banking by a handful of giant banks is inevitable.

"Ask Walter Mondale what he thinks about inevitability."

Mr. Herrington, who is also chairman of Coldwater National Bank, Coldwater, Kan., cited some figures to show that independent banks aren't about to be knocked out of any race by the larger banks. Last year, he said, the retun on assets for community banks rose while the return for banks with more than $1 billion in assets fell.

And quoting Federal Reserve Board Statistics. Mr Herrington said that the return on assets for indenpendent banks is higher now than during the 1970s, before deregulation. Furthermore, the return on assets for community banks is "still more than double that of the money center giants."

As for the IBAA, Mr. Herrington said the association has gained renewed vigor to fight for the legislative and regulatory changes needed to protect the interests of its members.

He attributes much of the enthusiasm to the growing "prestige and influence" of the association. During the last year alone, IBAA officials were invited to discuss various issues with top level officials in the Treasury Department, the Federal Reserve Board, the Federal Deposit Insurance Corp., and Vice President Bush's task group on realigning the federal regulatory agencies.

In his speech at the group's annual convention, Mr. Herrington told the bankers that "the IBAA has worked hard over the years to obtain the attention and respect of our nation's leaders, and I believe these meetings indicate that we have fully arrived as a major player in the policymaking of our nation's future."

"The IBAA is not the anti-issue association people have been led to believe," said Mr. Herrington in the interview. The banking industry has to reckon with the association if the much-wanted and needed changes are to take place. …