Magazine article American Banker

Mr. Smith Goes to Washington

Magazine article American Banker

Mr. Smith Goes to Washington

Article excerpt

Daniel R. Smith's corporate and legislative focus can be summed up in two words: New products. His prospects can be summed up in one: Tough.

As he becomes president-elect of the American Bankers Association this week, Mr. Smith formally takes up the industry cause of gaining new powers. The quest comes at a time when the chairman and chief executive of First of America Bank Corp. is scurrying to boost fee income at his own bank.

Mr. Smith has his work cut out in both endeavors.

In the Public Eye

Federal lawmakers' skittishness about expanding the bank charter is well known. And Mr. Smith has fallen behind in developing service products needed to bolster First of America's insulation from interest rate changes and slack loan demand.

The convergence of the two issues lit a fire under the executive. At First of America's 655 branches and the banking industry's 50,000 branches, "What we need most is new products," he says.

The Kalamazoo, Mich., native is at the start of a three-year cycle in which he will be a highly visible spokesman, in the first year as the ABA's president-elect; in the second year as president; in the third as immediate past president.

And what is his qualification to speak out on legislative issues? His former strategy at First of America personifies the danger of abiding by lawmaker's constrictive vision of what a bank should be.

In the 20 years Mr. Smith spent building his Kalamazoo-based company from a $300 million-asset community bank to a superregional controlling $20 billion in assets, he concentrated on being an all-star lender.

And he succeeded: The company's loan quality has long been exemplary.

But then the hammers started dropping. First came a recession, which flattened loan demand. Then, Mr. Smith realized that lending might be a slack business for much of the '90s. To his regret, Mr. …

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