Halcyon Days for Retail Banking: Trade Group's Most Lavish Convention Bespeaks New Clout
Kutler, Jeffrey, American Banker
MIAMI -- If the Consumer Bankers Association followed the practice of other trade groups and came up with a catchy phrase to set the tone of its annual conference, this year's might have been dubbed "A Time to Celebrate."
The trade association's field, variously called consumer or retail or personal banking, recently written off by many as a nowin proposition, now basks in the glow of profit growth and top management attention.
Befuddled by volatility and uncertainty on the commercial side of the business, bankers look to retail customers as the more stable and potentially lucrative sources of deposit and loan growth.
Retail is also where the action is. It is where Sears, Roebuck and Co. and numerous other nonbanks are joining the battle for customer loyalty, particularly in the large and increasingly affluent baby boom cohort.
Through all of this, the Consumer Bankers Association of Arlington, Va., is prospering. It held its 65th and most lavish convention this week at the Doral Country Club in Miami and attracted a record attendance of 450.
Carl Modecki, CBA president, reported that membership is up to 637. Included are 263 corporate members (principally depository institutions) and 28 holding companies. The rest are associate members, the suppliers of products and services to retail banks and to whom the CBA, unique among trade associations, extends full membership privileges.
Total membership rose to 637 from 630 in 1983-84 and 619 in 1982-83. The gains seem less than extraordinary, but Mr. Modecki explained that his "marketing" is very selective.
"We target the premier, progressive retail banking organizations," he said. The members, a relative handful of the American Bankers Association's 13,000-institution roster, account for 80% of all consumer credit extended by U.S. banks, which gives the group its desired clout.
Because it is specialized and homogeneous, the Consumer Bankers as lobbyists have taken strong positions in favor of interstate banking, broadening banks' power to enter the insurance business, and tolerating the entry of new nonbank competitors.
This hasn't endeared the CBA to groups such as the Independent Bankers Association of America or the Conference of State Bank Supervisors, who have been more willing to maintain the status quo. But on Capitol Hill CBA's posture has reportedly been welcomed by Senate Banking Committee chairman Jake Garn and other pro-deregulation forces.
One reason for the Consumer Bankers Association's impact in Washington is Joe Belew, its government relations director for the past year. Both he and Mr. Modecki are astute monitors of the changeable political winds. Mr. Belew, a former aide of Rep. Dough Barnard, D-Ga., draws on his extensive congressional contacts to probe the likely outcome of legislative debates.
In Miami, Mr. Belew brought together Senate and House committee staff members for a panel discussion of whether Congress is likely to pass significant banking legislation.
Reflecting Mr. Garn's and the Senate Banking Committee's willingness to recommend a bill as they did late last year, James E. Boland, the committee's general counsel, thought such legislation would be enacted only if a significant judicial decision, further disaster in the Farm Credit System, or crisis in the deposit insurance system occurs. Only something serious would divert the senator's attention from the budget and tax bills before yearend.
Mr. Boland said Mr. Garn is unwilling to waste the Senate's time on banking legislation as long as the climate in the House remains inhospitable.
Richard W. Peterson, counsel to the House subcommittee on commerce, consumer and monetary affairs, said flatly, "I expect nothing to occur."
Despite some sentiment to tackle the deposit insurance issue, "the speaker wants to go home by Thanksgiving if possible. …